Buchalter Nemer Represented Fannie Mae in the successful prosecution of an appeal to the Sixth Circuit Court of Appeal of an order related to confirmation of a bankruptcy plan.
In a dispute that lasted more than five years, Daniel Slate and Paul Arrow successfully argued each of four separate appeals related to the good faith requirement for confirmation of a plan of reorganization. In 2010, the debtor commenced a bankruptcy case in Memphis, Tennessee, and Buchalter Nemer was brought in to represent Fannie Mae as the secured creditor. The only other creditors were the Debtor’s former accountant and the Debtor’s former lawyer. The Debtor’s plan “artificially” impaired those two very small claims (total owed of less than $2,500) and then bootstrapped that impairment in an attempt to totally rewrite the terms of the obligations owed Fannie Mae.
The Sixth Circuit Court of Appeal determined that even though the impairment of the two small claims was allowable under the Bankruptcy Code, the plan structure was “an artifice to circumvent” the confirmation requirements of the Bankruptcy Code. The Court rejected the Debtor’s plan and Fannie Mae was allowed to foreclose on its collateral.