Opinion ID: 533036
Heading Depth: 2
Heading Rank: 2

Heading: Exercise of Equitable Powers

Text: 12 This conclusion does not end our analysis. The RLEA also argues the district court properly exercised its equitable powers to award interest. A reorganization court is essentially acting as a court of equity. Pepper v. Litton, 308 U.S. 295, 304, 60 S.Ct. 238, 244, 84 L.Ed. 281 (1939); In re Witte, 841 F.2d 804, 808 (7th Cir.1988). However, the general equity power is not an absolute grant to do equity. United States v. Sutton, 786 F.2d 1305, 1308 (5th Cir.1986). In the present case, the finality principles must be balanced against the general equitable power of the court to avoid unfairness. Hence, we will examine whether the district court properly exercised its general equitable powers to award pre-liquidation interest to the employees. 13 The district court found that the WRA clearly expresses the parties' intention that the WRA gave the employees no right to interest on the reduced wages. The court then based its decision to award interest on the gap in the WRA in not anticipating the length of the delay between the time the sale was ordered and the time a final price was reached. 5 We must now determine whether the length of the delay here was unanticipated and unfair to an extent that it required the intervention of equity at the expense of finality. 14 Initially, it is obvious that some delay in the determination of a final sale price was anticipated. The APA provided for a six-month period to resolve adjustments to the cash purchase price. This period was capable of being extended and in fact was so extended. In Insurance Group Comm. v. Denver & R.G.W.R. Co., 329 U.S. 607, 67 S.Ct. 583, 91 L.Ed. 547, reh'g denied, 330 U.S. 854, 67 S.Ct. 860, 91 L.Ed. 1296 (1947), the debtor wanted re-examination of a confirmed plan because World War II brought on unanticipated conditions in rail transportation demand, steel production, and money rates. The Court assumed, arguendo, that post-confirmation changes in conditions could be considered for the purpose of re-examination. It declined to re-examine the confirmed plan, however, because the debtor failed to allege changed conditions of a kind not considered when the plan was approved. 329 U.S. at 611-12, 67 S.Ct. at 585. These unanticipated conditions were far more severe than the delay involved here. This case illustrates the narrow circumstances under which a court should exercise equity to disturb a confirmed plan. 15 In addition, it is not at all clear that the delay here was unfair to the employees. In fact, the delay actually enured to the benefit of the employees since a greater sum was ultimately returned than was provided for in the APA. 6 Also, it is significant to the fairness consideration that a provision for pre-liquidation interest was sought to be included in the WRA, but was rejected. 7 We find the facts here did not require the intervention of equity to award pre-liquidation interest, and the district court abused its discretion in doing so.