Mako, Inc., In re, Nos. 91-7049

• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)
• Writing for the Court: Before LOGAN, BARRETT and SEYMOUR; LOGAN
• Citation: 985 F.2d 1052
• Parties: , Bankr. L. Rep. P 75,147 In re MAKO, INC. Debtor. RETAIL MARKETING COMPANY, Appellant, v. William R. KING, Appellee. In re MAKO, INC. Debtor. RETAIL MARKETING COMPANY, Appellant, v. Saragene RHUEMS, Appellee. In re MAKO, INC. Debtor. RETAIL MARKETING COMPANY, Plaintiff-Appellant, v. J & R MARKETING and Marvin Morse; Tulsa Cab Leasing Co.; James A. Brady; Jack Santee, Trustee, Defendants-Appellees.
• Docket Number: 91-7050 and 92-7122,Nos. 91-7049
• Decision Date: 16 February 1993

Page 1052

985 F.2d 1052 23 Bankr.Ct.Dec. 1658, Bankr. L. Rep. P 75,147 In re MAKO, INC. Debtor.
RETAIL MARKETING COMPANY, Appellant,
v.
William R. KING, Appellee.
In re MAKO, INC. Debtor.
RETAIL MARKETING COMPANY, Appellant,
v.
Saragene RHUEMS, Appellee.
In re MAKO, INC. Debtor.
RETAIL MARKETING COMPANY, Plaintiff-Appellant,
v.
J & R MARKETING and Marvin Morse; Tulsa Cab Leasing Co.;
James A. Brady; Jack Santee, Trustee, Defendants-Appellees. Nos. 91-7049, 91-7050 and 92-7122. United States Court of Appeals,
Tenth Circuit. Feb. 16, 1993.

Page 1053

Thomas A. Creekmore III (Steven W. Soule also of Hall, Estill, Hardwick, Gable, Golden & Nelson, with him, on the briefs), Tulsa, OK, for appellant.

Ron Wright of Kennedy, Wright, Stout & Fite, Muskogee, OK, for appellee William R. King (Ronald D. Wood, Tulsa, OK, with him, on the brief, for appellee Saragene Rhuems).

Before LOGAN, BARRETT and SEYMOUR, Circuit Judges.

LOGAN, Circuit Judge.

Retail Marketing Company (RMC) appeals orders of the district court dismissing its adversary proceedings against the defendants-appellees and affirming orders of the bankruptcy court holding that RMC lacked standing to prosecute the avoidance actions brought against defendants. ¹

Page 1054

In June 1989, the bankruptcy court confirmed a Chapter 11 plan for Mako, Inc. proposed by a creditor. Under that plan, RMC, a stranger to the estate, purchased the assets of the debtor corporation, Mako, Inc., and assumed its priority and secured debt. To meet the § 1129(a)(9)(A) ² requirement that all administrative claims be satisfied before the plan's confirmation, RMC specifically stated that it would pay all such claims, regardless of their amount. Although these claims were initially estimated at $2,350,000, RMC has had to pay nearly $1,000,000 more than that to satisfy all administrative claimants. The Chapter 11 plan also established a liquidating trustee, to transfer assets from the debtor to RMC, and a litigation trustee, to pursue certain adversarial actions on behalf of unsecured creditors.

After the effective date of the plan, RMC instituted this litigation against the various defendants-appellees. These defendants' motions for summary judgment were granted by the bankruptcy court and ultimately affirmed by the district court, both courts agreeing that neither the plan nor the Bankruptcy Code permitted RMC to exercise the avoidance powers. The cases were consolidated on appeal.

Summary judgment is appropriate if the record discloses "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). An order granting summary judgment is a legal determination subject to de novo review. Hatfield v. Burlington N. Ry., 958 F.2d 320, 321 (10th Cir.1992). Mixed questions of law and fact are also subject to de novo review. In re Ruti-Sweetwater, 836 F.2d 1263, 1266 (10th Cir.1988).

Section 1123(b)(3) provides that a reorganization plan may provide for

(A) the settlement or adjustment of any claim or interest belonging to the debtor or to the estate; or

(B) the retention and enforcement by the debtor, by the trustee, or by a representative of the estate appointed for such purpose, of any such claim or interest[.]

At issue in this case is whether the plan appoints RMC as a "representative of the estate" under that section, with authority to enforce the particular avoidance claims at issue. In Citicorp Acceptance Co. v. Robison (In re Sweetwater), 884 F.2d 1323, 1326 (10th Cir.1989), this court adopted the test for non-debtor, non-trustee parties seeking to qualify as representatives under § 1123(b)(3)(B) that was articulated in Temex Energy, Inc. v. Hastie & Kirschner (In re Amarex, Inc.), 96 B.R. 330 (W.D.Okla.1989).

That test is as follows: "Under § 1123(b)(3)(B), a party who is neither the debtor nor the trustee but who seeks to enforce a claim must establish two elements: (1) that it has been appointed; (2) that it is a representative of the estate." Id. at 334. The first element requires that the appointed party be approved by the court, which can be accomplished simply by approval of the plan. Sweetwater, 884 F.2d at 1326. Determining a party's representativeness under the second element is more involved. It requires the court to decide "whether a...