Bankruptcy Team Wins Trial Obtaining Denial of Chapter 11 Plan Confirmation for Petroleum Products Distributor

Seyfarth won a 3-day remote bankruptcy bench trial obtaining denial of a proposed chapter 11 bankruptcy plan wherein the debtor sought to retain all assets while only proposing to pay unsecured creditors a small fraction of their claims. The win came in the long-running litigation between our client, a Midwest-based distributor of branded petroleum products, and the debtor and his business. The Seyfarth team previously obtained a multimillion-dollar state court judgment against debtor and his company, resulting in his company filing for Chapter 11 bankruptcy protection. In 2021, the Seyfarth team uncovered bankruptcy fraud resulting in conversion of the bankruptcy case to a Chapter 7 liquidation. This caused the debtor to file for personal Chapter 11 bankruptcy protection. Thereafter, the Seyfarth team objected to the Chapter 11 plan proposed by Debtor in his personal bankruptcy. During the 3-day trial, the Seyfarth team successfully proved that the debtor committed numerous fraudulent acts, proposed his Chapter 11 plan in bad faith, and could not feasibly repay our client during the proposed 5-year plan. The court agreed with the Seyfarth team and denied confirmation in a decisive oral ruling.