Now Updating
George Czaplinski v. Bank of America

Summarizing by Lars Fuller

Kip Richards v. Rabo AgriFinance, LLC

Case Type:
Case Status:
19-6039 (8th Circuit, May 04,2020) Published
The Bankruptcy Appellate Panel affirmed the bankruptcy court's application of Nebraska's equitable estoppel rule to determine that the members of the chapter 11 debtor could not claim personal ownership of certain equipment and machinery that had been included in, among other things, the debtor's chapter 11 schedules. monthly operating reports and post-petition income tax return depreciation schedule. The evidence of the debtor's ownership of the machinery and equipment was sufficient to show that the bankruptcy court did not err in denying the appellants' Rule 59 motion.
Procedural context:
The LLC debtor violated an order of the bankruptcy court to deliver certain equipment and machinery to an auction company for sale pursuant to the debtor's confirmed chapter 11 plan and an order of the bankruptcy court. The secured creditor requested that the court enter an order holding the members of the debtor in civil contempt. The court entered the order, and the members asked the court amend the order under Fed. R. Bankr. P. 9023 and Fed. R. Civ. P. 59. The bankruptcy court refused, and the individuals appealed.
The appellants, Kip L. Richards and Andrea Richards, were members of the debtor, the Kip and Andrea Richards Family Farm & Ranch, LLC (the "Company"). The Company filed a chapter 11 petition in January 2015. Kip Richards signed the Company's schedules and statement of financial affairs as the Company's managing member. Andrea Richard prepared the Company's monthly chapter 11 reports. Each monthly report included the equipment at issue in the appeal. Each monthly report was reviewed by Kip. Kip never told Andrea to remove the equipment from one of the Company's chapter 11 monthly reports. Further, the Company's post-petition income tax returns, which Kip signed, stated that the Company owned much of the equipment and machinery at issue. In contrast, the depreciation on Kip and Andrea's 2016 personal income tax return was not for any of the subject equipment or machinery. During the bankruptcy, the Company did not abandon any of the subject machinery or equipment. The confirmed chapter 11 plan called for liquidation of substantially all of the Company's assets, including the subject machinery and equipment, in cooperation with the secured lender, Rabo AgroFinance, LLC, with proceeds being paid to Rabo. Disputes continued following plan confirmation, and the Company violated an order of the bankruptcy court to deliver the equipment and machinery to an auction company. Rabo filed motions for civil contempt and sanctions and for a writ of execution. The bankruptcy court granted both motions. The Richards moved to amend the civil contempt order, and Rabo objected. The bankruptcy court held two hearings on the motion to amend. At the second hearing, at which the Richards argued that they personally owned certain machinery and equipment, the bankruptcy court ruled that the Richards were equitably estopped under Nebraska law from asserting ownership to most of the equipment and denied their Rule 59 motion.

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!

About us in numbers

3144 in the system

3025 Summarized

1 Being Processed