Opinion ID: 658305
Heading Depth: 2
Heading Rank: 5

Heading: The Inland Steel Company Claim

Text: 54 Inland Steel Company brought an action against the Debtors in the United States District Court for the Northern District of Illinois alleging post-petition patent infringement and seeking $200 million in damages, trebled. In the LTV bankruptcy proceedings, Inland moved to compel the Debtors to reserve fully for their contingent liability; the Debtors cross-moved for permission to estimate Inland's claims at zero for purposes of the Plan and the reserve. The Debtors and Inland ultimately stipulated that Inland's pending claim would remain unimpaired but unreserved, and presented that stipulation for bankruptcy court approval. On May 26, 1993, the bankruptcy court conducted a hearing to determine, inter alia, whether the Plan was feasible and should be confirmed. At the hearing, Chief Judge Lifland heard a detailed account of the Inland stipulation, reviewed the agreement, and permitted everyone in attendance to be heard on the subject. Frito-Lay, which was represented at the hearing, did not choose to be heard. The stipulation was so ordered without any objection. 55 In briefing before this Court, Frito-Lay protests that on the very eve of confirmation, LTV entered into the Inland Settlement, which permitted potential claims of over $600,000,000 (30 times greater than Frito-Lay's ) to survive post-bankruptcy (emphases in original). Frito-Lay does not argue that this feature of the Plan renders it unfeasible. Frito-Lay's appellate position is that [t]he Plan should not have been confirmed, because the bankruptcy court somehow failed sufficiently to consider the impact that the Inland settlement might have on the Plan's feasibility. 56 On this record, we doubt that Frito-Lay preserved an objection to the Plan's feasibility, we doubt that Frito-Lay has standing to object to the Plan's feasibility (its claims presumably already having been paid, and its financial interest in the Plan's feasibility therefore eliminated), and we doubt that the bankruptcy court gave inadequate consideration to the Plan. We do not address any of those matters, however, because effective relief can no longer be fashioned. On June 28, 1993, LTV began consummation of the Plan, which entailed, among other happenings, the distribution of hundreds of millions of dollars in cash, common stock, preferred stock and warrants; the transfer of almost $1 billion in assets to creditors covered by restored pension plans; the merger and liquidation of corporate entities; the amendment of its certificate of incorporation and by-laws; and the recomposition of its Board of Directors. Frito-Lay's objection to the sufficiency of the bankruptcy court's consideration of the Plan's feasibility is now moot.