The Court temporarily allowed creditor’s claims pursuant to Fed.R.Bankr.P. 3018(a) for voting purposes.  Creditor purchased two claims.  The objecting creditor failed to establish that the claims were not purchased in good faith or that the purchaser was an insider of the debtor. Creditor was entitled to vote each claim separately.  

The Court denied the debtor’s request to set aside a default order granting stay relief, finding that the anti-modification provision under § 1123(b)(5) prevented the debtor from seeking to restructure the loan through a Chapter 11 plan.  There was no other evidence before the Court that the debtor would be able to sell the property to a third party to pay off the loan.  

On cross motions for summary judgment, the Court determined that 1) the language in the Debtor-Hospital’s confirmed Chapter 11 plan was broad enough to enjoin claims against former employees of the Debtor-Hospital relating to claims against the Debtor-Hospital and has res judicata effect even if such third-party injunction is contrary to the requirements of the Bankruptcy Code;  2) that Plaintiff received actual notice of the commencement of the bankruptcy case, the hearing on confirmation of the Chapter 11 plan, and the deadline for filing administrative claims; and 3) fact issues concerning whether the content of the notice was sufficient to satisfy due process and bind plaintiff to the injunction contained in the Confirmed Chapter 11 plan precluded summary judgment.

On objection to confirmation by certain restitution claimants, defrauded investors in the debtor’s Ponzi scheme, the Court denied confirmation of Chapter 11 plan proposing a “rising tide” distribution method whereby pre-petition distributions to defrauded investors are treated as distributions from the estate in an effort to equalize distributions between earlier defrauded investors who received a greater return on their principal investment and later defrauded investors who received little or nothing before the bankruptcy filing because the plan did not comply with the requirements of § 1123(a)(4), which requires “same treatment” of claims within a class.  The plan also failed to satisfy the “best interest of creditors test” under § 1129(a)(7) with respect to rejecting creditors.