In re Jordan Mfg. Co., Inc.
| Decision Date | 30 March 1992 |
| Docket Number | 87-80172,87-82591,87-80358,88-80474,86-80396,Bankruptcy No. 185-01473,88-81781,185-00139,185-01665.,88-80473 |
| Citation | 138 BR 30 |
| Parties | In re JORDAN MANUFACTURING COMPANY, INC., Debtor. In re Phillip R. BUCHEN and Mary Jane Buchen, Debtors. In re Kenneth L. DEAN and Nina S. Dean, Debtors. In re Robert F. JACKSON and Ruth E. Jackson, Debtors. In re DICKENS CONSTRUCTION COMPANY, INC., Debtor. In re C.S. NORCROSS, INC., Debtor. In re COOMER FARMS, a partnership, Clarence R. and Betty L. Coomer, Randall L. Coomer and Mary J. Coomer, Debtors. In re G. LARSON AND SONS FARMS, INC., Debtor. |
| Court | U.S. Bankruptcy Court — Central District of Illinois |
Barry M. Barash, Galesburg, Ill., for debtors Jordan Mfg. Co., Inc., Phillip R. and Mary Jane Buchen, Kenneth L. and Nina S. Dean, Robert F. and Ruth E. Jackson, Dickens Const. Co., Inc., C.S. Norcross, Inc., Coomer Farms, a partnership, Clarence R. and Betty L. Coomer, Randall L. Coomer and Mary J. Coomer.
Gregg N. Grimsley, Stephen A. Kouri, Peoria, Ill., for Norell Corp. Creditor, Jordan Mfg. Co., Inc., Tompkins State Bank, Creditor, Phillip and Mary Jane Buchen, Farmers Nat. Bank of Geneseo, Creditor, Dickens Const. Co. Inc., First State Bank of Princeton, re: Coomer Farms.
Donald L. Dorward, Washington, Ill., for International Minerals & Chemical Corp., Creditor, Kenneth L. and Nina S. Dean.
Archie Lawrence, Asst. Atty. Gen., Springfield, Ill., for State of Ill., creditor, re: Robert F. and Ruth E. Jackson; and Dickens Const. Co., Inc.
Lawrence J. Kwacala, Macomb, Ill., for Union Corp., re: C.S. Norcross.
Raymond M. Forster, Washington, D.C., for creditor, Pension Ben. Guar. Corp., re: C.S. Norcross, Inc.
Dean L. Sutton, Lytton, Lytton & Sutton, E. Moline, Ill., for debtor, G. Larson & Sons Farms.
Donald L. Robinson, Peoria, Ill., for Aetna Fin. Co., re: G. Larson & Sons Farms.
U.S. Trustee, Peoria, Ill.
In all the following Chapter 11 proceedings, the Debtors have filed motions for final decrees pursuant to Section 350 of the Bankruptcy Code, 11 U.S.C. Section 350, and current Rule 3022 of the Bankruptcy Rules, and some of their creditors have objected.
In In re Jordan Manufacturing, No. 185-01473, the Debtor is in default under the plan as to the creditor, Norrell Corporation. The other creditor, Pioneer Park One, is being paid, there is no default under the plan, but $9,300.00 is still due the creditor under the plan. These creditors object on the same grounds as those raised in In re Buchen.
In In re Buchen, No. 86-80396, the Debtor is current with the plan payments to the creditor, Tompkins State Bank, but $3,640.00 is still due the creditor under the plan. The creditor objects on the following grounds:
1. Under Section 350 of the Bankruptcy Code and prior bankruptcy Rule 3022, a final decree was not entered until "after an estate is fully administered" and to be in compliance with prior Bankruptcy Rule 3022 the debtor submitted to the court a confirmation order which retained jurisdiction in the court "until all claims have been paid in full" and "after the debtors successfully complete the plan".
2. The current Rule 3022 should not be applied retroactively. Creditors voted based on the language of the plan and a final decree should not be entered until fully paid and in light of the then existing law.
3. If default occurs, the creditor would be limited to a state court action to collect the reduced amount due under the plan.
4. If default occurs the creditor is not sure if it would be limited to the amount of the payment missed or the entire amount due.
In In re Dean, No. 185-00139, an unsecured creditor, International Minerals & Chemicals Corporation, objects on the grounds that none of the payments to the unsecured creditors of 10% per year for 10 years have been made.
In In re Jackson, No. 87-80358, the creditor, The Illinois Department of Revenue, objects that its claim of $650.00 for withholding taxes has not been paid.
In In re Dickens Construction Company, Inc., No. 87-82591, the debtor is current in its payments to the creditor, the Farmers National Bank of Geneseo, but there are eight quarterly payments of $875.00 each still due. The creditor makes the same objections as in Buchen. Another creditor, the Illinois Department of Revenue, objects to the entry of a final decree until all plan payments are made.
In In re Norcross, No. 88-81781, (Norcross # I) the debtor made some payments, but is in default as to others and the plan has not run its course. Twenty-one months after confirmation the debtor filed a second Chapter 11 proceeding In re Norcross, No. 91-81169, (Norcross # II). A creditor, Union Corporation, objects, asserting the Debtor is estopped to claim Norcross # I is fully administered.
In In re Coomer, No. 87-80172, the creditor, The First State Bank of Princeton, objected on the grounds that although payments under the plan are current, there are amounts due to unsecured creditors which have to be paid under the plan.
In In re G. Larson & Sons, No. 185-01665, the debtor is in default to the creditor, Aetna Finance, on a loan secured by a mortgage on real estate and first and second liens on equipment. The plan provided for a drop dead clause and the creditor has exercised the provision and has recorded a deed. Title to the real estate now is in the creditor, which the creditor is trying to sell. The creditor asserts it may need the jurisdiction of this Court to obtain possession of the real estate or the equipment, although it acknowledges the state courts are available for this purpose.
As a preliminary observation, it is noted that all these Chapter 11 proceedings were filed during the years of 1985 to 1988. The last year any of the Chapter 11 proceedings were confirmed was 1989. During this period, and to date, Section 350 remained unchanged and provided as follows:
During this period, Bankruptcy Rule 3022 provided as follows:
After an estate is fully administered, including distribution of any deposit required by the plan, the court shall enter a final decree (1) discharging any trustee if not previously discharged and cancelling the trustee\'s bond; (2) making provision by way of injunction or otherwise as may be equitable; and (3) closing the case.
However, in 1991, Bankruptcy Rule 3022 was amended to read as follows:
After an estate is fully administered in a Chapter 11 reorganization case, the court, on its own motion or on motion of a party in interest, shall enter a final decree closing the case.
Thereafter in 1991 the debtors requested their final decrees pursuant to current Bankruptcy Rule 3022.
The first objection to be considered raises the issue of which version of Bankruptcy Rule 3022 is applicable to the issuance of final decrees in these proceedings. Should current Bankruptcy Rule 3022 be applied retroactively to these confirmed Chapter 11 proceedings?
As a general rule, an amendment will be applied retroactively, absent express statutory language to the contrary, where the amendment relates only to remedies or procedures and where retroactive application would not destroy a substantive right. Ambrosino v. Rodman & Renshaw, Inc., 635 F.Supp. 968 (N.D.Ill.1986); see also Central Freight Lines, Inc. v. United States, 669 F.2d 1063 (5th Cir.1982). This general rule is embodied in the directive of the Supreme Court, concerning the application of the 1991 amendments to the Rules of Bankruptcy Procedure:
The foregoing additions and amendments to the Bankruptcy Rules shall take effect August 1, 1991 and shall govern all proceedings in bankruptcy cases thereafter commenced and, insofar as just and practicable, all proceedings in bankruptcy cases then pending.
Thus, the current rule will apply to these cases if its application is "just and practicable."
In In re Stroop, 47 B.R. 986 (D.C.Colo.1985), the court considered the issue of whether application of an amendment to the Bankruptcy Code to a pending case would result in manifest injustice. The court identified the following three factors to be considered:
The first factor, involving the status of the parties, has no impact where the dispute is a routine one between private parties, as is the case here. The second factor concerns whether the rights involved have matured or become unconditional. Noting that the right at issue in Stroop was more a procedural remedy than a substantive right, the court stated that absent manifest injustice, no one has a vested right in a given mode of procedure. In the cases before this Court, the entry of a final decree under Bankruptcy Rule 3022 is procedural in nature as it involves the "ministerial act" of closing a case after it is fully administered. B. Weintraub and J. Crames, Defining Consummation, Effective Date of Plan of Reorganization and Retention of Post Confirmation Jurisdiction, Suggested Amendment to Bankruptcy Code and Bankruptcy Rules, 64 Am.Bankr.L.J. 245 (Summer, 1990). The entry of a final decree does not alter the substantive rights of either the creditors or the debtors which are controlled by the Bankruptcy Code. The third aspect focuses upon any injury to pre-existing rights caused by the change in the law. As in Stroop, the amendment to Rule 3022 will have no impact on any preexisting rights of the creditors in these cases. Therefore, because the application of the current Rule 3022 is "just and practicable" it should be applied to these cases.
There is another reason why it should be applied. The effect...
To continue reading
Request your trial