Journal Register Company and Pulp Finish 1 Company (f/k/a Journal Register Comp

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
---------------------------------------------------------------X
In re: 	:
: 	Chapter 11
PULP FINISH 1 COMPANY (f/k/a Journal 	: 	Case No. 12-13774 (SMB)
Register Company), et al., 	: 	Jointly Administered
:
Debtors. 	:
---------------------------------------------------------------X
MEMORANDUM DECISION AND ORDER
DENYING VARIOUS FORMS OF RELIEF
REQUESTED BY JAMES D. SCHNELLER
A P P E A R A N C E S:
MR. JAMES D. SCHNELLER
Movant Pro Se
430 East Lancaster Avenue E 25
Saint Davids, PA 19087
MORGAN, LEWIS & BOCKIUS, LLP
101 Park Avenue
New York, NY 10178-0060
Neil E. Herman, Esq.
Patrick D. Fleming, Esq.
Of Counsel
‒ and ‒
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1270 Avenue of the Americas, Suite 2210
New York, NY 10020
Michael R. Nestor, Esq.
Kenneth J. Enos, Esq.
Andrew L. Magaziner, Esq.
Of Counsel
Counsel to the Liquidating Trustee
STUART M. BERNSTEIN
United States Bankruptcy Judge:
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 1 of 26

2
James D. Schneller has made the following motions now pending before the Court: (1)
Motion for Reconsideration of Order Confirming Proposed Plan of Reorganization, and for
Intervention, and for Stay, dated Oct. 28, 2013 (the “Confirmation Motion”) (ECF Doc. # 880)
and (2) Motion for Reconsideration of Order Closing the Case of Goodson Holding Company
and 27 Other Reorganized Debtor Cases, dated Dec. 2, 2013 (the “Case Closing Motion”) (ECF
Doc. # 922).) Upon due consideration, the motions are denied for the reasons that follow.
BACKGROUND
The Court has previously outlined the background to this dispute in its Memorandum
Endorsement and Order Denying Various Forms of Relief Requested by James D. Schneller,
dated July 30, 2013 (“Memorandum Endorsement”) (ECF Doc. # 730) familiarity with which is
assumed. The gravamen of Schneller’s claim is that he was defamed by an article published by
one of the Debtors ‒ apparently Goodson Holding Company (“Goodson”) ‒ and posted on the
internet on or about October 9, 2008. Consequently, when the Debtors (the “2009 Debtors”)
filed their first chapter 11case on February 21, 2009, (see In re Journal Register Co., 09-
10769(ALG) (the “First Case”)), Schneller was a pre-petition creditor. The Court confirmed the
First Case on July 7, 2009, and the confirmed plan discharged the 2009 Debtors, inter alia, from
their pre-petition debts, including any debt owed to Schneller. The plan also enjoined creditors
from pursuing the discharged debts. Accord 11 U.S.C. § 524(a)(2) (“A discharge in a case under
this title . . . operates as an injunction against the commencement or continuation of an action . . .
to collect, recover or offset any such debt as a personal liability of the debtor. . . .”)
It appears that Schneller did not receive actual notice of the First Case or file a proof of
claim or otherwise participate in the First Case. This is because he did not file his defamation
action against Goodson until December 3, 2009, after confirmation. Until then, he was an
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 2 of 26

3
unknown creditor, who received constructive notice of the proceedings through publication. The
First Case was closed on May 2, 2011.
Schneller moved to reopen the First Case on May 29, 2012. He argued, among other
things, that the 2009 Debtors intentionally concealed the case from him although they should
have known that he would have filed a claim, and he was not bound by the discharge or the plan
injunction due to lack of notice. Judge Gropper, who presided over the First Case, denied the
motion to reopen. 	(Order, dated July 9, 2012, at 2 (ECF Case No. 09-10769 Doc. # 982).)
Schneller moved for reconsideration of Judge Gropper’s order. While his motion was
pending, the Debtors (the “2012 Debtors”) filed this case (the “Second Case”) on September 5,
2012. Schneller filed a motion in the Second Case for relief from the stay, and the Court granted
the motion over the 2012 Debtors’ objection to the extent of allowing Schneller to pursue his
motion for reconsideration in the First Case. Thereafter, by order dated June 27, 2013, Judge
Gropper denied Schneller’s motion for reconsideration. Schneller filed an appeal from that
order, and the appeal is pending before the District Court. (See In re Journal Register Company,
13 Civ. 6554 (PKC).)
In the meantime, the 2012 Debtors filed the Debtors’ First Omnibus Objection to Claims,
dated May 24, 2013 (ECF Doc. # 653). It included an objection to Schneller’s claim on the
ground that it was discharged in the First Case. (Id., Ex. 1, B.) Following oral argument, the
Court disallowed and expunged Schneller’s claim “provided, however, that Schneller shall be
permitted to seek reconsideration of this Order in the event he obtains relief from the permanent
injunction set forth in the [First Case Confirmation Order].” (Order Sustaining Debtors’ First
Omnibus Objection to Claims, dated June 27, 2013 (ECF Doc. # 682).)
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 3 of 26

4
Schneller thereafter moved for reconsideration of the order expunging his claim and
coupled it with a motion to certify a direct appeal to the United States Court of Appeals and for
leave to proceed in forma pauperis on his appeal from the order expunging his claim. (See ECF
Doc. # 713.) The Court denied all of the requested relief in the Memorandum Endorsement. In
denying the reconsideration motion, the Court explained that “[t]he threshold issue presented by
the 2012 Debtors’ objection to Schneller’s claim was whether the claim was discharged in the
First Case. Absent relief from the discharge injunction, Schneller cannot pursue a discharged
claim in this case.” In other words, Schneller’s ability to assert an allowed claim in the Second
Case depended on his freeing himself from the constraints of the discharge in the First Case,
which he had not done. In denying the motion for leave to proceed in forma pauperis, the Court
observed that
Schneller is a serial plaintiff who ignores adverse judicial determinations and
continues to pursue frivolous litigation. Given the obvious effect of the discharge
injunction in the First Case on his claim in the Second Case and his failure to
obtain relief from that injunction, his continued prosecution of any appeal
disallowing his claim in the Second Case is not in good faith. Cf. 28 U.S.C.
§ 1915(a)(3) (“An appeal may not be taken in forma pauperis if the trial court
certifies in writing that it is not taken in good faith.”).
Notwithstanding Schneller’s motions, the 2012 Debtors continued to prosecute the
Second Case. On July 2, 2013, they filed their Joint Plan of Liquidation Pursuant to Chapter 11
of the Bankruptcy Code Proposed by the Debtors and the Official Committee of Unsecured
Creditors (the “Plan”) (ECF Doc. # 687) and Disclosure Statement for Joint Plan of Liquidation
Pursuant to Chapter 11 of the Bankruptcy Code Proposed by the Debtors and the Official
Committee of Unsecured Creditors (the “Disclosure Statement”) (ECF Doc. # 688), both dated
June 24, 2013. Schneller filed an objection to the Disclosure Statement on August 21, 2013 (see
ECF Doc. # 761), the Court heard the objection and overruled it, (see Transcript of 8/29/13
hearing, filed Sept. 5, 2013, at 44-50 (ECF Doc. # 788)), and approved the Disclosure Statement
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 4 of 26

5
on August 29, 2013, scheduling the confirmation hearing for October 8, 2013. (See Order
Approving (I) the Disclosure Statement, and (II) Voting and Solicitation Procedures with
Respect to the Joint Plan of Liquidation Pursuant to Chapter 11 of the Bankruptcy Code
Proposed by the Debtors and the Official Committee of Unsecured Creditors, dated Aug. 29,
2013 (ECF Doc. # 782).) Schneller did not file a timely appeal ‒ or any appeal disclosed by the
docket ‒ from the order approving the Disclosure Statement.
Schneller then served discovery requests on the Debtors on August 31, 2013 (see ECF
Doc. # 842, Parts 2 & 3) and September 16, 2013. (Id., Parts 4 & 5.) In addition, on September
17, 2013, he filed the Motion for Temporary Allowance of a Claim for Voting Purposes and for
Estimation of the Claim, dated Sept. 17, 2013 (the “Temporary Allowance Motion”) (ECF Doc. #
801.) The Court denied the Temporary Allowance Motion because Schneller’s claim had been
expunged and was not subject to temporary allowance under Bankruptcy Rule 3018(a).1
(Transcript of 9/26/13 hearing, filed Oct. 2, 2013 (“9/26/13 Tr.”), at 9-10 (ECF Doc. # 837); see
Order Denying Motion for Temporary Allowance of a Claim for Voting Purposes and for
Estimation of the Claim Filed by James D. Schneller, dated Sept. 30, 2013 (ECF Doc. # 828).)
The Court also treated the hearing as a discovery conference. During an extended
colloquy, (see 9/26/13 Tr. at 13-23), the Court expressed its view that Schneller’s discovery
requests were irrelevant to the only remaining issue ‒ confirmation ‒ and ultimately concluded
1 	Bankruptcy Rule 3018(a) deals, inter alia, with the situation where a party in interest has objected to a
claim but the objection has not been decided. The mere filing of an objection results in the claim’s disallowance, 11
U.S.C. § 502(a), and disenfranchises the creditor from voting for or against the plan; only votes cast by creditors
holding allowed claims count toward acceptance or rejection of a plan. 11 U.S.C. § 1126(c). Bankruptcy Rule
3018(a) authorizes the Court to estimate and allow the claim that is the subject of the unresolved objection for voting
purposes. F ED. R. BANKR . P. 3018 (“Notwithstanding objection to a claim or interest, the court after notice and
hearing may temporarily allow the claim or interest in an amount which the court deems proper for the purpose of
accepting or rejecting a plan.”) In Schneller’s case, the objection had been resolved, his claim had been expunged,
and Bankruptcy Rule did not apply.
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 5 of 26

6
that he was not entitled to the discovery because (1) he did not have an allowed claim, (2) even if
he did, the matters he was inquiring into would not affect his unsecured claim (which would
have been placed in class 6) and (3) his discovery amounted to a “fishing expedition.” (Id. at
24.) However, the Court informed Schneller that he was free to make a motion regarding his
request for discovery. (Id.)
Between September 30, 2013 and October 7, 2013, Schneller filed the following: (1)
Motion to Stay Orders Appealed From, dated Sept. 30, 2013 (ECF Doc. # 829); (2) Motion for
Emergency Stay or Restraining Order of Proceedings, dated Sept. 30, 2013 (ECF Doc. ## 830,
851); (3) Letter, dated Oct. 4, 2013, demanding action by the Court, the Creditors’ Committee
and the Office of the United States Trustee to investigate certain matters and appoint a chapter 11
trustee (ECF Doc. # 838); (4) Motion to Compel Compliance with Requests for Production of
Documents, dated Sept. 30, 2013 (ECF Doc. # 842); and (5) Objection to Debtor’s Proposed
Plan of Reorganization, dated Sept. 30, 2012 [sic] (ECF Doc. # 843.) The Court addressed his
motions and confirmation objection at the October 8, 2013 confirmation hearing. Schneller
explained that he was seeking to stay the confirmation hearing while he obtained discovery in
order to oppose confirmation. (Transcript of 10/8/13 hearing, filed Nov. 20, 2013 (“10/8/13
Tr.”), at 10-11 (ECF Doc. # 908).) The Court denied his motion for discovery and a stay because
his claim had been expunged and he lacked standing to object to confirmation. (Id. at 11) (citing
In re Kreisler Group, Inc., 648 F.2d 86, 88 (2d Cir. 1981) (decided under the former Bankruptcy
Act)); In re Southland Dev. Corp., 136 B.R. 40, 42 (E.D.N.Y. 1992) (decided under the
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 6 of 26

7
Bankruptcy Code). The Court refused to hear his objections to confirmation for the same
reason.2 (10/8/13 Tr. at 12.)
One week later, the Court entered the Order Confirming the Joint Plan of Liquidation
Pursuant to Chapter 11 of the Bankruptcy Code Proposed by the Debtors and the Official
Committee of Unsecured Creditors (the “Confirmation Order”), dated Oct. 15, 2013 (ECF Doc.
# 856). The Plan became effective on October 30, 2013 (the “Effective Date”), (Notice of (A)
Entry of the Confirmation Order, (B) the Occurrence of the Effective Date of the Plan, (C) the
Rejection Claims Bar Date, (D) the Administrative Claims Bar Date, and (E) the Final Fee
Application Deadline, dated Oct. 30, 2013 (ECF Doc. # 881)), and on or after the Effective Date,
the Debtors, inter alia, transferred all of their assets to the Liquidating Trust pursuant to the Plan
and dissolved. (Liquidating Trustee’s First Post-Confirmation Status Report, dated Dec. 2, 2013
(“Post-Confirmation Report”), at ¶ 3 (ECF Doc. # 914).) The Court entered the Final Decree
and Order Under 11 U.S.C. §§ 105(a) and 350(a), Fed. R. Bankr. P. 3022 and LBR S.D.N.Y.
3022-1 Closing Certain of the Debtors’ Chapter 11 Cases, dated Nov. 18, 2013 (the “Case
Closing Order”) (ECF Doc. # 897), and closed all of the affiliated cases, leaving the lead case, In
re Pulp Finish 1 Company (f/k/a Journal Register Company), Case No. 12-13774, as the only
open case.
2 	The Court subsequently entered an Order Denying Motions Filed by James D. Schneller Between
September 30, 2013 and October 7, 2013, dated Oct. 18, 2013 (ECF Doc. # 859).
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 7 of 26

8
DISCUSSION
A. 	Confirmation Motion
1. 	Reconsideration of the Confirmation Order
Schneller seeks reconsideration of the Confirmation Order under Rules 9023 and 9024 of
the Federal Rules of Bankruptcy Procedure. In addition to citing a generalized litany of alleged
deficiencies in the Plan which are discussed in more detail below, (see Confirmation Motion at
¶¶ 9-12, 14, 19), Schneller contends that the cases were filed and the confirmation was procured
through misconduct, i.e., bad faith and fraud. In particular, he argues that the Debtors always
planned a “chapter 22” (i.e., the 2009 Debtors intended to file the Second Case at the time they
filed the First Case), (id. at ¶ 15), and procured “the formal waiver or deemed acceptance” of
certain classes (presumably classes 5 and 7) in bad faith. (Id. at ¶ 10.) He also challenges the
sufficiency of the Disclosure Statement because it did not include any of his objections, (id. at ¶
13), and the timing of the section 363 sale of the Debtors’ assets and the alleged failure to
maximize the assets of the estates. (Id. at ¶ 20). These were the same charges he made in the
aforementioned letter demanding an investigation and the appointment of a trustee or examiner.
(See ECF Doc. # 838.) Finally, Schneller asserts personal claims relating to the failure to
consider his objections to confirmation, (Confirmation Motion at ¶ 8), the improper treatment of
his “prospective claim” in violation of 11 U.S.C. § 1129(b)(2)(B), (id. at ¶ 21), the refusal to
temporarily allow and estimate his claim for voting purposes, (id. at ¶ 22), and the refusal to
disclose pertinent insurance policies. (Id. at ¶ 23.) 3
3 	Schneller served a supporting memorandum approximately one month later. (See Memorandum of Law in
Support of Motion for Reconsideration of Order Confirming Proposed Plan of Reorganization, for Intervention, and
for Stay, dated Nov. 30, 2013 (“Schneller Memo”) (ECF Doc. # 923).) The Schneller Memo repeats the arguments
made in the Confirmation Motion, and adds a few more. He complains that the other tort creditors were able to
access the Debtors’ insurance or negotiate settlements with the Debtors notwithstanding the plan injunction in the
First Case. (Id. at 4 of 17.) He says he did not receive a notice required by the Plan. (Id.) He challenges the
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 8 of 26

9
The Confirmation Motion is untimely to the extent it seeks reconsideration of the
Confirmation Order under Federal Bankruptcy Rule 9023. The motion had to be filed within 14
days of the entry of the Confirmation Order. Accord Bankr. S.D.N.Y.R. 9023-1 (governing
motions for reconsideration). The Confirmation Motion was filed on October 30, 2013, 15 days
after the entry of the Confirmation Order, one day late.4 Furthermore, a party seeking relief
under Federal Bankruptcy Rule 9023 must show that the Court overlooked controlling decisions
or factual matters that might have materially influenced the outcome, or that reconsideration is
necessary to correct a clear error or prevent manifest injustice. Turnberry Centra Sub, LLC v.
Lehman Bros. Holdings Inc. (In re Lehman Bros. Holdings Inc.), Adv. No. 09-01062, 2013 WL
819734, at *1 (Bankr. S.D.N.Y. Mar. 5, 2013). As discussed below, Schneller has not shown
that the Court overlooked anything or erred, and he has not identified a manifest injustice that
must be prevented. Importantly, he does not quarrel with the conclusion that he lacked standing
to object to confirmation. Instead, he continues to repeat the same arguments that the Court
expressly refused to consider because he lacked standing or previously considered and decided.
This leaves Federal Bankruptcy Rule 9024. Rule 9024 incorporates FED. R. CIV. P.
60(b), but is limited by 11 U.S.C. § 1144 which states that “the court may revoke [a confirmation
order] if and only if such order was procured by fraud.” Accordingly, although Federal Civil
statement in the Order Approving Post-Confirmation Timetable as Required by Local Rule 3021-1(a), dated Nov. 6,
2013 (“Post-Confirmation Order”) (ECF Doc. # 888) that no adversary proceedings are pending in connection with
the Debtors’ case. According to Schneller, he is a plaintiff in an adversary proceeding pending in Pennsylvania. In
addition, he contends that the request for a stay in the Confirmation Motion is an adversary proceeding. (Schneller
Memo at 4 of 17.) He also asserts that the Plan did not contain a reservation of rights, but his argument is hard to
follow. (Id. at 5 of 17.) Finally, he maintains that the Debtors did not comply with Local Bankruptcy Rule 3019-1,
which relates to the modification of the plan before the close of voting, and disregarded the conditions to the
occurrence of the Effective Date. Hence, the Plan has not been substantially consummated. (Id. at 7 of 17.)
4 	According to his certificate of service attached to the Confirmation Motion, Schneller mailed or emailed his
Confirmation Motion to me as well as the other parties on October 29, 2013, the last day to file a notice of appeal.
My chambers received the Confirmation Motion by email on October 30, 2013 at 8:57 a.m., (see ECF Doc. # 951),
and the clerk filed it the same day.
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 9 of 26

10
Rule 60(b) provides several grounds for obtaining relief from a final order, a movant who seeks
to revoke a confirmation order under Federal Bankruptcy Rule 60(b) is limited to proving fraud,
and must file the motion within the 180-day time period set forth in 11 U.S.C. § 1144.
Branchburg Plaza Assocs., L.P. v. Fesq, 153 F.3d 113, 117 (3d Cir. 1998), cert. denied, 526 U.S.
1018 (1999); Bill Roderick Distrib., Inc. v. A.J. Mackay Co. (In re A.J. Mackay Co.), 50 B.R.
756, 758 n.1 (D. Utah. 1985); In re BGI, Inc., No. 11-10614 (MG), 2012 WL 5392208, at *3
(Bankr. S.D.N.Y. Nov. 2, 2012); In re Indu Craft Inc., No. 97-44958-RDD, 2011 WL 2619501,
at *3 (Bankr. S.D.N.Y. July 1, 2011), aff’d, No. 11 Civ. 5996(JMF), 2012 WL 3070387
(S.D.N.Y. July 27, 2012); In re Chipwich, Inc., 64 B.R. 670, 678 (Bankr. S.D.N.Y. 1986); cf. In
re Emergency Beacon Corp., 48 B.R. 356, 361 (Bankr. S.D.N.Y. 1985) (interpreting the
Bankruptcy Act of 1898, as amended). Thus, Schneller must demonstrate that the Confirmation
Order was procured by fraud.5
The threshold problem with the motion to reconsider the confirmation order is
Schneller’s refusal to recognize that the disallowance of his claim materially affected his status
as a “party in interest” under Bankruptcy Code § 1109(b).6 Section 1109(b) lists a creditor as a
“party in interest.” A “creditor” is an entity with a pre-petition claim, see 11 U.S.C.
§ 101(10)(A), and a “claim” is “a right to payment,” 11 U.S.C. § 101(5)(A), which “is nothing
more nor less than an enforceable obligation.” Pa. Dept. of Pub. Welfare v. Davenport, 495 U.S.
552, 559 (1990); accord Cohen v. de la Cruz, 523 U.S. 213, 218 (1998); Carrieri v. Jobs.com
5 	In addition, Federal Bankruptcy Rule 7001(5) required Schneller to proceed by adversary proceeding rather
than motion.
6 	Bankruptcy Code § 1109(b) provides that “[a] party in interest, including the debtor, the trustee, a creditors’
committee, an equity security holders’ committee, a creditor, an equity security holder, or any indenture trustee,
may raise and may appear and be heard on any issue in a case under this chapter.” (Emphasis supplied.)
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 10 of 26

11
Inc., 393 F.3d 508, 524 (5th Cir. 2004) (“The touchstone of any ‘claim’ is that there is an
‘enforceable obligation’ of the debtor or an enforceable ‘right to payment’ from the debtor.”).
The definition of “claim” is broad, and includes a disputed right to payment, but once the
court expunges the claim, the right to payment is no longer subject to dispute. Moreover, while
the concept of “party in interest” is elastic and not limited to the entities listed in § 1109(b), see
Savage & Assocs., P.C. v. K & L Gates LLP (In re Teligent, Inc.), 640 F.3d 53, 60 (2d Cir.
2011), it typically refers to someone with a financial or legal stake in the outcome of the case.
Id. Because one’s interests depend on the nature of the proceeding, a person may be a “party in
interest” for some purposes but not others. See id. at 61. For example, Schneller is a “party in
interest” with respect to the proceedings involving his claim, and has standing to seek
reconsideration of the disallowance of his claim under Bankruptcy Code § 502(j). The
disallowance of his claim, however, means that he no longer has a financial or legal stake in the
chapter 11 case, and is not a “party in interest” with standing to object to confirmation. See In re
Kreisler Group, Inc., 648 F.2d at 88 (decided under the former Bankruptcy Act); In re Flintkote
Co., 486 B.R. 99, 116 (Bankr. D. Del. 2012) (decided under the Bankruptcy Code); In re
Southland Dev. Corp., 136 B.R. 40, 42 (E.D.N.Y. 1992) (same); In re Rath Packing Co., 55 B.R.
528, 535 (Bankr. N.D. Iowa 1985) (same). 7 Regardless of the outcome of the application to
confirm the Plan in this case, Schneller had no right to payment from the Debtors.
At most, Schneller has a remote financial interest in the case. If an appellate court
reverses the determination in the First Case that Schneller is bound by the discharge and plan
7 	Even “a party in interest” has limited standing to object to confirmation. It “may not object to aspects of a
plan, confirmation requirements or issues that do not affect the party itself.” 7 ALAN N. RESNICK & H ENRY J.
S OMMER , COLLIER ON BANKRUPTCY ¶ 1128.04, at 1128-7 (16th ed. 2013) (“COLLIER ”); accord In re Quigley Co.,
391 B.R. 695, 703 (Bankr. S.D.N.Y. 2008) (party in interest “cannot challenge portions of the plan that do not affect
its direct interests.”).
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 11 of 26

12
injunction, the Court may reconsider the disallowance of his claim in the Second Case according
to the equities in the case. See 11 U.S.C. § 502(j). By then, all of the property may have been
distributed to the other creditors, and the future allowance of Schneller’s claim would not affect
the validity of those distributions. Id. In the end, he could hold an allowed claim but receive no
distribution. Nevertheless, the possibility of an allowed claim in the future depends on a reversal
of the adverse decision the First Case, and ultimately, proof of liability and damages in
connection with his defamation claim. These contingencies make his interest too remote to
confer Article III standing and/or “party in interest” standing under 11 U.S.C. § 1109(b). See
Flintkote, 486 B.R. at 114-15.
Aside from Schneller’s standing problem, his litany of errors simply takes issue with
provisions of the Plan but does not state a claim for fraud. Moreover, as the following shows,
his general challenges parrot certain requirements for confirmation under the Bankruptcy Code,
argue that the Plan did not comply with the cited provisions, fail to explain why it did not
comply and ignore the Court’s findings that it did:
1. 	Schneller summarily states that the Plan did not satisfy 11 U.S.C.
§ 1129(a)(1). (Confirmation Motion at ¶ 9.) Section 1129(a)(1) requires the plan
to comply with the applicable provisions of the Bankruptcy Code such as section
1122 relating to classification and section 1123 which governs the content of the
plan. S. REP. NO. 95-989, at 126 (1978); H. R. REP . NO. 95-595, at 412 (1977).
The Confirmation Order included a general finding that the Plan satisfied
§ 1129(a)(1) and more specific findings that the Plan satisfied 11 U.S.C. §§ 1122
and 1123. (Confirmation Order at ¶¶ 5-13.)
2. 	Schneller maintains, quoting Bankruptcy Code § 1123(a)(4), that “the plan
does not provide the same treatment for each claim or interest of a particular
class, unless the holder of a particular claim or interest agrees to a less favorable
treatment of such particular claim or interest.” (Confirmation Motion at ¶ 11.)
The Confirmation Order contained an express finding that the Plan did comply
with this requirement. (Confirmation Order at ¶ 9.)
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 12 of 26

13
3. 	Schneller contends that the Plan did not contain adequate means of
implementation, and that the duties and procedures set out for the Liquidating
Trustee were “unfair or inequitable.” (Confirmation Motion at ¶ 12.) The Court
found, however, that the Plan provided adequate and proper means for
implementation through the creation of a Liquidating Trust which would wind-
down the Debtors’ estates and make all distributions under the Plan,
(Confirmation Order at ¶ 10), and approved the Liquidating Trust Agreement.
(Id. at ¶¶ 38, 45.)
4. 	Schneller quotes Bankruptcy Code § 1129(a)(5)(A)(ii), maintaining that
the selection of any officer, director, or trustee under the Plan and any successor
is “not consistent with the interests of creditors and equity security holders and
with public policy.” (Confirmation Motion at ¶ 14.) The Court made a specific
finding that the Plan satisfied § 1129(a)(5) because the proponents disclosed that
Bradley Scher was the sole officer and director of the Debtors and the managing
member of Ocean Ridge Capital Advisors, LLC who will serve as the Liquidating
Trustee, (Confirmation Order at ¶ 18), and Ocean Ridge’s appointment was
consistent with the interests of the holders of claims and equity interests and
public policy. (Id. at ¶ 44.)
5. 	Finally, Schneller challenges the compliance with Bankruptcy Code
§ 1122, contending that the claims or interests placed in a class, including class 6,
were not substantially similar. (Confirmation Motion at ¶ 19.) The Court found
to the contrary. (Confirmation Order at ¶ 6) (“The Claims and Equity Interests
placed in each Class are substantially similar to other Claims or Equity Interests,
as the case may be, in each such Class.”)
Schneller’s arguments regarding fraud and bad faith are even more far-fetched.
Schneller’s speculation that the Debtors always contemplated a chapter 22 is just that, and does
not constitute clear and convincing evidence of fraud or misconduct. In addition, the Court
expressly found that the Plan was proposed in good faith, and more specifically, that the Plan
was the product of arm’s-length negotiations between the Debtors and the Creditors’ Committee,
was supported by the Debtors’ creditors and was proposed with the legitimate purpose of
maximizing the value of the Debtors’ estates and effectuating an effective liquidation of the
Debtors. (Confirmation Order at ¶ 16.) Similarly, his statement that the Debtors procured “the
formal waiver or deemed acceptance” of certain classes in bad faith does not constitute clear and
convincing evidence of bad faith. The Court found that the votes were solicited in good faith and
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 13 of 26

14
in a manner consistent with the Bankruptcy Code and the Bankruptcy Rules. (Confirmation
Order at ¶¶ 4, 34.)
Schneller’s collateral attacks on the orders approving the Disclosure Statement and the
§ 363 asset sale are procedurally improper and untimely. He did not properly appeal from the
order approving the Disclosure Statement or the § 363 sale order, and cannot collaterally attack
those final orders through the guise of a motion to reconsider the Confirmation Order.
Furthermore, he suggests some wrongdoing in connection with the timing of the sale and
asserts that it did not maximize value, but does not explain why. The Court expressly found,
among other things, that the sale agreement was entered into in good faith, (see Order (A)
Approving Purchase Agreement Between Debtors and Purchaser, (B) Authorizing and
Approving the Sale of Assets Free and Clear of All Liens, Claims, Encumbrances, and Interests,
(C) Authorizing and Approving the Assumption and Assignment of Executory Contracts and
Unexpired Leases in Connection Therewith, and (D) Granting Related Relief, dated Mar. 27,
2013, at ¶ J (ECF Doc. # 544)), the timeline for the sale was negotiated in good faith with the
Creditors’ Committee which supported the sale, (id. at ¶ M), the sale agreement with the buyer
represented a fair and reasonable offer, (id. at ¶ P), the Debtors demonstrated compelling
circumstances and good business reasons for the sale, (id. at ¶ R), and the sale agreement
constituted the highest and best offer and would provide a greater recovery for the Debtors’
estates than any other available alternative. (Id. at ¶ O.)
Schneller’s personal objections also lack merit. The Court refused to consider his
objections at the confirmation hearing because he lacked standing to make them. The Court did
not improperly treat his “prospective claim” in violation of Bankruptcy Code § 1129(b)(2)(B)
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 14 of 26

15
because the section did not apply. Section 1129(b)(2)(B) governs a cram down over the
rejection by a class of unsecured creditors. Schneller’s “prospective claim” belonged in class 6
if it belonged anywhere, and class 6 accepted the Plan. (Confirmation Order at ¶ 21.) In fact,
two creditors in class 6 holding claims aggregating $90 million voted to accept the Plan and
none voted to reject. (Declaration of Jeffrey L. Pirrung Certifying Vote on and Tabulation of
Ballots Accepting and Rejecting the Joint Plan of Liquidation Pursuant to Chapter 11 of the
Bankruptcy Code Proposed by the Debtors and the Official Committee of Unsecured Creditors
of Pulp Finish 1 Company, dated Oct. 4, 2013, Exs. A & B (ECF Doc. # 835).) Even if the Court
had allowed Schneller to vote his “prospective claim” to reject the Plan, class 6 would still have
accepted. See 11 U.S.C. § 1126(c). Schneller did not file a timely appeal from the order denying
his Temporary Allowance Motion, but even if he had, he has not identified any error. Finally, he
charges that the Debtors refused to disclose pertinent insurance policies that he requested in
discovery, which he sought to oppose confirmation, but the Court ruled that he had no right to
discovery because he lacked standing to object to confirmation.
As noted, Schneller added some additional charges in the Schneller Memo that are
discussed in an earlier footnote. Three of his new arguments, the failure to receive notice
required under the Plan, the alleged misstatement in the Post-Confirmation Order that there are
no pending adversary proceedings,8 and the failure to satisfy the conditions to the occurrence of
8 	Schneller maintains that he is a party to an adversary proceeding entitled Schneller v. Delaware County
Times, Civ. Action No. 11-001609, which he initially removed from the Delaware County Court of Common Pleas
to the United States District Court for the Eastern District of Pennsylvania. (See Notice of Removal, dated July 27,
2003 (ECF Doc. # 749).) The civil action was remanded to state court by Order, dated Sept. 16, 2013, (E.D. Pa.
Case No. 13-4369 (LS) ECF Doc. # 5). It appears that he then tried to remove the same state court action directly to
the Pennsylvania Eastern District Bankruptcy Court. (See Notice of Removal, dated Oct. 12, 2013 (Bankr. E.D. Pa.
Case No. 13-529 (JFK) ECF Doc. # 1).) The bankruptcy court held that the Notice of Removal was filed in violation
of the automatic stay and was void, and closed the adversary proceeding. (Order, dated Dec. 11, 2013 (Bankr. E.D.
Pa. Case No. 13-529 (JKF) ECF Doc. # 6).) Not surprisingly, Schneller has filed a motion for reconsideration. In
addition, there are no adversary proceedings pending in this Court.
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 15 of 26

16
the Effective Date, obviously post-date the Confirmation Order and are not the proper subjects
of a motion to reconsider the Confirmation Order. I assume that Schneller’s reference to the
failure to satisfy Local Bankruptcy Rule 3019-1 relates to some perceived modifications to the
Plan before the close of voting that he believes affected his claim. 9 Since he was not entitled to
vote his disallowed claim in the first place, he would not have been affected by any
modifications in the treatment of class 6, or any other modifications, and he lacks standing to
raise this issue. Furthermore, he did not explain how the plan proponents or the Plan failed to
comply with Local Bankr. R. 3019-1. Finally, the Debtors are free to negotiate, settle and pay
claims, even if they were discharged in the First Case. See 11 U.S.C. § 524(f).
For all of the foregoing reasons, Schneller’s motion to reconsider the confirmation of the
Plan is denied.
9 	Local Bankruptcy Rule 3019-1 states:
If the proponent of a chapter 11 plan files a modification of the plan after transmission of the
approved disclosure statement and before the close of voting on the plan, the proponent shall serve
a copy of the plan, as modified, upon the debtor, the trustee, each committee, the United States
Trustee, all entities directly affected by the proposed modification, and such other entities as the
Court may direct. On notice to such entities, the Court shall determine whether the modification
adversely affects the treatment of the claim of any creditor or the interest of any equity security
holder who has not accepted the modification in writing. If the Court determines that the
modification is not adverse, the plan, as modified, shall be deemed accepted by all creditors and
equity security holders who accepted the plan prior to modification. If the modification is adverse,
the requirements of Bankruptcy Rule 3017 shall apply to the modified plan and any amendment of
the disclosure statement necessitated by the modification.
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 16 of 26

17
2. 	Motion to Intervene
Schneller’s Confirmation Motion also includes a request to intervene and specifically
invokes FED. R. BANKR. P. 2018. 10 His stated purpose is to pursue discovery to support (1) his
argument that the timing of the filing and the prosecution of the Second Case smacked of “bad
faith,” (2) the success of his “underlying appeal” and (3) his contention that his defamation claim
is covered by the Debtors’ insurance. (Confirmation Motion at ¶ 16.) Rule 2018 provides for
intervention by an entity who is not otherwise entitled to participate in the bankruptcy case. S.
Blvd., Inc. v. Martin Paint Stores (In re Martin Paint Stores), 207 B.R. 57, 62 (S.D.N.Y. 1997);
9 COLLIER ¶ 2018.02, at 2018-3. The entity seeking to intervene must demonstrate cause,
meaning an economic or similar interest in the case or an aspect of the case. 9 COLLIER ¶
2018.04[3], at 2018-6. Other considerations include whether intervention will cause undue delay
or prejudice and whether the proposed intervener’s interests are already protected by a party in
the case. In re Martin Paint Stores, 207 B.R. at 62. The decision is committed to the Court’s
discretion. See Krys v. Official Comm. of Unsecured Creditors of Refco, Inc. (In re Refco), 505
F.3d 109, 119 n.14 (2d Cir. 2007); In re Martin Paint Stores, 207 B.R. at 62.
The Court declines in the exercise of its discretion to grant Schneller’s motion to
intervene. The Court already discussed Schneller’s argument that the Debtors contemplated a
chapter 22 when they filed the First Case. Assuming he has standing, his contention amounts to
bare speculation without substance, and the Court cannot think of a reason why the Debtors
would contemplate such a move. In addition, his discovery is aimed at a collateral attack either
10 	Federal Bankruptcy Rule 2018 states, in pertinent part:
(a) PERMISSIVE INTERVENTION. In a case under the Code, after hearing on such notice as the
court directs and for cause shown, the court may permit any interested entity to intervene generally
or with respect to any specified matter.
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 17 of 26

18
on the discharge and plan injunction in the First Case or the Confirmation Order in this case.
His efforts to obtain relief from the confirmation order in the First Case have been rebuffed, and
this Court found that the Plan was proposed in good faith, (Confirmation Order at ¶ 16), a
finding that necessarily implied that it was also filed in good faith. In re Quigley Co., 437 B.R.
102, 125 (Bankr. S.D.N.Y. 2010) (good faith inquiry under Bankruptcy Code § 1129(a)(3) “must
be viewed in light of the totality of the circumstances surrounding the establishment of a chapter
11 plan . . . including the debtor’s pre-filing conduct.”) In short, Schneller’s desire to fish for
evidence will waste everyone else’s time and money, and ultimately, may delay the closing of
this case, a delay that will prejudice creditors for the reasons discussed in connection with the
Case Closing Motion.
As to Schneller’s last two arguments, he is not entitled to discovery to bolster his pending
appeals, and he is not entitled to the Debtors’ insurance policies because he has no claim against
the Debtors. If he believes that he has a direct claim against the Debtors’ insurers that survived
the disallowance of his claim, he can pursue that claim in the appropriate forum but it is of no
concern to this case. If he believes that the insurance covers the claims asserted against the non-
Debtor parties in his Pennsylvania action, he should pursue his request for discovery there.
Accordingly, Schneller’s motion to intervene is denied.
3. 	Motion for a Stay
The last prong of the Confirmation Motion seeks a stay of proceedings pending
Schneller’s appeal. (Confirmation Motion at ¶¶ 27-39.) Rule 8005 of the Federal Rules of
Bankruptcy Procedure authorizes a bankruptcy judge to stay a judgment or order pending
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 18 of 26

19
appeal.11 The same standards that govern a stay pending an appeal from a District Court order to
the Court of Appeals apply in the case of an appeal from the Bankruptcy Court to the District
Court. See In re Savage & Assocs., P.C., No. 05 Civ.2072(SAS), 2005 WL 488643, at *1
(S.D.N.Y. Feb. 28, 2005).
The decision to grant or deny a stay pending appeal is committed to the discretion of the
bankruptcy court. See Nken v. Holder, 556 U.S. 418, 433 (2009). “The four factors to be
considered in issuing a stay pending appeal are well known: ‘(1) whether the stay applicant has
made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will
be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the
other parties interested in the proceeding; and (4) where the public interest lies.’” In re World
Trade Ctr. Disaster Site Litig., 503 F.3d 167, 170 (2d Cir. 2007) (quoting Hilton v. Braunskill,
481 U.S. 770, 776 (1987)); accord Nken, 556 U.S. at 426.
The first two factors are the most critical. Nken, 556 U.S. at 434. “It is not enough that
the chance of success on the merits be ‘better than negligible.’” Id. (quoting Sofinet v. INS, 188
F.3d 703, 707 (7th Cir. 1999)). “By the same token, simply showing some ‘possibility of
11 	Rule 8005 provides:
A motion for a stay of the judgment, order, or decree of a bankruptcy judge, for approval of a
supersedeas bond, or for other relief pending appeal must ordinarily be presented to the
bankruptcy judge in the first instance. Notwithstanding Rule 7062 but subject to the power of the
district court and the bankruptcy appellate panel reserved hereinafter, the bankruptcy judge may
suspend or order the continuation of other proceedings in the case under the Code or make any
other appropriate order during the pendency of an appeal on such terms as will protect the rights of
all parties in interest. A motion for such relief, or for modification or termination of relief granted
by a bankruptcy judge, may be made to the district court or the bankruptcy appellate panel, but the
motion shall show why the relief, modification, or termination was not obtained from the
bankruptcy judge. The district court or the bankruptcy appellate panel may condition the relief it
grants under this rule on the filing of a bond or other appropriate security with the bankruptcy
court. When an appeal is taken by a trustee, a bond or other appropriate security may be required,
but when an appeal is taken by the United States or an officer or agency thereof or by direction of
any department of the Government of the United States a bond or other security shall not be
required.
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 19 of 26

20
irreparable injury’ fails to satisfy the second factor.” Nken, 556 U.S. at 434-35 (citation
omitted). “‘The probability of success that must be demonstrated is inversely proportional to the
amount of irreparable injury plaintiff will suffer absent the stay. Simply stated, more of one
excuses less of the other.’” Mohammed v. Reno, 309 F.3d 95, 101 (2d Cir. 2002) (quoting Mich.
Coal. of Radioactive Material Users, Inc. v. Griepentrog, 945 F.2d 150, 153 (6th Cir. 1991));
accord Thapa v. Gonzales, 460 F.3d 323, 334 (2d Cir. 2006).
Schneller has failed to show any likelihood of success on his appeal. The issue on appeal
is straightforward: did the discharge and plan injunction in the First Case require the
disallowance of his claim in the Second Case. The answer is plainly in the affirmative, and
Schneller has not shown that he is likely to overturn Judge Gropper’s order that his claim has
been discharged. If his claim was discharged in the First Case, it was properly disallowed in the
Second Case, and as a result of the disallowance of his claim, he lacked standing to object to
confirmation of the Plan, a conclusion he does not appear to dispute. For the reasons stated in
connection with his motion for reconsideration of the confirmation order, he has failed to
demonstrate why he will succeed, much less make a strong showing why he is likely to succeed,
on his appeal.
He has also failed to show irreparable harm. If his claim is ultimately allowed upon
reconsideration, he will receive a distribution. It is true that there may be nothing left to
distribute by then, but assuming that this constitutes irreparable harm, the mere, remote
possibility of this result is insufficient particularly in the absence of any showing that he is likely
to succeed on his appeal.
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 20 of 26

21
A stay of proceedings will also injure the creditors with allowed claims by delaying their
distributions and preventing the Debtors from completing consummation and closing the last
estate. ePlus, Inc. v. Katz (In re Metiom, Inc.), 318 B.R. 263, 272 (S.D.N.Y. 2004) (noting that a
stay will prejudice creditors by delaying distributions).
Finally, no public interest is served by staying the Second Case. To the contrary, there is
a strong public interest in the finality of bankruptcy proceedings. Id. (“[T]he public interest in
the expeditious administration of bankruptcy cases as well as in the preservation of the
bankrupt’s assets for purposes of paying creditors, rather than litigation of claims lacking a
substantial possibility of success, outweighs the public interest in resolving the issues presented
here on appeal.”); In re Calpine Corp., No. 05-60200, 2008 WL 207841, at *7 (Bankr. S.D.N.Y.
Jan. 24, 2008) (“[T]here is a strong public ‘need for finality of decisions, especially in a
bankruptcy proceeding.’”) (quoting In re Twenty-Six Realty Assocs., L.P., No. 95 CV 1262(FB),
1995 WL 170124, at *16 (E.D.N.Y. Apr. 4, 1995)).
Accordingly, Schneller’s motion for a stay pending appeal is denied.
B. 	Case Closing Motion
Schneller seeks reconsideration of the order closing the affiliated Debtors’ cases,
including the Goodson case, because the estates were not fully administered or substantially
consummated, closing was not in the best interests of the Debtors, their estates or their creditors,
and there was insufficient cause to close the individual estates. (Case Closing Motion ¶ 3, at 2 of
13.) In addition, Schneller cites procedural deficiencies including insufficient notice and the
absence of a final confirmation order, (id. ¶ 4 at 2 of 13), and claims that the closings were
premature. (Id. ¶ 5 at 3 of 13.)
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 21 of 26

22
The memorandum attached to the Case Closing Motion fleshes out some of these
arguments. Schneller asserts that the Confirmation Order is not final because the Confirmation
Motion is pending, (id. at 6 of 13), the closings violate the provisions of the Plan, (id. at 6-7 of
13), and closing the Goodson case will result in future litigation to reopen it. (Id. at 7 of 13). In
addition, Schneller contends that he is party to a pending adversary proceeding. (Id. at 7-8 of
13.) Next, he argues that he did not receive notice of entry of the Confirmation Order or notice
of the Effective Date as required by the Plan. (Id. at 6, 8 of 13.) Finally, he contends that the
Debtors did not file their post-confirmation status report as required by the Post-Confirmation
Order. (Id. at 8-9, 10 of 13.)
Federal Bankruptcy Rule 3022 states that “[a]fter an estate is fully administered in a
chapter 11 reorganization case, the court, on its own motion or on motion of a party interest,
shall enter a final decree closing the case.” The rule is flexible, and the 1991 advisory committee
notes provide guidelines as to when a final decree is appropriate:
Factors that the court should consider in determining whether the estate has been
fully administered include (1) whether the order confirming the plan has become
final, (2) whether deposits required by the plan have been distributed, (3) whether
the property proposed by the plan to be transferred has been transferred, (4)
whether the debtor or the successor of the debtor under the plan has assumed the
business or the management of the property dealt with by the plan, (5) whether
payments under the plan have commenced, and (6) whether all motions, contested
matters, and adversary proceedings have been finally resolved.
Importantly, entry of a final decree should not be delayed “solely because the payments
required by the plan have not been completed,” and “[t]he court should not keep the case open
only because of the possibility that the court’s jurisdiction may be invoked in the future.” The
final decree does not “deprive the court of jurisdiction to enforce or interpret its own orders and
does not prevent the court from reopening the case for cause pursuant to § 350(b) of the Code.”
FED. R. BANKR. P. 3022 advisory committee’s note (1991).
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 22 of 26

23
Here, the factors identified by the advisory committee weighed in favor of closing the
affiliated Debtor cases. First, the Confirmation Order became final on October 29, 2013, 14
days after it was entered, because no notice of appeal had been filed by then. See FED. R.
BANKR. P. 8002(a). The Confirmation Motion was not filed until October 30, 2013, one day
later, and did not extend the period within which to appeal from the Confirmation Order. See
FED. R. BANKR. P. 8002(b)(4) (motion for relief from judgment under Rule 9024 will extend the
time to appeal only if it is filed within 14 days after the entry of the judgment). Second, on or
after the Effective Date, the Debtors’ transferred their property to the Liquidating Trust, and the
Liquidating Trust assumed the management of that property. (Post Confirmation Report at ¶ 3.)
Third, payments commenced under the Plan. 12 (Id. at ¶ 8.) Fourth, all motions, contested
matters and adversary proceedings were resolved. See footnote 8, supra.
Other factors also weighed in favor of closing all but one case. Schneller was not
prejudiced because the Plan consolidated the Debtors for purposes of confirming the Plan and
making distributions, and all of the assets and liabilities were deemed to be those of a single,
consolidated entity. (Plan at Art. IV.A(1).) As a result, Schneller’s “prospective claim” became
a claim against the surviving Debtor, Pulp Finish 1 Company. Schneller can pursue his right to
distribution in that case.
On the other hand, the Debtors’ creditors would suffer prejudice if the affiliated cases
remained open. Under 28 U.S.C .§ 1930(a)(6), a chapter 11 debtor must pay to the United States
12 	The transfer of the assets to the Liquidating Trust, its assumption of the management of those assets and the
commencement of distributions resulted in the “substantial consummation” of the Plan. See 11 U.S.C. 1101(2)
(defining “substantial consummation”).
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 23 of 26

24
Trustee a minimum of $325 each quarter until its case is dismissed, converted or closed. 13 See
Schwartz v. Acquatic Dev. Group, Inc. (In re Acquatic Dev. Group, Inc.), 352 F.3d 671, 680 (2d
Cir. 2003)(Straub J., concurring); Walton v. Jamko, Inc. (In re Jamko, Inc.); 240 F.3d 1312, 1313
(11th Cir. 2001). Vergos v. Gregg’s Enters., Inc., 159 F.3d 989, 993 (6th Cir. 1998); United
States Trustee v. CF&I Fabricators of Utah, Inc. (In re CF&I Fabricators of Utah, Inc.), 150
F.3d 1233, (10th Cir. 1998). The fee must be paid in each affiliated case, and where the affiliated
debtors are deemed substantively consolidated solely for plan purposes but not de facto
substantively consolidated, each affiliate must continue to pay the quarterly fee until that
affiliate’s case is closed, converted or dismissed. See Genesis Health Ventures, Inc. v. Stapleton
(In re Genesis Health Ventures, Inc.), 402 F.3d 416, 424 (3d Cir. 2005).
Although the Plan deemed the Debtors to be substantively consolidated for certain
purposes including those discussed earlier, it did not substantively consolidate the Debtors for all
purposes. (See Plan Art.IV.A(2).) Accordingly, each of the 28 affiliated Debtors arguably
remained liable for quarterly fees in the aggregate minimum amount of $9,100. Given that the
post-Effective Date administration of the Debtors’ estates is vested in one Liquidating Trustee
and requires only one open case, there is no reason why $9,100 each quarter should be paid to
the United States Trustee instead of to creditors. Accordingly, it was appropriate to enter a final
decree closing the 28 affiliated cases.
13 	Section 1930(a)(6) states in relevant part that “[t]he fee shall be $325 for each quarter in which
disbursements total less than $15,000,” until the case has been “converted and dismissed.” Many chapter 11 cases
are never “converted or dismissed.” Instead, they are closed when the bankruptcy court’s administration of the case
is complete. Thus, although the statute speaks of the obligation to pay fees until the case is “converted or
dismissed,” it has been interpreted by the cited authorities to mean that the debtor’s obligation to pay United States
Trustee fees also terminates when the case is closed.
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 24 of 26

25
Schneller also argues that the Debtors ignored the conditions to the occurrence of the
Effective Date set forth in the Plan. He cites to Article VIII.E which provides that if the
conditions to the occurrence of the Effective Date set forth in Article VIII.B do not occur within
180 days after the Confirmation Date, or such later date as determined by the Debtors and the
Creditors’ Committee, the Confirmation Order may be vacated by the Court and the Plan will be
null and void.
Schneller has not explained why the conditions to the occurrence of the Effective Date
have not occurred, and in fact, they have. The Confirmation Order has become final and there is
no stay in effect, (Plan, Art. VIII.B(1)), the Confirmation Order includes the provisions required
for the Plan’s effectiveness, (id. Art. VIII.B(2)), final versions of the Plan and any supplemental
documents and exhibits have been filed and are satisfactory to the plan proponents, (id. Art.
VIII.B(3)), all necessary documents have been executed and the properties of the various Debtor
estates have been transferred to the Liquidating Trust in accordance with the Plan, (id. Art.
VIII.B(4)), and it does not appear that the plan proponents required any regulatory approvals
within the meaning of Art. VIII.B(5). (See Confirmation Order at ¶ 19.)
As to Schneller’s other arguments, the prospect of future litigation or the need to invoke
the Court’s jurisdiction at some future time does not require the cases remain open. If the
circumstances warrant it, he can move to reopen at the appropriate time. See 11 U.S.C. § 350(b)
(“A case may be reopened in the court in which such case was closed to administer assets, to
accord relief to the debtor, or for cause.”). As noted, there are no pending adversary
proceedings. In addition, he can seek further relief relating to his “prospective claim” in the
open case. Lastly, the Liquidating Trustee has filed a post-confirmation report. (See Post-
Confirmation Report.)
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 25 of 26

26
Accordingly, the Case Closing Motion is denied. The Court has considered the
remaining arguments made in the Confirmation Motion and the Case Closing Motion and
concludes that they lack merit.
So ordered.
Dated: New York, New York
January 16, 2014
/s/ Stuart M. Bernstein
STUART M. BERNSTEIN
United States Bankruptcy Court
12-13774-smb Doc 952 Filed 01/16/14 Entered 01/16/14 12:56:32 Main Document
Pg 26 of 26