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Summarizing by Amir Shachmurove

EVOQ Properties, Inc. v. Maddux (In re Meruelo Maddux Properties, Inc.)

No. CC-12-1479-TaPaKi (9th Cir. B.A.P., April 15, 2013).
Affirms ruling of the bankruptcy court on all three issues.
Procedural context:
Appellant (the “Reorganized Debtor”) appeals the bankruptcy court’s order allowing Appellee (“Maddux”), a former officer and director of the debtor, to pursue enforcement of the advancement provisions of a prepetition indemnity agreement in a non-bankruptcy forum.
During the course of the bankruptcy proceedings, Maddux filed three proofs of claims (the “Proofs of Claims”), each based on agreements for contribution, indemnity (the “Indemnity Agreement”), and subrogation. At some point after confirmation of the debtor’s plan of reorganization, Maddux was removed as an officer and director of the Reorganized Debtor. The plan provided, among other things, for retention of claims against insiders of the debtor relating to both pre-confirmation and pre-petition conduct. The Reorganized Debtor later filed a motion seeking disallowance of the Proofs of Claims based on the contribution agreement and the Indemnity Agreement (the “Disallowance Motion”). Maddux responded with a notice of qualified non-objection, reserving his right to seek reconsideration for cause, under Section 502(j), in the event that the Reorganized Debtor would seek to assert claims against him that would trigger Maddux’s rights to indemnity or contribution. The bankruptcy court granted the Disallowance Motion without prejudice to Maddux’s right to seek reconsideration for cause (the “Disallowance Order”). On the day on which the Disallowance Order was entered, the Reorganized Debtor sued Maddux in state court. Maddux then flied a motion for reconsideration with the bankruptcy court, “simply asking the Court to reconsider its order disallowing those Claims.” The Reorganized Debtor opposed the motion, largely on the grounds that Maddux’s claim for indemnity was contingent.
Taylor, Pappas, and Kirscher.

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