Bank of New York Trust Co. NA v. Pacific Lumber Co. (In re Scopac)

Summarized by Leslie Hyman , Pulman, Cappuccio, Pullen & Benson
15 years 4 months ago

Citation:

(5th Circuit, Dec 31,1969)

Tag(s):

5th Circuit

Ruling:

The Fifth Circuit held that (1) the district court erred in dismissing for lack of jurisdiction an appeal of the bankruptcy court's order denying note-holders' superpriority claim despite the existence of a related appeal of a plan confirmation order; (2) the appeal was not rendered equitably moot by substantial confirmation of the plan; and (3) the bankruptcy court erred in its calculation of the value of the note-holders' superpriority claim.

Procedural context:

Appeal from district court order dismissing appeal as moot and from order of the bankruptcy court denying a superpriority claim under § 507(b).

Facts:

Appellants were holders of notes secured by timber and non-timber assets. After the petition date, the bankruptcy approved the debtor's use of creditors' assets to preserve the value of the estate. The lienholders were given a superpriorty claim to the extent of post-petition diminution of their interests. A plan was proposed. Hearings on plan confirmation centered on the value of the timber assets at plan confirmation. The bankruptcy court determined that the value was $510 million, which was less than the noteholders' claim. The noteholders sought a superpriority claim. In separate orders, the bankruptcy court confirmed the plan and denied the superpriorty claim. The noteholders separately appealed the two orders. The district court affirmed the confirmation order and dismissed the superpriority claim appeal for lack of jurisdiction due to the pendency of the confirmation order appeal.

Judge(s):

Jones, Prado, Ozerden

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