Opinion ID: 172833
Heading Depth: 2
Heading Rank: 3

Heading: Post-Confirmation Events

Text: SMDI appealed both of those decisions to the district court. On the merits, SMDI argued that the bankruptcy court's reasons for finding fault with SMDI's plan were in error; that ConsumerInfo had engaged in unethical communications with the debtor, which led to its paying the debtor $20,000 and convincing him to abandon his support for SMDI's plan; that the trustee was not disinterested in his dealings with ConsumerInfo; that the trustee's interest in the disposition of the estate's assets inappropriately influenced his dealings in this case [6] ; that the Joint Plan should not have been confirmed because it wrongly denied payment to SMDI on SMDI's claims against the estate; and that certain aspects of the Joint Plan were not fair and equitable to SMDI. While that appeal was pending, however, some significant post-confirmation events took place which substantially changed the posture of SMDI's appeal. Under the Joint Plan, the Plan was to become effective only after, inter alia, any pending appeals were resolved. However, the Joint Plan also enabled Mr. Jubber and ConsumerInfo to waive those requirements. They in fact waived those requirements in October 2007, thus paving the way for the Plan to be substantially consummated despite SMDI's pending appeal. And, once the Joint Plan became effective, the trustee took substantial steps to pay creditors, object to creditors' claims, and prosecute the AP. In turn, ConsumerInfo made significant payments to the trustee to cover the estate's administrative costs and creditors' claims. SMDI feared that the parties would try to implement the Joint Plan while SMDI's appeal was pending, and sought to prevent that by requesting a stay of the Plan pending their appeal. The bankruptcy court denied SMDI's request to stay confirmation of the Joint Plan in part because the bankruptcy court concluded, on a preliminary basis, that SMDI's appeal would not be rendered moot once the creditors were paid under the Joint Plan since there is a possibility that SMDI could use its $2.6 million that it set aside to fund the repayment to ConsumerInfo. (Appx. at 1060.) SMDI then sought a stay from the district court arguing, inter alia, that the court should grant a stay because there is a high probability that, without a stay, the Joint Plan will be substantially consummated during the pendency of SMDI's appeal and render it moot. (Aple. Supp. Appx. at 82.) Nonetheless, the district court denied SMDI's request for a stay. SMDI did not appeal that decision to this court.