839 F.2d 1383 (10th Cir. 1987), 85-2783, Sheftelman v. Standard Metals Corp.

Docket Nº85-2783.
Citation839 F.2d 1383
Party Name, 18 Collier Bankr.Cas.2d 18, Dann S. SHEFTELMAN, individually, and on behalf of all others similarly situated, Creditor-Appellant, v. STANDARD METALS CORPORATION, Debtor-Appellee.
Case DateDecember 29, 1987
CourtUnited States Courts of Appeals, Court of Appeals for the Tenth Circuit

Page 1383

839 F.2d 1383 (10th Cir. 1987)

, 18 Collier Bankr.Cas.2d 18,

Dann S. SHEFTELMAN, individually, and on behalf of all

others similarly situated, Creditor-Appellant,

v.

STANDARD METALS CORPORATION, Debtor-Appellee.

No. 85-2783.

United States Court of Appeals, Tenth Circuit

December 29, 1987

Page 1384

Nicholas E. Chimicles of Greenfield & Chimicles, Haverford, Pa. (R. Bruce McNew of Greenfield & Chimicles, Haverford, Pa., Robert H. Levin of Adelman, Lavine, Krasny, Gold & Levin, Philadelphia, Pa., Michael E. Romero and Robert L. Connelly of Isaacson, Rosenbaum, Woods, Snow & Levy, Denver, Colo., with him on the briefs), for creditor-appellant.

Glen E. Keller, Jr. of Davis, Graham & Stubbs, Denver, Colo. (Christopher L. Richardson and C. Randel Lewis of Davis, Graham & Stubbs, Denver, Colo., with him on the brief), for debtor-appellee.

Brent T. Johnson of Fairfield and Woods, Denver, Colo. (Stephen W. Seifert of Fairfield and Woods, Denver, Colo., with him on the brief), for appellee Creditors' Committee.

Richard A. Kirby, Asst. General Counsel, S.E.C., Washington, D.C. (Daniel L. Goelzer, General Counsel, Jacob H. Stillman, Associate General Counsel, Paul Gonson, Solicitor, Leslie E. Smith and Martha H. McNeely, Attys., S.E.C., Washington, D.C., with him on the briefs), for S.E.C.

Before TACHA, SETH and BARRETT, Circuit Judges.

OPINION ON REHEARING

PER CURIAM.

This is an appeal from the denial of claims filed in the Chapter 11 proceedings of Standard Metals Corporation in Colorado, taken by Mr. Sheftelman as a creditor on his own behalf and for a class of creditors. The Securities and Exchange Commission (SEC) appeared in the trial courts and does so here pursuant to 11 U.S.C. Sec. 1109(a).

Mr. Sheftelman filed a Proof of Claim on August 30, 1984 on his own behalf and on behalf of other bondholders (as a class) in the Standard Metals Chapter 11 proceedings as purchasers of Industrial Revenue Series 1983 bonds issued on behalf of a subsidiary of Standard (National Smelting of New Jersey). This was a bond issue which apparently raised about 6.6 million dollars. The claims asserted that Standard Metals and the subsidiary conspired to fraudulently divert a portion of the proceeds to Standard's own use rather than for the intended and announced purpose of the issue. The claims were filed before any plan of reorganization had been filed in the Chapter 11 proceedings. Mr. Sheftelman had not received, nor had other bondholders, actual or constructive notice of the bar date. The bondholders were not listed as creditors.

Mr. Sheftelman had filed a civil class action suit in the federal court in New Jersey on behalf of the same bondholders about three weeks before the claims were filed in the Chapter 11 proceedings. Standard Metals was not a party to the class action suit in New Jersey.

Schedules had been filed in the Colorado Chapter 11 proceedings but none of the bondholders here concerned were scheduled. A bar date was fixed as June 10, 1984. The claims in issue were filed August 30--several months after the bar date. A hearing was set for February 5, 1985 for a consideration of the claims. Mr. Sheftelman was to then appear, had been ordered to do so, but did not do so. He filed motions to require that notice be given to the bondholders of the 1983 series of a bar date; that the bar...

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