Debt Acquisition Company of America V, LLC v. William Leonard, Jr.

MEMORANDUM

Because the parties are familiar with the facts and procedural history of this case, we repeat only those facts necessary to resolve the issues raised on appeal. Debt Acquisition Company of America appeals from an order in a Chapter 7 bankruptcy action, arguing that Paragraph Six of the district court’s order violates various provisions of the Bankruptcy Code, as well as the terms of a previously confirmed Chapter 11 plan (the Chapter 11 Plan). We hold that Paragraph Six constitutes an abuse of discretion, and we vacate this portion of the district court’s order.

The Bankruptcy Code requires that all Chapter 11 plans “provide the same treatment for each claim or interest of a particular class.” 11 U.S.C. § 1123 (a)(4). With limited exception, creditors are bound by the provisions of a confirmed plan “whether or not such creditor ... has accepted the plan.” 11 U.S.C. § 1141 (a).

Once a Chapter 11 plan is confirmed, “all questions that could have been raised pertaining to the plan are entitled to res judicata effect.” Miller v. United States, 868 F.3d 999, 1004 (9th Cir.2004) (quoting Trulis v. Barton, 107 F.3d 685, 691 (9th Cir.1995)). Courts read Chapter 11 plans…