* Pursuant to 5 TH C IR . R. 47.5, the Court has determined that this opinion should

not be published and is not precedent except under the limited circumstances set forth in

5 TH C IR . R. 47.5.4. UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 97-50109

In the Matter of: AL COPELAND ENTERPRISES, INCORPORATED,

Debtor.

LOUISIANA FIRST FINANCIAL GROUP, INCORPORATED,

Plaintiff-Appellant,

versus

AL COPELAND ENTERPRISES, INCORPORATED,

Defendant- Appellee.

Appeal from the United States District Court

For the Western District of Texas

(A-96-CA-113)

June 9, 1998

Before POLITZ, Chief Judge, BENAVIDES and PARKER, Circuit Judges.

POLITZ, Chief Judge: *

Louisiana First Financial Group, Inc. (LFFG) appeals an adverse summary

judgment by the bankruptcy court, dismissing its claim for commissions based on1 58 B.R. 339 (Bankr. S.D. Tex. 1986), aff’d , 875 F.2d 859 (5th Cir. 1989).

2 a contract with Al Copeland Enterprises, Inc. ( ACE). On the first appeal we

remanded to the bankruptcy court to determine if the burden of proof announced

in In Re Hinkley 1 had been follo wed. On remand, after imposing the proper,

respective burdens, the bankruptcy court granted ACE’s motion for summary

judgment. The district court affirmed. Concluding that LFFG raised no issue of

material fact as to its ultimate burden under Hinkle y, we now affirm the district

court’s affirmance of the bankruptcy court’s ruling.

BACKGROUND

In 1988, LFFG, a mortgage broker, contracted to provide $18.2 million in

mortgage financing for ACE. The contract provided in part that LFFG would

receive a one percent commission on the total amount of financing arranged,

contingent on the monies actually being funded. ACE would also be obligated to

pay the commitment fee if ACE executed a written acceptance of the financing and

later decided against consummating the transaction.

T he agreement thereafter was modified several times as ACE’s financial

needs changed. Ultimately, the contract was amended to provide that LFFG would

work with Merrill Lynch in obtaining $120 million in mortgage financing for ACE,

and the two of them would split a four pe rcent commission if the monies were3

actually funded, or if ACE executed a written acceptance of the financing

arrangement.

As efforts to obtain the necessary funding began in earnest, it became

apparent that ACE’s debts would have to be restructured before any new financing

could be obtained. LFFG worked with ACE to find a company to do the

restructuring, ultimately securing Pru Bache for the task. In return for its efforts,

LFFG contends that it was to be paid a 1% commission on any refinancing done in

connection with the restr ucture. The parties also anticipated that mortgage

financing would be a part of the overall restructuring and that LFFG would get a

commission of 2%, its half of the 4% commission it was to share with Merrill

Lynch. In an apparent att empt to circumvent LFFG’s commissions, ACE

terminated its relationship with LFFG an d selected First Boston rather than Pru

Bache for the restructuring. First Boston was not successful in restructuring ACE

and ACE filed a Chapter 11 petition in bankruptcy in April 1991.

LFFG filed suit in state court t o recover its commissions, alleging ACE’s

breach of contract, claiming $2.4 million, which included the 2% commission of

the $120 million in mortgage financing and $2.5 million as its commission on the2 The $2.5 million claim represents 1% of $250 million. LFFG contends that $250

million in non mortgage financing would have been necessary in the restructuring of

ACE. This amount represents the difference in ACE’s outstanding debts in 1990 less the

$120 million in mortgage financing that was to be funded.

3 Article 1772 provides, “A condition is regarded as fulfilled when it is not

fulfilled because of the fault of a party with an interest contrary to the fulfillment.”

La.Civ. Code art. 1772.

4 debt restructur ing. 2 Following ACE’s bankruptcy filing, LFFG filed its proof of

cla im therein. In its initial hearing, the bankruptcy court found that ACE had

breached its contract with LFFG in bad faith by selecting First Boston, in lieu of

Pru Bache, to avoid paying LFFG’s commissions. Under La. Civ. Code art. 1772, 3

the court held that the suspensive condition (that monies be actually funded) was

deemed fulfilled and awarded LFFG $2.4 million. The claim for commissions on

the debt restructure was dismissed. The district court affirmed the bankruptcy

court. On appeal, however, we remanded to the bankruptcy court for clarification

of the placement of the Hinkley burden of proof. On remand the bankruptcy court

properly placed the Hinkl ey burden and awarded summary judgment in favor of

ACE. LFFG appealed to the district court which affirmed the bankruptcy court.

The instant appeal timely followed.

ANALYSIS

A proof of claim executed and filed in accordance with the Bankruptcy Rules4 Bank.R.3001(f). See also, Hinkley , 89 B.R. 608; In Re Simmons 765 F.2d

547 (5th Cir. 1985).

5 Hinkley , 89 B.R. 608.

6 The bankruptcy court found that ACE had breached the contract with LFFG in

bad faith. This finding was affirmed on appeal and is not an issue in this appeal.

5 constitutes prima facie evidence of the validity and amount of the claim. 4 One

objecting to a claim has the burden of presenting a substantial factual b asis to

overcome that prima facie validity of the proof of claim. Once the debtor has met

this burden, the claimant must then prove its claim under the relevant substantive

law. 5

LFFG filed an amended proof of claim for its commissions under the con tract

with Ace. Although no financing was actually procured, and the voluntary

r estructure of Ace did not take place, LFFG contended that it was entitled to the

commissions because under Article 1772 the suspensive con dition was deemed

fulfilled by virtue of Ace’s bad faith breach. 6 To rebut LFFG’s prima facie proof

of claim Ace countered that it had not received and LFFG wo uld not have been

able to procu re any mortgage financing for ACE. At that point it became

incumbent on LFFG to prove the validity of its claim under Louisiana law. LFFG

submitted that the mere breach of the contract was sufficient under Louisiana law

to invoke the presumption of Article 1772, asserting that the suspensive condition7 Stevens v. Tynes , 357 So.2d 7 (La. App.), cert. denied , 357 So.2d 1152 (La.

1978).

6 would be considered fulfilled because LFFG was prevented from actually fulfilling

the condition by Ace’s bad faith breach. Article 1772 requires more, however, than

a mere showing of A ce’s bad faith breach -- LFFG must prove that but for the

breach the condition would have been fulfilled. 7 In the instant case LFFG has not

offered any evidence to prove that it would have pro cured lenders for Ace who

would have provided the mortgage financing, or that Pru Bache would have been

suc c essful in its attempt to restructure Ace. LFFG contends that its very

e ngagement of Pru Bache, a company who had been successful in many similar

debt restructure s, was sufficient evidence of its ability to fulfill the suspensive

condition. Pru Bache, however, was not a lender ready, willing, and able to

advance the funds to Ace. Pru Bache, much like LFFG, was to locate lenders and

assist in the restructuring of Ace. The record contains nothing beyond mere

speculation supporting the proposition that either LFFG or Pru Bache would have

in fact been able to locate willing lenders or that a successful restructuring of this

company would have occurred.

The j udgment of the district court affirming the bankruptcy court is

AFFIRMED.