Sears v. Sears (In re AFY, Inc.)
- Citation:
- Case No. 11-6042 (8th Cir., Jan. 23, 2012)
- Tag(s):
-
- Ruling:
- In affirming the order from Chief Bankruptcy Judge Thomas L. Saldino for the District of Nebraska ruling in favor of various Sear's family members ("Appellees") and in denying Robert and Korley Sears ("Appellants") appeal, the Eighth Circuit 1) overruled Appellants objections to claims involving Appellees interests in a stock sale agreement (the “Agreement”) whereby Appellees sold their interest in the AFY, Inc., (the "Debtor") back to the Debtor and Korley, 2) overruled Appellants claim for a stock redemption, and 3) overruled Appellants request for additional discovery time and preparation for a full evidentiary hearing.
- Procedural context:
- Eighth Circuit affirmed the bankruptcy court judgment in its entirety upon direct appeal from the bankruptcy court.
- Facts:
- In June of 2007, the Appellees executed the Agreement whereby they sold their interests in the Debtor corporation, also owned by Appellants, back to the Debtor and Korley Sears, the Vice President of the Debtor. In February of 2010, Appellants individually filed for relief under Chapter 11 of the Bankruptcy Code and a month later, the Debtor filed for Chapter 11 relief as well. The Appellants submit that they are the only shareholders of the Debtor. The Appellees contend that they have a security interest in Korley's shares in the Debtor pursuant to certain minutes from a shareholder meeting, a promissory note signed by Korley, and the plain textual meaning of the Agreement. Appellants assert they are not liable to the Debtor under the Agreement. The Eighth Circuit found that the four corners of the Agreement unambiguously provide that the Debtor is liable, therefore allowing the Appellees to file their claims seeking an interest in the Debtors estate. Lastly, the Appellants seek more time to bring in outside evidence, including postponing an evidentiary hearing in order to conduct further discovery and cross examine witnesses. The bankruptcy court denied such request providing that by the date of the hearing, over a year had already passed since the Appellees filed their claims.
- Judge(s):
- Schermer, Kressel, Venters, Circuit Judges.
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