Opinion ID: 3062086
Heading Depth: 5
Heading Rank: 2

Heading: Deferment of Objections to CCB Claims

Text: SMDI’s second argument has to do with the Joint Plan’s provision that objections to the CCB Claims “shall be deferred until there are Monetary Recoveries or other funds to pay them.” Conf. App., Joint Plan ¶ 3.3. Such funds would become available, if at all, only after the conclusion of the AP.12 SMDI, however, wished to object to the CCB Claims before the AP terminated. If, while the AP was pending, SMDI had been able to eliminate the CCB Claims or significantly lower their estimated value, SMDI argues that 12 Such monetary recoveries, of course, would have been paid by SMDI. Ultimately, the bankruptcy court did not award any damages to the Liquidating Trust. The Trustee appealed the issue to the district court, which affirmed, and he did not appeal further. 46 it would have had sufficient funds to settle the AP by paying all claims against the estate. Conf. App., Aplt. Br. at 12–13, 15. Once the AP was over, a successful objection to the CCB Claims could no longer permit SMDI to settle the AP and keep the Domain Name. SMDI argues, therefore, that deferment of objections to the CCB Claims was an inequitable term designed to inflict “special prejudice” on SMDI. Conf. App., Aplt. Br. at 50 (quoting Grandfather Mountain Ltd. P’ship, 207 B.R. at 487). Like the bankruptcy court, we are not blind to the parties’ intentions in this litigation. We have no doubt that the objection-delaying provision was of strategic value in ConsumerInfo’s effort to see the AP litigated to its conclusion. But SMDI simply does not provide any authority for the proposition that this provision inflicted the kind of “special prejudice” that could require denial of the Joint Plan’s confirmation. Any legitimate claims or interests SMDI had in this case were protected under the Joint Plan. SMDI’s claims, like those of other creditors, were paid in full, with interest. Moreover, the Joint Plan specified that if the Liquidating Trust were to recover funds that could benefit SMDI’s interest, SMDI would have its chance to object to the CCB Claims (which would otherwise be paid first). In its capacity as an interest-holder, SMDI had nothing to gain from objecting to the CCB Claims unless and until there was a monetary recovery in the AP. To the extent that SMDI was prejudiced by the Joint Plan, the prejudice had nothing to do with its status as a creditor or interest-holder in the estate. Of course, SMDI wanted a plan that would ensure settlement of the AP, while ConsumerInfo wanted a plan 47 that would make settlement less likely. But to the extent that SMDI had a right to try to maneuver the confirmation process toward a settlement that would let it keep property it obtained in violation of the automatic stay, this simply was not a right the Joint Plan was obligated to protect. iii. Bar on SMDI Objecting to Post-Confirmation Fees Finally, the Joint Plan barred SMDI from objecting to the Liquidating Trustee’s fees and provided that only the U.S. Trustee had standing to do so. SMDI argues that this restriction on fee objections was also a term of “special prejudice.” Conf. App., Aplt. Br. at 50. We cannot agree. ConsumerInfo and the Trustee had a legitimate reason for including this term. If they had not included it, SMDI could have continued to challenge the Liquidating Trustee’s fees in order to impede his ability to litigate the AP against SMDI. We do not see how SMDI was unfairly prejudiced by its inability to do so.