Opinion ID: 451948
Heading Depth: 1
Heading Rank: 2

Heading: issues

Text: 10 I. Whether investors who did not appear and object to the plan at the confirmation hearing have standing to appeal the order confirming the plan. 11 II. Whether Brooks, who did attend the hearing, filed a timely appeal pursuant to Fed.R.App.P. 4(a)(3). 12 III. Whether the Bankruptcy Rules required the Trustee to file individual adversary actions against all of the investors whose security interests he wished to avoid, rather than permitted him to eliminate those interests by a motion to confirm a chapter 11 plan. 13 IV. Whether section 1122 of the Bankruptcy Code required the Trustee to place each investor in a separate class in the plan, rather than permitted him to place all of the investors in one class. STANDARDS OF REVIEW 14
15 Because the bankruptcy court certified its order confirming the plan for appeal to the district court pursuant to General Order 24, the district court did not consider whether the investors had standing to appeal the order. Therefore, we are the first court to consider the standing issue. 16
17 The issue whether Brooks filed a timely appeal pursuant to Fed.R.App.P. 4(a)(3) was not before the district court. We will address this issue concerning our jurisdiction. 18
19 The bankruptcy court confirmed the Trustee's proposed plan without addressing the fact that the plan's avoidance of the investor's security interests violated the rules of bankruptcy procedure by circumventing the notice requirements for adversary proceedings. The bankruptcy court simply ruled in the Trustee's favor on the merits, implicitly approving the procedure employed. The district court affirmed. 7 20 Because we are in as good a position as the district court to review the findings of the bankruptcy court, we independently review the bankruptcy court's decision. See, e.g., In re Mellor, 734 F.2d 1396, 1399 (9th Cir.1984); In re Comer, 723 F.2d 737, 739 (9th Cir.1984); In re Bialac, 712 F.2d 426, 429 (9th Cir.1983). 8 We review the bankruptcy court's findings of fact under the clearly erroneous standard and its conclusions of law de novo. In re American Mariner Industries, Inc., 734 F.2d 426, 429 (9th Cir.1984). 21 Whether the Trustee followed the proper procedures to avoid the investors' security interests involves a question of law that we review de novo. See In re McKay, 732 F.2d 44 (3d Cir.1984) (without discussing the standard of review, the Third Circuit reversed the bankruptcy court's order confirming a chapter 13 plan because the plan violated the rules of bankruptcy procedure). 22
23 The bankruptcy court may confirm a plan only if the plan designates classes of claims, 11 U.S.C. Sec. 1123(a)(1), and places only substantially similar claims in the same class. 11 U.S.C. Sec. 1122(a). The bankruptcy court made no express finding whether the investors' claims, which the Trustee placed in the same class, were substantially similar. However, the bankruptcy court did find that the plan complied with the applicable provisions of chapter 11, which would include section 1122(a). Because the bankruptcy court's implicit determination that the investors' claims were substantially similar resolves a question of fact, we review it under the clearly erroneous standard. Cf. In re Palisades-On-The-Desplaines, 89 F.2d 214, 217 (7th Cir.1937) (lower court has broad latitude in classifying claims under analogous provision of former Bankruptcy Act).