GL3B Trust II, et al. v. First Citizens Bank & Trust Company, et al. (In re Autterson)
- Summarized by Steven Mulligan , Coan, Payton & Payne, LLC
- 9 years 2 months ago
- Citation:
- GL3B Trust, et al. v. First Citizens Bank & Trust Co., et al. (In re Autterson), Case Nos. CO-14-063, CO-14-064 (BAP 10th Cir. November 6, 2015). Unpublished.
- Tag(s):
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- Ruling:
- Waiver can be express or, if clear and unambiguous conduct is present, implied and debtor’s conduct in ignoring the terms of the loan documents, as both lenders’ representatives and borrow, amounted to waiver of the interest provisions of the loan documents; but, the parties’ course of conduct established that the amounts advanced to debtor by appellants were loans.
- Procedural context:
- Appellants appealed the bankruptcy court’s reduction of their claims against debtor by approximately 26% from a collective amount of about $5.4 million to about $4.0 million. The issue on appeal involved the applicability of (i) waiver which is primarily a factual issue reviewed for clear error, and (ii) parol evidence which is a legal issue reviewed de novo. The BAP affirmed concluding that terms of agreements cannot be enforced or disregarded by parties according at their convenience, especially when doing so places the debtor’s other unsecured creditors at a disadvantage.
- Facts:
- Debtor sold a trust company at a significant profit and undertook tax and estate planning efforts which included the formation of the appellant etities. The entities were controlled by debtor but always maintained separate legal identities since their inception, had satisfied the standards for treatment as such and debtor’s dealings with these entities have always been carefully and appropriately documented, and money transfers from the entities to debtor had always been treated as loans. There were two loans at issue in this matter and in each instance, no interest, either non-default or default, was ever charged. Debtor listed his obligations under loans in his schedules and included interest or default interest thus increasing the amount owed although at the time of filing bankruptcy, debtor was unaware that the loans were in default.
- Judge(s):
- Cornish, Nugent, Somers (Somers)
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