Opinion ID: 594234
Heading Depth: 2
Heading Rank: 1

Heading: facts

Text: 4 AMD filed for Chapter 11 bankruptcy on December 19, 1985. Because of serious capital problems, the reorganization plan had a number of false starts. Capital was provided by several investors, including the two appellants. Williams is the Chief Operating Officer of Rupp and Bowman Company and a member of the Creditors' Committee in the AMD bankruptcy proceeding. Schuster is the President and Chairman of Quest Biotechnology, Inc., a holding company. On August 31, 1987, Quest entered into a management agreement with AMD, and Schuster became Chairman of AMD's Board of Directors. 5 On October 1, 1989, AMD filed its Sixth Amended Plan with the bankruptcy court. Many of AMD's creditors had agreed to accept equity in AMD in full satisfaction, and the attorneys and accountants associated with the debtor had agreed to take 65% of the dollar amount of their accrued claims in cash plus certain stock. The Plan provided that the cash payments to the appellees would take place in two equal installments, and that the second installment, due on March 12, 1991, would be guaranteed personally by Schuster and Williams. Schiff received a note in the principal amount of $97,7690.33, and Krieg received a note in the principal amount of $127,731.91. The guaranties provided that the notes would accrue interest at the prime rate of the Chase Manhattan Bank of New York until paid and that attorneys' fees and costs of collection would be paid by the guarantors in event of default. The Plan was confirmed by the Bankruptcy Court on December 6, 1989. 6 The debtor defaulted on the second installment, and the notes came due but were not paid. Krieg and Schiff filed this suit in which they seek payment from Schuster and Williams.