United States Ninth Circuit

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In Re Fagerdala USA - Lompoc Inc., 16-35430

Reversing a district court order affirming the bankruptcy court and vacating the bankruptcy court's order granting a Chapter 11 debtor's motion to designate claims for bad faith and preclude the claims from being voted against a plan of reorganization because a bankruptcy court may not designate claims for bad faith simply because a creditor offers to purchase only a subset of available claims in order to block a plan of reorganization and blocking the plan will adversely impact the remaining creditors. At minimum there must be some evidence that the creditor is seeking some untoward advantage over other creditors for some ulterior mortive.

Appellate Information

  • Decided
  • Published 2018/06/04




  • United States Ninth Circuit