Search Market Direct, Inc. v. Jubber (In re Paige)

Citation:
Search Market Direct Inc. v. Jubber (In re Paige), D.C. No. 2:07-CV-00822-DB; BAP No. UT-08-062; D.C. No. 2:09-CV-00988-DB (11th Cir., July 16, 2012)
Tag(s):
Ruling:
The Court held: The confirmed Chapter 11 plan was proposed in good faith and was fair and equitable; A proposed competing plan could not have been confirmed because it was not feasible; The automatic stay was violated when the debtor sold an Internet domain name to a creditor after filing for bankruptcy; Turnover of the domain name to the bankruptcy estate was an appropriate remedy for the stay violation; Trustee was disinterested and so should not be deprived of his fees. These rulings AFFIRM the decisions of the courts below.
Procedural context:
Appeal from the United States Bankruptcy Court for the District of Utah, the United States District Court for the District of Utah, and the Bankruptcy Appellate Panel of the 11th Circuit.
Facts:
The debtor owned the domain name "freecreditreport.com". An entity called SMDI purchased the Domain Name from a third party shortly after Paige filed for bankruptcy. The estate’s trustee then instituted an Adversary Proceeding (AP) to recover it. Another party interested in the domain name, ConsumerInfo, agreed to provide funds to repay the estate’s creditors and litigate the AP in exchange for the estate’s promise to give ConsumerInfo the Domain Name if it was recovered. SMDI and ConsumerInfo proposed competing Chapter 11 plans. The bankruptcy court denied confirmation of the plan SMDI proposed (the SMDI Plan), under which the Adversary Proceeding would have been settled and SMDI would have kept the Domain Name. The court instead confirmed a Joint Chapter 11 Plan (the Joint Plan) supported by ConsumerInfo and the Trustee. Under the Joint Plan, the Adversary Proceeding was transferred to a Liquidating Trust which continued to litigate it for the estate and ConsumerInfo. The bankruptcy court resolved the Adversary Proceeding in the Liquidating Trustee’s favor in 2009. The Liquidating Trustee transferred the Domain Name to ConsumerInfo and the Joint Plan was otherwise substantially consummated. Over objections from SMDI, the Trustee and his law firm received compensation for their work on behalf of the estate.
Judge(s):
BRISCOE, Chief Judge, HOLLOWAY and KELLY, Circuit Judges.

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