Court Opinion

ID: 4514611
Source: CourtListenerOpinion
Date Created: 2020-03-11 00:01:51.076459+00
Date Added: 2024-06-11T09:46:06.209541
License: Public Domain

FILED
                                                                           APR 15 2019
                           NOT FOR PUBLICATION
                                                                      SUSAN M. SPRAUL, CLERK
                                                                         U.S. BKCY. APP. PANEL
                                                                         OF THE NINTH CIRCUIT

             UNITED STATES BANKRUPTCY APPELLATE PANEL
                       OF THE NINTH CIRCUIT

In re:                                               BAP No. AZ-18-1223-TaLB

JOAN KATHRYN LIVDAHL,                                Bk. No. 2:16-bk-12768-MCW

                    Debtor.

LEONARD NOEL ROBERTS,

                    Appellant,

v.                                                   CORRECTED
                                                     MEMORANDUM*
JOAN KATHRYN LIVDAHL,

                    Appellee.

                    Argued and Submitted on March 22, 2019
                             at Phoenix, Arizona

                                Filed – April 15, 2019

               Appeal from the United States Bankruptcy Court
                         for the District of Arizona

         *
        This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value, see 9th Cir. BAP Rule 8024-1.
          Honorable Madeline C. Wanslee, Bankruptcy Judge, Presiding

Appearances:               Craig Stephan argued for appellant; Katherine
                           Anderson Sanchez and Vail C. Cloar of Dickinson
                           Wright PLLC argued for appellee.

Before: TAYLOR, LAFFERTY, and BRAND, Bankruptcy Judges.

                                INTRODUCTION

      Leonard Roberts held a large judgment against chapter 111 debtor

Joan Livdahl and actively protected his interests in her bankruptcy case. As

the bankruptcy judge would later note, he routinely had at least two

attorneys appear at hearings; three of his attorneys were of record in the

bankruptcy case.

      But when the confirmation hearing commenced on Debtor’s second

amended plan of reorganization (the “Second Plan”), Mr. Roberts and his

attorneys were nowhere to be found. Debtor’s counsel acknowledged on

the record that Mr. Roberts’s lead bankruptcy counsel had informed her

that he was on vacation, but she also said that she anticipated that one of

his other attorneys would appear. The bankruptcy court then proceeded

with the confirmation hearing, overruled Mr. Roberts’s objections on the

      1
        Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules
of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of
Civil Procedure.

                                           2
merits, and confirmed the Second Plan.

      On appeal, Mr. Roberts argues that the bankruptcy court violated his

constitutional right to due process when it confirmed the Second Plan at

the hearing; he also argues that confirmation was in error. Neither position

has merit. Accordingly, we AFFIRM the bankruptcy court’s confirmation

order.

                                   FACTS

      In October 2015, Mr. Roberts obtained a large judgment for fraud and

unjust enrichment against Debtor (the “Claim”). The Arizona Court of

Appeals affirmed the judgment, and, through judgment enforcement

activities, Mr. Roberts fully secured the Claim. He also foreclosed his

judgment lien on Debtor’s house and acquired it through credit bid at the

sheriff’s sale.

      Thereafter, Debtor filed a chapter 11 petition, but it provided only

temporary protection against collection on the Claim. Mr. Roberts obtained

a judgment from the bankruptcy court rendering the Claim

nondischargeable. He also obtained stay relief and evicted her from

possession of the house.

      Mr. Roberts’s acquisition of Debtor’s house through credit bid

reduced but did not eliminate the fully secured Claim. So, Debtor

attempted to manage the Claim and her other debts through plan

confirmation. But her first plan was not confirmed. Mr. Roberts objected,

                                      3
and, at a contested confirmation hearing, the bankruptcy court required a

revised disclosure statement and another plan.

      Debtor then filed the Second Plan. It proposed to pay unsecured

creditors in full over five years and to pay the Claim in full with interest at

a rate already found appropriate by the bankruptcy court. But, the Second

Plan did not amortize the payment on the Claim evenly over the seven-

year payment period. Instead, it provided for annual payments totaling

$20,000 and a balloon payment at or before the end of the seven-year

period. Mr. Roberts characterized the Second Plan as providing for

negative amortization, but Debtor claimed rights to offset against the Claim

that, coupled with reduction of the debt as a result of the credit bid, made

this characterization uncertain as of the confirmation hearing.

      The bankruptcy court eventually approved the disclosure statement

for the Second Plan and provided notice of the confirmation hearing on the

Second Plan (the “Notice of Hearing”). The Notice of Hearing stated: “The

Court will consider whether to confirm the [Second] Plan at a hearing on

July 17, 2018, at 10:00 a.m. . . .” It set a deadline to object, and it noted:

            9. PROCEDURE IF A PLAN OBJECTION IS FILED: If a
      party objects to confirmation of the [Second] Plan, the
      Confirmation Hearing will be a non-evidentiary hearing at
      which the Court will determine the appropriate manner to
      address and resolve any objection.

             10. PROCEDURE IF NO PLAN OBJECTION IS FILED: If

                                          4
     no party objects to confirmation of the [Second] Plan, the Court
     may confirm the [Second] Plan at the Confirmation Hearing if
     the Proponent presents sufficient evidence (e.g., witness
     testimony, declaration, or documents) to allow the Court to
     make the findings required by Bankruptcy Code § 1129.

     Mr. Roberts timely filed the only objection to confirmation. He raised

a variety of arguments. As most relevant to this appeal, he argued that the

Second Plan was not proposed in good faith because Debtor was

consistently dishonest and consistently delayed plan confirmation, that the

Second Plan unjustifiably delayed conversion to chapter 7, and that the

Second Plan was not feasible because of the alleged negative amortization

of the Claim.

     The general unsecured claims class, however, voted 100% in favor of

the Second Plan.

     The day before the confirmation hearing, Debtor filed her declaration

in support of plan confirmation and a combined memorandum in support

of plan confirmation and response to Mr. Roberts’s objection.

     Only Debtor’s counsel appeared at the confirmation hearing. When

asked, she said that, although she knew one of Mr. Roberts’s counsel was

out of town, she expected one of his other attorneys to appear.

     The bankruptcy judge then proceeded with the confirmation hearing,

considered Mr. Roberts’s objections to confirmation, and evaluated the

existing evidentiary bases for plan confirmation. The bankruptcy judge

                                     5
then began an oral ruling on plan confirmation:

      Okay. All right. All right. Thank you, Ms. Sanchez. I have had
      an opportunity to review the plan, review the objection, review
      the ballot report, review Ms. Livdahl's declaration, and then of
      course we've had quite a discussion today with respect to
      various factors with respect to confirmation of a plan under a
      Chapter 11.

      So as I review this record, I see that the plan does appear to be
      valid.

Hr’g Tr. (July 17, 2018) 26:23–27:5. The bankruptcy judge thereafter:

addressed and overruled Mr. Roberts’s objections based on Debtor’s

alleged lack of good faith, payment of professional fees, classification, best

interests of creditors, scope of the injunction, offset, and alleged lack of

feasibility; and concluded that he lacked standing to object on behalf of

other creditors. In sum, the bankruptcy judge concluded that the Second

Plan complied with 11 U.S.C. § 1129, found there was no reason to delay

confirmation, and, thus, confirmed the Second Plan.

      The bankruptcy judge emphasized that: “I would also like the order

[confirming the Second Plan] to reflect that [Mr. Roberts’s] objections have

been specifically overruled on the merits and also overruled on grounds of

failure to prosecute the objections due to the nonappearance of counsel. But

both of those reasons would justify moving the case forward.” Id. at

31:20–25.

      That same day, the bankruptcy court entered minutes reflecting that

                                        6
the bankruptcy court confirmed the Second Plan.

      The next day, Mr. Roberts filed a motion asking the bankruptcy court

to vacate the minute entry confirming the Second Plan and to reset a

hearing on its confirmation. He alleged that his bankruptcy counsel

thought that, due to his absence and because he informed Debtor’s counsel

that he would be out of the country, the confirmation hearing would be

continued. He argued that because he was the only secured creditor and

the largest creditor, it would be “fair, just, and equitable” for the

bankruptcy court to vacate the minute entry so that his counsel could

appear and argue.

      The bankruptcy court agreed to hear the motion on shortened time.

      But in the meantime, Debtor lodged a proposed order confirming the

Second Plan, and the bankruptcy court entered a modified confirmation

order notwithstanding the pending motion to vacate and Mr. Roberts’s

objections to the order itself. Mr. Roberts timely appealed this confirmation

order but did not seek a stay pending appeal.

      Attention then turned to the motion to vacate. Debtor opposed it; she

argued that it failed both to identify the appropriate legal standard and to

establish that reconsideration under Civil Rule 59 or 60 (which are applied

in bankruptcy by Rules 9023 and 9024) was warranted. At the

reconsideration hearing, Mr. Roberts’s attorney clarified that the motion,

“really, I think, would be under Rule 59.” Hr’g Tr. (Aug. 21, 2018) 4:5–6.

                                        7
And when the bankruptcy judge inquired about Mr. Roberts’s attorneys’

nonappearance at the confirmation hearing, his counsel stated: “It was my

recommendation that my co-counsel not appear . . . .” Id. at 12:4–11, 14–15.

      After argument, the bankruptcy court entered a signed minute order

denying the motion to vacate.

      In the order, the bankruptcy court noted that Mr. Roberts had several

counsel of record and, despite this, none of the attorneys asked the

bankruptcy court or opposing counsel to continue the confirmation

hearing. Instead, “[t]hey simply failed to appear.” The bankruptcy court

next found it unreasonable for Mr. Roberts’s attorneys to not communicate

with Debtors’ counsel and to assume that she would know “that only the

vacationing attorney would be representing their collective client at a

noticed hearing, or that she should ask for a continuance when she and her

client prepared and appeared at the hearing ready to prosecute their

confirmation request.”

      The bankruptcy court next faulted Mr. Roberts for not identifying the

relevant reconsideration authority, much less establishing that

reconsideration was warranted under Civil Rule 59 or 60. It clarified that it

did not need to take additional evidence or schedule a further evidentiary

hearing to resolve the plan objections and confirm the plan. It continued:

      It instead needed to work through the legal issues and obtain
      certain clarifications. The Court, having prepared for the
      confirmation hearing, was able to proceed and make

                                      8
      determinations on the merits based on the record before it.
      Roberts' objections seem focused primarily on how long it
      would take to be repaid, and whether the plan was in the best
      interest of creditors or whether the plan was feasible. The Court
      spent a substantial amount of time working through the
      confirmation issues. The Court then made its rulings on the
      merits. This was not a default situation.

And it concluded: “Roberts has failed to meet his burden for

reconsideration, rehearing, or relief from the order. Accordingly, the Court

denied the relief requested in the Motion to Vacate, as well as any relief

sought under [Civil] Rule 59 or 60.”

      Mr. Roberts never amended his notice of appeal to include the denial

of reconsideration.

      At oral argument, counsel stated that after confirmation of the

Second Plan: Debtor began making the required payments to unsecured

creditors; and the bankruptcy court determined that as a result of a credit

bid and offset the Second Plan would pay about $400,000 on the Claim.2

                                 JURISDICTION

      The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and

157(b)(2)(L). We have jurisdiction under 28 U.S.C. § 158. In so determining,

the Panel acknowledges that Mr. Roberts did not seek a stay of

      2
        By the Panel’s math, the Second Plan provides for a small amount of principal
reduction before payment in full through the balloon payment; it is not a negative
amortization plan.

                                           9
confirmation and that distributions under the Second Plan have begun, but,

in the absence of any mootness argument by Debtor, the Panel declines to

consider whether equitable mootness applies. See Motor Vehicle Cas. Co. v.

Thorpe Insulation Co. (In re Thorpe Insulation Co.), 677 F.3d 869, 879–83 (9th

Cir. 2012).

                                    ISSUES

      Did the bankruptcy court deprive Mr. Roberts of due process when it

confirmed the Second Plan?

      Did the bankruptcy court abuse its discretion when it confirmed the

Second Plan?

                          STANDARD OF REVIEW

      We review for an abuse of discretion the bankruptcy court’s ultimate

decision to confirm a chapter 11 plan. Marshall v. Marshall (In re Marshall),

721 F.3d 1032, 1045 (9th Cir. 2013); Computer Task Group, Inc. v. Brotby (In re

Brotby, 303 B.R. 177, 184 (9th Cir. BAP 2003). But we review for clear error

any factual determinations as to good faith and feasibility. In re Brotby, 303

B.R. at 184. We review de novo whether a litigant’s due process rights were

violated. DeLuca v. Seare (In re Seare), 515 B.R. 599, 615 (9th Cir. BAP 2014).

      A bankruptcy court abuses its discretion if it applies the wrong legal

standard, misapplies the correct legal standard, or makes factual findings

that are illogical, implausible, or without support in inferences that may be

drawn from the facts in the record. See TrafficSchool.com, Inc. v. Edriver Inc.,

                                       10
653 F.3d 820, 832 (9th Cir. 2011) (citing United States v. Hinkson, 585 F.3d

1247, 1262 (9th Cir. 2009) (en banc)).

                               DISCUSSION

      Mr. Roberts argues on appeal that the bankruptcy court deprived

him of due process and erred when it confirmed the Second Plan. Neither

position has merit.

      A.    Mr. Roberts appealed only the confirmation order; he did not
            appeal the reconsideration order.

      We start by clarifying the scope of the appeal: We review only the

order confirming the Second Plan; we do not review the order denying

Mr. Roberts’s reconsideration motion.

      The chronology of the orders and motions is important:

!     At the confirmation hearing, the bankruptcy judge announced a

      decision confirming the Second Plan;

!     Mr. Roberts filed a reconsideration motion;

!     The bankruptcy court entered an order confirming the Second Plan;

!     Mr. Roberts filed a notice of appeal of that order; and

!     The bankruptcy court later denied Mr. Roberts’s reconsideration

      motion.

      Rule 8002 provides that a notice of appeal filed after the bankruptcy

court announces a decision but before entry of the order is treated as filed

on the date of and after that entry. Fed. R. Bankr. P. 8002(a)(2). That rule

                                         11
also discusses the effect of a reconsideration motion on the time to appeal.

It states that if a party timely files a Rule 9023 motion, the time to file a

notice of appeal runs from the entry of the order disposing of that motion.

Fed. R. Bankr. P. 8002(b)(1)(B). It also provides: “If a party files a notice of

appeal after the court announces or enters a judgment, order, or

decree—but before it disposes of any motion listed in subdivision

(b)(1)—the notice becomes effective when the order disposing of the last

such remaining motion is entered.” Fed. R. Bankr. P. 8002(b)(2).

      Rule 8002 also discusses how to appeal a reconsideration decision:

      If a party intends to challenge an order disposing of any motion
      listed in subdivision (b)(1)—or the alteration or amendment of
      a judgment, order, or decree upon the motion—the party must
      file a notice of appeal or an amended notice of appeal. The
      notice or amended notice must comply with Rule 8003 or 8004
      and be filed within the time prescribed by this rule, measured
      from the entry of the order disposing of the last such remaining
      motion.

Fed. R. Bankr. P. 8002(b)(3).

      In turn, Rule 8003 provides that a notice of appeal must include a

copy of the order appealed. Fed. R. Bankr. P. 8003(a)(3).

      Here, Mr. Roberts complied with Rule 8003(a)(3) by identifying the

subject of the appeal as the confirmation order entered August 10, 2017 and

attaching a copy of the confirmation order as an exhibit. Because

Mr. Roberts’s notice of appeal was filed before the bankruptcy court

                                        12
entered the order denying his motion to vacate, he could not have

identified that order in his notice of appeal. Per Rule 8002(b)(3),

Mr. Roberts was required to file an amended notice of appeal. He did not.

We thus conclude that Mr. Roberts did not appeal the order denying his

motion to vacate.

      That this was intentional is confirmed by Mr. Roberts’s opening

appellate brief. In it, Mr. Roberts “simply mention[s] the denial of the

motion for reconsideration in his brief, but then articulate[s] neither the

standard for reviewing a motion for reconsideration nor any reason why he

believes the denial of reconsideration, rather than [plan confirmation], was

in error.” Lolli v. Cty. of Orange, 351 F.3d 410, 415 (9th Cir. 2003). This

briefing and notice of appeal structure is insufficient to preserve appellate

rights as to the denial of reconsideration. Id.; see also Johnson v. Hyundai

Motor Finance (In re Johnson), BAP No. CC-15-1042-DTaKu, 2015 WL

5923397, at *5 (9th Cir. BAP Oct. 9, 2015) (declining to consider any issues

with respect to a second reconsideration order when the debtor did not

identify it in the notice of appeal, merely referenced it in his opening brief

but did not assign error to it, and failed to provide a transcript of the

relevant hearing).

      We consider only the confirmation order on appeal.

                                        13
       B.     The bankruptcy court did not deprive Mr. Roberts of due
              process by confirming the Second Plan at the duly noticed
              and scheduled confirmation hearing.

       Mr. Roberts argues that the bankruptcy court deprived him of due

process under the Fifth Amendment when it confirmed the Second Plan.

We disagree.

       Constitutional due process “requires notice reasonably calculated,

under all the circumstances, to apprise interested parties of the pendency of

the action and afford them an opportunity to present their objections.”

United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 272 (2010) (internal

quotation marks omitted). Here, the Code provides that “[a]fter notice, the

court shall hold a hearing on confirmation of a plan.” 11 U.S.C. § 1128(a).3

       Mr. Roberts’s due process argument turns on his read of the Notice of

Hearing. By his account, it describes only two possible scenarios: if there

were no objections, the bankruptcy court might confirm the Second Plan

given sufficient evidence; or, if there were objections, then the bankruptcy

court would delay confirmation and schedule an evidentiary hearing. He

thus contends that his objection made confirmation at the scheduled

hearing improper and that the confirmation order violated his due process

rights.

       Mr. Roberts’s position has facial appeal. The Notice of Hearing is not

       3
        In his opening brief, Mr. Roberts cites § 1324 as the relevant statute. It is not.
That statute governs confirmation hearings for chapter 13 cases.

                                              14
a model of clarity. But we conclude that he was afforded due process.

      We first consider the text of the Notice of Hearing. Paragraph ten

expressly allows for confirmation at the initial hearing in the absence of

objection. But paragraph nine, which outlines the impact of objection on

the initial hearing, is not a bald promise of judicial inaction as argued by

Mr. Roberts. It acknowledges that in the face of objection, the hearing will

be non-evidentiary. But it also states that, notwithstanding objection, the

bankruptcy court will determine at this initial hearing how to address and

resolve any objections. So, the Notice of Hearing put Mr. Roberts on notice

that the bankruptcy court had options for decision at the initial hearing.

      It is a “well established principle” that courts have “inherent power

to control their dockets.” United States v. W.R. Grace, 526 F.3d 499, 509 (9th

Cir. 2008) (internal quotation marks omitted). Federal judges have

“substantial discretion” about what “happens inside the courtroom.” Id.

(internal quotation marks omitted). And federal courts “are vested with

inherent powers enabling them to manage their cases and courtrooms

effectively . . . .” Id. (internal quotation marks omitted).

      Here, the bankruptcy court acted in accord with paragraph nine and

its generalized power to manage matters on its docket. It decided to resolve

the plan objections on the record at the hearing. In reaching this decision it

acted with extensive knowledge of the bankruptcy case gained from

administration of the plan process and the nondischargeability and stay

                                        15
relief litigation involving Mr. Roberts. The record makes clear that,

notwithstanding his absence, the bankruptcy court carefully considered

Mr. Roberts’s objections. But at the end of this analysis, it concluded that a

contested evidentiary hearing was unnecessary.

      The Notice of Hearing did not prohibit the bankruptcy court from

being decisional in this fashion. Mr. Roberts had actual notice that the

bankruptcy court would consider plan confirmation and decide how to

proceed if there were objections; this actual notice “more than satisfied” his

“due process rights.” Espinosa, 559 U.S. at 272.

      Thus, Mr. Roberts’s decision not to attend the hearing is fatal to his

due process argument. His position reduces to the proposition that he, not

the bankruptcy court, had the right to control the confirmation process

because, once he objected, the bankruptcy court was required to continue

the hearing even as he failed to attend. But the bankruptcy court never lost

discretion to determine that a continued hearing was unnecessary even in

the face of objection. Indeed, the Notice of Hearing expressly warned

parties that the bankruptcy court would consider how to proceed with plan

confirmation at the hearing. So, if Mr. Roberts wanted to be heard about

whether an evidentiary hearing was necessary or whether the bankruptcy

court had sufficient evidence to confirm at the initial hearing, he needed to

attend the initial hearing.

      It is also unclear what type of evidentiary hearing Mr. Roberts

                                      16
anticipated. He did not argue in his plan objection that there were disputed

factual issues that required an evidentiary hearing to resolve, nor did he

expressly request an evidentiary hearing.4 Instead, at the conclusion of his

objection he simply asked the bankruptcy court to sustain his objection to

confirmation based on his brief and the record in the case. True,

Mr. Roberts stated in a footnote that he had a forensic expert willing to

testify that a promissory note listed as an asset on Debtor’s schedules was

not a legitimate document; but he does not discuss on appeal how this

possible isolated factual issue compels reversal. Put differently, Mr. Roberts

has not shown that the bankruptcy court erred in not holding an

evidentiary hearing because he never established that an evidentiary

hearing was necessary. Bankruptcy courts regularly, at non-evidentiary

hearings, grant motions based on the evidence in the record.

      Last, Mr. Roberts suggests that Delaney-Morin v. Day (In re Delaney-

Morin), 304 B.R. 365 (9th Cir. BAP 2003), supports his due process

argument, but that case is legally and factually distinguishable. There, a

secured creditor filed a stay relief motion based on three theories, and the

notice of preliminary hearing referred to the hearing as “non-evidentiary.”

      4
        This contrasts with Mr. Roberts’s earlier objection to Debtor’s first amended
plan, where he explicitly “request[d] that this Court adopt the blended rate formula
used by the Ninth Circuit in Boulders, and allow the Creditor to present evidence to
establish the interest rate in this manner.” Before the hearing on confirmation of the
Second Plan, the bankruptcy court determined the appropriate interest rate.

                                            17
Id. at 367. But the motion was not supported by competent, admissible

evidence, and the debtor expressly sought a continuance, which the

bankruptcy court denied. Id. at 367–68. Then, at the hearing, which the

debtor did not attend, the creditor raised two new grounds which it

supported only with creditor’s counsel’s “avowals.” Id. at 368, 370. The

bankruptcy court granted the motion based solely on the new allegations.

Id. at 368.

      On appeal, we reversed. Id. at 371. We noted that the “avowals” were

not evidence and stated that even if they could be treated as an offer of

proof, the debtor was misled by being told the hearing was non-

evidentiary. Id. at 370. As a result, because the allegations at the hearing

that formed the basis for the bankruptcy court’s granting the motion were

not made in the original motion, debtor lacked an opportunity to respond

to the allegation; “[t]his raises due process concerns.” Id. In addition, we

noted that Civil Rule 7054 provided that a court cannot grant by default

more relief than originally requested in the pleadings. Id. at 370–71.

      Delaney-Morin, thus, is distinguishable. First, Debtor provided

competent, admissible evidence in support of her motion to confirm the

Second Plan. More importantly, the bankruptcy court did not confirm the

Second Plan based only on new legal arguments or factual assertions made

at the hearing; thus, it did not deprive Mr. Roberts of an opportunity to be

heard on the matters before it. Rather, the bankruptcy court overruled his

                                       18
objections on the merits.

       In sum, Mr. Roberts had actual notice that the bankruptcy court

would consider whether to confirm the Second Plan at the hearing; this

comported with due process.

       C.     The bankruptcy court did not abuse its discretion when it
              confirmed the Second Plan.

       Mr. Roberts argues that the bankruptcy court abused its discretion in

confirming the Second Plan. He is wrong.

       First, he argues based on “newly discovered” information and alleges

that the day before the confirmation hearing Debtor disclosed to him that

her related LLC held an interest in 48 additional acres of Iowa farmland.

This new disclosure of valuable farmland, he contends, has implications for

Debtor’s good faith, the value of the LLC’s assets, the proper liquidation

analysis, and the best interest of creditors’ test (i.e., unsecured creditors

could be paid in full immediately rather than in five years5).

       We deem these arguments forfeited because Mr. Roberts never

       5
         We disagree with Mr. Roberts about the best interest of creditors test. He
suggests that immediate liquidation would “be better” for unsecured creditors. But, as
the bankruptcy court ruled at the confirmation hearing and as Mr. Roberts does not
dispute on appeal, Mr. Roberts as a fully secured creditor lacks standing to advance
unsecured creditors’ interests. Next, when creditors are paid in full, as they are here, the
best interests of creditors does not require immediate liquidation. Finally and in any
event, the unsecured creditors voted in favor of the Second Plan. We also disagree that
good faith always requires a chapter 11 debtor to promptly liquidate as opposed to
attempting a payout over time that may avoid the need for liquidation.

                                            19
presented them to the bankruptcy court in the context of plan confirmation.

Orr v. Plumb, 884 F.3d 923, 932 (9th Cir. 2018) (“The usual rule is that

arguments raised for the first time on appeal . . . are deemed forfeited.”).

He knew about the issue before the confirmation hearing, but he failed to

appear and to argue the point at that time. Instead, he raised these

arguments with the bankruptcy court in his motion to vacate the minute

entry, which he conceded was premised on Civil Rule 59. The bankruptcy

court entered an order denying the motion. Mr. Roberts never appealed

that order. Nor does he argue in his appellate brief that the bankruptcy

court abused its discretion in denying reconsideration. This, in turn, works

a waiver (i.e., Mr. Roberts intentionally relinquished his right to argue that

the bankruptcy court erred in so deciding). McKay v. Ingleson, 558 F.3d 888,

891 (9th Cir. 2009) (“Because this argument was not raised clearly and

distinctly in the opening brief, it has been waived.”).6

       The only argument that remains is Mr. Roberts’s position that the

bankruptcy court abused its discretion in concluding that the Second Plan

was feasible. He argues that the bankruptcy court misread his § 1129(a)(11)

       6
        Two recent Ninth Circuit cases discuss waiver and forfeiture in the bankruptcy
context. See Reid and Hellyer, APC v. Laski (In re Wrightwood Guest Ranch, LLC), 896 F.3d
1109, 1113–14 (9th Cir. 2018); Harkey v. Grobstein (In re Point Center Financial, Inc.),890
F.3d 1188, 1194 (9th Cir. 2018). Neither compels reversal here as we do not need to
decide whether Mr. Roberts forfeited these arguments in their entirety merely by failing
to appear at the hearing. Instead, he raised them in connection with reconsideration
and, thus, our affirmance is based on a different shade of waiver and forfeiture—
Mr. Roberts’s failure to appeal from the order denying his motion to vacate.

                                            20
objection. The bankruptcy court thought his objection was based on an

increased interest rate on his judgment, he explains, when instead his

argument was premised on the following: negative amortization would

result in his judgment increasing over course of the seven year plan; the

Second Plan allows Debtor to retain her assets and to pay creditors over

time; Debtor failed to show that she could obtain a loan sufficient to make

the balloon payment; and, instead, Debtor would have to liquidate assets

thereby defeating the Second Plan’s purpose and rendering it nonfeasibile.

      To start, § 1129(a)(11) provides that the court should not confirm a

plan if it would likely “be followed by the liquidation, or the need for

further financial reorganization, of the debtor . . . under the plan, unless

such liquidation or reorganization is proposed in the plan.” 11 U.S.C.

§ 1129(a)(11) (emphasis added). Here, the Second Plan expressly provides

for the possibility of liquidation. It states: “The Debtor may, in her

discretion, sell or encumber the Iowa Property or any other assets of [an

LLC in which she has an interest] and use the funds to pay the Claim.”

Correspondingly, Debtor’s disclosure statement states that the “balloon

payment to [Mr. Roberts] will likely come from a loan or a sale of the Iowa

Property.” It further states that “Debtor believes this is feasible as the Iowa

Property is valued in excess of the Allowed [Mr. Roberts’s] Claim.”

      The Second Plan thus proposes that liquidation of the LLC’s assets

may be required. And Mr. Roberts concedes that if the value of this real

                                       21
property remains steady—and he presented no evidence that it is likely to

decrease in value7—its liquidation would pay him in full. The Second Plan

thus is feasible as described, and the bankruptcy court did not abuse its

discretion in overruling Mr. Roberts’s § 1129(a)(11) objection.

      In sum, Mr. Roberts fails to show that the bankruptcy court abused

its discretion in confirming the Second Plan.

                                   CONCLUSION

      Based on the foregoing, we AFFIRM.

      7
         Mr. Roberts’s other position is in some tension with this. He argues that Debtor
failed to disclose that the LLC owned additional farmland and that the farmland is thus
more valuable than Debtor claimed. If he is correct, then even more equity would be
available to support refinance or to pay the Claim through liquidation.

                                           22