filed: April 6, 1992; June 1, 1992, Amended Filed.
Appeal from the United States Bankruptcy Court for the Eastern District of California. Hon. David E. Russell, Bankruptcy Judge, Presiding. Bk. No. 90-26310-B-11 This Opinion Substituted for Withdrawn Opinion of April 6, 1992
Before: Meyers, Ollason and Jones, Bankruptcy Judges
MEYERS, Bankruptcy Judge:
An unsecured creditor appeals from the bankruptcy court's order confirming a plan of reorganization, arguing that the plan improperly placed similar claims in separate classes and violated the absolute priority rule. We AFFIRM.
The Appellant, Steelcase Inc. ("Steelcase"), manufactures office furniture and related systems. Capital Office Systems, Inc. ("Capital") was a Steelcase dealer. Steelcase sold products to Capital on open account pursuant to a predetermined credit line. In addition, a wholly owned financing subsidiary of Steelcase financed large sales of its products for Capital. James E. Johnston ("Debtor") is the Chief Executive Officer and majority shareholder of Capital. The Debtor had guaranteed payment of Capital's debt to Steelcase.
On October 1, 1990, the Debtor filed a petition under Chapter 11 of the Bankruptcy Code ("Code"). At this time, Steelcase and its financing subsidiary were allegedly owed $1,913,057.90 plus interest, attorney's fees, costs and other charges for products sold and delivered. Steelcase holds a non-priority, unsecured claim.
One day after the petition was filed, the Debtor sued Steelcase in state court. Steelcase subsequently removed the action to district court and obtained relief from the automatic stay to file a counterclaim against the Debtor.
The Debtor filed a disclosure statement and plan of reorganization. The plan has 26 classes. Steelcase's claim is classified separately in Class 23. In the plan, the Debtor disputes Steelcase's claim. In the event Steelcase is successful in its pending district court action and the Debtor does not obtain a stay of the enforcement of the judgment, the Debtor promises to pay the full amount of Steelcase's claim plus interest within 120 days of the entry of judgment by the district court.
On July 19, 1991, the bankruptcy court signed an order confirming the Debtor's plan. Steelcase ...