- Ag Docket
The debtor filed Chapter 12, but defaulted on his plan payments to secured creditors when his crop yield and sales price projections were not met. The debtor's provided testimony that showed he was uncertain about revenue and expenses, and made "nonsensical" estimates of tillable acreage and planned tillable acreage. His financial information was inaccurate and he understated lease rates. The debtor then proposed an amended plan which called for the sale of his farm that would pay the creditors in full, but the buyer was not disclosed. A creditor who had invested heavily in a facility on the debtor's farm, proposed a competing plan that called for a higher selling price of the farm and additional funds to be provided to secured creditors. The court found the debtor's plan to be deficient and the trustee opposed the debtor's plan. The court held that the debtor did not proposed a feasible plan and the amended plan was not proposed in good faith. However, the court granted leave to the debtor to allow the debtor to file an amended plan by end of day on May 8, 2015, which the debtor did (and the creditor also filed an another amended plan which again raised the selling price of the farm and named the creditor as the buyer). The court, however, again determined that the debtor's amended plan was based on faulty financial information and did not reflect the inherent risk of farming. The debtor failed to meet his burden under 11 U.S.C. Sec. 1229(b) to propose a plan in good faith. The debtor's plan also did not meet the liquidation test of 11 U.S.C. Sec. 1225(a)(4). The court held that the creditor's modified plan which called for a sale of the farm to the creditor at a higher price than what the debtor proposed did satisfy all requirements and was confirmed. In re Daniels, No. 13-30010, 2015 Bankr. LEXIS 1609 (W.D. La. May. 11, 2015).
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