Southern pacific funding corporation liquidating trust
The district court had jurisdiction over Spieker's appeal pursuant to 28 U.
Sections 12.1-12.12 of the Indenture are its subordination provisions. Like section 12.2, section 12.3 further provides that if any payments are made on the Notes before the Senior Indebtedness is paid in full, those payments must be turned over to the Senior Indebtedness until the Senior Indebtedness is paid in full. That is, the Plan provides for the payment of double dividends to Senior Indebtedness-it gets its own share plus the share to which the holders of the Notes would otherwise be entitled. That provision prohibits the termination or modification of an executory contract, or any right or obligation thereunder, solely on the basis of a provision of the contract that is conditioned on insolvency of the debtor. Standard of Review The district court's decision on an appeal from a bankruptcy court is reviewed de novo. County of Los Angeles (In re Gruntz), 202 F.3d 1074, 1084 n. This court therefore applies the same standard of review applied by the district court. Chang (In re Chang), 163 F.3d 1138, 1140 (9th Cir.1998). Discussion Section 365 of the Bankruptcy Code deals generally with executory contracts and unexpired leases. What section 12.3 does require is that SPFC pay directly to the holders of Senior Indebtedness any payments to which the holders of the Notes would otherwise be entitled. It further provides that, notwithstanding the provisions of section 12.3, in the event that payments are made to the holders of the Notes, such payment shall be “held in trust” for the benefit of the holders of the Senior Indebtedness.
Southern Pacific Funding Corporation: (District of Oregon) Southern Pacific was a former NYSE Oregon based national home mortgage lender and servicer having originated or purchased approximately billion of home equity loans of which it securitized approximately billion. Beck has represented numerous debtors in Chapter 11 cases, such as Caressa, Inc.
( million debt shoe manufacturer); Gardens East Plaza, Ltd.
Spieker argued that the Indenture was an executory contract, that section 12.3 purported to modify SPFC's payment obligations conditioned on SPFC's insolvency, and that section 12.3 was therefore invalid under § 365(e)(1). § 510(a), a subordination agreement is to be enforced according to its terms; and (2) if Spieker's argument were accepted, it would essentially put all unsecured debt on a par with Senior Indebtedness. P., was merged into EOP Operating Limited Partnership. For the sake of simplicity, we will generally use “insolvency” as a catchall, intending it to cover each of the provisions of § 365(e)(1).4. Spieker also argues that the bankruptcy court erred in applying 11 U. Because we have concluded that § 365(e)(1) does not apply to the Indenture in this case, we need not reach this argument.
This appeal challenges the bankruptcy court's confirmation of the Second Amended Plan of Reorganization (the “Plan”) of Debtor Southern Pacific Funding Corporation (“SPFC”), in a case under Chapter 11 of the Bankruptcy Code. Section 12.2 of the Indenture provides that, when Senior Indebtedness matures or is in default, no payments may be made to holders of the Notes until the Senior Indebtedness is paid in full or the default is cured. He has been recognized in a number of publications for the quality of his bankruptcy practice including: Best Lawyers in America; Leading Florida Attorneys; Super Lawyers and Euromoney Guide to the Leading US Insolvency Lawyers. He is a member of the firm’s Bankruptcy & Business Reorganizations Practice. We reject it as inconsistent with both the text and intent of § 365(e)(1). Conclusion For the foregoing reasons, the district court did not err in affirming the bankruptcy court's confirmation of the Plan. Thus, contrary to Spieker's argument, the payment of double dividends does not in any way contravene section 12.2. This interpretation contradicts the intention of the parties and flies in the face of long-established industry practice. This contention makes it appear that section 12.3 modifies the rights of the holders of the Notes because, according to Spieker, section 12.3 requires payments to the Note holders (although the Note holders are then required to turn over those payments to Senior Indebtedness), while section 12.2 forbids such payments. In fact, neither section 12.3 nor the subordination provisions of the Plan require payments to the holders of the Notes (until Senior Indebtedness is paid in full).