Judge Jones interpreted plan he confirmed prior to his District Court appointment. He granted summary judgment to defendants, holding plan did not explicitly provide plaintiff with a lien or establish intent to create an equitable lien.
Affirmed summary judgment for appellees over dispute in property, based on permanent injunction and release of claims in confirmed Second Amended Plan. Appellants failed to substantiate purported oral agreement or its change in plan.
Although appellants raised new factual and legal arguments related to ownership, they were not waived because they related to underlying claims. But Circuit held they are not supported in the record and therefore do not change the plan. Circuit also affirmed that personal and subject matter jurisdiction existed; that there was insufficient evidence of an intentional violation of plan injunction; and contempt sanctions were not justified.
Judge Markell denied confirmation, holding Debtor failed to show feasibility and “drop dead” liquidation clause did not save plan. The Court noted distinct requirement of feasibility even with creditor consent. §§ 1129(a)(8), (11).
Debtor called for debt still more than twice value of Debtor; annual accounting losses of at least $15 million over next seven years; and underfunded plan by $38.4 million. Court rejected Debtor’s contingencies to increase performance. Experts testified contingencies were not in the plan because they were not supported by facts at hand; the Court rejected later testimony that contingencies were more likely than not to occur.
Court also considered alternative analysis of six feasibility factors from Trans Max Technologies, but held plan still failed to meet them. Court explicitly rejected feasibility based on a liquidation option.
Debtor “asks the court to allow it to float along until it sinks, suggesting that when it ultimately sinks, the court need not concern itself with how creditors will make it onto the life raft—or even whether there will be a life raft available.” Finally, Court rejected Debtor’s arguments that it is a socially responsible transit system whose contributions to the community exceed costs, as that is not standard for feasibility.