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Claim was expunged in its entirety because ReGen's predecessor in interest, AT&T, had full notice of the cure claims bar date and AT&T failed to file a cure claim; and, moreover, because ReGen failed to object to the plan at the confirmation, it could no longer do so at this time. The district court affirmed. Issues: Whether ReGen should be allowed to file an unsecured claim against the bankruptcy estate based upon additional pre-petition contract arrearages that had not been cured by the Debtor when it assumed the executory contract despite its predecessor in interest's failure to file a cure claim.
Rules: Bankruptcy Rules (Rule 2002 and 3003) allow a bankruptcy court to set bar dates so long as creditors are notified by mail at least 20 days prior to the bar date.
Holding: Affirmed.
Reasoning: The notice provided was unambiguous and sufficient to put AT&T on notice of both the cure claim bar date and the consequences of the failure to file a cure claim by such date. Thus, AT&T's failure to file a cure claim precludes ReGen's attempt to file (despite ReGen arguing that the ReGen Claim was a different kind of claim - a general unsecured claim) what amounts to the kind of claim (a cure claim) that had to be filed by the bar date set by the bankruptcy court. "To allow a party who misses the bar date to pursue untimely cure claims as general unsecured ones 'would severely undermine the debtor's and the Court's ability to analyze... and exercise their rights under Section 365." Moreover, the plan of reorganization does not violate the Best Interests of Creditors test because the ReGen Claim had been settled long before the plan was confirmed.
Facts: Central Valley AG Enterprises' ("CV") and a wholly owned subsidiary, Orange Coast Enterprises, bought 98% of a partnership share in Astropar Leasing Partnership ("Astropar"). For TEFRA purposes, CV was an indirect partner. The other partner in Astropar was a partnership called STM-CIG, which were the promoters of a lease-stripping tax shelter in which Astropar participated. Due to the lease-stripping, Astropar had substantial losses in 1993, 1994, and 1995, which it declared on its tax returns. And, because partnerships are not taxed, CV benefited from the decreased tax liability. Ultimately, the IRS disallowed the losses and CV was held to have a tax deficiency. The IRS also adjusted Astropar's tax returns in 1996 and 1998. In 1998, Orange Coast and STM-CIG filed protests for tax years 1993 and 1994 and STM-CIG filed a protest for the 1995 return. Because of the protests, a conference was held in the IRS Appeals Office. After the conference, in March 2001, the IRS mailed the Notice of Final Partnership Administrative Adjustment ("FPAA"). Under TEFRA, the Astopar partners had 150 days to file a petition to adjust the FPAA in a court. If any partner objected to the FPAA, all the partners were deemed to be parties to the proceeding. No objection was filed, however; instead, 250 days after the FPAA, CV declared chapter 11. The government filed an unsecured priority claim for the tax years 1993-1995 in the amount of $13.1 million.
Issues: (1) Whether the Bankruptcy Court is conferred with jurisdiction, under 11 U.S.C. § 505(a)(1), in light of the Tax Equity And Fiscal Responsibility Act of 1982 ("TEFRA"), which provides that the tax treatment of partnership items ordinarily must be determined at the partnership level.
Rules: (1) Under TEFRA, § 505(a)(1) jurisdiction is not distinguished by a tax liability and a partnership item - the bankruptcy court has jurisdiction over a debtor-partner's ultimate tax liability, which necessarily includes his or her partnership interest. Bankruptcy court jurisdiction is, however, limited to the debtor, the bankruptcy court does not have jurisdiction over a non-debtor partner.
