Schafer and Weiner Denies Creditor Voting Rights in Subchapter V Case

John Stockdale, Jr. and Michael E. Baum represented an independent distributor of new and used telephone equipment in its Subchapter V case.  The case was filed to resolve intellectual property litigation that had been draining the debtor’s resources for more than four years. While the creditor timely filed a proof of claim, it failed to do any more than attach a copy of its complaint in support of its claim. Schafer and Weiner quickly objected to the proof of claim as (1) barred by the creditor’s own bankruptcy case and (2) failing to satisfy the minimum requirements necessary to give its claim prima facie effect. In connection therewith, the Creditor and Debtor filed competing motions to estimate the creditor’s claim for plan confirmation purposes.  After substantial briefing and a hearing, the Court agreed with Schafer and Weiner that the Creditor failed to adequately support its claim, found the claim unliquidated, and denied the creditor the opportunity to vote to accept or reject the debtor’s plan of reorganization.  That paved the way for confirmation under section 1191 of the Bankruptcy Code notwithstanding the creditor’s objection to the plan.