- Case Type:
- Case Status:
- United States Bankruptcy Appellate Panel Case No. WY-19-037 (10th Circuit, Oct 15,2020) Not Published
- The BAP affirmed the bankruptcy court award of postpetition interest, attorneys’ fees, and costs to the Bank. The BAP specified that the bankruptcy court's prior order which overruled the Debtor’s claim objection was a final order, and the Debtor did not appeal that order. Therefore, the BAP precluded the Debtor from challenging the note enforceability in the instant appeal.
- Procedural context:
- Twiford Enterprises, Inc. (Debtor) filed Chapter 11 bankruptcy in Wyoming. Rolling Hills Bank and Trust (Bank), the largest secured creditor, filed its proof of claim on the five loans asserting a debt of over $5 million. The Debtor objected to the 18% default interest rate and other procedural issues. The bankruptcy court held an evidentiary hearing on the matter and overruled the Debtor’s objection. The Debtor did not appeal the order overruling the Debtor’s objection. Subsequently the Bank filed a request for postpetition interest, attorneys’ fees, and costs under 11 U.S.C. § 506(b) arguing the Bank stood as an oversecured creditor with an equity cushion of at least $2 million. The Debtor objected arguing that the interest rates were not ascertainable. Therefore, the Debtor argued those contract provisions were invalid resulting in no contract authorizing interest and attorneys' fees. The Debtor additionally objected to the reasonableness of the request for attorneys’ fees asserting multiple theories. The bankruptcy court found a valid contract between the Debtor and the Bank that authorized interest and attorneys’ fees, because the interest rates could be identified by the Bank’s Index, which the loan documents referenced. The bankruptcy court granted the Bank’s request in part when it awarded postpetition interest and most of the requested attorneys’ fees and costs. The bankruptcy court did reduce the amount of requested attorneys’ fees finding some merit that the Bank engaged in “overzealous representation.” The Debtor timely appealed.
- The Debtor owns and operates a cattle ranch in Wyoming maintaining a herd of approximately 1,400 cattle on over 2,500 acres. The Debtor is controlled by family members who have lived on the ranchland for over 100 years. The Debtor received financing from the Bank through a series of five loans secured by real and personal property, including the herd. Three of the loans contained promissory notes that included variable interest rates, and the Bank tied these rates to its internal Index. The Bank loaned over $5 million to the Debtor. The value of the real property stood at $4,650,000, and the value of the personal property stood at $3,131,243, for a total of $7,791,243. The Debtor and the Bank disagreed on the status of the loans, the calculation of the variable interest rates, and the maturity dates. The inability to come to a resolution resulted in the Debtor filing bankruptcy in 2018.
- The Hons. Somers, Jacobvitz, and Loyd
Glencove Holdings, LLC v. Steven Bloom
Summarizing by Amir Shachmurove
3337 in the system
3 Being Processed