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In re Zachary Allen ; Tiara Donegan

Summarizing by Lars Fuller

Mark Technologies Corp. v. Frazer (In re Mark Technologies Corp.)

Case Type:
Case Status:
BAP No. CC-16-1435-KUFL (9th Circuit, Feb 01,2018) Not Published
BAP for 9th Circuit issued single ruling on four separate appeals. BAP dismissed appeals as moot, and in alternative, affirmed on the merits. After bankruptcy court (C.D. Cal.) approved settlement and sale pursuant to 11 USC 363(m), appellants appealed orders. Appellants failed to post a bond to stay bankruptcy court order. BAP concluded that failure to post bond mooted appeals under 363(m) and equitable grounds.
Procedural context:
Bankruptcy court (C.D. Cal.) granted motions to approve settlement and for sale of assets. Four objecting creditors appealed separately to the BAP for 9th Circuit.
Debtor MTC owned real property developed with windfarm projects (Projects). MTC entered into lease and series of agreements with EDF under which EDF maintained and operated the projects. A dispute arose over the early termination of the lease resulting in a $20M judgment against MTC in favor of EDF. MTC filed chapter 11 to stay EDF's collection efforts. The case converted to chapter 7. The real property was encumbered by three involuntary liens held by Inv, ECM, and EDF (Lien Creditors) totaling $22M. MTC disputed the three liens, which exceeded the value of the real property. Trustee moved to sell the real property in conjunction with settlement agreement with Lien Creditors whereby they agreed to reduce their liens, release claims against the estate, and allow certain sale proceeds to go to estate. Affiliates of MTC (TR & AMF) objected to the settlement agreement and asset sale, disputing ownership of certain assets being transferred, and disputing that sale complied with 11 USC 363. After several amendments to the settlement agreement and two hearings, the bankruptcy court approved the settlement agreement and asset sale.
Kurtz, Faris, Lafferty

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