UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

WEST PALM BEACH DIVISION 

In re: Case No. 22-11577-EPK 

 Chapter 11 

Mine Hill Anesthesia, LLC, et al., Subchapter V 

 (Jointly Administered) 

 Debtors. 

___________________________________/ 

ORDER ON MOTIONS FILED BY BANC OF CALIFORNIA 

 Ten months after confirmation of the plan in these jointly administered chapter 11 

cases, a secured creditor with no notice of the filing of these cases or confirmation of the plan 

filed several motions asking the Court to undo confirmation of the plan, to undo a settlement 

with another secured creditor that was incorporated in the confirmed plan, and to prohibit 

the debtors from using the secured creditor’s cash collateral. Without doubt the movant is 

not bound by the approval of the debtors’ settlement with the other secured creditor, the 

confirmed plan, the confirmation order, or any other substantive order entered in these 

chapter 11 cases. But the Court has no authority to grant the relief requested. The most the 

Court can do is confirm that the movant retains all rights it would otherwise have absent the 

Erik P. Kimball

Chief United States Bankruptcy Judge

_____________________________________________________________________________

ORDERED in the Southern District of Florida on March 12, 2024.

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filing of these cases and that the movant may proceed against the debtors, other parties, and 

their property in other courts of competent jurisdiction. 

 In this Order, the Court rules on: 

 (a) Pacific Western Bank’s Motion to Vacate Confirmation Order [ECF No. 236]; 

 (b) Pacific Western Bank’s Motion to Vacate Order Granting Motion to Approve 

Compromise of Controversies Between Debtors and Echelon Financial, LLC [ECF No. 241]; 

and 

 (c) Pacific Western Bank’s Motion to Prohibit Use of Its Cash Collateral, For 

Accounting & Disgorgement [ECF No. 243] (together, the “Motions”). 

 The Court carefully reviewed the Motions and the briefs filed by Mine Hill Anesthesia, 

LLC, Mine Hill Surgical Center, LLC, and Champey Pain Group, LLC (together, the 

“Debtors”), Echelon Financial, LLC (“Echelon”), and Banc of California f/k/a Pacific Western 

Bank (“PacWest”). ECF Nos. 247, 265, 273, 278, and 279. 

Relevant Case Background 

 The Debtors filed voluntary petitions under subchapter V of chapter 11 on February 

25, 2022. 

 In their Joint Chapter 11 Case Management Summary [ECF No. 15], the Debtors 

stated that Echelon had obtained a judgment of more than $2.2 million and had commenced 

“aggressive collection efforts against the Debtors by garnishing certain of the Debtors’ 

accounts.” The Debtors filed their bankruptcy petitions “to obtain a breathing spell from 

Echelon’s aggressive collection efforts and reorganize their debts.” The Debtors indicated 

Echelon as their only secured creditor with a lien on “[c]ertain receivables factored by 

Echelon.” The Debtors’ status report under 11 U.S.C. § 1188(c) disclosed essentially the same 

information. ECF No. 58. The Debtors’ subsequently filed schedules list an auto loan, some 

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auto leases, Bankers Healthcare Group, LLC, and Echelon as their only secured creditors. 

ECF No. 62; ECF No. 39, Case No. 22-11578; ECF No. 39, Case No. 22-11579. 

 PacWest holds a substantial claim against the debtors Mine Hill Surgical Center, LLC 

and Champey Pain Group, LLC secured by all of their personal property, among other 

collateral. PacWest’s claim is not mentioned in any regard in the Debtors’ schedules or 

statement of financial affairs nor was PacWest included in the Debtors’ matrix of creditors. 

 Echelon sought relief from the automatic stay to collect the Debtors’ accounts 

receivable, which Echelon argued were purchased by Echelon, and the Debtors opposed that 

request. ECF No. 66, 87, and 117. The Debtors objected to Echelon’s filed claim based 

primarily on the argument that Echelon’s advances to the Debtors were loans that violated 

Florida’s criminal usury statute. ECF No. 110. The Debtors and Echelon attended a judicial 

settlement conference with Hon. Paul G. Hyman, Jr. and settled their disputes. ECF No. 

126. 

 The Debtors filed a motion for approval of the settlement with Echelon [ECF No. 137] 

and a joint chapter 11 plan incorporating the settlement [ECF No. 151, the “Plan”]. On 

August 9, 2022, the Court entered an order approving the Debtors’ settlement with Echelon. 

ECF No. 161. Among other things, the Debtors agreed that Echelon would have an allowed 

claim of $1.7 million secured by a lien on all of the Debtors’ assets and the parties agreed to 

specific terms for payment of that sum with interest. The settlement resolved Echelon’s 

motion for relief from the automatic stay, the Debtors’ objection to Echelon’s claim, and the 

Debtors’ appeal from Echelon’s state court judgment. 

 On November 10, 2022, the Court confirmed the Debtors’ Plan. ECF No. 200. 

Consistent with 11 U.S.C. § 1141(b), the confirmation order explicitly vested all property of 

the bankruptcy estates in the Debtors. As of that date, there were no bankruptcy estates. 

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 One hundred forty-six days later, on April 5, 2023, PacWest first appeared in this case 

through counsel. ECF No. 213. Before then, PacWest had no knowledge of the settlement 

with Echelon, the confirmation of the Plan, or even that these bankruptcy cases had been 

filed. Although PacWest gained knowledge of the order confirming the Plan well within the 

180-day period following confirmation, PacWest did not seek revocation of confirmation 

under 11 U.S.C. § 1144. 

 After several months of discovery, PacWest filed the three Motions under 

consideration here. The Court ordered the parties to mediate and the parties elected to 

attend a judicial settlement conference with Hon. Paul G. Hyman, Jr. ECF Nos. 250, 253, 

254, and 259. They were unable to settle. ECF No. 268. 

Arguments of the Parties 

 PacWest asks the Court to vacate the confirmation order under Fed. R. Civ. P. 60(b)(3), 

(b)(4), or (b)(6), made applicable here by Fed. R. Bankr. P. 9024. ECF No. 236. In this regard, 

PacWest relies primarily on In re Rideout, 86 B.R. 523, 530 (Bankr. N.D. Ohio 1988). ECF 

No. 265. PacWest also asks the Court to vacate the order approving the settlement with 

Echelon under Rules 60(b)(3), (b)(4), (b)(6), or (d)(3). ECF No. 241. PacWest asks the Court 

to prohibit the Debtors from using its cash collateral allegedly in violation of 11 U.S.C. § 363, 

seeks adequate protection for the alleged improper use of its cash collateral, and seeks an 

accounting and sanctions. ECF No. 243. PacWest confirms that it did not and does not seek 

relief under 11 U.S.C. § 1144. ECF No. 279. 

 Echelon argues that the confirmation of the Plan may only be revoked as a result of 

fraud and only by seeking such relief within 180 days after confirmation under 11 U.S.C. § 

1144. ECF Nos. 247, 273. 

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 The Debtors agree with PacWest that the appropriate remedy is to afford PacWest 

relief from the confirmation order under Rule 60. They ask the Court to then re-set the Plan 

for confirmation. ECF No. 278. 

Section 1144 Provides the Sole Basis to Revoke a Chapter 11 Confirmation Order 

 11 U.S.C. § 1144 provides, in pertinent part: “On request of a party in interest at any 

time before 180 days after the date of the entry of the order of confirmation, and after notice 

and a hearing, the court may revoke such order if and only if such order was procured by 

fraud.” 

 Section 1144 is the sole basis to vacate or revoke an order confirming a chapter 11 

plan. In re Logan Place Props., Ltd., 327 B.R. 811, 814 (Bankr. S.D. Tex. 2005) (“fraud under 

§ 1144 [is] the exclusive means by which a plan can be revoked”) (citing cases). “Presumably 

mindful of the intricate chain of events that is often set in motion by the order of confirmation, 

Congress made the considered choice that only fraud would warrant an attempt to 

‘unscramble the egg,’ and even then only within the 180-day time frame imposed by § 1144.” 

In re Winom Tool & Die, Inc., 173 B.R. 613, 616 (Bankr. E.D. Mich. 1994); see also In re 

Orange. Tree Assocs., Ltd., 961 F.2d 1445, 1447 (9th Cir. 1992) (”In recognition of the strength 

of the interest in finality of reorganization plans, courts have held uniformly that strict 

compliance with section 1144 is a prerequisite to relief.”); In re Logan Props., Ltd., 327 B.R. 

at 814-15 (“If the language ‘if and only if’ does not express fraud as the exclusive means of 

revocation, it is difficult to imagine what language Congress could find to make this point 

clear.”). 

Rule 60 Does Not Apply to Orders Confirming Chapter 11 Plans 

 Rule 60 does not provide an end run around section 1144. Bankruptcy Rule 9024, 

which makes Rule 60 applicable here, specifically states that “a complaint to revoke an order 

confirming a plan may be filed only within the time allowed by § 1144.” It is generally 

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recognized that “[t]his time limit may not be circumvented by invocation of Rule 60.” In re 

Baron’s Stores, Inc., 390 B.R. 734, 744 (Bankr. S.D. Fla. 2008); BFP Invs., Inc. v. BFP Invs., 

Ltd., 150 F. App’x 978, 979 (11th Cir. 2005); see also In re Smith Audio Visual, Inc., No. 11-

42026-11, 2013 WL 1279064, at *5 (Bankr. D. Kan. Mar. 28, 2013) (noting that “numerous 

courts have held that the ‘if and only if’ language contained in § 1144 precludes any 

application of Rule 60(b) or invocation of the Court’s equitable powers under 11 U.S.C. § 105 

to set aside an order confirming a plan unless fraud is alleged.”). Even if Bankruptcy Rule 

9024 is in conflict with section 1144, “the Bankruptcy Code trumps the Bankruptcy Rules.” 

In re Logan Props., Ltd., 327 B.R. at 815 (citing cases); see also BFP Invs., Inc. 150 F. App’x 

at 979; 28 U.S.C. § 2075 (The Bankruptcy Rules “shall not abridge, enlarge, or modify any 

substantive right.”). 

 PacWest cites one decision that appears to support application of Rule 60(b) here. In 

re Rideout, 86 B.R. 523 (Bankr. N.D. Ohio 1988). The court in Rideout attempted to 

distinguish vacating an order confirming a plan, which would “only result in the Hearing on 

Confirmation being reset,” from the “permanent Revocation of the Plan.” Id. at 530 (emphasis 

in original). But section 1144 does not provide for revocation of the plan itself. It authorizes 

revocation of the “order of confirmation.” Nothing in section 1144 permanently erases a plan 

as the Rideout court seems to suggest. There is no difference between revoking and vacating 

a chapter 11 confirmation order. In re Logan Props., Ltd., 327 B.R. at 813 n.1; In re Baron’s 

Stores, Inc., 390 B.R. at 744. The Rideout decision is an unfortunate example of sympathy 

for the plight of the parties overshadowing the will of Congress. The goal was admirable but 

the outcome nonetheless unauthorized. 

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Echelon Settlement is Not Subject to Reconsideration 

 While the Debtors’ settlement with Echelon was initially approved by separate order 

of the Court, the settlement was later incorporated in the Plan and the Plan was confirmed. 

PacWest asks the Court to vacate the order approving the settlement under Rule 60. Because 

the settlement is an integral part of the Plan, this request for relief is just another way of 

asking the Court to vacate the confirmation order. The Court cannot vacate the order 

approving the Echelon settlement for the same reasons it cannot vacate the confirmation 

order. 

PacWest’s Requests Relating to Cash Collateral Must Be Denied 

 PacWest seeks several forms of relief relating to its alleged interested in the Debtors’ 

cash collateral. Cash collateral includes various types of fungible property “in which the 

estate and an entity other than the estate have an interest.” 11 U.S.C. § 363(a). The term 

“estate” refers to the bankruptcy estate established under 11 U.S.C. § 541. Upon 

confirmation of the Plan all property of the bankruptcy estates vested in the reorganized 

Debtors subject only to the terms of the Plan. 11 U.S.C. § 1141(b); ECF Nos. 151 and 200. 

As of entry of the confirmation order, there were no bankruptcy estates. Thus, there is no 

cash collateral subject to 11 U.S.C. § 363. PacWest is not entitled to any relief relating to its 

claimed interest in cash collateral. This ruling is without prejudice to PacWest’s rights to 

pursue similar relief in other courts of competent jurisdiction as a result of alleged defaults 

under PacWest’s loan documents. 

PacWest is Not Bound by Prior Substantive Orders Entered in These Cases 

 PacWest had no notice at all of these jointly administered cases or of any orders 

entered in these cases through and including the confirmation order until well after such 

orders became final and no longer subject to appeal. Because of a complete lack of due process, 

PacWest is not bound by the order approving the Echelon settlement, the Plan, the 

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confirmation order, or any substantive order entered in these cases other than this Order. In 

re Spring See Valley Farms, Inc., 863 F.2d 832, 834-35 (11th Cir. 1989); Dalton Dev. Project 

#1 v. Unsecured Creditors Comm. (In re Unioil), 948 F.2d 678, 683-84 (10th Cir. 1991); 

Reliable Elec. Co. v. Olson Constr. Co., 726 F.2d 620, 622-23 (10th Cir. 1984). PacWest retains 

all of its rights against the Debtors, co-obligors, guarantors, and any other parties, and all of 

its rights to pursue its collateral whether in the control of the Debtors, Echelon, or any other 

parties, in either case whether or not such parties participated in these jointly administered 

cases. The approval of the Echelon settlement and the confirmation of the Plan do not in any 

way diminish PacWest’s rights against anyone or against any property. 

 PacWest argues that the Echelon settlement and the Plan provide for the granting of 

liens in favor of others, the use of PacWest’s collateral to secure obligations to others, and the 

use of PacWest’s collateral to pay other creditors, among other provisions at odds with 

PacWest’s loan documents. If any such parties had a valid lien on PacWest’s collateral prior 

to the filing of these bankruptcy cases, PacWest retains whatever rights and priority it 

otherwise would have absent the filing of these bankruptcy cases. To the extent any parties 

obtained liens on PacWest’s collateral as a result of approval of the Echelon settlement or 

confirmation of the Plan, PacWest retains whatever interests it had in such collateral senior 

to any such liens. No order of this Court, including without limitation the order approving 

the Echelon settlement and the confirmation order, modified any of PacWest’s rights in its 

collateral. If the Debtors’ actions constitute defaults under PacWest’s loan documents, 

PacWest may pursue whatever remedies are appropriate under applicable non-bankruptcy 

law. 

Conclusion 

 The Debtors ask this Court to vacate the confirmation order under Rule 60 to permit 

the parties to “resolve their disputes in a single forum, this Court, as opposed to piecemeal 

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litigation in multiple forums.” ECF No. 278. The Court is not unsympathetic to the 

challenges that now face the Debtors, Echelon, PacWest, and other parties in interest. 

However, the Court is unable to ignore the limitations imposed by Congress. 

 PacWest is not without remedies. It may pursue the Debtors, co-obligors, guarantors, 

Echelon, and any other persons or entities to enforce its claims and its rights in collateral. 

Nothing in this bankruptcy case will stand in the way. The Court will explicitly confirm that 

PacWest’s pre-bankruptcy rights have not been modified by any order entered in these cases. 

ORDER 

 For the foregoing reasons, the Court ORDERS and ADJUDGES as follows: 

 1. The Pacific Western Bank’s Motion to Vacate Confirmation Order [ECF No. 236] 

is DENIED. 

 2. The Pacific Western Bank’s Motion to Vacate Order Granting Motion to Approve 

Compromise of Controversies Between Debtors and Echelon Financial, LLC [ECF No. 241] is 

DENIED. 

 3. The Pacific Western Bank’s Motion to Prohibit Use of Its Cash Collateral, For 

Accounting & Disgorgement [ECF No. 243] is DENIED. 

 4. The Court confirms that Banc of California f/k/a Pacific Western Bank 

(“PacWest”): 

 (a) Retains any and all claims and rights, legal and equitable, against Mine 

Hill Anesthesia, LLC, Mine Hill Surgical Center, LLC, Champey Pain Group, LLC, MDHT, 

LLC, Edward Champey, all creditors and parties in interest in these bankruptcy cases 

whether or not they participated in these cases, and any other persons and entities, and that 

no order or action in these jointly administered bankruptcy cases has in any way limited or 

modified such claims and rights; and 

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 (b) Retains all of its security interests, liens, mortgages, and any and all 

similar rights of any kind, against property owned by, controlled by, or in the possession of 

Mine Hill Anesthesia, LLC, Mine Hill Surgical Center, LLC, Champey Pain Group, LLC, 

MDHT, LLC, Edward Champey, all creditors and parties in interest in these bankruptcy 

cases whether or not they participated in these cases, and any other persons and entities, 

and that no order or action in these jointly administered bankruptcy cases has in any way 

limited or modified such rights. 

 5. To the extent any persons or entities claimed a lien on collateral of PacWest 

prior to the filing of these bankruptcy cases, PacWest retains whatever rights and priority 

they otherwise would have absent the filing of these bankruptcy cases. 

 6. To the extent any persons or entities obtained a lien on PacWest’s collateral as 

a result of any order entered in these bankruptcy cases, including without limitation the 

order approving the Echelon settlement [ECF No. 161] or the order confirming the Plan [ECF 

Nos. 151, 200], PacWest retains whatever rights it had in such collateral senior to any such 

liens. 

 7. Nothing in this Order is intended to create a right or priority in favor of 

PacWest that would not have existed under applicable non-bankruptcy law absent the filing 

of these bankruptcy cases. 

8. In entering this Order, it is the Court’s intention to confirm in every possible 

way that these bankruptcy cases have not had any impact on PacWest’s rights against anyone 

or against any property. The Court retains jurisdiction to clarify this Order to the extent 

necessary to ensure that PacWest’s rights are preserved. If these jointly administered cases 

are closed, PacWest may seek an order reopening these cases, without fee, solely to clarify 

this Order. 

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Copies to all appropriate parties by Heather L. Ries, Esq., who must file a certificate of service 

with the clerk of court. 

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