Opinion ID: 162082
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 2 The undisputed facts are set out in the published decision of the Tenth Circuit Bankruptcy Appellate Panel. See Allen v. Geneva Steel Co. (In re Geneva Steel Co.), 260 B.R. 517 (10th Cir.BAP2001). We restate only the relevant points here. 3 In 1999, Geneva Steel Company filed a petition in bankruptcy court seeking to reorganize under Chapter 11 of the Bankruptcy Code. The petition listed, among other debt, two public bond issues, the first issue coming due in 2001, the second in 2004. Under the terms of Geneva's proposed reorganization plan, all bondholders, regardless of the maturity date of their bonds, were grouped into a single class. Each member of the class would receive common stock in the reorganized company. Classes subordinate to the bondholders would receive nothing. 4 A trustee for each of the two bond issues submitted proofs of claim for the bondholders, including Richard Allen, who held notes due in 2001. Allen, on his own initiative, filed a $500,000 proof of claim, alleging that company fraud caused him to retain his debt securities. Accompanying his proof of claim was a letter from Allen to Geneva's chief executive officer. It stated that he had retained his notes, much to his detriment, because company officials remained silent in the face of growing financial difficulties. 5 Geneva moved to disallow Allen's claim as redundant to the claim filed on his behalf by the trustee. Allen objected, asserting that his claim rested on principles of fraud, not upon his ownership of the bonds. The bankruptcy court ruled that: (1) to the extent Allen's claim is based on his bonds, it duplicates the trustee's claim and is therefore disallowed; and (2) to the extent it is based on fraud, it is subordinate to the claims of both bondholders and general goods and services creditors, since it is a claim, under section 510(b) of the Code, for damages arising from the purchase or sale of[] a security. 11 U.S.C. § 510(b). 6 Geneva later amended its reorganization plan to create a new class of creditors: those whose claims were subordinated pursuant to section 510 of the Code. Claims in this category, which include only Allen's, receive no distributions. 7 The Tenth Circuit's Bankruptcy Appellate Panel affirmed the bankruptcy trial court's ruling, and Allen appeals. The order subordinating his claim is a final order. See Adelman v. Fourth Nat'l Bank & Trust Co., N.A. (In re Durability, Inc.), 893 F.2d 264, 265-66 (10th Cir.1990). We exercise jurisdiction under 28 U.S.C. § 158(d).