Iberiabank v. Geisen
506 B.R. 573
S.D. Fla.2014Background
- FFS Data, Inc. filed Chapter 11; Iberiabank held an unsecured claim arising from a Siena Loan guaranteed by FFS and Geisen.
- Siena was a borrower-owned landlord; the Siena Loan total was about $10.6 million and secured by a mortgage on Siena property.
- A forbearance and a settlement followed, fixing Iberiabank’s unsecured claim at $2 million and omitting Geisen’s personal guaranty from the settlement.
- FFS’s Chapter 11 plan was confirmed in March 2011; Iberiabank did not object at the confirmation stage.
- Iberiabank later sued Geisen in state court seeking the Siena Loan deficiency; Geisen asserted the Plan released his personal guaranty.
- Bankruptcy Court denied Iberiabank’s Motion to determine that the Confirmation Order and Discharge Injunction did not release unrelated non-debtor claims; appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 8.13’s text is descriptive or limiting as to Geisen’s release. | Iberiabank argues the phrase limits the release to fiduciary duties. | Geisen argues release is broad, not limited by that descriptor. | Descriptive, not limiting; broad general release. |
| Whether the Plan release extends to Geisen’s personal guaranty of the Siena Loan. | Iberiabank contends the release covers guaranty claims. | Geisen contends the release does not reach non-debtor guaranties absent specificity. | Release extends to Geisen’s personal guaranty. |
Key Cases Cited
- Travelers Indemnity Co. v. Bailey, 557 U.S. 137 (Supreme Court 2009) (bankruptcy injunctions can bar related state-law claims integrated into plan)
- In re Applewood Chair Co., 203 F.3d 914 (5th Cir. 2000) (specificity needed to release non-debtor guaranties; general release insufficient)
- FOM Puerto Rico S.E. v. Dr. Barnes Eyecenter Inc., 255 Fed.Appx. 909 (5th Cir. 2007) (contextual specificity factors support non-debtor release of guaranty)
- Republic Supply Co. v. Shoaf, 815 F.2d 1046 (5th Cir. 1987) (broad release can extend to guaranties when language is sufficiently explicit)
- In re Dow Corning Corp., 456 F.3d 668 (6th Cir. 2006) (contract principles govern interpretation of confirmed plans)