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In re Riviera Drilling & Exploration Co.

United States Bankruptcy Appellate Panel For the Tenth Circuit

December 17, 2013

IN RE RIVIERA DRILLING & EXPLORATION COMPANY, Debtor. THURNER INDUSTRIES, INC., THURNER EXPLORATIONS, INC., T INVESTMENT GROUP, VICON, INC., TIMOTHY THURNER, individually and as successor in interest to an undivided 50% of the interest held in the name of the Thurner Heat Treating Corporation Employees' Profit Sharing Plan, an ERISA Trust, SCOTT THURNER, individually, and as trustee for the Doris Thurner Family Trust, and as successor in interest to an undivided 50% of the interest held in the name of the Thurner Heat Treating Corporation Employees' Profit Sharing Plan, an ERISA Trust, SAMUEL THURNER, individually and as successor in interest to one fourth of the Robert E. Thurner Family Trust, SALLY THURNER, individually and as successor in interest to one fourth of the Robert E. Thurner Family Trust, HOLLY THURNER, individually and as successor in interest to one fourth of the Robert E. Thurner Family Trust, THE DORIS THURNER FAMILY TRUST, by and through Scott Thurner, Trustee, and 350 SAINT PAUL, LLC, Appellants,
v.
GUNNISON ENERGY CORPORATION, Appellee Bankr. No. 10-11902

Page 864

Appeal from the United States Bankruptcy Court for the District of Colorado.

T. Edward Williams of Benjamin, Bain, Howard and Cohen, LLC, Greenwood Village, Colorado, for Appellants.

Michael J. Pankow (Joshua M. Hantman with him on the brief) of Brownstein Hyatt Farber Schreck, LLP, Denver, Colorado, for Appellee.

Before MICHAEL, NUGENT, and SOMERS, Bankruptcy Judges.

OPINION

Page 865

NUGENT, Bankruptcy Judge.

Section 1121(e) of the Bankruptcy Code[1] provides that in small business Chapter 11 cases, only the debtor may file a plan of reorganization in the first 180

Page 866

days after the case's filing.[2] The court may extend the debtor's exclusivity period for a longer time, but § 1121(e)(2) says that " the plan and disclosure statement . . . shall be filed not later than 300 days after the date of the order for relief." [3] In this case, after the 300-day deadline had passed, a creditor, appellee Gunnison Energy Corporation (" GEC" ), filed a plan of liquidation. At issue is whether § 1121(e) permits a creditor to file a plan after the 300-day deadline expires without being extended. The court confirmed GEC's plan thirty-four months after the order for relief and after the debtor's plan and amended plan were denied confirmation. The debtor's principals, the Thurners, argued below that the 300-day deadline bars creditors and debtors alike from proposing plans once the time has expired, and that instead of confirming the GEC plan, the bankruptcy court should have dismissed the case. Though few courts have spoken to this particular question, we conclude that the 300-day deadline applies to the debtor alone and that the judgment of the bankruptcy court should be AFFIRMED.

I. Factual Background

The debtor, Riviera Drilling and Exploration Company (" Riviera" ), owns a 43% interest in several oil and gas leases in Colorado (the " Leases" ). Scott, Sam, and Jacob Thurner, and various trusts and corporate entities established by them (collectively the " Thurners" ) own the other 57% interest in the Leases. GEC owns a pipeline that transports gas from the Thurner-Riviera wells and the parties have a history of disputes over the transmission of gas from these Leases.

Riviera filed a small business Chapter 11 case in the District of Colorado on February 2, 2010. In August of 2010, Riviera proposed a plan which was not confirmed. GEC filed a motion to convert or dismiss the case. In November of 2010, Riviera proposed a second plan and, at a November 30 hearing on the motion to dismiss, the bankruptcy court directed Riviera to file a motion to extend time to confirm its plan by December 6, 2010. Riviera did so, but on December 15, 2010, the court appointed a Chapter 11 trustee and, on January 3, 2011, denied the extension motion. The Chapter 11 trustee then attempted to close a ยง 363 sale of 100% of the Leases. When that sale fell apart, the trustee filed an adversary proceeding against the Thurners seeking to sell the properties, to equitably subordinate the interests of the Thurners to the general creditors, and substantially consolidate the leasehold interests of the Thurners with the debtor's estate (the " ...


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