Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-87-01796/USCOURTS-ca10-87-01796-0/pdf.json

Parties Involved:
Federal Savings & Loan Insurance Corporation
Appellee
John Luciani
Not Party
RLT Construction Company
Appellant
Rainbow Tower Associates
Not Party
Bernard Rodin
Not Party
Robert L. Thompson
Appellant

Document Text:

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UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

In Re: RAINBOW TOWER ASSOCIATES, ) 

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Debtor, ) 

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RAINBOW TOWER ASSOCIATES, JOHN 

LUCIANI, BERNARD RODIN, RLT 

CONSTRUCTION COMPANY, and 

ROBERT L. THOMPSON, 

Appellants, 

FILED 

United Stat.es Court of Appeals 

Tenth Circuit 

FEB O 81989 

ROBERT L. HOECKER 

Clerk 

v. 

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No. 87-1796 

(D.C. No. 84-2084-S) 

(D. Kansas) 

FEDERAL SAVINGS & LOAN 

INSURANCE CORPORATION, Receiver 

for Century Savings Association, 

Appellee. 

ORDER AND JUDGMENT 

Before MOORE, TACHA, and BRORBY, Circuit Judges. 

This is an appeal from an order of the district court sitting 

in review of a bankruptcy court judgment. Among other things, 

appellants argue that FSLIC is an unsecured creditor not entitled 

to the proceeds of the sale of the estate property. This argument 

overlooks the fact that FSLIC's predecessor was a secured creditor 

entitled to payment of the full value of its secured claim as a 

consequence of the cramdown provisions of Chapter XII. Because 

Appellate Case: 87-1796 Document: 01019962650 Date Filed: 02/08/1989 Page: 1 
the bankruptcy court set aside the plan, that value is presently 

undetermined. 1 

As a consequence of the sale of the secured property, one 

might reasonably expect that the bankruptcy court will determine 

the value of the FSLIC claim is equal to the sale price of the 

security. In any event, because the property sold was part of the 

bankruptcy estate, and because that estate is still pending, all 

issues relating to the property of the estate, including the 

proceeds of the sale and the claims against it, are within the 

exclusive jurisdiction of the bankruptcy court. In the meantime, 

appellants have no right whatever to continued possession of the 

sale proceeds, and appellants harbor those proceeds contrary to 

the jurisdiction of the bankruptcy court. 

We have considered the remaining issues raised by the 

appellants and conclude they are specious. We further conclude 

that this appeal is frivolous. Therefore, the judgment of the 

district court is AFFIRMED substantially for the reasons set forth 

in the district court orders of April 3, 1987, and May 6, 1987. 

It is further ORDERED, within ten days of the date of this 

order, counsel for the appellants shall show cause in writing why 

he should not be sanctioned in accordance with the provisions of 

1Appellants have misread the import of the footnote relating to 

FSLIC's predecessor in our prior order and judgment. We did not 

''misdirect[] some of [our] sympathy for the secured creditor" as 

offensively suggested in appellants' brief. Appellants, however, 

have patently misconstrued the legal consequences of the concept 

of "cramdown'' as well as the import of the orders of the 

bankruptcy court. Until a new plan is confirmed or there is 

another disposition of FSLIC's secured claim, it should be obvious 

that FSLIC's claim has not been satisfied, appellants' frivolous 

protestation to the contrary notwithstanding. 

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Appellate Case: 87-1796 Document: 01019962650 Date Filed: 02/08/1989 Page: 2 
Fed. R. App. P. 38; 28 U.S.C. § 1912, and Tenth Circuit Rule 

46.6.1 for prosecuting a frivolous appeal. Braley v. Campbell, 

832 F.2d 1504 (10th Cir. 1987). Counsel for the appellee shall 

within ten days of the date of this order file an affidavit 

setting forth the time and effort he spent on this appeal together 

with the amount of the attorney fees charged to his client. 

Entered for the Court 

John P. Moore 

Circuit Judge 

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Appellate Case: 87-1796 Document: 01019962650 Date Filed: 02/08/1989 Page: 3