IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION. GROEB FARMS, INC., Case No

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1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: GROEB FARMS, INC., Case No Debtor Hon. Walter Shapero Chapter 11 PRODUCER/PACKER CLAIMANTS OBJECTION TO CONFIRMATION OF DEBTOR S PROPOSED SECOND AMENDED PLAN OF REORGANIZATION TO THE HONORABLE UNITED STATES BANKRUPTCY JUDGE: Claimants Ruby s Apiaries, Inc. (Claim No. 132), Kallas Honey Farm, Inc. (Claim No. 134), Wind River Honey Company (Claim No. 136), William H. Perry d/b/a Perry Apiaries (Claim No. 137), Heaven s Honey, Inc. d/b/a Bennett s Honey Farm (Claim No. 138), Blake Shook d/b/a Desert Creek Honey (Claim No. 141), Heaven s Honey, Inc. d/b/a Chip s Bees (Claim No. 142), Cox Honey of Utah, LLC (Claim No. 143), Kelvin Adee d/b/a Adee Honey Farms (Claim No. 144), Bernard Casavan d/b/a Casavan Apiaries (Claim No. 145), Brett Adee d/b/a Adee Honey Farms (Claim No. 146), Chris Moore d/b/a Moore s Honey Farm (Claim No. 147), Bauer Honey, Inc. (Claim No. 148), and Dan s Honey Company (Claim No. 150) (collectively, the Producer/Packer Claimants ), by their undersigned counsel, file this Objection to Debtor s Proposed Second Amended Plan of Reorganization (including all supplemental and ancillary documents) (the Plan ), and respectfully show the following: wsd Doc 321 Filed 12/13/13 Entered 12/13/13 14:43:58 Page 1 of 6

2 PRELIMINARY STATEMENT 1. Bankruptcy Code 1123(a) and 1129(b) complement each other and require (i) the same treatment of each claim or interest of a particular class; (ii) the fair and equitable treatment of each class of claims; and (iii) the absence of unfair discrimination among classes. 11 U.S.C. 1123(a)(3), 1129(b). Whether a plan is fair and equitable is determined on a caseby-case basis. In re Amer. HomePatient, Inc., 298 B.R. 152 (Bankr. M.D. Tenn. 2003), aff d, 420 F.3d 559 (6th Cir. 2005). A plan is not necessarily fair and equitable even though it may technically satisfy the specific requirements in the subsections of Bankruptcy Code 1129(b)(2)(A). In re Sandy Ridge Dev. Corp., 881 F.2d 1346 (5th Cir. 1989). When deciding whether a plan is fair and equitable, the bankruptcy court must consider the plan as a whole within the context of the creditors rights under state law. In re Ferch, 333 B.R. 781 (Bankr. W.D. Tex. 2005). 2. Here, the proposed Plan seeks to segregate the Class 5 unsecured creditors into three sub-classes: 5A (Trade Claims), 5B (Other General Unsecured Claims), and 5C (Unsecured Convenience Class Claims). Per the proposed Plan, the Producer/Packer Claimants claims fall within Class 5B. 3. The proposed Plan also seeks to treat the unsecured claims in the three sub-classes differently. For example, Sub-Class 5A Trade Creditors may receive up to 110% of the amount of their claims while Sub-Class 5C Unsecured Convenience Class Creditors will receive payment in full in cash. On the other hand, Sub-Class 5B Other General Unsecured Creditors (including Producer/Packer Claimants) will only receive their Pro Rata share of the proceeds from the General Unsecured Claims Litigation Trust in accordance with the General Unsecured Claims Trust Waterfall if any wsd Doc 321 Filed 12/13/13 Entered 12/13/13 14:43:58 Page 2 of 6

3 4. In addition to the discrimination between, and unfair and unequal treatment of, the unsecured creditors within the overall Class of unsecured creditors, the timing and amount of any payments Sub-Class 5B Other General Unsecured Creditors (including Producer/Packer Claimants) might receive are ill-defined and uncertain. As of the date this Objection was filed, the proposed Class Action Settlement is not final and its terms have not been revealed. Among other things, the Class Action Settlement impacts the General Unsecured Claims Litigation Trust and the amounts the Producer/Packer Claimants might conceivably receive. 5. As unsecured claimants, Sub-Class 5A Trade Creditors, Sub-Class 5B Other General Unsecured Creditors (including Producer/Packer Claimants), and Sub-Class 5C Unsecured Convenience Class Creditors hold the same types of claims and, therefore, should be treated equally, fairly, and without discrimination for the rights of one holder (or group of holders) to the detriment of the others. 6. Even if the proposed Plan technically satisfies the requirements for confirmation (which Producer/Packer Claimants do not concede), the proposed Plan unfairly protects Sub- Class 5A Trade Creditors and Sub-Class 5C Unsecured Convenience Class Creditors to the detriment of Sub-Class 5B Other General Unsecured Creditors (including Producer/Packer Claimants). As such, the proposed Plan treats all unsecured creditors in the same class (i.e., Class 5) disparately in violation of Bankruptcy Code 1123(a) and 1129(b), and should not be confirmed in its current form. OBJECTIONS 7. The Producer/Packer Claimants, therefore, respectfully object to the proposed Plan as being unfair, inequitable and discriminatory against Sub-Class 5B Other General Unsecured Creditors (including Producer/Packer Claimants). Sub-Class 5A Trade Creditors, wsd Doc 321 Filed 12/13/13 Entered 12/13/13 14:43:58 Page 3 of 6

4 Sub-Class 5B Other General Unsecured Creditors (including Producer/Packer Claimants), and Sub-Class 5C Unsecured Convenience Class Creditors are of equal legal dignity and, therefore, should be treated equally, fairly, and without discrimination for the rights of one holder (or group of holders) to the detriment of the others. 8. The Producer/Packer Claimants further object to the proposed Plan because the timing and amount of any payments they might receive are ill-defined and uncertain. CONCLUSION WHEREFORE, the Producer/Packer Claimants respectfully request that this Court (i) deny confirmation of the proposed Plan, (ii) require the Debtor to amend the proposed Plan and all supplemental and ancillary documents as necessary to cure the above-described defects to effect the fair, equal and non-discriminatory treatment of all Class 5 unsecured creditors with certainty, and (c) award Producer/Packer Claimants such other and further relief to which they are justly entitled. Dated: December 13, Detroit, Michigan Respectfully submitted, By: /s/ Alyson Oliver Alyson Oliver (P55020) OLIVER LAW GROUP, P.C. 950 West University Drive, Suite 200 Rochester, MI Telephone: (248) Facsimile: (248) AOliver@OliverLG.com Richard L. Coffman THE COFFMAN LAW FIRM The First City Building 505 Orleans St., Ste. 505 Beaumont, TX wsd Doc 321 Filed 12/13/13 Entered 12/13/13 14:43:58 Page 4 of 6

5 Telephone: (409) Facsimile: (866) ATTORNEYS FOR PRODUCER/PACKER CLAIMANTS OF COUNSEL: Ben Barnow Sharon A. Harris Erich P. Schork Blake A. Strautins BARNOW AND ASSOCIATES, P.C. One N. LaSalle Street, Suite 4600 Chicago, IL Telephone: (312) Facsimile: (312) G. Robert Blakey Professor of Law Emeritus* Notre Dame Law School *Noted for purpose of identification 7002 East San Miguel Avenue Paradise Valley, AZ Telephone: (574) wsd Doc 321 Filed 12/13/13 Entered 12/13/13 14:43:58 Page 5 of 6

6 CERTIFICATE OF SERVICE I certify that on December 13, 2013, THE Producer/Packer Claimants Objection to Confirmation of Debtor s Proposed Second Amended Plan of Reorganization was electronically filed and served on all counsel of record, via the Court s CM/ECF system, including the following counsel of record for Debtor. Judy A. O Neill Tamar N. Dolcourt FOLEY & LARDNER, LLP One Detroit Center 500 Woodward Ave., Suite 2700 Detroit, MI COUNSEL FOR DEBTOR /s/ Alyson Oliver Alyson Oliver COUNSEL FOR PRODUCER/PACKER CLAIMANTS wsd Doc 321 Filed 12/13/13 Entered 12/13/13 14:43:58 Page 6 of 6