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The Security National Bank of Sioux City, IA v. Vera T. Welte Testamentary Trust

Summarizing by Amir Shachmurove

Spencer ad hoc Equity Committee v. Idearc, Inc. (In re Idearc, Inc.)

Citation:
Case No. 10-10858 (5th Cir. October 17, 2011)
Tag(s):
Ruling:
The Debtors' chapter 11 plan was substantially consummated. Accordingly, the Court of Appeals affirmed the District Court's denial of appeal of confirmation order on grounds of equitable mootness.
Procedural context:
The Bankruptcy Court entered an order confirming the Debtors' chapter 11 plan. An Ad hoc committee appealed the confirmation order to the District Court. The District court dismissed the appeal of the confirmation order on the grounds of equitable mootness. The Ad hoc committee appealed the District Court's order dismissing the appeal on equitable mootness grounds to the Court of Appeals for the Fifth Circuit. The Court of Appeals affirmed the District Court's ruling.
Facts:
The Debtors Idearc, Inc. and its affiliates (the "Debtors") obtained confirmation of their chapter 11 plan over the objection of The Spencer ad hoc Equity Committee (the "Spencer Committee"). The Spencer Committee alleged prior fraud had occurred and that claims existed against third parties. The Spencer Committee appealed the Bankruptcy Court's order confirming the Debtors' chapter 11 plan. The Spencer Committee further moved for a stay of the bankruptcy proceedings during the pendency of their appeal. The Bankruptcy Court, however, denied the Spencer Committee's motion for a stay pending appeal. Consequently, the Debtors proceeded forward with their confirmed chapter 11 plan. The plan was substantially consummated because property was transferred under the plan, distributions were materially advanced under the plan, and the relief requested by the Spencer Committee did not outweigh the disturbance that would occur to the success of the Debtors' reorganization and to third parties.
Judge(s):
Smith, Southwick and Graves, Per Curiam

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