Judges: PerCuriam
Filed: Jun. 23, 2014
Latest Update: Mar. 02, 2020
Summary: 2 1 NONPRECEDENTIAL DISPOSITION To be cited only in accordance with Fed. R. App. P. 32.1 United States Court of Appeals For the Seventh Circuit Chicago, Illinois 60604 Submitted June 17, 2014* Decided June 23, 2014 Before JOEL M. FLAUM, Circuit Judge FRANK H. EASTERBROOK, Circuit Judge ILANA DIAMOND ROVNER, Circuit Judge Appeal from the United No. 14---1735 States Bankruptcy Court for IN THE MATTER OF: the Southern District of Indiana, Indianapolis CASTLETON PLAZA, LP, Division. Debtor---Appel
Summary: 2 1 NONPRECEDENTIAL DISPOSITION To be cited only in accordance with Fed. R. App. P. 32.1 United States Court of Appeals For the Seventh Circuit Chicago, Illinois 60604 Submitted June 17, 2014* Decided June 23, 2014 Before JOEL M. FLAUM, Circuit Judge FRANK H. EASTERBROOK, Circuit Judge ILANA DIAMOND ROVNER, Circuit Judge Appeal from the United No. 14---1735 States Bankruptcy Court for IN THE MATTER OF: the Southern District of Indiana, Indianapolis CASTLETON PLAZA, LP, Division. Debtor---Appell..
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NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted June 17, 2014∗
Decided June 23, 2014
Before
JOEL M. FLAUM, Circuit Judge
FRANK H. EASTERBROOK, Circuit Judge
ILANA DIAMOND ROVNER, Circuit Judge
Appeal from the United
No. 14-‐‑1735
States Bankruptcy Court for
IN THE MATTER OF: the Southern District of
Indiana, Indianapolis
CASTLETON PLAZA, LP, Division.
Debtor-‐‑Appellant.
No. 11-‐‑01444-‐‑BHL-‐‑11
Basil H. Lorch III, Judge.
Order
Our first decision in this case held that “[a]n impaired lender who objects to any
plan that leaves insiders holding equity is entitled to the benefit of competition.” In re
Castleton Plaza, LP, 707 F.3d 821, 824 (7th Cir. 2013). We remanded with the expectation
∗ This successive appeal has been submitted to the original panel under Operating Procedure 6(b). After
examining the briefs and the record, we have concluded that oral argument is unnecessary. See Fed. R.
App. P. 34(a); Cir. R. 34(f).
No. 14-‐‑1735 Page 2
that Castleton Plaza (the debtor) would propose a plan that either eliminated the
insiders’ equity interest or allowed competition.
Castleton proposed new plans, but all of them retained an equity stake for insiders
and omitted any opportunity for competition. The bankruptcy judge disallowed all of
these plans, ruling that they failed to comply with this court’s mandate. Given one final
opportunity to propose a plan that either removed the insiders’ interest or allowed
competition, Castleton refused. The bankruptcy court dismissed the proceeding, and
the debtor has appealed.
It contends that competition is unnecessary because EL-‐‑SNPR, the secured lender,
will be paid in full and is not “impaired”. The problem with that argument was noted in
our first opinion. All of Castleton’s proposed plans materially change the terms of the
loan, deferring payment for as long as 30 years (so that if the real estate market declines
during that time the lender will not be paid), reduce the rate of interest, and eliminate
several security features of the transaction. That is not a promise of full repayment. EL-‐‑
SNPR is impaired under the proposed plans.
The bankruptcy court properly implemented this court’s decision. The bankruptcy
is over, and the lender can foreclose in the ordinary course. If, as debtor maintains, the
collateral is worth more than the loan, then it can find another source of capital and
outbid EL-‐‑SNPR at the auction.
AFFIRMED
