In Re Green Rivers Forest, Inc.

190 B.R. 477, 1995 Bankr. LEXIS 1877, 1995 WL 776066
CourtUnited States Bankruptcy Court, M.D. Georgia
DecidedOctober 16, 1995
Docket19-70118
StatusPublished
Cited by1 cases

This text of 190 B.R. 477 (In Re Green Rivers Forest, Inc.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Green Rivers Forest, Inc., 190 B.R. 477, 1995 Bankr. LEXIS 1877, 1995 WL 776066 (Ga. 1995).

Opinion

MEMORANDUM OPINION

JAMES D. WALKER, Jr., Bankruptcy Judge.

Green Rivers Forest, Inc., (“Debtor”) initiated this Motion To Revoke Permission To Practice Pro Hae Vice And For Sanctions Under Rule 11 Of The Federal Rules Of Civil Procedure 1 against Aetna Life Insurance Company and its counsel Hebb & Gitlin (collectively “Aetna”). Based on the following analysis, the Court will deny Debtor’s motion.

FINDINGS OF FACT

Over the course of litigation regarding confirmation of Debtor’s plan, Aetna repeatedly made allegations of bad faith, ex parte communications, and judicial misconduct during the state court liquidation proceedings of the Alabama Life Insurance Company (“ALIC”), a creditor in this Chapter 11 case. Aetna sought to present evidence of this alleged misconduct in an effort to persuade this Court to designate ALIC’s vote as a rejection of the plan pursuant to 11 U.S.C. § 1126(e). This Court denied Aetna’s Motion To Designate ALIC’s vote, and Debtor brought the present motion.

The course of events in the Alabama State Court were the source of Aetna’s contentions in its Motion To Designate, and provide a background for Debtor’s present motion. On October 7, 1994, a hearing was held before the Alabama State Court regarding the liquidation of ALIC. At the hearing a settlement (the “Pike Settlement”) was reached by which Green Land Company 2 (“GLC”) agreed to consent to the liquidation of ALIC, the Alabama Insurance Department agreed to transfer certain land and mortgages to the Alabama Life and Disability Guaranty Association (the “Guaranty Association”), and the Guaranty Association would negotiate in “good faith” with GLC and/or Burton Green regarding the sale of the fee interest in 13,676 acres of land (the “13,676 Acres”) to be transferred to the Guaranty Association by the Alabama Insurance Department.

On November 13, 1994, John Crawley, counsel for GLC, filed a Motion for Immediate Hearing, requesting a hearing before the Alabama State Court to challenge the good faith of the Guaranty Association in negotiating for the sale of the fee interest in the 13,676 Acres. Thereafter, an Amended Motion for Immediate Hearing was filed.

A hearing on the Pike County motion was scheduled for December 14, 1994, in Enterprise, Alabama before Judge McAliley. The hearing was cancelled due to the illness of Burton Green. In the course of discussions on December 14th among representatives of the Guaranty Association, the receiver and Debtor, questions arose as to whether the Pike Settlement obligated the receiver to sell to the Guaranty Association certain mortgages owned by ALIC encumbering land owned in fee by Debtor. The receiver disputed that the Pike Settlement imposed any such obligation on the receiver.

During the course of those discussions in Enterprise on December 14th, representatives of GLC and/or Debtor inquired whether, if Debtor’s plan were amended to provide for a one-year payout of the ALIC Secured Claims, the receiver would vote for the plan. The receiver replied that he would discuss the offer with his counsel, Tommy James. *480 On December 27,1994, the receiver delivered a letter to Debtor advising Debtor that, after consultation with Mr. James, the receiver had decided not to change his vote.

On December 29, 1994, a telephone conference hearing was conducted by Judge McAli-ley. In addition to Judge McAliley, participants in the call were Mr. Crawley (on behalf of Green Land Company), Wes Boyer (on behalf of Debtor), Burton Green (Debtor’s principal), Vicki McPherson (an employee of Debtor), and two attorneys for the Guaranty Association, Bill Patty and James Anderson (Patty and Anderson on behalf of the receiver). Aetna has claimed that Mr. Crawley appeared at the instigation of Debtor.

At the outset of the call, Judge McAliley announced that the issue to be decided was whether the receiver had acted in good faith in refusing to vote for Debtor’s plan. Before this Court, Aetna complained that neither Mr. Patty nor the receiver received prior notice that such a hearing would take place. When Mr. Patty was patched into the call, he had no understanding of why the call had been convened. Aetna alleged that Judge McAliley stated, “This is what I understand the issue is going to be today.” There apparently was no agreement by the parties at the beginning of the call that the issue announced by Judge McAliley was the issue to be resolved.

The conference call was originated by Mr. Crawley and was billed to Burton Green, who accepted charges for the call. The call originated from the telephone number of Judge McAliley in Enterprise, Alabama. The call originated at 11:05 a.m. and was not normalized until 11:23 a.m., meaning that, until 11:23 a.m., the parties on the call could not talk to one another. Mr. Patty was the last party added to the call at 11:22 a.m. The telephone hearing lasted twenty-three minutes, terminating at 11:46 a.m.

Following the telephone hearing, on December 29, 1994, Judge McAliley issued an order (the “Pike County Order”) ordering the receiver to vote in favor of Debtor’s Plan Of Reorganization on the ground that the receiver had not exercised good faith as required by the Pike County Settlement.

Based on the above presentation, Aetna sought to have this Court in effect reverse or nullify the vote of ALIC as ordered by the Alabama State Court. Aetna alleged that Mr. Crawley and the state court judge engaged in improper ex parte communications and bad faith and, as for the judge, judicial misconduct in allowing himself to be improperly influenced. As previously indicated, this Court declined to designate ALIC’s vote finding the evidence presented by Aetna to be unconvincing and capable of several different explanations, only one of which would implicate the alleged misconduct on the part of the state court judge and Debtor.

CONCLUSIONS OF LAW

Bankruptcy Rule 9011 governs an attorney’s obligations to verify the facts and legal arguments in documents presented to the Court for consideration. Rule 9011 provides: Rule 9011. SIGNING AND VERIFICATION OF PAPERS

(a) Signature. Every petition, pleading, motion and other paper served or filed in a case under the Code on behalf of a party represented by an attorney, except a list, schedule, or statement, or amendments thereto, shall be signed by at least one attorney of record in the attorney’s individual name, whose office address and telephone number shall be stated. A party who is not represented by an attorney shall sign all papers and state the party’s address and telephone number. The signature of an attorney or a party constitutes a certificate that the attorney or party has read the document; that to the best of the attorney’s or party’s knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation or administration of the case.

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Cite This Page — Counsel Stack

Bluebook (online)
190 B.R. 477, 1995 Bankr. LEXIS 1877, 1995 WL 776066, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-green-rivers-forest-inc-gamb-1995.