Thurner Industries, Inc. v. Gunnison Energy Corp. (In re Riviera Drilling & Exploration Co.)

502 B.R. 863, 70 Collier Bankr. Cas. 2d 1307, 2013 Bankr. LEXIS 5262, 58 Bankr. Ct. Dec. (CRR) 244
CourtBankruptcy Appellate Panel of the Tenth Circuit
DecidedDecember 17, 2013
DocketBAP No. CO-12-112; Bankruptcy No. 10-11902
StatusPublished
Cited by3 cases

This text of 502 B.R. 863 (Thurner Industries, Inc. v. Gunnison Energy Corp. (In re Riviera Drilling & Exploration Co.)) is published on Counsel Stack Legal Research, covering Bankruptcy Appellate Panel of the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thurner Industries, Inc. v. Gunnison Energy Corp. (In re Riviera Drilling & Exploration Co.), 502 B.R. 863, 70 Collier Bankr. Cas. 2d 1307, 2013 Bankr. LEXIS 5262, 58 Bankr. Ct. Dec. (CRR) 244 (bap10 2013).

Opinion

OPINION

NUGENT, Bankruptcy Judge.

Section 1121(e) of the Bankruptcy Code1 provides that in small business Chapter 11 cases, only the debtor may file a plan of reorganization in the first 180 [866]*866days after the case’s filing.2 The court may extend the debtor’s exclusivity period for a longer time, but § 1121(e)(2) says that “the plan and disclosure statement ... shall be filed not later than 300 days after the date of the order for relief.”3 In this case, after the 300-day deadline had passed, a creditor, appellee Gunnison Energy Corporation (“GEC”), filed a plan of liquidation. At issue is whether § 1121(e) permits a creditor to file a plan after the 300-day deadline expires without being extended. The court confirmed GEC’s plan thirty-four months after the order for relief and after the debtor’s plan and amended plan were denied confirmation. The debtor’s principals, the Thurners, argued below that the 300-day deadline bars creditors and debtors alike from proposing plans once the time has expired, and that instead of confirming the GEC plan, the bankruptcy court should have dismissed the case. Though few courts have spoken to this particular question, we conclude that the 300-day deadline applies to the debtor alone and that the judgment of the bankruptcy court should be AFFIRMED.

1. Factual Background

The debtor, Riviera Drilling and Exploration Company (“Riviera”), owns a 43% interest in several oil and gas leases in Colorado (the “Leases”). Scott, Sam, and Jacob Thurner, and various trusts and corporate entities established by them (collectively the “Thurners”) own the other 57% interest in the Leases. GEC owns a pipeline that transports gas from the Thurner-Riviera wells and the parties have a history of disputes over the transmission of -gas from these Leases.

Riviera filed a small business Chapter 11 case in the District of Colorado on February 2, 2010. In August of 2010, Riviera proposed a plan which was not confirmed. GEC filed a motion to convert or dismiss the case. In November of 2010, Riviera proposed a second plan and, at a November 30 hearing on the motion to dismiss, the bankruptcy court directed Riviera to file a motion to extend time to confirm its plan by December 6, 2010. Riviera did so, but on December 15, 2010, the court appointed a Chapter 11 trustee and, on January 3, 2011, denied the extension motion. The Chapter 11 trustee then attempted to close a § 363 sale of 100% of the Leases. When that sale fell apart, the trustee filed an adversary proceeding against the Thur-ners seeking to sell the properties, to equitably subordinate the interests of the Thurners to the general creditors, and substantially consolidate the leasehold interests of the Thurners with the debtor’s estate (the “Adversary”).4 That Adversary remains pending. On June 14, 2012, several years after the case was filed, the trustee moved to convert the case to a Chapter 7. GEC responded to this motion by filing a plan (the “Plan”).5

The Plan provided that GEC would offer $600,000 in immediate financing to the es[867]*867tate to fund the payment of allowed administrative expenses, make an initial 10% dividend distribution to the general unsecured creditors, and finance post-confirmation operations including prosecution of the Adversary to its conclusion.6 In exchange, the reorganized debtor would sell 100% of the lease interests to GEC upon substantive consolidation of the Thurners’ interests into the estate. If substantive consolidation did not occur, GEC was to receive all of Riviera’s assets, including its lease interests, in payment for the Plan financing it provided.7 The Plan also provided for the appointment of a plan administrator to replace the trustee as the plaintiff in the Adversary and to administer the estate as the Plan provided.8

The Thurners objected to confirmation of the Plan on a variety of grounds, including their assertion that because the 300-day period for plan filing had not been extended, GEC was barred from filing a plan. After an evidentiary hearing, the bankruptcy court confirmed the Plan and concluded in a reasoned order that the 300-day deadline applies only to plans filed by a debtor, not by other proponents (the “Confirmation Order”). The court then entered a separate confirmation order. The Thurners appeal both of these orders.9 They sought stay pending appeal, but the court denied their request.

II. Appellate Jurisdiction

This Court has jurisdiction to hear timely filed appeals from final orders, final collateral orders, and, with leave of court, interlocutory orders of bankruptcy courts within the Tenth Circuit, unless one of the parties elects to have the district court hear the appeal.10 The Thurners timely filed their notice of appeal from the bankruptcy court’s final order and the parties have consented to this Court’s jurisdiction because they have not elected to have the appeal heard by the United States District Court for the District of Colorado.11

But even when a timely appeal of a final order is made to this Court, we lack jurisdiction to review it if the appellant lacks standing to bring the appeal.12 In addition to the interpretation of § 1121, this appeal raises issues of standing and equitable mootness. To determine whether we have jurisdiction of the appeal and whether we should proceed to the merits, we address these two issues first.13

[868]*868A. Standing

Standing to appeal is limited to those “aggrieved” by a bankruptcy court’s order.14 Under the “persons aggrieved” standard, parties will have standing to appeal a bankruptcy court order only if their “rights or interests are directly and adversely affected pecuniarily by the decree or order of the bankruptcy court.”15 Here, GEC claims that the Thurners’ grievance is based merely on their legal argument about the meaning of § 1121(e) and that they are not truly “aggrieved” because they have no pecuniary interest at stake. GEC argues that absent the Plan’s confirmation, there would be no funds to distribute to any unsecured creditors or interest holders, including the Thurners. This argument ignores the economic reality that a sale of Riviera’s minority interest in the gas wells lays the Thurners open to being forced to partner with the entity they claim destroyed Riviera, or to buy out the balance of the gas interests, something they plainly lack the wherewithal to do. Even though the Thurners may have nothing to say about the disposition of the Riviera interests, that disposition certainly affects their economic interests. That suffices to give them standing to appeal.

B. Equitable mootness

The equitable mootness doctrine allows a court to decline to hear a bankruptcy appeal “even when relief could be granted, if implementing the relief would be inequitable.”16 This doctrine can be applied to appeals from orders confirming Chapter 11 plans.

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Cite This Page — Counsel Stack

Bluebook (online)
502 B.R. 863, 70 Collier Bankr. Cas. 2d 1307, 2013 Bankr. LEXIS 5262, 58 Bankr. Ct. Dec. (CRR) 244, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thurner-industries-inc-v-gunnison-energy-corp-in-re-riviera-drilling-bap10-2013.