Case No. 10-66172 (Jointly Administered)[1] .United States Bankruptcy Court, E.D. Michigan, Southern Division.
May 2, 2011
ORDER REQUIRING DEBTORS TO AMEND DISCLOSURE STATEMENT
THOMAS TUCKER, Bankruptcy Judge
On April 27, 2011, the Debtors filed a plan and disclosure statement, in a document entitled “Proposed First Amended Combined Plan and First Amended Disclosure Statement of Jointly Administered Affiliated Cases” (Docket # 113). The Court cannot grant preliminary approval of the disclosure statement contained within this document (“Disclosure Statement”). The Court notes the following problems, which Debtors must correct.
First, the definition in Paragraph 1.15 of the Plan on page 4 states: “Debtor(s) shall mean George Shamoun, Jr., Melinda Shamoun and GGS Investments, Inc. In the event that the language in this Combined Plan and Disclosure Statement or any associated documents says `Debtor’ in the singular, this shall mean both
Debtors unless it clearly appears otherwise.” (Emphasis added). Because there are three Debtors, but the phrase “both Debtors” implies two Debtors, it is unclear which Debtors the word “Debtor” is intended to mean. Debtors must clarify this definition. Debtors must also delete the phrase “unless it clearly appears otherwise” from the definition.
Second, in Paragraph 2.2 of the Plan on page 5, Debtors must estimate the amount of fees
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that will be owed to Debtors’ attorney, and must state or estimate when the automotive repairs in payment for such fees will be made and completed.
Third, with regard to each class treated in Article III, Debtors must state when payments will begin.
Fourth, the Plan on page 5 states, in relevant part, that the Class 1 claim of “Flagstar Bank, or its successor in interest shall receive One Thousand, Nine Hundred and Thirty-six ($1,936.00) to be paid directly to the creditor by the Debtor.” It is unclear if this payment of $1,936.00 is to be a one-time payment or a periodic (e.g., monthly) payment. Debtors must clarify this, and must state when the payment(s) will begin, the frequency of the payments (e.g., monthly), and the duration of the payments. In addition, Debtors must correct the typographical error in Paragraph 3.1, in the number “$160,00.”
Fifth, with respect to the Class 9 claims of general unsecured creditors, treated in Paragraph 3.9 of the Plan on page 7, Debtors must state (1) the amount and frequency of payments to be made to this class; (2) when such payments are to begin and end; and (3) what the total percentage dividend will be to this class, stated as a percentage using a decimal format rather than the format Debtors have used. (Debtors state a dividend of “6 1/6%.” If Debtors truly intend to state that the total dividend will be six and one-sixth percent, they should state it as “6.17%.”)
Sixth, in the liquidation analysis in Paragraph VI.A of the Disclosure Statement on page 17, Debtors must correct a typographical error. The “claim against Keith Johnson — Inventory Transfer” is listed, in one box, as having a fair market value of $10,000 and a forced sale value of “$25,000,” but then is listed in two other boxes as having a forced sale value of $2,500.
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Debtor must correct this inconsistency.
Seventh, Exhibit 2 contains a summary of post-petition financial information regarding Debtors. However, it is not in the same line itemization format as the summary of the pre-petition financial information in Exhibit 1. Debtors must correct this.
Accordingly,
IT IS ORDERED that no later than May 5, 2011, Debtors must file an amended combined plan and disclosure statement which corrects the above stated problems.
IT IS FURTHER ORDERED that Debtors also must provide to Judge’s chambers, no later than May 5, 2011, a redlined version of the amended combined plan and disclosure statement, showing the changes Debtors have made to Debtors’ “Proposed First Amended Combined Plan and First Amended Disclosure Statement of Jointly Administered Affiliated Cases” (Docket # 113), filed April 27, 2011. Debtors must submit this redlined document to chambers electronically, through the Court’s order submission program.
Signed on April 30, 2011