Court Opinion

ID: 2963673
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:13:47.007954+00
Date Added: 2024-06-11T11:42:44.696205
License: Public Domain

USCA1 Opinion

	

          November 22, 1995 UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                                     
                                 ____________________

        No. 94-2173

                       MONARCH LIFE INSURANCE COMPANY, ET AL.,

                                     Appellants,

                                          v.

                                    ROPES & GRAY,

                                      Appellee.

                                                     
                                 ____________________

        No. 94-2200

                       MONARCH LIFE INSURANCE COMPANY, ET AL.,

                                      Appellees,

                                          v.

                                    ROPES & GRAY,

                                      Appellant.

                                                     
                                 ____________________

                                     ERRATA SHEET

             The  opinion of this Court, issued September 13, 1995, is amended
        as follows:

             p.9,  1, l.14:  "(Bankr. D.D.C. 1992))."  in place of "(Bankr. D.
        Colo. 1992))."

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                                     
                                 ____________________

        No. 94-2173

                       MONARCH LIFE INSURANCE COMPANY, ET AL.,

                                     Appellants,

                                          v.

                                    ROPES & GRAY,

                                      Appellee.

                                                     
                                 ____________________

        No. 94-2200

                       MONARCH LIFE INSURANCE COMPANY, ET AL.,

                                      Appellees,

                                          v.

                                    ROPES & GRAY,

                                      Appellant.

                                                     
                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                 [Hon. Frank H. Freedman, Senior U.S. District Judge]
                                          __________________________

                                                     
                                 ____________________

                               Torruella, Chief Judge,
                                          ___________

                            Cyr and Stahl, Circuit Judges.
                                           ______________

                                                     
                                 ____________________

                                          3

             Bruce E. Baty,  with whom  Christopher D.  Schneider, Morrison  &
             _____________              _________________________  ___________
        Hecker, Charles K. Bergin, Jr., and Robinson, Donovan, Madden & Barry,
        ______  ______________________      __________________________________
        P.C. were on brief for Monarch Life Insurance Company.
        ____
             John  K. Villa, with whom  Nicole K. Seligman,  Philip J. Deutch,
             ______________             __________________   ________________
        Williams  & Connolly, Charles S.  Cohen and Egan,  Flanagan and Cohen,
        ____________________  _________________     __________________________
        P.C. were on brief for Ropes & Gray.
        ____

                                                     
                                 ____________________

                                  September 13, 1995
                                                     
                                 ____________________

                                          2

                    CYR,   Circuit  Judge.     Following   an  unsuccessful
                    CYR,   Circuit  Judge.
                           ______________

          intermediate appeal to the district court, Monarch Life Insurance

          Co. ("Monarch  Life")  continues  to  press its  challenge  to  a

          bankruptcy  court  order enjoining  its  prosecution  of a  legal

          malpractice action  in Massachusetts Superior  Court against  its

          former counsel,  the law firm  of Ropes &  Gray.   The bankruptcy

          court  determined  that  the   Monarch  Life  action  violated  a

          permanent injunction incorporated in the confirmed reorganization

          plan  of  its  parent corporation,  Monarch  Capital  Corporation

          ("Monarch Capital").   We now  affirm the district  court on  the

          ground that Monarch Life  is collaterally estopped from asserting

          a state court challenge to the bankruptcy court's jurisdiction to

          enter  the  permanent injunction  incorporated  in the  confirmed

          reorganization plan.  

                                          I
                                          I

                                      BACKGROUND
                                      BACKGROUND
                                      __________

                    Monarch Capital, incorporated as  a holding company  in

          1968,  marketed life  and  disability  insurance through  Monarch

          Life, its  wholly-owned Massachusetts subsidiary,1  and developed

          real estate  through another group of  subsidiaries ("real estate

          subsidiaries").    Ropes  &  Gray  provided   simultaneous  legal

          representation to Monarch Capital and its subsidiaries, including

          Monarch Life.  In 1985, Monarch Capital established a  Short-Term

                              
          ____________________

               1For  simplicity sake,  "Monarch  Life" includes  appellants
          Springfield  Life  Insurance  Company  and  First  Variable  Life
          Insurance Company.  

                                          3

          Investment  Pool  ("STIP"),  a  common bank  account  into  which

          Monarch Capital's  subsidiaries agreed to make  daily deposits of

          their  excess  cash  balances.   The  STIP  agreement  authorized

          Monarch  Capital to  borrow  needed funds  from  the STIP  at  an

          interest rate more favorable than the market  rate, and permitted

          the subsidiaries to recoup their STIP deposits on demand.

                    Beginning   in  1987,  Monarch  Capital's  real  estate

          subsidiaries began experiencing serious cash flow problems due to

          an abrupt economy-wide decline  in real estate values.   In order

          to prop up its failing real estate subsidiaries, Monarch  Capital

          began to  borrow heavily  from the  STIP deposits  contributed by

          Monarch  Life.     By  1990,  Monarch   Life's  outstanding  STIP

          "advances" to  Monarch Capital  approximated $175 million.   When

          Monarch Life learned the  extent of Monarch Capital's borrowings,

          it unilaterally cancelled its participation in the STIP.  Shortly

          thereafter, Monarch Life discharged Ropes &  Gray as its counsel.

          During  that same  year, Monarch  Capital borrowed  an additional

          $235 million from a group of financial institutions (hereinafter:

          "the 235 Banks"), pledging  its capital stock in Monarch  Life as

          collateral for the loan.          

                    In May  1991, the Massachusetts  Insurance Commissioner

          placed  Monarch Life in receivership.  The receiver in turn filed

          an  involuntary  chapter  11 petition  against  Monarch  Capital.

          After  seven months  of negotiation,  the principal  creditors of

          Monarch Capital    the 235  Banks and Monarch Life    proposed  a

          plan  of reorganization  ("Plan"), which  purported to  settle or

                                          4

          release a tangle of "complex" claims and cross-claims held by and

          against Monarch  Capital, its subsidiaries, and  other creditors.

          In  re Monarch  Capital Corp.,  No. 91-41379-JFQ,  slip op.  at 9
          _____________________________

          (Bankr.  D. Mass. June 25, 1992).2  These included Monarch Life's

          claim that Monarch Capital, acting in concert with the 235 Banks,

          had used  the STIP  to deplete  Monarch  Life's coffers,  thereby

          placing   Monarch  Life   in   violation   of   state   insurance

          regulations.3   In  consideration  of their  mutual agreement  to

          release claims  and to make  financial contributions to  fund the

          Plan,  the  Plan  proponents  insisted  on  the  inclusion  of  a

          permanent injunction to protect them from future lawsuits arising

          from or related to claims settled under the Plan.  

                    The  injunction  ultimately   included  in  the   order

          confirming the Plan provides as follows:  

                    In  addition  to  the discharge  provided  by
                    Section 1141  of the Bankruptcy  Code and  to
                    supplement   the   discharge  provisions   of
                    Article   VI.A  of   the  Plan,   this  Order
                    constitutes an injunction against all persons
                                                      ___ _______
                    (other than the FDIC as Receiver) from taking
                    any  of the following  actions (other than an
                              
          ____________________

               2Ropes & Gray was scheduled as a creditor  in the chapter 11
          proceeding, but asserted no claim against Monarch Capital. 

               3The  Plan  also  provided,  inter alia,  that  (1)  Monarch
                                            _____ ____
          Capital  would separate its  insurance business (thereby creating
          the "Life Group") from its real estate business (thereby creating
          the  "New Realty  Group"); and  (2) the  235 Banks  would release
          their guaranty  claims against Monarch Capital's  subsidiaries in
          connection  with the 1990 loan  to Monarch Capital,  and agree to
          share  the Monarch Life capital  stock which had  been pledged as
          collateral  for the  1990 loan  with Monarch  Capital's unsecured
          creditors.  Upon confirmation of  the Plan in June 1992, the  235
          Banks  became  Monarch  Life's  "parent"  by  acquiring  a  clear
          majority of  Monarch Life  stock, and Monarch  Life emerged  from
          receivership.

                                          5

                    action   brought  to  enforce  any  right  or
                    obligation under  the Plan or  the Settlement
                    Agreement):  
           
                         a. commencement or  continuation of  any
                            ____________ __  ____________ __  ___
                         action  or  proceeding  arising from  or
                         ______  __  __________  _______ ____  __
                         related  to  a  claim  against  [Monarch
                         _______  __  _  _____  _______
                         Capital] against or  affecting or  [sic]
                         any  property  of [Monarch  Capital], or
                         any direct or indirect transferee of any
                         property  of,  or  direct   or  indirect
                         successor in  interest  to, any  of  the
                         foregoing . . . ; and  
                                           ___

                         b. commencement or  continuation of  any
                            ____________ __  ____________ __  ___
                         action  or  proceeding  arising from  or
                         ______  __  __________  _______ ____  __
                         related to a claim against the Debtor of
                         _______ __ _ _____ _______ ___ ______
                         this Chapter 11 case, the [Monarch Life]
                         Receivership  or  the operations  of the
                         Debtor against  or affecting any  of New
                         Holding  Co.,  New Realty  Co., [Monarch
                         Life],  the  Agent, the  235  Banks, the
                         Trustee,  the  Creditors' Committee  (in
                         such   capacity),  the   [Monarch  Life]
                         Receiver and  their respective officers,
                                  ___  _____ __________
                         directors, employees, attorneys, agents,
                                               _________
                         successors  and  assigns  other  than  a
                         claim to enforce  obligations under  the
                         Plan or  the Settlement Agreement .  . .
                         .4  
           
          Id. at 19-20 (emphasis added).   
          ___

                    After  a   hearing,  at  which  the  parties  discussed

          whether, and to what extent,  Bankruptcy Code   105(a)5  empowers

          a bankruptcy  court to  afford permanent injunctive  relief which

          effectively  grants  a  "discharge"  to parties  other  than  the
                                                           _____  ____  ___

          chapter  11  debtor, the  bankruptcy  court  confirmed the  Plan,
          _______  __  ______

                              
          ____________________

               4Subparagraphs (a) and (b)  each list specific exceptions to
          the coverage of the injunction; none are material to this appeal.

               5Section 105(a) provides in  relevant part:  "The  court may
          issue any  order,  process,  or  judgment that  is  necessary  or
          appropriate  to  carry out  the provisions  of  this title."   11
          U.S.C.   105(a).

                                          6

          including  the proposed injunction.   See id. at  23-27; see also
                                                ___ ___            ___ ____

          infra Appendix  at pp.  i-iii (containing relevant  excerpts from
          _____

          confirmation  order).   The  bankruptcy court  found that  absent

          prompt confirmation  of a  chapter 11  plan, Monarch Life  likely

          would be forced into  liquidation.  In re Monarch  Capital Corp.,
                                              ____________________________

          No.  91-41379-JFQ,  slip  op. at  18.    Monarch  Life's receiver

          elected not to appeal the confirmation order.

                    Monarch  Life  soon  discovered   documentary  evidence

          allegedly   establishing  that   Ropes   &  Gray   simultaneously

          represented   both   Monarch   Capital   and  Monarch   Life   in

          circumstances  which suggested an  inherent conflict of interest.

          In May 1993, Monarch Life brought suit in  Massachusetts Superior

          Court, seeking  compensatory damages  for Ropes &  Gray's alleged

          participation  in  Monarch  Capital's  private  strategy  to  use

          Monarch Life's  STIP contributions  to prop up  Monarch Capital's

          moribund real  estate investments.   Monarch Life  alleged, inter
                                                                      _____

          alia,  that Monarch  Capital  and Ropes  &  Gray, in  reports  to
          ____

          Massachusetts  insurance  regulators, deliberately  concealed the

          nature  and  understated the  amount  of the  STIP  "advances" to

          Monarch Capital, thereby exposing  Monarch Life and its directors

          to civil liability for  Monarch Life's violation of Massachusetts

          insurance  laws which  require that  insurance companies  keep on

          hand minimum "admitted assets" to cover extant policies.  Monarch

          Life further alleged that Ropes & Gray had deliberately concealed

          from Monarch Life the ongoing use of the  STIP by Monarch Capital

          to finance its  long-term real  estate ventures, as  well as  the

                                          7

          fact  that  Monarch Capital  had  no realistic  prospect  of ever

          repaying its STIP "advances" had Monarch Life made demand.6

                    Ropes & Gray filed a motion for civil  contempt against

          Monarch Life  in the  bankruptcy court,  claiming that its  state

          court action  violated the injunctive provision  in the confirmed

          Monarch  Capital chapter  11 plan.   Following  a hearing  on the

          contempt  motion, the  bankruptcy court  determined that  (1) the

          Monarch  Life  action  was barred  by  the  broad  terms of  both

          subparagraphs (a) and (b) of the injunction included in the Plan,

          see supra p.  6; and (2) the  doctrine of res  judicata precluded
          ___ _____                                 ___  ________

          Monarch Life from attacking the bankruptcy court's "jurisdiction"

          to enter the  broad-based injunction.   Ropes &  Gray v.  Monarch
                                                  _____________     _______

          Life Ins. Co. (In re Monarch Capital Corp.), No. 91-41379-JFQ, at
          _____________  ___________________________

          6-7 (Bankr. D. Mass. Oct.  15, 1993).  The bankruptcy court  held

          Monarch Life  in civil contempt  but refused to  impose sanctions

          because the terms  of the injunctive  provision in the  confirmed

          Plan  were not "sufficiently  specific and definite"  to permit a

          finding that the  violation had been deliberate  or undertaken in

          bad faith.  Id. at 7.  On intermediate appeal, the district court
                      ___

          affirmed  the bankruptcy court decision.  Ropes & Gray v. Monarch
                                                    ____________    _______

          Life  Ins. Co.  (In re  Monarch Capital  Corp.), 173 B.R.  31 (D.
          ______________   _____________________________

                              
          ____________________

               6Ropes  & Gray responded  that (1)  Monarch Capital,  as the
          parent of Monarch Life, had the unfettered legal right to use its
          subsidiaries'  assets  as it  wished; (2)  Ropes  & Gray  had not
          learned  of the  STIP  advances until  1989,  by which  time  the
          outstanding balances  were already significant; and  (3) in order
          to  protect Monarch Life's interests,  Ropes & Gray  at that time
          advised  Monarch  Capital not  to  "borrow"  any additional  STIP
          funds.

                                          8

          Mass. 1994).7

                                          II
                                          II

                                      DISCUSSION
                                      DISCUSSION
                                      __________

                    Monarch Life  contends, as  a matter  of law,  that the
                                            __  _ ______  __ ___

          permanent  injunctive provision  included in  the confirmed  Plan

          cannot extinguish actions  against third parties such  as Ropes &

          Gray, since bankruptcy courts have no "jurisdiction" or  power to
                                             __  ____________      _____

          "discharge"  (1) debts other than those of the chapter 11 debtor,

          see  Brief for  Appellants at  12-16   (citing Bankruptcy  Code  
          ___

          524(e), 11 U.S.C.   524(e) ("[D]ischarge  of a debt of the debtor

          does not  affect the liability  of any  other entity  on, or  the

          property  of  any  other   entity  for,  such  debt.");  American
                                                                   ________

          Hardwoods,  Inc.  v.  Deutsche   Credit  Corp.  (In  re  American
          ________________      ________________________   ________________

          Hardwoods,  Inc.), 885  F.2d 621,  626 (9th  Cir. 1989)),  or (2)
          ________________

          debts of any nondebtor such as Ropes & Gray which concededly made

          no financial contribution to  the Plan, see id. at  16-20 (citing
             _________                            ___ ___

          In  re Heron,  Burchett, Ruckert  & Rothwell,  148 B.R.  665, 687
          ____________________________________________

                              
          ____________________

               7The district  court relied  on slightly  different grounds.
          First,  it determined  that  it would  be  unfair to  invoke  res
                                                                        ___
          judicata against  Monarch Life, which honestly  believed that the
          ________
          injunctive provision was not broad enough to bar  actions against
          parties like Ropes &  Gray.  Id. at 40-41.  The  court also ruled
                                       ___
          that  subparagraph (b) was inapposite because Ropes & Gray was no
          longer Monarch Life's "attorney" at  the time of the confirmation
          hearing.  Id. at 43-44.  Nevertheless, it concluded that subpara-
                    ___
          graph  (a)  of the  injunction was  broad  enough to  bar Monarch
          Life's state court action  against Ropes & Gray.   Id. at  44-45.
                                                             ___
          The  district  court thereupon  vacated  the  order of  contempt,
          inasmuch as the lack  of clarity in the injunctive  provision not
          only  made   sanctions  unwarranted   but  also   undermined  the
          bankruptcy  court's threshold  finding  that Monarch  Life was  a
          contemnor.  Id. at 46.
                      ___

                                          9

          (Bankr. D.D.C. 1992)).  

                    Ropes  & Gray  counters  that Monarch  Life is  barred,

          under  the doctrines of res judicata  and judicial estoppel, from
                                  ___ ________

          litigating  the scope of the  bankruptcy court's power because it

          not only knowingly failed to appeal from the order confirming the

          chapter 11 Plan, but in its announced role as a Plan proponent it
                                                               _________

          acquiesced in  its co-proponents'  arguments that the  bankruptcy
          __________

          court possessed  broad injunctive powers under  Bankruptcy Code  

          105(a).  See Stoll v. Gottlieb, 305 U.S. 165, 172  (1938) (unless
                   ___ _____    ________

          a party in interest  objects, and appeals an erroneous  ruling by

          the bankruptcy court that it  had "jurisdiction" to confirm terms

          of  plan, the  ruling is  conclusive in  subsequent proceedings);

          Republic  Supply Co. v. Shoaf,  815 F.2d 1046,  1052-53 (5th Cir.
          ____________________    _____

          1987) (same); cf. Celotex Corp. v. Edwards, 115 S. Ct. 1493, 1499
                        ___ _____________    _______

          (1995)  (if bankruptcy  court  determines that  it possesses  so-

          called "related to" jurisdiction  to enjoin under Code    105(a),

          and the jurisdictional  question remains open for  determination,

          aggrieved litigant's recourse is  by appeal from bankruptcy court

          decision, not  by collateral  attack on bankruptcy  court order);

          cf.  also Maggio  v.  Zeitz, 333  U.S.  56, 69  (1948)  (contempt
          ___  ____ ______      _____

          proceeding is not appropriate  vehicle for attacking validity, or

          retrying  the  merits,  of   the  order  contravened  by  alleged

          contemnor).

          A.  Standards of Review 
          A.  Standards of Review
              ___________________

                    Although   the  conclusions  of   law  reached  by  the

          bankruptcy  court and the district  court are subject  to de novo
                                                                    __ ____

                                          10

          review, the  underlying findings of fact by  the bankruptcy court

          are reviewed only for  clear error.  Western  Auto Supply Co.  v.
                                               ________________________

          Savage Arms, Inc. (In re Savage Indus., Inc.),  43 F.3d 714, 719-
          _________________  _________________________

          20, n. 8 (1st Cir. 1994); In re G.S.F. Corp., 938 F.2d 1467, 1474
                                    __________________

          (1st  Cir.  1991).    The  applicability  vel non  of  preclusion
                                                    ___ ___

          principles  is a question of law.   See, e.g., Gonzalez v. Abreu,
                                              ___  ____  ________    _____

          27 F.3d 751, 755 (1st Cir. 1994).  Since the  judgment (viz., the

          order  confirming the Plan) was rendered by a federal tribunal   

          the bankruptcy  court      see FDIC v.  Shearson-American Express
                                     ___ ____     _________________________

          Inc.,  996  F.2d  493,  497  (1st  Cir.  1993)  (bankruptcy court
          ____

          decisions trigger normal res judicata principles) (citing Katchen
                                   ___ ________                     _______

          v.  Landy, 382 U.S.  323, 334 (1966)),  cert. denied, 114  S. Ct.
              _____                               _____ ______

          1054  (1994); see  also, e.g.,  Stoll, 305  U.S. at  170 (finding
                        ___  ____  ____   _____

          bankruptcy court order confirming reorganization plan entitled to

          res judicata effect);  Eubanks v.  FDIC, 977 F.2d  166, 170  (5th
          ___ ________           _______     ____

          Cir. 1992)  (similar), federal preclusion principles  apply.  See
                                                                        ___

          Blonder-Tongue  Lab., Inc. v. University of Ill. Found., 402 U.S.
          __________________________    _________________________

          313, 324-25 (1971); Recoveredge L.P.  v. Pentecost, 44 F.3d 1284,
                              ________________     _________

          1290 (5th Cir. 1995); Orijas v. Louisiana-Pacific Corp., 31  F.3d
                                ______    _______________________

          995, 1010 (10th  Cir. 1993); Restatement (Second)  of Judgments  
                                       __________________________________

          87.   In order to invoke  collateral estoppel (issue preclusion),

          Ropes  &  Gray must  demonstrate  that:  (1)  both  the  contempt

          proceedings and  the confirmation  proceedings involved  the same
                                                                       ____

          issue  of law  or fact;  (2) the  parties actually  litigated the
          _____                                     ________  _________

          issue in  the confirmation proceedings; (3)  the bankruptcy court

          actually resolved  the  issue in  a  final and  binding  judgment
          ________ ________

                                          11

          (viz., its confirmation  order); and (4)  its resolution of  that

          issue  of  law  or fact  was  essential  to  its judgment  (i.e.,
                                        _________

          necessary to its holding).   See Grella v. Salem Five Cents  Sav.
                                       ___ ______    ______________________

          Bank, 42 F.3d 26, 30 (1st Cir. 1994); Piccicuto v. Dwyer, 39 F.3d
          ____                                  _________    _____

          37,40 (1stCir. 1994);Restatement (Second)of Judgments  27(1982).8
                               ________________________________

          B.  Merits of Issue Preclusion Claim
          B.  Merits of Issue Preclusion Claim
              ________________________________
                              
          ____________________

               8Monarch  Life argues that Ropes  & Gray cannot  rely on res
                                                                        ___
          judicata principles  because it  filed no chapter  11 claim  and,
          ________
          therefore,  was  not a  "party"  to the  chapter  11 confirmation
          proceedings.   See, e.g.,  Apparel Art  Int'l v.  Amertex Enters.
                         ___  ____   __________________     _______________
          Ltd., 48 F.3d 576, 583 (1st Cir. 1995) (claim preclusion normally
          ____
          requires  "identicality  of  parties,"  or   at  least  privity).
          Frequently, however, "res judicata"  is used more inclusively, to
                                ___ ________
          refer  either  to claim  preclusion  or  issue preclusion  (i.e.,
                 ______                        __  _____ __________
          collateral  estoppel).  See Grella, 42 F.3d at 30-31 (noting that
                                  ___ ______
          basis for  bankruptcy court  decision was unclear,  and observing
          that  labels    "res  judicata" and "collateral  estoppel"    are
                           ___  ________
          less important than substance  of parties' argumentation in light
          of factual  circumstances) (citing  Dennis v. Rhode  Island Hosp.
                                              ______    ___________________
          Trust,  744  F.2d  893,  898  (1st  Cir.  1984));  Railway  Labor
          _____                                              ______________
          Executives' Ass'n  v. Guilford Transp. Indus., Inc.,  989 F.2d 9,
          _________________     _____________________________
          11  n.3 (1st  Cir. 1993)  (noting confusion prevailing  over same
          labels); see also Fiumara  v. Fireman's Fund Ins. Cos.,  746 F.2d
                   ___ ____ _______     ________________________
          87, 90 n.1 (1st Cir. 1984)  (noting "distinct family resemblance"
                                      
          between  two doctrines).  Since Monarch  Life seeks to relitigate
          only one  component "issue"  arising from the  confirmation order
          (viz.,  the  bankruptcy court's  jurisdiction  or  power under   
          105(a)),  the preclusion defense asserted by Ropes & Gray is more
          exactly    characterized    as   collateral    estoppel   ("issue
          preclusion").  
               A  party invoking issue preclusion need not show that it was
          privy  to  the first  proceeding.   See  Parklane Hosiery  Co. v.
                                              ___  _____________________
          Shore, 439 U.S.  322, 326-28  (1979) (no  "mutuality of  parties"
          _____
          rule); Blonder-Tongue Lab., 402 U.S. at 328 (same);  Fiumara, 746
                 ___________________                           _______
          F.2d  at 92; cf. DiPinto v. Sperling, 9 F.3d 2, 4 (1st Cir. 1993)
                       ___ _______    ________
          (Rhode Island law).   It need only  show that "the party  against
                                                             _____  _______
          whom issue preclusion will  be applied had a fair  opportunity to
          ____ _____ __________ ____  __ _______
          litigate  the issue fully."  Kyricopoulos v. Town of Orleans, 967
                                       ____________    _______________
          F.2d  14, 16  (1st Cir. 1992)  (Massachusetts law  dispenses with
          "mutuality"  rule) (emphasis  added).   Of  course,  even if  the
          bankruptcy  court   had  based  its  contempt   ruling  on  claim
          preclusion,  we  would have  been free  to  affirm on  any ground
          supported by  the bankruptcy court  record.  See  La Electronica,
                                                       ___  _______________
          Inc. v. Capo-Roman (In  re Electronica, Inc.), 995 F.2d  320, 321
          ____    __________  ________________________
          n.1 (1st Cir. 1993).

                                          12

               1.   "Same Issue" 
               1.   "Same Issue" 
                     __________

                    We must  first identify the precise  issue Monarch Life

          sought  to "relitigate"  in  its defense  against Ropes  & Gray's

          motion for civil contempt.   We have held that  Bankruptcy Code  

          105(a)  confers ample power  upon the bankruptcy  court to enjoin

          the  initiation  or continuation  of  judicial  proceedings in  a

          nonbankruptcy forum  against nondebtors during the  pendency of a

          chapter 11 case,  where the court reasonably concludes  that such

          actions  would  entail  or   threaten  adverse  "impact"  on  the

          administration of the chapter 11 estate.  See In re G.S.F. Corp.,
                                                    ___ __________________

          938 F.2d at 1474.  These injunctions  serve simply as adjuncts to

          the  automatic   stay,  see  Bankruptcy  Code      362(a),  which
                                  ___

          ostensibly  protects  only  the  debtor  and  its  property  from
                                ____

          creditor "grab-law"  tactics after the "race  to the courthouse."
                                       _____

          See  Austin v. Unarco Indus.,  Inc., 705 F.2d  1, 4-5 (1st Cir.),
          ___  ______    ____________________

          cert.  dismissed, 463 U.S. 1247 (1983).  Since the automatic stay
          _____  _________

          may induce creditors  to refocus their recovery efforts  upon the

          chapter  11  debtor's  co-obligors,  a  temporary  injunction  is

          sometimes  needed  to  protect  nondebtors  (e.g.,  a   corporate

          debtor's principals and managing  officers) whose time and energy

          should not be diverted  to collateral lawsuits and away  from the

          effort to reorganize the debtor.  Like the automatic stay itself,

          see  Bankruptcy   Code     362(c),  however,   these  accessorial
          ___

          injunctions  normally  lapse       at  the  latest      following

          confirmation  of the  chapter  11 plan  and  the closing  of  the

          chapter  11 case,  leaving  the nondebtor  co-obligor once  again

                                          13

          exposed  to  pursuit  by   the  discharged  chapter  11  debtor's

          creditors.  

                    The more intricate  "jurisdictional" question raised by

          the  confirmation order and contempt  proceedings in this case is

          whether  Congress  intended an  outer  temporal  boundary on  the

          availability of injunctive relief under Bankruptcy Code   105(a).

          Since  the  chapter  11 debtor  is  the  only entity  permanently
                                                                ___________

          discharged upon confirmation of a chapter 11 plan, id.   1141(d),
                                                             ___

          its creditors usually  are free to pursue  all available remedies

          against those undischarged  entities which were obligated,  along

          with  the chapter 11  debtor, on a  prepetition debt.   See id.  
                                                                  ___ ___

          524(e) ("[D]ischarge of a debt of the debtor does not affect  the

          liability of any other  entity on, or the  property of any  other

          entity  for, such debt.").   Whether  the Code  likewise empowers

          bankruptcy   courts   to   enter  permanent   injunctions   which
                                            _________   ___________

          effectively confer  de facto "discharge" relief  upon the chapter
                              __ _____

          11 debtor's  co-obligors, and  if so, under  what conditions  and

          limitations, are the topics of continuing debate and disagreement

          in both case law and commentary.   See, e.g., Howard C. Buschmann
                                             ___  ____

          III & Sean P. Madden, The Power and Propriety of Bankruptcy Court
                                ___________________________________________

          Intervention  in Actions  Between  Nondebtors,  47  The  Business
          _____________________________________________

          Lawyer 913 (1992). 

                    The  case law splits  along two principal  lines.  Some

          courts hold  that section  105(a) does  not  permit a  bankruptcy

          court  permanently to  enjoin post-confirmation  lawsuits against

          nondebtors,  since such  an order  would directly  contravene the

                                          14

          "more  specific"  proscription in  section  524(e).   See,  e.g.,
                                                                ___   ____

          AmericanHardwoods, 885F.2d at626; LandsingDiversified Properties-
          _________________                 _______________________________

           II v.  First Nat'l Bank &  Trust Co. (In re  Western Real Estate
          ___     _____________________________  __________________________

          Fund, Inc.), 922 F.2d  592, 600-01 (10th Cir. 1990),  modified on
          __________                                            ________ __

          other grounds, 932  F.2d 898 (10th Cir. 1991).   The factual cir-
          _____ _______

          cumstances in  these cases  did not  suggest,  however, that  the

          grant  of  injunctive relief  was in  any  sense integral  to the

          success  of   the  chapter  11  reorganization.     See  American
                                                              ___  ________

          Hardwoods, 885 F.2d at 626  (noting no "unusual facts" warranting
          _________

          permanent "discharge" of debtor's loan guarantor). 

                    The  second  line of  cases  note  that section  524(e)

          cannot be construed as an absolute or per se proscription against
                                    ________    ___ __

          permanent injunctive relief for all nondebtors.  See, e.g., In re
                                                           ___  ____  _____

          Heron, Burchette, 148 B.R. at 687 (noting that   524(e) "contains
          ________________

          no language of prohibition  and [thus] should not be  interpreted
          __ ________ __ ___________

          to  limit court's power under   105(a)") (emphasis added).  These

          courts  have formulated  various  tests for  determining when  de
                                                                         __

          facto  "discharges" would not be ultra vires.  See, e.g., Menard-
          _____                            _____ _____   ___  ____  _______

          Sanford v. Mabey (In re A.H. Robins Co.), 880 F.2d  694, 702 (4th
          _______    _____  _____________________

          Cir.),  cert. denied, 493 U.S. 959 (1989), cited with approval in
                  _____ ______                       _____ ____ ________ __

          In re G.S.F.  Corp., 938 F.2d at  1474-75; In re  Master Mortgage
          ___________________                        ______________________

          Inv. Fund, 168 B.R.  930, 935 (Bankr. W.D. Mo.  1994) (collecting
          _________

          cases).   In extraordinary circumstances, it has been held that a

          bankruptcy court can grant permanent  injunctive relief essential

          to enable  the formulation  and confirmation of  a reorganization

          plan if,  for example, nondebtors who  would otherwise contribute

                                          15

          to  funding the plan will  not settle their  mutual claims absent

          "protection"  from  potential post-confirmation  lawsuits arising

          from their  prepetition relationship with the  chapter 11 debtor.

          See, e.g., In re A.H. Robins Co., 880  F.2d at 702.  These courts
          ___  ____  _____________________

          have  taken into  consideration  whether (1)  the creditors  have

          overwhelmingly approved  the plan,  with the injunction;  (2) the

          plan contemplates full  payment of all  creditor claims; and  (3)

          the  injunction   would  affect  a  relatively   small  class  of

          claimants.  Id. at 698, 700-702; In re Master Mortgage,  168 B.R.
                      ___                  _____________________

          at 935.

                    In this second line of  cases, the courts have ascribed

          importance  to  the  fact   that  the  cooperation  of  essential

          "contributing"  parties may  not  have been  forthcoming, and  no

          chapter 11 plan may have  been practicable, absent an  injunctive

          provision   affording   so-called   incidental  "protection"   to
                                              __________

          nondebtors  who  do  not intend  to  contribute  directly to  the
                               ___

          chapter  11 plan.   For  example,  if a  non-"contributing" party

          holds  an  indirect  claim  against  a   would-be  "contributing"

          party,9  such  as  a  contingent  claim  for  indemnification  or

          contribution, the potential  "contributing" party may  decline to

          accept, or  contribute to, the  chapter 11 plan  in circumstances

                              
          ____________________

               9Ropes  &  Gray  argues  that it  "contributed"  to  Monarch
          Capital's chapter 11 plan to the extent it held contingent claims
          for  indemnification  or  contribution against  Monarch  Capital,
          which  it  effectively "released"  by  refraining  from filing  a
          claim.   See supra  note 2.   For present  purposes, however, the
                   ___ _____
          term  "contributing" parties is used to  refer to those entities,
          such as the 235 Banks and Monarch Life, which proposed and signed
          onto the Plan.

                                          16

          where the non-"contributing" party remains free to implead him as

          a third-party defendant  in a post-confirmation lawsuit.   See In
                                                                     ___ __

          re  A.H. Robins, 880  F.2d at 702.   In such circumstances, these
          _______________

          courts have  afforded the "incidental protection"  of a permanent

          injunction   by   enjoining   "direct"   actions    against   the
                                                              _______   ___

          noncontributor in order to  protect the contributor from exposure
          ______________

          to indirect liability.

               2.   Actual Litigation
               2.   Actual Litigation
                    _________________

                    Monarch Life  represents that it had  no inkling during

          the confirmation  proceedings that any party  was contending that

          section 105(a) enabled  the bankruptcy court to  grant the broad-

          based  "incidental"  injunctive  relief  required  to  protect  a

          "noncontributing"  party such as Ropes  & Gray.   In a memorandum

          submitted prior to confirmation by the 235 Banks, however, it was
                    _____ __ ____________

          plainly stated that    

                    the Injunction must  by necessity extend  not
                    only  to parties  like the  235 Banks  or the
                    [Monarch Life] Receiver  who are  signatories
                    to,  and gave actual consideration under, the
                    Settlement  Agreement,  but  also   to  those
                    nonsignatory  parties  such  as officers  and
                    directors of  those parties  .  . .  .   That
                    consideration  will  be seriously  diminished
                    and  the  releases  granted  the  signatories
                    worthless if the nonsignatories  can continue
                    to be  sued, since certain  signatory parties
                    would be directly or indirectly liable to the
                             ________ __ __________ ______ __ ___
                    parties  being  sued.   Consequently, actions
                    _______  _____  ____
                    against   the   nonsignatories  will   be  as
                    destructive  to  the  settlement  as  actions
                    against the signatories.

          (Emphasis added.)   The 235 Banks  memorandum repeatedly adverted

          to the problem posed  for both "signatories" and "nonsignatories"

          unless  the latter were insulated    by injunctive relief    from

                                          17

          post-confirmation  lawsuits.    Moreover,  it  prominently  cited

          cases, such as A.H. Robins, supra, involving "incidental" injunc-
                         ___________  _____

          tive  relief for  noncontributing  nondebtors holding  contingent

          claims for indemnification or contribution.

                    Monarch Life  argues, nonetheless, that  the 235  Banks

          memorandum does not establish  that the section 105(a) issue  was

          "actually  litigated,"  within  the  meaning  of  the  collateral

          estoppel doctrine, since the memorandum was not signed by Monarch

          Life  and therefore merely represented the 235 Banks' view of the

          applicable law.  We do not agree.  

                    First, the  235 Banks and  Monarch Life     through its

          receiver    held themselves forth in the confirmation proceedings

          as joint Plan  proponents, frequently sharing  responsibility for
             _____

          presenting the merits of discrete portions of the Plan before the

          bankruptcy court.   See  also supra  note  3.   Monarch Life  may
                              ___  ____ _____

          disagree with the litigation  stance taken by its  receiver prior

          to confirmation  of the Plan,  but it does  not contend  that the

          receiver could not bind it for issue preclusion purposes.  

                    Second, there is no reason to suppose that Monarch Life

          itself did not expect to benefit    nor indeed that it has not in

          fact benefited    from the protection afforded in response to the

          235 Banks'  invitation to confer the  broadest available "incide-

          ntal"  protection,  upon  all  noncontributing  co-obligors, from

          future  lawsuits "arising  from  or related  to  a claim  against

          [Monarch Capital] or affecting or [sic]  any property of [Monarch

          Capital]."   Thus,  we cannot  simply  assume that  no  protected

                                          18

          noncontributor  held an  indirect  claim  for indemnification  or

          contribution against Monarch Life.  
                       _______ _______ ____

                    Third,  even if  Monarch  Life had  not yet  discovered

          specific grounds for its asserted cause of action against Ropes &

          Gray relating to Monarch  Capital's abuse of the STIP,  it cannot

          plausibly  contend that  Ropes &  Gray's alleged  involvement, as

          Monarch Capital's counsel during the relevant time period, was so

          far removed from  Monarch Life's contemplation that it  could not

          have  weighed  the strategic  advantages  and  risks involved  in

          advocating "incidental" injunctive  relief prior to  confirmation

          of the Plan.  See,  e.g., DeCosta v. Viacom Int'l Inc.,  981 F.2d
                        ___   ____  _______    _________________

          602, 605-06, 610  (1st Cir. 1992) (court may  decide not to apply

          collateral estoppel  where there has been  a "significant" change

          in  the law or factual circumstances since the first judgment was

          entered; and finding no such "significant change"), cert. denied,
                                                              ____  ______

          113 S. Ct.  3039 (1993).   Moreover,  changed circumstances  will

          preclude  the application  of  collateral estoppel  only if  they

          might  have  altered the  decision the  court  made in  the first
                       _______

          proceeding.   See  Montana v.  United States,  440 U.S.  147, 159
                        ___  _______     _____________

          (1979); EEOC v.  American Airlines,  48 F.3d 164,  167 (5th  Cir.
                  ____     _________________

          1995).  And, Monarch Life cannot establish that it would not have

          proposed  precisely the  same  injunction, whereby  it agreed  to

          release a number of viable causes of action against third parties

          "arising  from" claims  against Monarch  Capital, even if  it had

          known the particulars  of its malpractice  claim against Ropes  &

          Gray in  June 1992.  Cf. Fiumara v. Fireman's Fund Ins. Cos., 746
                               ___ _______    ________________________

                                          19

          F.2d 87, 91-92 (1st  Cir. 1984) (noting  that "all of the  events

          which define  the [subsequent] federal complaint  occurred in the

          period before the [first proceeding] and were at  least generally

          hinted  at during  that  trial," and  "[i]f  they were  not  then

          litigated as  hotly  as plaintiff  would now  wish, they  plainly

          could have been").

                    Finally,  and most importantly, the "actual litigation"

          component in  the collateral  estoppel analysis does  not require

          that  Monarch Life  be shown  to have  advocated the  broad-based

          "incidental" injunction, but only that the "jurisdictional" issue

          was squarely raised by the 235 Banks,  thus giving Monarch Life a

          full and fair opportunity to interpose objection if  it disagreed

          with the 235  Banks' legal contentions.  See Blonder-Tongue Lab.,
                                                   ___ __________________

          402  U.S. at 328  (in order to further  the interests of finality

          and judicial economy, collateral  estoppel doctrine requires that

          litigant be afforded "one full and  fair opportunity for judicial

          resolution" of the  issue).  Therefore, since the  section 105(a)

          "jurisdictional" issue  was expressly broached in  the 235 Banks'

          memorandum prior to  confirmation of the  Plan, and by  prominent

          citation to decisions such as  A.H. Robins, supra, Monarch Life's
                                         ___________  _____

          silence alone satisfied the second criterion under the collateral

          estoppel analysis.10
                              
          ____________________

               10Monarch  Life argues  that  the     105(a) order  must  be
          interpreted as  enjoining only the  noncontributors' cross-claims
                                    ____
          impleading Plan  contributors, not  Monarch Life's initiation  in
          Massachusetts Superior  Court of its principal  claim against the
          noncontributing  Ropes &  Gray.   See Brief  for Appellant  at 21
                                            ___
          (citing Pacor, Inc.  v. Higgins,  743 F.2d 984  (3d Cir.  1984)).
                  ___________     _______
          Even if  this "severability"  contention had merit,  the district

                                          20

               3.   Actual Resolution
               3.   Actual Resolution
                    _________________

                    Monarch Life  argues that a genuine  dispute remains as

          to  whether  the  "ambiguous"  order   of  confirmation  actually

          resolved the section 105(a) "jurisdictional" issue "litigated" by
          ________

          the parties prior to confirmation.  See Reply Brief for Appellant
                                              ___

          at 11 (citing Commonwealth of Mass. v. Departmental Grant Appeals
                        _____________________    __________________________

          Bd.,  815  F.2d 778,  788 (1st  Cir.  1987) (party  may challenge
          ___

          interpretation of ambiguous injunction not  previously interpret-

          ed));  see  also In  re  Monarch Capital  Corp.,  173 B.R.  at 41
                 ___  ____ ______________________________

          ("Appellants do not challenge the Bankruptcy Court's authority to

          enter  the  Injunction .  . .  .").   Consequently, it  cannot be

          presumed that the same issue was before the bankruptcy court both

          in the  confirmation proceedings  and  the contempt  proceedings.

          Its argument begs the question.  

                    Monarch Life  asserts a two-pronged attack  against the

          contempt order.  Its first line  of attack is that the injunctive

          provision  in  the confirmation  order  cannot  be "expanded"  to

          encompass   Ropes  &   Gray's   contingent  obligations   because

          bankruptcy  courts  have  no  power  to  enter  such  broad-based
                                    __  _____

          injunctions  under  section  105(a).     However,  it  cannot  be

          considered  a  conclusive answer  to  Ropes  & Gray's  collateral

          estoppel defense  for Monarch  Life to  say that it  subjectively
                                                               ____________
                              
          ____________________

          court  properly noted that it  had been waived  by Monarch Life's
          failure to  raise it in the bankruptcy court contempt proceeding.
          See  In re  Monarch Capital  Corp., 173  B.R. at  45 (issues  not
          ___  _____________________________
          raised before the bankruptcy  court are deemed waived  on appeal)
          (citing  Juniper Dev.  Group  v. Kahn  (In re  Hemingway Transp.,
                   ___________________     ____   _________________________
          Inc.), 993 F.2d 915, 935 (1st Cir.), cert. denied, 114 S. Ct. 303
          ____                                 _____ ______
          (1993)). 

                                          21

          construed the confirmation order  more narrowly than its language

          and context warranted.   See Piccicuto, 39 F.3d at  41 (rejecting
                                   ___ _________

          argument that prior judgment  was ambiguous and used "regrettably

          loose language").   Rather,  Monarch Life's construction  must be

          evaluated  against the objective  import of  the language  in the

          confirmation  order  itself.     As  the  confirmation  order  is

          dispositive, it is set out at length in the appendix.   See infra
                                                                  ___ _____

          Appendix pp. i-iii. 

                    Monarch  Life mischaracterizes  the obvious  breadth of
                                                        _______  _______

          the  confirmation order as ambiguity.   Even a  cursory review of
                                     _________

          the confirmation  order demonstrates beyond doubt  that the third

          criterion  in the collateral estoppel analysis has been met.  See
                                                                        ___

          Grella, 42 F.3d  at 30-31  (issue may be  actually litigated  and
          ______

          resolved "even if it is not explicitly decided," as long as it is

          logically necessary to final decision).  

                    Monarch Life  emphasizes the  fact that  the bankruptcy

          court distinguished American  Hardwoods11    a case in  which the
                              ___________________

          enjoined action had been  against a nondebtor who would  not have
                                                            _____  ___ ____

          contributed to the  chapter 11 plan    and then  stated that "the
          ___________                                                   ___

                              
          ____________________

               11Monarch Life points also to a decision entered  earlier in
          an  unrelated adversary proceeding,  wherein the bankruptcy court
          denied  the chapter  11  trustee's motion  to  enjoin a  suit  by
          Monarch Capital shareholders against  Monarch Life.  It considers
          that decision  probative because it noted  the bankruptcy court's
          concern that such an injunction might exceed the limitations  set
          forth  in American Hardwoods.   See In re  Monarch Capital Corp.,
                    __________________    ___ ____________________________
          No.  91-41379-JFQ (Bankr.  D. Mass.  Apr. 8,  1992).   We do  not
          agree.  First,  the proposed  injunction involved  there was  not
          part of    thus could not be "essential" to    the reorganization
          plan.   Further,  the  bankruptcy court  expressly  distinguished
          American Hardwoods in its final order of confirmation.  
          __________________

                                          22

          persons protected  by the [Monarch Capital]  Injunction have con-
          _______ _________

          tributed substantial  amounts to  the Plan  . .  . ."   (Emphasis

          added.)  But the bankruptcy court did not say that Plan contribu-

          tors, such  as the  235 Banks  and  Monarch Life,  were the  only
                                                                       ____

          entities  "protected" by the  injunction.   Rather, it  said that

          this injunctive protection was  the reason for entering a  perma-
                                              ______

          nent injunction.  Moreover, in distinguishing American Hardwoods,
                                                        __________________

          where protection for contributors was not at issue, the bankrupt-
                                                ___

          cy  court cited  with  approval several  decisions     like  A.H.
                                                                       ____

          Robins, supra    (and provided  plain parenthetical descriptions)
          ______  _____

          holding that  section 105(a) empowers bankruptcy  courts to grant

          permanent injunctions  not only against  actions asserting claims

          directly  against plan contributors, but "incidental" injunctions
          ________

          protecting plan  contributors from indirect claims for indemnifi-
                                             ________ ______

          cation and contribution, at least where such protection is deemed

          "essential" to the success  of a reorganization plan.   See infra
                                                                  ___ _____

          Appendix at p. i. 

                    By citing  A.H. Robins, supra,  and cases of  its kind,
                               ___________  _____

          the bankruptcy court plainly signaled its endorsement of the Plan

          proponents' request for a broad injunction extending "incidental"

          protection  to all  noncontributors who  might  otherwise implead

          Plan contributors  as third-party defendants in  subsequent state

          court actions.    The bankruptcy  court  then made  the  required

          predicate findings for a broad "incidental" injunction as enumer-

          ated in  A.H.  Robins.   It  found that  (1) the  injunction  was
                   ____________

          "essential"  to  garner  the  Plan  contributors'  cooperation in

                                          23

          Monarch  Capital's  reorganization,  and  (2)  Monarch  Capital's

          creditors  overwhelmingly had approved  the injunctive provision.

          See infra  Appendix at p. ii.   Monarch Life cannot  turn a blind
          ___ _____

          eye  to the  plain  import of  the  injunctive provision  in  the

          confirmation order, then under the  guise of an alleged  "ambigu-

          ity"  attempt to  relitigate the  "jurisdiction" of the  court to

          enter the injunction. 

                    Finally, this is not  a conventional "preclusion" case,

          wherein the court is required to interpret a first judgment which

          was entered by a different tribunal.  Even though our interpreta-
                           _________

          tion of the confirmation order essentially presents a question of

          law, see United States  v. O'Rourke, 943  F.2d 180, 186 (2d  Cir.
               ___ _____________     ________

          1991), the bankruptcy court in this case was interpreting its own

          order of confirmation.  We think customary appellate deference is

          appropriate in these circumstances with respect to the bankruptcy

          court's  determination that  the  confirmation  order was  suffi-

          ciently broad to confer "incidental"  protection to noncontribut-

          ing  parties like Ropes &  Gray.12  Similarly,  because the bank-
                              
          ____________________

               12See, e.g., In re Weber,  25 F.3d 413, 416 (7th Cir.  1994)
                 ___  ____  ___________
          (noting that bankruptcy court's interpretation of its own confir-
          mation order is entitled to same  deference as generally accorded
          courts  construing  their  own  judgments);  William  B.  Schnach
                                                       ____________________
          Retirement Trust  v.  Unified Capital  Corp.  (In re  Bono  Dev.,
          ________________      ______________________   __________________
          Inc.), 8 F.3d  720, 721-22 (10th  Cir. 1993) (same;  interpreting
          ____
          bankruptcy court's "superpriority" order);  Texas N.W. Ry. Co. v.
                                                      __________________
          Diamond Shamrock Ref.  & Mktg. Co. (In re  Chicago, Rock Island &
          __________________________________  _____________________________
          Pac.  R.R.  Co.), 865  F.2d 807,  810-11  (7th Cir.  1988) (same;
          _______________
          construing bankruptcy court's order approving  sale); Ranch House
                                                                ___________
          of  Orange-Brevard, Inc.  v.  Gluckstern (In  re  Ranch House  of
          ________________________      __________  _______________________
          Orange-Brevard,  Inc.),  773 F.2d  1166,  1168  (11th Cir.  1985)
          _____________________
          (same; confirmation order); see  also generally Farmhand, Inc. v.
                                      ___  ____ _________ ______________
          Anel  Eng'g Indus.,  Inc., 693  F.2d 1140,  1146 (5th  Cir. 1982)
          _________________________
          (noting that district  courts are entitled to deference in inter-

                                          24

          ruptcy  court was  directly engaged in  the give-and-take  of the

          confirmation  proceedings and  had the  better vantage  point for

          determining  whether the parties had been  fairly apprised of the

          "jurisdictional" issue,  we likewise  think it prudent  to accord

          some deference to its determination that the section 105(a) issue

          was  "actually litigated."   See  Ranch House  of Orange-Brevard,
                                       ___  _______________________________

          Inc. v. Gluckstern (In  re Ranch House of  Orange-Brevard, Inc.),
          ____    __________  ___________________________________________

          773 F.2d 1166, 1168  (11th Cir. 1985) ("The bankruptcy  judge who

          has  presided over  the case from  its inception  is in  the best

          position to  clarify any apparent inconsistencies  in the court's

          rulings."); supra Section II.B.2.
                      _____

                    Notwithstanding the numerous  warning signals,  Monarch

          Life  elected  to treat  the  obvious breadth  of  the injunctive

          provision as  ambiguity.  The record  remains clear, nonetheless,

          that the bankruptcy court's  "jurisdiction" to enjoin enforcement

          of Monarch Life's claims against the noncontributing Ropes & Gray

          was  actually litigated and  that Monarch Life  therefore was re-

          quired, but  failed, to object  to the confirmation  order and/or

          appeal from  the section 105(a) injunctive  provision included in

          it.  

               4.   Essentiality
               4.   Essentiality
                    ____________

                    It follows, a fortiori, from our determination that the
                                _ ________

          confirmation order included an  "incidental" injunction, that the

          bankruptcy court's ruling  on its  section 105(a)  "jurisdiction"
                              
          ____________________

          preting own  orders); Securities and  Exch. Comm'n v.  Sloan, 535
                                ____________________________     _____
          F.2d 679, 681 (2d  Cir. 1976) (same), cert. denied,  430 U.S. 966
                                                _____ ______
          (1977).  

                                          25

          was essential to the effectiveness and validity of the injunctive

          provision.   See  Stoll,  305 U.S.  at  171-72 ("Every  court  in
                       ___  _____

          rendering a  judgment tacitly,  if not expressly,  determines its

          jurisdiction over . . . the subject matter.").

                                         III
                                         III

                                      CONCLUSION
                                      CONCLUSION
                                      __________

                    We  therefore hold  that  the issue  of the  bankruptcy

          court's power to enter  its so-called "incidental" injunction was

          precluded,  having been conclusively resolved in the confirmation

          order which Monarch Life  neither opposed nor appealed.    Though

          there is  conflicting authority on the  "jurisdictional" reach of

          section  105(a), the  confirmation  order cited  precedent for  a

          broad-based "incidental"  injunctive provision.   Cf. Restatement
                                                            ___ ___________

          (Second) of Judgments    29 cmt.  j (1980) (court  may refuse  to
          _____________________

          invoke  collateral  estoppel  if  first  judgment  was  "patently

          incorrect").  Accordingly, Monarch Life cannot now argue that the

          confirmation order is not subject to this broad construction.  We

          express  no view on the soundness of  the precedents cited in the

          confirmation order, nor on  their applicability to the particular

          Plan proposed by  Monarch Life.13   The proper  recourse for  ad-
                              
          ____________________

               13Ropes  & Gray  cross-appeals from  the bankruptcy  court's
          refusal  to  award it  compensatory  damages  for Monarch  Life's
          contempt.  See Brief for Appellee at 48 (citing Perker v.  United
                     ___                                  ______     ______
          States, 153 F.2d 66, 70 (1st Cir. 1946) (noting that "complainant
          ______
          is entitled  as a matter of  right to an order  in civil contempt
          imposing a  compensatory fine")).   As the district  court noted,
          however, the level of  specificity needed to ground a  finding of
          contempt  is not susceptible to precise  quantification.  We find
          no  abuse of discretion in the bankruptcy court's implicit deter-
          mination  that  Monarch Life  did  not commit  such  an egregious

                                          26

          dressing those questions was  by direct appeal from the  order of

          confirmation.  

                    Finally,  the  confirmation  order enjoined  all  post-

          confirmation  lawsuits  "arising  from"  or  "related to"  claims

          against Monarch  Capital.  See supra  p. 6.  The  complaint filed
                                     ___ _____

          against Ropes & Gray  in Massachusetts Superior Court by  Monarch

          Life alleges a joint scheme  by Monarch Capital and Ropes  & Gray

          to abuse the STIP account at  Monarch Life's expense    plainly a

          claim "arising  from" Monarch  Life's STIP claim  against Monarch

          Capital.   We  agree with  the  district court  that  it was  not

          unreasonable  to expect that Ropes & Gray might attempt to assert

          cross-claims  against parties  who  "contributed" to  the Monarch

          Capital Plan,  or cross-claims  which  ultimately would  "affect"

          Monarch Capital's property in  the hands of its "direct  or indi-

          rect transferee[s]"  or "successor[s] in interest."  See supra p.
                                                               ___ _____

          6; see also In re Monarch Capital Corp., 173 B.R.  at 45 (reject-
             ___ ____ ___________________________

          ing  Monarch Life's argument that there is absolutely no conceiv-

          able ground upon which Ropes & Gray might assert a cross-claim in

          the superior court  action).   Thus, it is  academic whether  the

          injunction also "protects" Ropes &  Gray as Monarch Life's former
                                                                     ______

          "counsel." 

                    The judgment of  the district court  is affirmed.   The
                    The judgment of  the district court  is affirmed.   The
                    _______________________________________________________

          parties shall bear their own costs.
          parties shall bear their own costs.
          __________________________________
                              
          ____________________

          contempt as would compel the imposition of sanctions.  See, e.g.,
                                                                 ___  ____
          Johnston  Envtl. Corp. v. Knight  (In re Goodman),  991 F.2d 613,
          ______________________    ______   _____________
          620 (9th Cir. 1993) (noting that bankruptcy court  has discretion
          to  award no damages  if it finds  contempt insufficiently "egre-
          gious").

                                          27

                                       APPENDIX
                                       APPENDIX
                                       ________

                    Section  105 of  the  Bankruptcy  Code grants  the
               Court broad equitable power to issue any order, process
               or judgment  that is necessary or  appropriate to carry
               out  the provisions  of Title  11.   In re  Old Orchard
                                                    __________________
               Investment Co.,  31 Bankr. 599, 601  (W.D. Mich. 1983);
               ______________
               Menard-Sanford v.  Mabey (In  re A.H. Robins  Co.), 880
               ______________     _____  _______________________
               F.2d 694, 702 (4th Cir. 1989), cert. denied, 110 S. Ct.
                                              _____ ______
               376  (1989) (affirming  power  of  bankruptcy court  to
               enjoin  suits permanently against nondebtors in a plan,
               where  there  existed  certain  indemnification  rights
               against the debtor); In re Energy Co-op, Inc., 886 F.2d
                                    ________________________
               921 (7th Cir. 1989) (permanent injunction issued pursu-
               ant to  settlement agreement); MacArthur Co.  v. Johns-
                                              _____________     ______
               Manville Corp. (In re Johns-Manville Corp.) 837 F.2d 89
               ______________  __________________________
               (2d  Cir.  1988), cert.  denied,  488  U.S. 868  (1988)
                                 _____  ______
               (permanent injunction  may  be issued  against  actions
               against an insurer  as part of settlement  incorporated
               in a  chapter 11 plan notwithstanding  claims that this
               impermissibly  discharged a nondebtor);  see In  re CCA
                                                        ___ __________
               Partnership,  70 Bankr.  696  (Bankr.  C.D. Cal.  1985)
               ___________
               (judgment  creditor  enjoined  from   enforcing  claims
               against debtor's individual partners).

                    Section 105 grants  bankruptcy courts "ample power
               to  enjoin  actions  excepted from  the  automatic stay
               which  might interfere  in the  rehabilitative process,
               whether in a liquidation  or in a reorganization case."
               In re Johns Manville Corp.,  26 Bankr. 420, 425 (Bankr.
               __________________________
               S.D.N.Y. 1983), quoting Collier on Bankruptcy    362.05
                               _______ _____________________
               (15th ed. 1982).  Further, bankruptcy courts "may issue
               or  extend stays  to  enjoin a  variety of  proceedings
               which  will  have an  adverse  impact  on the  debtor's
               ability to formulate a  Chapter 11 plan."  In  re Johns
                                                          ____________
               Manville Corp., 40 Bankr. 219, 226 (S.D.N.Y. 1984).
               ______________

                    Under  section 105,  this Court  has the  power to
               issue  injunctions  which  prevent proceedings  against
               nondebtor third parties  where pursuit of such  actions
               would  materially and  adversely affect  the  estate or
               creditor recoveries  under  a plan  of  reorganization.
               See Codfish  Corp. v.  FDIC (In  re Codfish Corp.),  97
               ___ ______________     ____  ____________________
               B.R. 132, 135 (Bankr. D.P.R. 1988) (injunctions  appro-
               priate  where there  is clear  and convincing  evidence
               "that the estate  would be substantially  and adversely
               affected by  the continuance of such an action"); In re
                                                                 _____
               Monroe Well Serv., Inc., 67  B.R. 746, 751 (Bankr. E.D.
               _______________________
               Pa. 1986) (injunctions appropriate to avoid anticipated
               adverse impact on bankruptcy estate); G.S.F. Corp., 938
                                                     ____________
               F.2d [1464,]  1474 [(1st Cir. 1991)  (adverse impact on
               debtor's estate required  for injunction against  third

                                          i

               party actions).

                    This Court  has the power to  approve the releases
               and issue  the Injunction with respect  to the Trustee,
               Temporary Receiver and creditors' Committee for matters
               in connection with the  chapter 11 case.  In  re Drexel
                                                         _____________
               Burnham Lambert Group, Inc., 138 B.R. [723, 753 (Bankr.
               ___________________________
               S.D.N.Y. 1992)].  

                    Where an injunction allows a settlement that forms
               the  basis of a chapter  11 plan to  take effect, where
               the entire settlement and hence  the plan hinges on the
               parties being free  from the very  claims that the  in-
               junction would prohibit, courts will order  the injunc-
               tive relief.  See,  e.g., In re A.H. Robins  Co., Inc.,
                             ___   ____  ____________________________
               880 F.2d  694 (4th  Cir.), cert.  denied, 493 U.S.  959
                                          _____  ______
               (1989); MacArthur Co., 837 F.2d  [at 89]; SEC v. Drexel
                       _____________                     ___    ______
               Burnham Lambert,  Inc. (In  re  Drexel Burnham  Lambert
               ______________________  _______________________________
               Group, Inc.), 130 B.R. 910, 928 (S.D.N.Y. 1991), aff'd,
               ___________                                      _____
               960 F.2d 285 (2d Cir. 1992); UNARCO Bloomington Factory
                                            __________________________
               Workers v.  UNR Indus., Inc.,  124 B.R. 268  (N.D. Ill.
               _______     ________________
               1990);  Republic Supply  Co. v.  Shoaf, 815  F.2d 1046,
                       ____________________     _____
               1050 (5th Cir. 1987).

                    The  opinion of the Court  of Appeals in the Ninth
               Circuit in In re American  Hardwoods, 885 F.2d 621 (9th
                          _________________________
               Cir.  1989) is  inapposite.   In that  case, guarantors
               were protected  by the  provisions of a  plan, although
               they apparently provided no  contribution to that plan.
               The injunction  was not  shown to  be essential  to the
               plan.  The  court also  notes that  section 524(e),  on
               which  the Ninth Circuit relies, does  not by its terms
               preclude  the entry  of injunctive  relief in  favor of
               nondebtors  making   plan  contributions,  particularly
               where as here,  creditors have overwhelmingly consented
               to it. ...   In this case, the persons protected by the
               Injunction  have contributed substantial amounts to the
               Plan, creditors have agreed  to the Injunction in order
               to get these  payments, and the Injunction  is the only
               basis  on which  to build,  confirm and  effectuate the
               Plan.

                    Recent  cases  following  American  Hardwoods  are
                                              ___________________
               distinguishable from the facts  of this case on similar
               grounds.   See, e.g.,  In re Western  Real Estate Fund,
                          ___  ____   _______________________________
               922 F.2d 592 (10th Cir. 1990).  In Western, an attorney
                                                  _______
               was not enjoined from collecting all fees for work done
               on behalf  of the debtor.   In  that case, the  fees at
               issue  were owed by a nondebtor third party who did not
               contribute  to the  debtor's  plan.   The attorney  was
               allowed  to collect against that third party.  In In re
                                                                 _____
               Rohnert  Park Auto Parts, Inc.,  113 B.R. 610 (9th Cir.
               ______________________________

                                          ii

               BAP 1990), a creditor was time barred from asserting  a
               claim  in the  debtor's bankruptcy.   The  creditor was
               enjoined  by  the  bankruptcy  court   from  collecting
               against a nondebtor third party who  was liable for the
               debt.  The [court] did not uphold that  plan provision.
               However, the  nondebtor third party had not contributed
               to  the funding  of the  plan, nor  was  the injunction
               shown essential to  that plan.  In  this case, however,
               the persons protected by the Injunction are the princi-
               pal contributors  of consideration to the  Plan.  Those
               persons  would not  contribute without  the Injunction.
               Therefore, Western Real  Estate and Rohnert Park  Auto,
                          ____________________     __________________
               like American Hardwoods, are inapposite.
                    __________________

          In  re Monarch Capital Corp., No. 91-41379-JFQ, slip op. at 23-27
          ____________________________

          (Bankr. D. Mass. June 25, 1992).

                                         iii