McKinstry v. Richard Holmes Enterprises, LLC (In re Black Diamond Mining Company, LLC)

(E.D. Ky. June 16, 2016)

The district court affirms the bankruptcy court’s order dismissing the reopened bankruptcy case. The creditor consented to the unsecured creditors trusts’ settlement of a claim, which was followed by a distribution to creditors and closure of the case. The creditor then moved to reopen the case, and the bankruptcy court granted the motion on condition that the creditor deposit its distribution amount in escrow. The creditor failed to do so, and the case was then dismissed. The bankruptcy court did not err in placing a condition on reopening the case. Because the creditor waited to challenge the settlement and bring claims against the trusts’ attorneys after distribution, there were no fund to indemnify the trust. Thus, the requirement to deposit funds in escrow was appropriate. Opinion below.

Judge: Thapar

Attorneys for Creditor: The Getty Law Group, PLLC, C. Thomas Ezzell, Richard A. Getty, Ware Jackson Lee O’Neill Smith & Barrow, LLP, Paul Smith, Timothy F. Lee

Attorneys for Trust and Its Attorneys: Foley & Lardner, LLP, David B. Goroff, Geoffrey S. Goodman, Dinsmore & Shoal LLP, David James Treacy, Hoover Hull Turner LLP, Michael R. Limrick, Patrick A. Ziepolt, Wayne C. Turner

2016-06-16 – in re black diamond mining company

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