Elite of Los Angeles, Inc. v. Hamilton (In re Hamilton)
Elite of Los Angeles, Inc. v. Hamilton (In re Hamilton), 2018 WL 3637905 (9th Cir. BAP July 31, 2018), the Ninth Circuit Bankruptcy Appellate Panel reversed an Order of the Bankruptcy Court for the Southern District of California, where the Bankruptcy Court’s Order had confirmed the chapter11 plan of the debtor, who was an individual. The BAP ruled that the debtor had not satisfied the standards of 11 USC 1129, that had to be met, in order for the individual debtor’s Chapter 11 plan to be confirmable. A major defect in the plan was that plan enjoined creditors that held debts against debtor, that were NOT dischargeable, from taking collection efforts to collect those nondischargeable debts from debtor, despite the plan being confirmed, and the chapter 11 plan did not provide any meaningful distribution to the non-dischargeable debts, so the creditors holding non-dischargeable claims were likely worse off as a result of the plan being confirmed, than those creditors would have been, if the plan had not been confirmed. From the decision, it appears that, if the plan had provided for paying the nondischargeable debts 100% over the life of the plan, the injunction might have been sustained.