In re Johnson

ORDER REGARDING ASSIGNMENT OF CLAIMS

Debtors Don and Elizabeth Johnson filed their Chapter 11 petition commencing this bankruptcy in 1982. Their plan of reorganization, providing for full payment to all creditors, was confirmed in 1984.

In June, 1985, the debtors converted their case to liquidation proceedings under Chapter 7. At that time, they stated that they could not continue making the payments due under their plan because funding for the plan was to come from their 20% interest in J.D. Lumber, a lumber mill in Priest River, Idaho, and this income had ceased. In their request for conversion, the debtors stated that they believed that the majority owners of J.D. Lumber had acted against them illegally.

After conversation, the Chapter 7 trustee commenced an action in federal district court against the majority owners of J.D. Lumber. On July 18, 1989, a district court jury found them liable to the estate on account of fraud and deceit, breach of fiduciary duties, and racketeering (RICO). Judgment was entered against them in the amount of $174,284.00, including punitive damages.

Since entry of the judgment, the losing owners of J.D. Lumber have done everything possible to…