Monahan-Pacific Construction v. Committee of Unsecured Creditors (In re MC2 Capital Partners, LLC)

Summarized by Thomas Phinney , Felderstein Fitzgerald Willoughby Pascuzzi & Rios LLP
11 years 6 days ago

Citation:

9th Cir. BAP No. NC-14-1190-PaJuTa (February 25, 2015) (Not for Publication)

Tag(s):

Ruling:

The BAP affirmed a bankruptcy court order that declined to amend its findings relating to the "manipulation of the books and records" by an insider creditor of the Debtor, which finding was made in support of the bankruptcy court's order sustaining an objection to the claim of the creditor. The creditor sought to remove the "manipulation" finding to avoid possible preclusive effect in unspecified future proceedings.

Procedural context:

The bankruptcy court sustained an objection to claim brought by the Committee of Unsecured Creditors against an insider creditor. The creditor made a motion to amend the findings under FRCP 59(e) as made applicable by FRBP 9023. The bankruptcy court denied the motion to amend, and the creditor appealed to the BAP. The BAP affirmed the order of the bankrupty court.

Facts:

Creditor was the general contractor for the debtor on a large contract. Both the debtor and the creditor were controlled by the same individual. Creditor's sole argument in its motion to amend was that the bankruptcy court erred in finding that the insider individual had manipulated the books and records of the creditor and the debtor "because it may have negative preclusive effects." Creditor did not argue that there was any newly discovered evidence, that the bankruptcy court committed clear error, or that there was an intervening change in controlling law. Rather, Creditor targeted the bankruptcy court’s alleged improper finding as a manifest error of fact or law, because that finding might be interpreted as a fraud finding in subsequent proceedings.

Judge(s):

PAPPAS, JURY, and TAYLOR, Bankruptcy Judges

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