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Thursday, January 08, 2009

Ind. Decisions - No Indiana decisions, but a rare Chapter 12 bankruptcy opinion

From the opinion:

Chapter 12 bankruptcy was created “to give family farmers facing bankruptcy a fighting chance to reorganize their debts and keep their land.” In re Wiese is a 14-page opinion by Judge Tinder, who writes:
When the Wieses defaulted on the loan repayment, the Bank commenced foreclosure and replevin actions in state court on the collateral in which the Bank held security interests. The Wieses then filed for Chapter 12 bankruptcy, a voluntary type of bank- ruptcy specifically designed for family farmers. As part of the Wieses’ confirmed plan of bankruptcy, the Wieses and the Bank made certain concessions, one of which (and the reason for this appeal’s existence) required the Wieses to release their purported “lender liability” claims against the Bank, arising from the Bank’s advice in con- nection with the loan and the construction of the barn. The Wieses later decided to have the bankruptcy case dismissed, as they had a statutory right to do—but the bankruptcy court determined that there was “cause” for the terms of the confirmed plan to remain binding on the parties. The Wieses appealed to the district court, which reversed the decision of the bankruptcy court. Now the Bank appeals from the district court’s decision, and the Wieses seek sanctions against the Bank for bringing this appeal. * * *

The bankruptcy court’s decision that there was “cause” for the terms of the confirmed plan to remain binding on the parties was within its discretion; therefore, we REVERSE the decision of the district court, and we DENY the Wieses’ motion for sanctions.

Posted by Marcia Oddi on January 8, 2009 12:12 PM
Posted to Ind. (7th Cir.) Decisions