Memorandum of Decision Re: Res Judicata of Chapter 11 Plan

NORTHERN DISTRICT OF CALIFORNIA
DO NOT PUBLISH This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
In re ASSOCIATED VINTAGE GROUP,                                                          No. 99-13853 Debtor(s). ______________________________________/
Memorandum on Objection to Claim of The Alary Corporation
     Creditor Alary Corporation admits that it received a preferential security interest within 90 days of the date of the bankruptcy petition in this case. Its only defense to the objection of the disbursing agent to its claim is that confirmation of the debtor's Chapter 11 plan is res judicata as to any disputes which could have been raised before confirmation, so that the objection is barred.      Confirmation of a plan generally bars actions not specifically reserved in the plan or the order confirming it. In re Kelley, 199 B.R. 698, 704 (9th Cir. BAP 1996). While much of Kelley is dicta, the essential holding is that a creditor cannot be "sandbagged" into not opposing or even supporting a plan only to find itself in unanticipated post-confirmation litigation. In this case, page 14 of the plan specifically reserves in the Disbursing Agent the power to object to claims and avoid transfers and mentions Alary Corporation by name as being the object of possible post-confirmation litigation. Accordingly, the court finds that the specificity requirement of Kelley has been met and the Disbursing Agent is not barred from asserting his claims against Alary. Preference claims can be prosecuted by separate adversary proceeding, or as a defense to the transferee's claim. In re America West Airlines, Inc., 217 F.3d 1161, 1163 (9th Cir. 2000); In re Badger Lines, Inc., 206 B.R. 521, 527 (E.D.Wis.1997).      The parties having stipulated that no other issues exist, the objection to the claim of Alary Corporation will be sustained. Counsel for the Disbursing Agent shall submit an appropriate form of order.
Dated: April 16, 2001                                                                                                                                ___________________________                                                                                                                                                                              Alan Jaroslovsky                                                                                                                                                                               U.S. Bankruptcy