MERV Properties, L.L.C. v. Forcht Bancorp, Inc. (In re MERV Properties, L.L.C.)

(6th Cir. B.A.P. Oct. 6, 2015)

The Sixth Circuit B.A.P. affirms the bankruptcy court’s order granting summary judgment in favor of the bank. The debtor brought claims against the bank following the debtor’s default on the loan after its Chapter 11 plan was confirmed. The debtor alleged fraud and collusion against the bank and others. The bank moved to dismiss the claims based on a release provision in a forbearance agreement that had been executed by the debtor, and the bankruptcy court granted the motion. On appeal, the court rejects the debtor’s argument that it should have been allowed time to conduct discovery because that issue was not preserved for appeal. The court also holds that the debtor failed to show that there exists a dispute of material fact as to the validity of the release. The adverse interest exception did not apply because the forbearance agreement provided benefits to the debtor. Finally, the court holds that the forbearance agreement was not unconscionable under Kentucky law. Opinion below.

2015-10-06 – merv properties v forcht bancorp

Author: Matt Lindblom