Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-06132/USCOURTS-ca10-90-06132-0/pdf.json

Parties Involved:
Anadarko Bank & Trust Company
Appellant
Neva M. Weber
Appellee
Raymond Weber
Appellee
Ronald L. Weber
Appellee
Weber and Weber
Appellee

Document Text:

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

FI LED 

United States Court of Appeals 

Tenth Ci~cuit 

In Re: ) 

) 

RONALD L. WEBER; NEVA M. WEBER; ) 

RAYMOND WEBER; WEBER AND WEBER, ) 

a partnership, ) 

) 

Debtors, ) 

) 

) 

RONALD L. WEBER; NEVA M. WEBER; ) 

RAYMOND WEBER; WEBER AND WEBER, ) 

a partnership, ) 

) 

Appellees, ) 

) 

v. ) 

) 

ANADARKO BANK & TRUST COMPANY, ) 

) 

Appellant. ) 

ORDER AND JUDGMENT* 

JUN 2 8 1991 

!\OBERT L. HOECKER 

Clerk 

No. 90-6132 

(D.C. No. CIV 88-1787-P) 

(W.D. Okla.) 

Before ANDERSON, TACHA, and BRORBY, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 90-6132 Document: 010110128258 Date Filed: 06/28/1991 Page: 1 
34(a); 10th Cir. R. 34.1.9. 

submitted without oral argument. 

The case is therefore ordered 

Anadarko Bank & Trust Company appeals from an order of the 

district court reversing that portion of a bankruptcy court order 

which modified debtors' Chapter 12 Plan of Reorganization by 

setting an effective date for the plan of April 1, 1988. On 

appeal, the bank argues that the bankruptcy court had the power to 

so modify the plan and did not abuse its discretion in its 

exercise of that power. We affirm in part and reverse in part. 

Debtors filed simultaneous Chapter 12 petitions which were 

later consolidated. On April 1, 1988, following a hearing, the 

bankruptcy court orally confirmed debtors' reorganization plan. 

Debtors were unable to prepare a confirmation order for the court 

to sign due to disputes between debtors, the bank, and the trustee 

in bankruptcy. The disputes were eventually settled except that 

the parties were unable to agree on an effective date for the 

plan. This issue was submitted to the court for resolution. On 

August 18, 1988, without further hearing, 1 the bankruptcy court 

entered an order which both confirmed the plan and set an 

effective date of April 1, 1988. 

On appeal to the district court, debtors argued that the 

bankruptcy court did not have the power to modify the plan by 

setting a date which made the plan effective prior to the date of 

the court's written order. The district court agreed holding that 

the bankruptcy court "was without authority to modify the Chapter 

1 Apparently notice was sent and a hearing was set. The 

hearing was cancelled when the bankruptcy court entered its order 

of August 18, 1988. 

2 

Appellate Case: 90-6132 Document: 010110128258 Date Filed: 06/28/1991 Page: 2 
.... ,r ., 

12 Plan sua sponte prior to the entry of the Confirmation Order on 

August 18, 1988." Rec. tab 46 at 5. The district court held that 

the effective date was controlled by section 1.9 of the plan which 

provided that the plan would become effective "[t]hirty (30) days 

after the date on which the order confirming the Plan becomes 

final and nonappealable." Rec. tab 1, Reorganization Plan at 2. 

The district court then set an effective date of October 1, 1988. 

On appeal, the bank argues the bankruptcy court had the power 

to modify the plan pursuant to 11 U.S.C. § 105(a). 2 The 

bankruptcy court may have had the power to modify the plan under 

either section 105(a) or its broad equitable powers. See First 

Nat'l Bank & Trust Co. v. Abel (In re Western Real Estate Fund, 

Inc.), 922 F.2d 592, 598 (10th Cir. 1990). We need not decide 

this issue, however, because, in any event, we must hold that the 

bankruptcy court abused its discretion in its exercise of any such 

power it may have had under the circumstances present here. 

Debtors argued to the district court that, as a result of 

setting April 1 as the effective date, rather than October 3, 3 

they are liable for an additional $29,786.00 in interest. Rec. 

tab 7, Ex. B. An increase of this magnitude can only be held to 

be a major modification of the plan and, as such, it requires 

notice and a hearing to all interested parties, absent clear 

justification as shown in the record. The parties have failed to 

2 11 U.S.C. § 105(a) provides that the "court may issue any 

order, process, or judgment that is necessary or appropriate to 

carry out the provisions of the [the Bankruptcy Code]." 

3 Under section 1.9, the plan would have become effective on 

October 3, if August 18, the date the court's written order was 

entered, were used as the activating date. 

3 

Appellate Case: 90-6132 Document: 010110128258 Date Filed: 06/28/1991 Page: 3 
..... 

submit any materials showing such justification. 4 Therefore, we 

affirm that portion of the district court's order which reversed 

the bankruptcy court's ruling setting April 1 as the effective 

date. 

Based on our reasoning above, we must also hold the district 

court erred in setting an effective date of October 1, 1988. That 

modification was also made without notice to all interested 

parties. We also note that debtors argued to the district court 

that an October 3 effective date "was beyond the contemplation and 

intent of all the parties and, probably, the Bankruptcy Court on 

April 1, 1988." Rec. tab 7 at 6. We reverse that portion of the 

district court's order which set the October 1 effective date. 

The judgment of the United States District Court for the 

Western District of Oklahoma is AFFIRMED in part and REVERSED in 

part. This case is REMANDED with directions that the district 

court remand this case to the United States Bankruptcy Court for 

the Western District of Oklahoma for it to establish an effective 

date for debtor's reorganization plan following notice and 

hearing. 

Entered for the Court 

Stephen H. Anderson 

Circuit Judge 

4 We also note there is no indication in the record that all 

interested parties were noticed regarding the other modifications 

made to the plan. Seep. 2, supra. 

4 

Appellate Case: 90-6132 Document: 010110128258 Date Filed: 06/28/1991 Page: 4