In re Roger Mason Ralph

Summarized by Thomas DeCarlo , John Steinberger & Associates, PC
12 years 6 months ago

Citation:

Case No. 13-8006 (6th Cir. BAP 2013)

Tag(s):

Ruling:

Although Rule 9024 governing reconsideration of claims is an exception to the one-year limit under Rule 60(c) for reconsideration of orders in general, Debtor's motion to reconsider claim filed more than one year after entry of the order allowing claim was time barred where order resolving claim not only allowed claim but also dealt with numerous other issues necessary to global settlement between multiple parties.

Procedural context:

Debtor, mulitple creditors, and other parties entered into a consent agreement that fixed the amount of one Creditor's secured claim and resolved issues regarding title to property and allowing sale of property. Three years later, Debtor filed an Emergency Motion to set aside that portion of the Consent Order that determined the amount of the Creditor's claim. Debtors' Motion was denied by the Bankruptcy Court and Debtors appealed.

Facts:

Creditor held an allegedly secured claim against assets of the Debtor and others. Debtor, Creditor and the third parties (at least one of whom was also a debtor in bankruptcy) entered into a compromise and settlement that liquidated the Creditor's claim; cleared title to certain property that may have been encumbered by Creditor; Creditor waived right to object to sale of real property and to receive pre- and post-petition interest on claims; Creditor waived right to retain liens on properties owned by debtor and by multiple other parties other than three specific farms; Creditor waived certain repayment rights; and Creditor and third party agreed that creditor's claim would not be subordinated to that of third party. Three years later, Debtor performed an audit and determined that the amount of the agreed secured claim exceeded what was actually owed and sought to reconsider the claim under Section 502(j) and Rule 9024. Bankruptcy Court concluded that complexity of settlement removed Order from scope of Rule 9024 and brought it within the one year limitation of Rule 60(c). Court also concluded that relief would be inequitable as Debtor sought to set aside only that portion of the Order that liquidated the secured claim while leaving the rest of the Order unaffected, although compromise of amount of claim was integral element of overall Order, and Order was essential to Debtor's ability to reorganize. The BAP affirmed without explanation other than to state, "[T]he Panel concludes that the bankruptcy court did not err in determining that the debtor-appellant's motion fell outside the exception in Rule 9024 for the reconsideration of claims and was therefore untimely under Rule 60(c). Accordingly, we affirm for the reasons stated in the bankrutpcy court's order entered on November 26, 2012."

Judge(s):

Harris, Humphrey and Preston

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