GL3B Trust II, et al. v. First Citizens Bank & Trust Company, et al. (In re Autterson)
- Summarized by Lars Fuller , BakerHostetler
- 9 years 2 months ago
- Citation:
- GL3B Trust II, et al. v. First Citizens Bank & Trust Company, et al. (In re Autterson), BAP No.CO-14-063 & BAP No.CO-14-064 (BAP 10th Cir. Nov. 6, 2015)
- Tag(s):
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- Ruling:
- The BAP for the 10th Circuit affirmed the ruling of the bankruptcy court (D. Colo.) granting in part a creditors' objection and reducing the allowed amount of two claims scheduled as undisputed by the debtor where the debtor was affiliated and controlled the creditors holding the contested claims. The BAP agreed with the bankruptcy court that the debtor and the affiliated creditors intentionally waived the express written interest provisions of the promissory notes at issue. The BAP agreed that the bankruptcy court properly disallowed interest on the claims where the debtor and the creditors never sought to include interest on the promissory notes prior to bankruptcy. The BAP also rejected appellants' argument that the bankruptcy court incorrectly applied parol evidence in considering evidence of the parties' intent, or in considering the parties' conduct subsequent to execution of the loan agreement to determine the parties' intent.
- Procedural context:
- Creditor objected to claims scheduled as undisputed by chapter 11 debtor. Bankruptcy court granted objection in part, reducing claim. Creditors whose claims were reduced appealed to the BAP for the 10th Circuit.
- Facts:
- Creditor objected to claims of two creditors who were affiliated with debtor. Debtor scheduled claims as undisputed. Claims at issue arose when debtor organized two entities to hold assets for estate and tax planning. Debtor controlled the entities, but entities followed careful distinctions to preserve separate identities. Debtor borrowed from each entity with properly documented loan agreements. The loan agreements included provisions for interest on the loans, plus default interest. Debtor defaulted on the loans pre-bankruptcy, but the entities made no collection efforts, or otherwise sought to claim default interest. Debtor scheduled the debts to include the maximum amount of pre-default and post-default interest.
- Judge(s):
- Cornish, Nugent, Somers
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