485 B.R. 478
6th Cir. BAP2012Background
- Debtors filed a voluntary Chapter 12 petition on Sept. 14, 2011; this is their second Chapter 12 filing after a 2009 case was dismissed.
- Appellees Quality Leasing, Farm Credit Services of Mid-America (FCS), and American Savings Bank, FSB (ASB) are secured creditors with claims listed on Schedule D.
- Bankruptcy court denied confirmation, and dismissed the case with prejudice for two years, after finding bad faith and multiple plan/financial deficiencies.
- Debtors submitted several pro se filings and attempted controversial securitization/standing theories; counsel represented them for most proceedings.
- Court proceedings included motions for relief from stay, dismissal, and a January 25, 2012 confirmation hearing; the March 5, 2012 order denied confirmation and dismissed the case with prejudice,→ later affirmed on appeal.
- Two-year prejudice bar under § 1208(c) and § 349(a) maintained; Rule 59/60 motions to reconsider denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Debtors’ objection to proofs of claim stripped the claims’ presumptive validity. | Pertuset argues objections strip validity. | Appellees argue objections were not validly heard; standing remains. | Objections did not strip presumptive validity. |
| Whether the creditors had standing to file claims or seek relief. | ASB, Quality Leasing, and FCS claimed standing as creditors. | Creditors had claims, thus standing. | Creditors had standing to file claims. |
| Whether the Debtors’ evidentiary requests were properly before the court and whether a continuance was warranted. | Debtors sought admission of testimony/reports and a continuance. | Requests were improper or unwarranted; attorney was withdrawal issue. | Court did not abuse discretion in denying evidentiary requests and continuance. |
| Whether the plan’s lack of a liquidation analysis, feasibility, and good faith supported denial of confirmation. | Debtors argued plan complied with §1225. | Plan failed best interests, feasibility, and good faith requirements. | Plan not confirmable; confirmation denied. |
| Whether dismissal with prejudice was appropriate for bad faith and related conduct. | Debtors contest dismissal grounds. | Court found bad faith and serial filings warranted dismissal with prejudice. | Dismissal with prejudice upheld. |
Key Cases Cited
- Raynard v. Rogers (In re Raynard), 354 B.R. 834 (B.A.P. 6th Cir. 2006) (final order of bankruptcy court is appealable; confirmation denial is final)
- In re J & M Salupo Dev. Co., 388 B.R. 795 (B.A.P. 6th Cir. 2008) (abuse of discretion standard for denial of reconsideration)
- In re Am. HomePatient, Inc., 420 F.3d 559 (6th Cir. 2005) (de novo review of legal conclusions; best interests analysis)
- In re Brice Rd. Devs., L.L.C., 392 B.R. 274 (B.A.P. 6th Cir. 2008) (feasibility and plan confirmation standards under §1225)
- In re Caldwell (Hardin v. Caldwell), 851 F.2d 852 (6th Cir. 1988) (12-factor test for good faith in plan filings (chapter 12 context))