Sanburg Financial Corporation v. American Rice, I, 448 F. App'x 415

Sandburg Financial sues American Rice in Texas state court for damages under pre-petition and post-petition contracts arising from a 1988 California real estate transaction.
ERLY guaranteed payment; Barrington Capital and GMAC required guarantees from ERLY and its affiliates and executives as a condition of the deal.
American Rice filed Chapter 11; plan confirmed July 7, 1999. Sandburg asserted post-confirmation contracts to be enforceable despite discharge.
Two post-confirmation contracts (Aug. 9, 1999 and Nov. 22, 1999) allegedly provided new consideration to Sandburg in exchange for forbearance, while reaffirming debt obligations.
District court held Sandburg’s post-confirmation claims were discharged and the contracts unenforceable under 11 U.S.C. § 524(c); Sandburg appealed the post-confirmation contract rulings.
Court emphasizes § 524(c) strict compliance and rejects the “new and independent consideration” exception as a basis to enforce post-confirmation contracts.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether post-confirmation contracts are discharged or enforceable under § 524(c).	Sandburg asserts post-confirmation contracts are new agreements supported by new consideration.	American Rice contends post-confirmation contracts fall under § 524(c) and were not compliant.	Post-confirmation contracts are void and unenforceable; discharge compliance required.
Whether any “new and independent consideration” exception saves post-confirmation contracts.	Sandburg relies on cases allowing new independent consideration to enforce post-confirmation contracts.	Court rejects the exception as unsupported by controlling authority and contrary to § 524(c).	No valid exception; contracts unenforceable under § 524(c).
If not enforceable, did the district court err in so ruling given forbearance as consideration.	Forbearance on enforcing the Judgment against Rice Haiti constitutes new consideration.	Forbearance is not enough to overcome lack of § 524(c) compliance and the pre-discharge debt was discharged.	District court did not err; forbearance does not save noncompliant reaffirmation contracts under § 524(c).

In re Kinion, 207 F.3d 751 (5th Cir. 2000) (reaffirmation contracts must comply with § 524(c) to be enforceable)