Francois Freres USA, Inc. v. Weiss (In re Walldesign, Inc.)

Case Type:
Case Status:
BAP No, CC-17-1290-KuFS (9th Circuit, Aug 02,2018) Not Published
An avoidance defendant-creditor cannot rely on Rule 60 for reconsideration, instead of a timely appeal, of an order disallowing the party's proof of claim, especially where the arguments asserted in the motion for reconsideration are identical to the arguments previously rejected by the bankruptcy court.
Procedural context:
The defendant appealed an order of the bankruptcy court denying the defendant-appellant's motion that the court reconsider its order disallowing the defendant-appellant's proof of claim.
The sole shareholder of the debtor used the debtor's funds to pay a barrel supplier $5,928.66 (let that sink in) for barrels that were to be used at the shareholder's family winery. The liquidation trustee sued the defendant to recover the money as a fraudulent transfer. The defendant paid this amount in satisfaction of the fraudulent transfer claim. The barrel supplier then filed a proof of claim for this amount. The bankruptcy court disallowed the proof of claim. After the appeal period expired, the barrel supplier filed a Rule 60(b) motion for reconsideration, which the bankruptcy court denied. The barrel supplier appealed the denial of the motion for reconsideration, having undoubtedly spent multiples of the amount paid in satisfaction of the original fraudulent transfer claim.

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