Opinion ID: 583698
Heading Depth: 1
Heading Rank: 4

Heading: Construing the Plan

Text: 34 Under the Plan of Reorganization, Pester transferred its refinery assets (including any chemicals subject to Ethyl's right to reclaim) to Derby Refining Company in exchange for fifty-four self service gas stations that Derby either owned or leased. The Plan also accomplished the financial restructuring of Pester, classified the claims and interests of its creditors, and provided for the treatment of impaired and unimpaired classes of creditors. 35 Although the parties and the bankruptcy court focused upon the provisions of the Plan dealing with reclamation creditors such as Ethyl, under our analysis of § 546(c) the more important focus is its treatment of the secured creditors who had superior rights in the chemicals Ethyl sought to reclaim. If the Plan in fact satisfied the claims of those creditors with the chemicals, or their proceeds, then Ethyl's right to reclaim would be valueless. 36 The Plan placed the relevant secured creditors in two different classes. Secured creditors in each class released their respective liens on Pester's assets, including any chemicals--an essential provision since those assets were being conveyed to Derby. Their secured claims were deemed satisfied by the Plan, and they waived any deficiency claims. In exchange, these creditors received value from the following sources: 37 . $22,000,000 from Pester Marketing Company (PMC), the debtor that will operate the service stations obtained from Derby, $6,000,000 payable at confirmation and the rest over a ten year period. 38 . A $2,000,000 note from Pester, secured by a promissory note Pester received in the agreement with Derby. 39 . $1,230,515 from Pester, over ten years without interest, secured by subordinate liens on the assets received from Derby. 40 . Payment of a revolving credit loan at confirmation, by using [Pester] cash or PMC cash. 41 . Pester's variable rate $9,000,000 ten-year note. 42 . Class B stock in PMC. 43 . $2,600,000 in notes payable from a reversionary interest in Pester's pension plan and secured by a condominium owned by PMC. 44 . PMC's $750,000 ten-year note. 45 . Any proceeds from a pending lawsuit after the first $300,000 is paid to the settling reclamation creditors. 46 Under these terms, we think it apparent that the secured creditors elected to release their secured interests in the chemicals Ethyl sought to reclaim in exchange for payments from sources other than the proceeds from those chemicals. This they were free to do, subject to bankruptcy court approval through confirmation, to facilitate Pester's reorganization. Because the secured creditors released their superior liens and satisfied their claims from unrelated assets and income sources, the bankruptcy court properly valued Ethyl's right to reclaim at the full invoice price of the chemicals. 8 47 Pester argues that Ethyl is estopped and barred from asserting any right it had to the alternative remedies allowed by § 546(c) because the confirmed Plan, as explained in the debtors' Disclosure Statement and as subsequently modified, expressly excludes reclamation claimants from administrative expense priority. Therefore, Ethyl must be relegated to an unsecured creditor status. The bankruptcy court rejected this argument, after examining the relevant terms of the Plan, the Disclosure Statement, and the modifying Master Agreement in great detail. We agree with its analysis of these documents. We also note that the Plan expressly provides that non-settling reclamation claimants, such as Ethyl, will receive payment in full of the amount finally determined to be due by Court order. Thus, the Plan does not bar, but expressly contemplates, the judgment entered by the bankruptcy court after it sustained Ethyl's reclamation claim.