710 F.3d 299 (5th Cir. 2013), 11-51057, In re Spillman Development Group, Ltd.

Docket Nº:11-51057.
Citation:710 F.3d 299
Opinion Judge:EDITH BROWN CLEMENT, Circuit Judge.
Party Name:In the Matter of SPILLMAN DEVELOPMENT GROUP, LIMITED; Debtor. v. Richard L. Bischoff; Spillman Investment Group, Limited; Donald C. Walden; Stephen W. Gurasich, Jr.; Robert H. West; Richard Topfer; Alan Topfer; Morton L. Topfer, Appellees. Fire Eagle L.L.C., Appellant
Attorney:Richard William Martinez, New Orleans, LA, for Appellant. Earl Landers Vickery, C. Daniel Roberts, C. Daniel Roberts & Associates, P.C., Mark Lee Hawkins, Armbrust & Brown, L.L.P., Austin, TX, for Appellees.
Judge Panel:Before REAVLEY, DENNIS, and CLEMENT, Circuit Judges.
Case Date:February 28, 2013
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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710 F.3d 299 (5th Cir. 2013)

In the Matter of SPILLMAN DEVELOPMENT GROUP, LIMITED; Debtor.

Fire Eagle L.L.C., Appellant

v.

Richard L. Bischoff; Spillman Investment Group, Limited; Donald C. Walden; Stephen W. Gurasich, Jr.; Robert H. West; Richard Topfer; Alan Topfer; Morton L. Topfer, Appellees.

No. 11-51057.

United States Court of Appeals, Fifth Circuit

February 28, 2013

Page 300

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Richard William Martinez, New Orleans, LA, for Appellant.

Earl Landers Vickery, C. Daniel Roberts, C. Daniel Roberts & Associates, P.C., Mark Lee Hawkins, Armbrust & Brown, L.L.P., Austin, TX, for Appellees.

Appeal from the United States District Court for the Western District of Texas.

Before REAVLEY, DENNIS, and CLEMENT, Circuit Judges.

EDITH BROWN CLEMENT, Circuit Judge.

Fire Eagle L.L.C. (" Fire Eagle" ) appeals the district court's decision affirming a bankruptcy court's grants of summary judgment in two consolidated matters. We AFFIRM.

FACTS AND PROCEEDINGS

Beginning in November 2001, Spillman Development Group, Ltd. (" SDG" ) took out a series of loans to finance its construction of the Falconhead Golf Course in Bee Cave, Texas. American Bank of Texas (" the Bank" ) loaned SDG an initial $7.2 million and later a further $900,000. Both

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of these loans (together, " the Senior Indebtedness" ) were secured by liens on SDG's assets and limited guarantees executed by SDG principals. Each of these limited guarantees contained a forum-selection clause requiring that any suit brought by the guarantors be brought in Grayson County, Texas, which is located within the Eastern District of Texas. As further collateral for the Senior Indebtedness, the Spillman Investment Group, Ltd. (" SIG" ) assigned its rights in a $1.2 million certificate of deposit to the Bank under the condition that the Bank would return the certificate to SIG upon payment of the Senior Indebtedness. In addition to the Senior Indebtedness, SDG also borrowed $4.1 million from Fire Eagle Neither the guarantees nor the certificate of deposit secured this junior debt owed to Fire Eagle.

On August 1, 2005, SDG filed for bankruptcy in the Western District of Texas, its principal creditors being the Bank and Fire Eagle. After disagreements between these two creditors over competing proposed Chapter 11 reorganization plans, Fire Eagle purchased the Senior Indebtedness from the Bank. At the time of this acquisition, Fire Eagle and the Bank stipulated that the outstanding balance owed on the Senior Indebtedness was approximately $9.1 million. Despite this consolidation amongst the creditors, the bankruptcy court refused to confirm either the reorganization plan proposed by Fire Eagle or that proposed by SDG and instead ordered an 11 U.S.C. § 363(b) sale of SDG's assets, which included the principal assets securing the Senior Indebtedness. The bidding on these assets progressed until an entity called Falcon Golf Course Partners, L.P. submitted a cash bid of $9.2 million. At this point, Fire Eagle entered a credit bid, pursuant to 11 U.S.C. § 363(k), of $9.3 million. The bankruptcy court accepted Fire Eagle's bid and later held, on SDG's motion, that Fire Eagle's credit bid had paid in full the Senior Indebtedness and that Fire Eagle had no deficiency claim against SDG's estate for the Senior Indebtedness.

SIG and all of the individual guarantors except for one (" the Guarantors" ) then filed an adversary action in bankruptcy court in the Western District of Texas (" the Guarantors' Adversary" ), seeking a declaratory judgment that, as a result of the sale, the Guarantors should be released from their obligations under the guaranty agreements and that the certificate of deposit should be returned to SIG. Fire Eagle moved to dismiss the suit on a number of grounds, including that the bankruptcy court lacked subject-matter jurisdiction and that venue was improper because of the forum-selection clauses contained within the guarantees. Fire Eagle also filed its own action against the remaining guarantor, Richard Bischoff, in district court in the Eastern District of Louisiana (" the Bischoff Adversary" ). Fire Eagle contended in both suits that its credit bid had not paid in full the Senior Indebtedness and that it could therefore still collect against the guarantees.

The bankruptcy court in the Western District of Texas resolved the Guarantors' Adversary by denying Fire Eagle's motion to dismiss and granting summary judgment to the Guarantors, holding that, " This is not rocket science. The Senior Loan has been PAID!!!!" Fire Eagle moved the court to reconsider, and Bischoff moved to intervene. The bankruptcy court denied Fire Eagle's motion to reconsider and granted Bischoff's motion to intervene.

Shortly thereafter, in the Bischoff Adversary, the district court in the Eastern District of Louisiana granted Bischoff's motion to transfer venue to the Western

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District of Texas for referral of the case to the bankruptcy court there, noting that Bischoff had become a party to the near-resolved Guarantors' Adversary. The bankruptcy court then consolidated the Bischoff Adversary and the Guarantors' Adversary and granted Bischoff summary judgment. On SIG's motion, it also ordered the release of the certificate of deposit. After the bankruptcy court...

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