Colorado Mountain Express, Inc. v. Aspen Limousine Service, Inc. (In Re Aspen Limousine Service, Inc.)Colorado Mountain Express, Inc. v. Aspen Limousine Service, Inc. (In Re Aspen Limousine Service, Inc.)
MEMORANDUM OPINION AND ORDER ON APPEAL
Airрort shuttle operator Colorado Mountain Express (CME) appeals from a final order of the bankruptcy court confirming the joint Chapter 11 reorganization plan submitted by small business debtor Aspen Limousine Service (ALS) and Airport Shuttle Colorado (ASC). CME contends the bankruptcy court erroneously elevated speed over fairness in the way it conducted the confirmation proceedings under the new Bankruptcy Code provisions applicable to small business reorganizations. Specifically, CME argues the court erred in prohibiting CME from soliciting approval on an equally accelerated basis for a competing plan of reorganization pursuant to which ALS would be liquidated and CME, instead of ASC, would receive its assets. I affirm the order.
I. FACTS AND PROCEDURAL HISTORY
A. Background
For some time, debtor ALS was a principal carrier providing passenger transportation services between Denver’s Stapleton Airport (and later, Denver International Airport (DIA)) and certain ski and recreation areas in Pitkin County, Colorado. ALS began suffering financial difficulties in 1994. It ceased providing service for a period, reinstituted it on a reduced basis, and then, in May 1995, filed for Chapter 11 bankruptcy protection. ALS’s difficulties and reduced service presented an opportunity for CME, a carrier that had previously provided transportation services between Denver and points in nearby Eagle County, to expand into Pitkin County and compete directly with ALS. The move was the precursor to a fierce battle between the two competitors. Unwilling to confine their battle to the marketplace, ALS and CME are currently waging it in the bankruptcy courts, in civil lawsuits and in
B. The Bankruptcy Proceedings
ALS filed its voluntary petition under Chapter 11 of the Bankruptcy Code on May 5, 1995.
See
The filing of a voluntary petition under Chapter 11 triggers a limited period of time during which only thе debtor may file a proposed plan of reorganization. Generally, this exclusive period is for 120 days.
On August 9,1995, 96 days after ALS filed its voluntary petition, ALS and ASC submitted a Joint Plan of Reorganization. (R.Vol. I Tab 122.) Pursuant to the plan, the 100% interest in ALS owned by ALS President Robert Regulski, Secretary-Treasurer Gilmore and ALS Vice President/director Phillip Sullivan 2 would be canceled and issued to ASC in consideration for its payment of all funds necessary to consummate the plan. Id. All potential breach of fiduciary duty claims between ALS and BHP would be deemed settled and released, and together ALS and BHP would form a Litigation Trust to pursue causes of action against CME in the antitrust lawsuit No. 95-D-1185. Id.
On August 14, ALS filed its Notice of Election to Proceed as a Small Business under
CME filed a competing Liquidating Plan of Reorganization and Disclosure Statement based on its status as a creditor 3 that same day. (R.Vol. II Tabs 149 & 150.) CME’s plan called for the liquidation of ALS and the transfer of ALS’s assets to CME. (Id. Tab 149 at p. 13.) Simultaneously with the filing of its plan, CME filed a Motion for Forthwith Conditional Approval of Creditor’s Disclosure Statement and Ballot. (Id. Tab 151.) The motion was set for hearing on September 13, 1995. (Id. Tab 158.)
ALS filed a written objection to CME’s motion for forthwith conditional approval on September 7, arguing the imposition of a competing plan burden on a small business
The bankruptcy court issued a bench ruling on September 14 denying CME’s motion for forthwith conditional approval without prejudice and on an “interim basis.” (Id. Tab 167.) The court also stated that it “may, if appropriate,” reconsider the motion at a hearing it then scheduled for September 26, see id., for the continued considеration of (1) the status of the Chapter 11 proceedings; (2) the adequacy of CME’s disclosure statement; and (3) CME’s motion for forthwith conditional approval. (Id. Tab 168.) The court reserved the right to issue a published opinion on the order at a later date.
Despite the court’s order denying CME’s motion for forthwith approval, CME wrote creditors a letter discussing CME’s plan. ALS viewed this as a solicitation in violation of the court’s order, and on September 25, 1995, filed a motion for an order to show cause why CME should not be held in contempt. (Id. Tab 181.)
The bankruptcy court issued a written order explaining its September 14 decision to deny CME’s motion for conditional approval on an interim basis. (R.Vol. II Tab 187.) This order analyzed the small business provisions applicable in this case and addressed three issues critical to CME’s appeal. While the court agreed a strict construction of the 100 day exclusive period in
The September 25 order emphasized the interim nature of the denial of CME’s motion. While the court reserved the right to reaffirm its ruling at the September 26 hearing, it invited CME to submit for consideration any modifications of its statement it wished. The court stated it would consider any modified statement at a later hearing and might reconsider CME’s motion for conditional approval if the ALS plan faltered.
Id.
Recognizing its decision “may appear to be a little inconsistent,” the court explained that it was intended to give ALS “its opportunity to quickly get a timely filed plan confirmed in a cost efficient manner,” but also
CME also filed its objections to ALS’s disclosure statement and first amended plan of reorganization on September 25. CME filed a Notice of Filing of Amended Plan and Disclosure Statemеnt and Request for Forthwith Conditional Approval of Amended Disclosure Statement before the September 25 hearing. (R.Vol. II Tab 184.) 8 At the hearing, the bankruptcy court ordered the parties to file any comments or objections to CME’s amended disclosure on or before October 2, 1995. (See Minutes, R.Vol. II Tab 186.) It also ordered ALS’s motion regarding CME’s alleged contempt set for hearing. 9
Objections to CME’s amended plan were filed on October 2, 1995 by Sullivan, Gilmore and Regulski (R.Vol. Ill Tab 193), the wage claimants’ committee (Id. Tab 194), and ALS (Tab 195). The bankruptcy court considered these objections and in an order issued October 5,1995, found ALS objections 2.b, e, f, g, h, k, 1, m, n(l)(2)(3), 3.a, and d to be “valid and worthy of consideration by CME and, to a greater or lesser degree, should be dealt with and incorporated into CME’s Second Amended Disclosure Statement Regarding its First Amended Liquidating Plan of Reorganization.” (Id. Tab 204.) The other objections were rejected. The court ordered that CME was entitled to submit a second amended statеment, and that if CME did so, the court would “expeditiously review” the statement, and “if appropriate,” consider it “for approval, circulation and balloting,” and “set[] a confirmation hearing, subject to [ALS’s] pending Plan and Disclosure Statement.” (Id.)
Pursuant to the bankruptcy court’s order, ALS filed a document summarizing the voting on its plan of reorganization and a status report on the various objections to confirmation filed by the Colorado Department of Revenue and CME. (R.Vol. III Tab 200.) ALS filed a supplement to this status report before the confirmation hearing on October 10, 1995. (Id Tab 217.)
At 8:30 on the morning of the October 10 hearing, CME filed a Motion for Allowance of Administrative Expense Claims. (R.Vol. Ill Tab 206.) The motion identified three administrative claims: (1) the $3.2 million in antitrust and business tort counterclaims pending in No. 95-D-1185; (2) $60,000 based on CME’s “substantial contribution” to ALS’s bankruptcy case under
The confirmation hearing went forward as scheduled on October 10 and continued through the following day. During the proceedings held on October 10, the court disallowed CME’s administrative expense claims for purposes of the confirmation hearing only, estimating them at zero. See Minutes of Proceedings (R.Vol. Ill Tab 218). The court also found ALS’s disclosure statement adequate and approved it. (Id.)
Based on these and other rulings made by the court on October 10, ALS filed a Second Amended Joint Plan of Reorganization on October 11,1995.
(Id.
Tab 220.) The second amended joint plan was considered at a hearing held October 13, 1995. On the condition that certain modifications to the joint plan be filed by October 23, 1995, the plan was confirmed from the bench.
See
Minutes of October 13 hearing (R.Vol. Ill Tab 221). The modifications were filed, and the bankruptcy court entered a written Order Confirming Second Amended Joint Plan of Reorganiza
CME filed its Notice of Appeal on November 2, 1995, and sought relief from the automatic stay to participаte in proceedings before the Public Utilities Commission on the joint application of BHP (Messrs. Regulski, Gilmore and Sullivan) and ASC for the transfer of the ALS stock. The bankruptcy court denied CME’s request, ordering it to “forthwith withdraw its protest/interventions before the Colorado Public Utilities Commission.” See Findings of Fact and Conclusions of Law (Dec. 15, 1995) (Docket No. 352). CME’s appeals from the bankruptcy court’s December 15 order have been assigned Civil Action Nos. 95-K-3235 and 95-K-3236.
On December 22, 1995, CME filed a Motion for Stay Pending Appeal with the bankruptcy court. When the bankruptcy court failed to act on the motion by December 28, CME filed a Motion for Stay with this court. Because speedy implementation of the reorganization would moot CME’s appeal, the motion was granted. I now address the issues on this appeal from the October 24 order confirming ALS’s Second Amended Joint Plan of Reorganization, as amended.
II.ISSUES ON APPEAL
CME presents four issues for appeal. CME contends the bankruptcy court erred (1)in frustrating сompetitive bidding for ALS by refusing to act upon the adequacy of CME’s disclosure statement; (2) in approving, on a final basis, the adequacy of ALS’s disclosure statement; (3) in estimating CME’s Administrative Claim at $0 for the purposes of confirmation; and (4) in confirming the ALS/ASC Second Amended Joint Plan of Reorganization as Modified.
III.STANDARD OF APPELLATE REVIEW
The bankruptcy court’s findings of fact are subject to the clearly erroneous standard of review. Bank.R. 8013. Its legal conclusions are subject to
de novo
review.
Phillips v. White (In re White),
IV.DISCUSSION
A. Refusal to Consider Competing Plan
CME’s assertion that the bankruptcy erred in frustrating competitive bidding for ALS by “refusing to act upon the adequacy of [CME’s] disclosure statement” is unpersuasive. It is clear from the record that the bankruptcy court did act upon the adequacy of CME’s disclosure statement: It reviewed the various objections to CME’s statement; identified those it found had merit; and invited CME to address the objections in an amended statement which it would hear “subject to [ALS’s] pending Plan and Disclosure Statement.” See Order dated October 5 (R.Vol. Ill Tab 204.) CME’s real complaint is that the bankruptcy court did not afford CME’s plan the same liberal and expedited treatment to which a small business debtor’s plan is entitled under the 1994 Bankruptcy Reform Act.
In this case of first impression, the bankruptcy court interpreted new statutory language applicable to small business reorganizations and determined that, while a creditor may file and solicit approval for a competing plan under
I agree with the bankruptcy court’s analysis.
CME contends the bankruptcy court’s conduct “stripped the ALS creditors of their statutory right under Section 1129(c) to chose [sic] between competing plans.” Opening Br. at 8. This argument is specious. The creditors’ right to choose under § 1129(c) is triggered only when the requirements of § 1129(a) and (b) “are met with respect to more than one plan.” CME’s plan nеver got to that stage. Again, CME’s complaint is with the bankruptcy court’s decision to give ALS a “first opportunity” to get its plan confirmed and to deny, on an interim basis, CME’s motion for forthwith conditional approval of its disclosure statement. As set forth above, that course of action was within the court’s discretion to take under a proper interpretation of
I conclude the bankruptcy court balanced properly the competing objectives under Chapter 11 of enabling a diligent debtor to gain a fresh start while at the same time encouraging competitive bidding for the equity of a reorganized debtor.
B. The Adequacy of ALS’s Amended Disclosure Statement
The bankruptcy court concluded there were no “basic flaws or missing information” in the Amended Disclosure Statement, and ruled it contained “essential and adequate information to enable the creditors and interest holders to make a knowing and sensible decision.” Order Confirming Second Am. Joint Plan of Reorganization of ALS and ASC as Modified (R.Vol. II Tab 237) аt ¶ 1. The court found the statement did not have to discuss the elements or the existence of CME’s competing plan. Nor did it require further amendment to disclose any modifications or amendments to the plan made between the time of conditional approval and the confirmation hearing because such changes “were advantageous to and not adverse to any class of creditors.” Id.
CME contends the bankruptcy court erred in approving ALS’s Amended Disclosure Statement because at the time it was approved for transmittal to creditors, it was “materially false and misleading” in two respects: (1) it failed to disclose the existence of the “more attractive” competing CME Plan, and suggested the only alternative to the ALS/ASC joint plan was “catastrophic liquidation”; and (2) it materially understated the consideration being paid to Regulski, Gilmore and Sullivan for their cooperation. CME Opening Br. at 9, Reply at 2. These failures, CME argues, renderеd the statement inadequate under § 1125(a) and (f) and the standards set forth in
In re Stanley Hotel,
Section 1125(f)(2) provides that acceptances and rejections of a plan may be solicited based on a conditionally approved disclosure statement as long as the debtor provides “adequate information” to each holder of a claim or interest that is solicited. “Adequate information” is defined in § 1125(a) as
information of a kind, and in sufficient detail, as far as is reasonably practicable ..., that would enable a hypothetical reasonable investor ... to make an informed judgment about the plan, but adequate information need not include such information about any other possible or proposed plan.
The determination of what is “adequate information” in a disclosure statement is a practical and variable inquiry made on a case-by-case basis.
In re Texas Extrusion Corp.,
1. Failure to Disclose Competing Plan
At the time ALS filed its Amended Disclosure Statement on September 1, 1995, CME’s Plan and Disclosure Statement were not of record. CME concedes this point, but argues its plan was of record by the time the statement was conditionally approved such that approval was error. I disagree.
As an initial matter,
The purpose of a disclosure statement is to inform equity holders and claimants about the probable financial results of the acceptance or rejection of that particular plan.
In re Stanley Hotel,
I conclude the bankruptсy court did not err in failing to require ALS to disclose the existence of CME’s competing reorganization plan. 12
Under the ALS/ASC joint plan, all avoidance and state law breach of fiduciary duty claims against ALS insiders Regulski, Gilmore and Sullivan (BHP) were to be released. CME contends that ALS’s Amended Disclosure Statement was inadequate in its description of the proposed settlement with BHP by understating prepetition payments to BHP by $500,000 and by failing to place any value on these claims in the liquidation analysis. The bankruptcy court considered these arguments at the confirmation hearing and rejected them, finding “[t]he payments to the insiders and the possible claims against them have been adequately disclosed.” Confirmation Order (R.Vol. Ill Tab 237) at ¶ 1.
It is not necessary to the adequate information standard that a disclosure statement specifically speculate as to future uncertainties such as the consequences of various possible outcomes of pending, let alone hypothetical, litigation.
See In re Stanley Hotel,
I conclude the bankruptcy court did not abuse its discretion in finding ALS’s disclosure statement adequate with respect to the BHP settlement.
C. CME’s Administrative Claims
CME asserts the bankruptcy court prescribed a “patently superficial and inadequate” process for estimating its administrative expense claims under
CME filed its Motion for Allowance of Administrative Expense Claims on the morning of the October 10, 1995 confirmation hearing. CME sought over $3,260,000 in administrative expenses based on the following claims: (1) antitrust and business tort claims based on ALS’s allegedly anti-competitive post-petition conduct valued at $3.2 million; (2) a claim for “actual, necessary expenses incurred by CME, a creditor, in making a substantial contribution in this Chapter 11 ease” valued at $60,000; and (3) an unspecified “claim for damages, in an amount presently unknown,” for other post-petition misconduct “comprising disparagement and other business torts.” Motion for Allowance (R.Vol. Ill Tab 206) at 1-2.
CME provided no factual or legal support for its claims and made no attempt to itemize its damages. It simply requested an order of allowance for “(i) damages in an amount to be determined in
[Aspen Limousine v. Colorado Mountain Express,
No. 95-D-1185]; (ii)damages for disparagement and other post-petition business torts by the Debtor in an amount to be proven; [and] (iii) making a substantial contribution as a creditor under
Rather than continuing the confirmation hearing, the court addressed the motion as one of several threshold issues to be taken up before the question of plan feasibility.
See
Tr. of Oct. 10, 1995 Confirmation Hr’g (R.Vol. VI) at 135-36. The court indicated it would take a “preview look” at CME’s administrative expense claims, hearing the representations of the parties and taking offers of proof.
Id.
at 135. It emphasized consideration would be for the limited purpose of determining whether CME’s antitrust claim “qualifie[d] as an administrative claim” and, then, for claim estimation under
For its offer of proof, CME tendered a copy of its Answer and Counterclaim filed in No. 95-D-1185. CME claimed the evidence to be presented at trial in that case would show that ALS approached customers and potential customers of CME and advised them that engaging in business with CME would be unlawful and that doing so would subject them to civil litigation and damages. Tr. (R.Vol. VI) at 138-39. It would also show that ALS’s representatives told Pitkin County Airport officials to deny CME counter space at the airport for the purpose of eliminating or curtailing CME’s ability to compete in Pitkin County. Id. at 139-40. Based on the evidence at trial, CME maintained it would be awarded treble damages under the antitrust laws in the amount of $3.2 million. Id.
With respect to its $60,000 substantial contribution claim under
The bankruptcy court disallowed both the antitrust and contribution claims as administrative expenses for the purpose of confirmation, estimating them at $0. It found the latter barred under
In re Lister,
1. The contribution claim.
I agree the attorney fees and costs incurred by CME in pursuing its competing plan do not qualify as “administrative expenses” under
2. The $3.2 million antitrust claim.
CME asserts its $3.2 million antitrust counterclaim in Civil Action No. 95-D-1185 is an administrative expense that should have been given a value and considered in any confirmation of the ALS/ASC plan. I am unpersuaded.
Allowable administrative expenses under § 503(b) “inelud[e] ... (1)(A) the actual, necessary costs and expenses of preserving the estate, including wages, salaries, or commissions for services rendered after the commencement of the case.” The Supreme Court has held that tort claims arising dur
Several courts have applied
Reading
broadly, treating post-petition claims for damages as administrative expenses without considering whether they were “actual and necessary” to the administration of the estate or of its reorganization, or whether they were more properly viewed as general creditor claims.
See, e.g., In re MacDonald,
In this circuit, however, the statutory priority given administrative claims under § 503 “[is] to be narrowly construed.”
In re Amarex,
It seems unlikely based on this authority that the Tenth Circuit would follow the Western District of Texas’ approach in In re MacDonald and view ALS’s contingent liability for $3.2 million in antitrust damages as a priority administrative expense. Unlike the fire-related damages in Reading, which were fixed and directly related to the receiver’s negligence in preserving the property of the estate during the railroad’s reorganization period, the $3.2 million in antitrust damages sought by CME is speculative as to amount and unrelated to the preservation of the estate.
3. Estimation.
Assuming, for the sake of argument, that CME’s post-petition antitrust claims could be viewed as a priority administrative expense, I consider whether the bankruptcy court abused its discretion by the manner in which it estimated their value.
If the court determines that the liquidation of a claim would unduly delay the administration of a bankruptcy case, it must estimate the claim’s value for purpose of allowance.
CME contends the bankruptcy court abused its discretion in refusing to continue
a. Was the method used an abuse of discretion?
While I have grave reservations generally about the use of offers of proof in Chapter 11 proceedings requiring notice and a hearing, 14 the bankruptcy court’s reliance on them in this case was not an abuse of discretion.
Allowing parties to be heаrd through offers of proof, under certain circumstances, may be appropriate “so long as the court is assuming the truth of what is offered and not attempting to resolve issues on conflicting offers of proof.”
Drislor Assoc. v. Metro North State Bank,
Although CME implies the bankruptcy court deprived it of due process by fading to require an evidentiary hearing, it does not develop this argument or cite any authority to support it. Nor does CME suggest the form the evidentiary hearing should have taken, or how such a hearing would have resulted in a valuation of its claim greater than $0.
See Bittner,
Finally, the timing of CME’s motion, together with the fact that confirmation of the ALS/ASC plan would doom CME’s efforts to liquidate ALS and take over its assets through the approval of its competing plan, detract from the arguments on appeal. The motion was untimely and CME’s arguments to the contrary elevate form over substance. The Bankruptcy Reform Act of 1994 added the requirement that administrative expense claims be “timely filed” or, if “tardily filed,” be permitted only upon a showing of cause.
b. Was the $0 valuation dearly erroneous?
CMÉ asserted at oral argument that the bankruptcy court’s $0 valuation was also clearly erroneous on its merits. The issue of whether a bankruptcy court used an appropriate method to estimate a claim is distinct from the issue of whether it reached valid findings of fact.
See Bittner,
Even assuming the truth of what was offered, the $0 valuation of CME’s antitrust claims was not clearly erroneous. CME made no effort in its motion for allowance of administrative expenses or in its offer of proof to provide the court with any facts from which it could discern the likelihood of success on the merits of CME’s claims in No. 95-D-1185, let alone estimate the amount of damages to which CME might be entitled if it did succeed. Other than to state it would prove $1.2 million in actual damages “at trial” (which then would be trebled under the antitrust laws) CME’s offer failed entirely to tie ALS’s alleged anticompetitive conduct with any specific harm or financial loss to CME. Taking every word of CME’s offer as true, there simply was nothing on which the bankruptcy court could have based a value estimate.
D. Confirmation
Finally, CME asserts the ALS/ASC joint plan failed to meet the requirements for confirmation under
CME claims confirmation was erroneous because:
(1)The plan failed to satisfy
(2) ALS and ASC failed to comply with
(3) The plan failed to satisfy the requirement under
(4) Had the bankruptcy court evaluated CME’s administrative claims properly, it would have found the plan unconfirmable under
(5) The plan failed to satisfy the “cram down” provisions of
1. Standing
Any determination of standing involves a two-step inquiry: (1) whether a litigant has been sufficiently injured; and (2) whether he is the proper proponent of the rights he seeks to assert. In the bankruptcy context, the former is satisfied by establishing one is a “person aggrieved,” i.e., one whose rights or interests is “directly and adversely affected pecuniarily” by an order of the bankruptcy court.
Holmes v. Silver Wings Aviation, Inc.,
The ALS/ASC joint plan provides for a 100% payout of unsecured impaired
As an initial matter, ALS and ASC deny CME’s claim is payable over time under the plan. They maintain it is a Class 4 consumer refund claim payable in full on the effective date of confirmation. See Second Am. Joint Plan (R.Vol. Ill Tab 220) at 4-6. In an unusual stance for a creditor, CME denies it can be paid in full on confirmation and insists its claim be treated as a Class 7 claim payable over a three year period. Even if this were true, the record supports the bankruptcy court’s finding that 8% was “an appropriate present value rate” that provided CME with a value as of the effective date of the plan “equal to the allowed amount of its claims.” See Confirmation Order (R.Vol. III Tab 237) at p. 4. 17
I conclude CME’s pecuniary interests are not adversely affected for the purposes of standing by a plan providing for a 100% payout of its $48 claim over three years at 8% interest. It follows, then, that CME’s pecuniary interests are not adversely affected by the confirmation of the ALS/ASC joint plan over a competing plan calling for an immediate 100% payout of its claim. CME is not a “person aggrieved” under the Kane stаndard and therefore lacks standing to challenge the fact of confirmation on appeal.
Even assuming CME were “aggrieved” and that its claims were based on its own rights rather than those of third-parties, its assignments of error are insufficient to warrant reversal.
2. Merits
My conclusions above regarding CME’s administrative claims, the adequacy of ALS’s disclosure statement and the propriety of the 8% interest rate, dispose of CME’s assertions of error in claims (3)-(5). I review the issues raised in CME’s claims (1) and (2) under the clearly erroneous standard.
(1)
As the committee notes immediately following
The аssurances of which CME complains were part of the negotiation and solicitation process on an approved disclosure statement. “Once adequate information has been provided a creditor, § 1126(b) does not limit communication between creditors.”
Century Glove, Inc. v. First American Bank of New York,
V. CONCLUSION
Based on all of the foregoing, I AFFIRM the bankruptcy court’s Order of Confirmation dated October 24, 1995. The Order granting a stay pending appeal filed by this court on December 29, 1995 is VACATED and the appeal DISMISSED. The parties are to pay their own costs on appeal.
Notes
. In addition to their activities before the Colorado Public Utilities Commission and the Interstate Commerce Commission, the parties have initiated at least three lawsuits in this court. In
Aspen Limousine Serv., Inc. v. Colorado Mountain Express,
No. 95-K-1345 (filed May 26, 1995), ALS contends CME lacks regulatory authority to operate in Pitkin County and seeks a permanent injunction preventing CME from doing so. I denied ALS's motion for preliminary injunction in that case on June 21, 1995.
CME has also filed appeals from at least three other orders of the bankruptcy court. These appeals — Nos. 95-K-3235, 95-K-3236, and 96-K-l 19 — challenge orders issued by the court on December 15 and December 20, 1995, which prohibited CME from participating in proceedings before the Public Utilities Commission in which ALS and ASC sought to consummate the transfer of stock to ASC and held CME in contempt of court.
. These individuals, who act collectively and are identified by the acronym “BHP” in the plan, each owned ¡é of the shares of ALS’s stock.
. CME’s unsecured claim is for $48.
.The modification provided Class 7 unsecured creditors with 100% of their allowed claims at 8% interest, payable in quarterly installments over three years. (R.Vol. II Tab 162.) The first amended plаn provided such creditors with 75% of their claims at 6% interest, with the remainder to be paid from the proceeds of a litigation trust.
. In its objection, the United States Trastee sought additional evidence of the joint plan's feasibility as well as additional information regarding the litigation trust, and administrative expense claims.
. Western later withdrew its objection. (See Docket # 189.)
. The court revisited each of these issues in a published opinion issued on October 25, 1995,
nunc pro tunc
to September 14, 1995, and published at
. CME’s First Amended Disclosure Statement and First Amended Liquidating Plan of Reorganization on September 28. (R.Vol. II Tabs 190-91.)
.In an order not made part of the record on appeal, ALS’s motion was set for hearing on December 6, 1995. (See Docket # 185.) The bankruptcy court found CME in contempt, and the matter is on appeal. See supra, n. 1.
. That CME’s plan truly was “more favorable” is disputed. The ALS/ASC Amended Joint Plan provided for 100% payment of claims. CME's plan also provided for 100% payment, but at a faster pace. CME's opinion that its plan was otherwise "more favorable” and "less risky” was speculativе, and several objections to CME's plan had been filed. A number of the objections were deemed valid, and CME was asked to amend its statement to address them. See Order (October 5, 1995) (R.Vol. Ill Tab 204).
. I note that if, as the record suggests, CME sent the claimant classes in this case a letter informing them of the existence of its competing plan during the week following the September 14 hearing, then many, if not all, knew of CME's plan before they cast their votes in favor of ALS's plan. Only CME objected to the ALS/ASC joint plan.
.I reject out of hand CME's contention for the first time on appeal that the confirmation order should be revoked because ALS’s failure to disclose the CME plan was tantamount to fraud.
See
CME Opening Br. at 9-10, Reply at 3 (citing
In re Tenn-Fla Partners,
. The court also found the antitrust claim "problematic” in that it was filed on the morning of the confirmation hearing by ALS’s primary competitor and the proponent of a competing plan. Confirmation Order at ¶ 3. The court realized that if it failed to estimate the claim's value, CME’s motion by its terms might defeat any possibility of confirmation. Id. Yet the nature of the claim, together with the fact that the lawsuit upon which it was based had only recently been filed in federal court, meant estimation would require speculating as to the outcome of a complex antitrust case in which the facts had not even been developed. "It would take an enormous leap of faith and violate notions of simple fairness," the court concluded, "to allow [the antitrust] claim at this time." Confirmation Order at ¶ 3.
.
. In
Bittner,
the Third Circuit compared different methods of estimating the value of pre-petition stоckholder claims pending against the debt- or in a separate state court action. The method the stockholders proposed was for the court to estimate the present value of the probability that they would be successful in their state court action.
.A review of the docket in Nо. 95-D-1185 reveals the parties’ Stipulated Plan and Schedule for Discovery was only approved by Judge Daniel on January 12, 1996.
. The plan proponents' expert, Ed Trehan, testified that 8% interest rate provided under the plan to compensate unsecured Class 7 creditors for the lost time value of their money was reasonable. See Tr. October 11 Hearing (R.Vol. VII) at 263. He rejected the suggestion of CME's counsel on cross-examination that the creditors were entitled to at least the same rate ASC was paying its lender to finance the plan, i.e. prime (8.75%). The unsecured creditors, Trehan pointed out, were not banks. In his opinion, the appropriate rate was one the creditors could have been expected to earn on their own investments over the same period of time. The 8% rate, he concluded, was “at least 2 to 2)6 percentage point higher” than the rate they could have expected investing the money on their own. Id.
.