In re Doty
| Decision Date | 09 February 1991 |
| Docket Number | Bankruptcy No. 86-62139. |
| Citation | 129 BR 571 |
| Parties | In re Melvin Arthur DOTY and Walter Eugene Doty aka Doty Bros., an Ind. Gen. Partner, Debtors. |
| Court | U.S. Bankruptcy Court — Northern District of Indiana |
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Edward Ummel, Plymouth, Ind., for the debtor.
Edward Chosnek, Lafayette, Ind., for the creditor, Farm Credit Services, Inc.
This Chapter 11 case comes before the Court on Motion filed on August 15, 1990 by Farm Credit Services of Mid-America, ACA (hereinafter: "FCS") for Interpretation of Confirmed Plan and for Determination of Payments due Unsecured Creditors for Crop Year 1989 pursuant to Amended Plan and Disclosure Statement filed by the Debtors on August 19, 1988, which was modified by an agreed immaterial modification filed on December 27, 1988, and which was confirmed by Order of Court dated December 30, 1988 (hereinafter: "Motion").
The Motion of FCS asserts that it is the holder of a secured claim in the sum of $332,500.00, and is also the holder of an unsecured claim in the sum of $81,057.67.
The Motion of the FCS further asserts that Clause 6.9 of Amended Plan provides as follows to the treatment of unsecured creditors:
6.9 Class 9 claims, all other unsecured creditors, along with deficiencies of the unsecured creditors, shall be approximately One Hundred Fifty Thousand Sixty-five Dollars and Thirty-two Cents ($150,065.32), as follows:
Exhibits "C" and "D" are not attached to the original copy of the Amended Plan which is attached as Exhibit "E" to the Amended Disclosure Statement filed August 19, 1988. However, Exhibits "C" and "D" are attached to the Amended Disclosure Statement.
The Motion of FCS further asserts that the Court by Order entered on November 2, 1988 approved the Debtors' Amended Disclosure Statement filed on August 19, 1988, which provides in its relevant part as follows at Clause 6, Summary of Plan:
Finally, all other unsecured claims, along with deficiencies of the secured creditors, shall be approximately One Hundred Fifty Thousand sixty-five Dollars and Thirty-two Cents ($150,065.32), as follows:
Exhibit "C" to the Amended Disclosure Statement sets out a projected 1988 cash flow statement for the Debtors, which in a condensed form stated as follows:
Beginning Balance 8/15/88 $ 12,893.28
Anticipated Income 8/15/88-12/31/88 $116,558.00
Less
Anticipated Exp. 8/15/88-12/31/88 $ 27,844.00
Less
Cash Reserve for planting 1989 Crops $ 21,000.00
Net Profits Available for Distribution $ 80,607.28
Less
Estimated Administrative Claims and
Annual payments to secured creditors $ 61,000.00
Total available for distribution to
Unsecured Creditors $ 19,607.28
Unsecured Distribution percentage
percentage — 1988 13%
Exhibit "D" to the Amended disclosure Statement sets out a projected 1989-1992 cash flow statement for the Debtors, which in a condensed form stated as follows:
Beginning Balance January 1
(Cash reserve from previous year) $ 21,000.00
Income $157,300.00
Less
Expenses and Cash reserve for following
year's crop $ 86,400.00
Net Profits
Available for Distribution $ 91,900.00
Less
Administrative Claims and Secured
Claims $ 55,141.24
Total Distribution to Unsecured Creditors $ 36,758.76
Unsecured Distribution Percentage 24.5%
Total Percentage over 5 year plan 111%
(Emphasis supplied)
This Amended Disclosure Statement was approved by the Court without objection on November 2, 1988.
The Motion of FCS further asserts that the Amended Disclosure Statement and Amended Plan contemplates that "full payments" be distributed to unsecured creditors, that a demand was made by FCS on the Debtors for an $8,500.00 payment due February 10, 1989, and for a $16,211.57 payment due February 10, 1990, and that the Debtors contend that the Amended Plan provides only for a pro rata distribution of net profits of Debtors, and there were no net profits for 1988 and 1989.
As a consequence, FCS requests that the Court enter an order interpreting and clarifying the Debtors' confirmed plan regarding its intended treatment of unsecured claims. In addition, FCS requests that if the Debtors are only obligated to pay a dividend only out of the net profits on unsecured claims, that a disclosure of the Debtors financial affairs, properly adjusted, will show that the Debtors did in fact have net profits for the year 1989, and should be required to pay the same to unsecured creditors.
Pursuant to status conference held on October 17, 1990, the Debtors were ordered to file a response thereto.
On October 22, 1990, the Debtors filed their Response to the Motion of the FCS.
The response asserts that the Order Confirming the Amended Plan on December 30, 1988 is clear and unambiguous, in that paragraph three (3) thereof specifically provides as follows:
That the revised amount of claims due to the unsecured creditors as set forth above are hereby approved, with said unsecured creditors to receive annually for five (5) years all of the net profits (after priority claims, secured claims, operating expenses and living expenses) to be divided pro rata among the creditors pursuant to the above claim amounts. (Emphasis supplied).
The Debtors assert that FCS is now attempting to revoke the Order Confirming the Amended Plan by alleging that the Amended Plan provides for a guaranteed minimum payment based on the anticipated cash flow charts attached to the Amended Plan as Exhibits "C" and "D", and that any ambiguity that FCS may attempt to attribute to the Amended Plan was resolved by the above provision in the Order.
The Debtors further assert that the Order Confirming the Plan was distributed to all creditors on January 3, 1989, and Bankr.R. 9024 provides that a complaint to revoke an order confirming a plan must be filed within the time allowed by 11 U.S.C. § 1144 which provides that a request to revoke an order of confirmation must be made before 180 days after the entry of the order confirming the plan, and the order can only be revoked if such order was procured by fraud. Thus, according to the Debtors the Order Confirming the Amended Plan is res judicata on the issue, and cannot be revoked.
The Court takes judicial notice of the fact that on April 17, 1989, or after the Order confirming the Debtors' Plan was entered on December 30, 1988, the Court ordered the Debtors to file a post-confirmation report pursuant to Bankr.R. 2015(a)(6).
On August 1, 1989, the Debtors filed a statement that the Plan had been substantially consummated,1 and applied for a final decree pursuant to Bankr.R. 2015(a)(7) on that same date. The Debtor also filed a statement of payments made or projected to be made under the Plan on August 1, 1989.
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