August 28, 2011 1:43 PM
C:\WLR\A\Fennell\settle obj resp F.doc
Mrs. Fennell appreciates all the work that GLC as debtor in possession and the GLCCommittee have done over the past few months. She recognizes that their knowledgeconcerning the alleged Ponzi scheme far exceeds what the objectors and this court now know.She sympathizes with their frustration against those who would now thwart the capstone of their efforts, namely, the transfer of $5 million in assets from the Donnan estate to the GLC estate tofund GLC’s already-filed liquidation plan. But no matter how admirable those efforts are, theydo not prove GLC’s right to relief in this court.If the Motion is to be decided under the Justice Oaks II factors at all, then its settlementfails because (a) the probability of success on the complaint as pled is nil, and (d) the creditors of this estate have different paramount interests. But we don’t even get there. The Donnans asdebtors in possession have irreconcilable conflicts in advancing the settlement in the first place,and their request to take property from the estate has been improperly noticed to those who mayassert competing claims.
I. WHAT IS GLC’S CLAIM TO TAKE ESTATE ASSETS?
The first question is, what is the claim that the Donnans seek to settle with an immediate$5 million in estate assets? The Complaint at par. 73 says:73. GLC is entitled to the imposition of a constructive trust and/or a purchase money resulting trust covering any and all property or assets owned byeach of the Defendants or in which one or both of the Defendants has or mayclaim to have an interest of any nature, kind, or description, including but notlimited to, any and all real property, personal property, cash or cash equivalents,accounts, general intangibles, or contract rights.
, O.C.G.A. § 53-12-132(a);
City Nat’l Bank of Miami v. Gen. Coffee Corp. (In re: Gen. Coffee Corp.)
,828 F.2d 699 (11th Cir. 1987)].Those words describe a claim under Georgia law, which GLC’s bankruptcy estateinherited from the pre-bankruptcy GLC through 11 U.S.C. § 541(a). It is not an avoidance claimcreated when GLC filed its bankruptcy case through 11 U.S.C. §§ 544 – 550.
Case 11-31083 Doc 67 Filed 08/28/11 Entered 08/28/11 13:51:37 Desc MainDocument Page 3 of 13