(Published) - In re Western Capital Partners LLC, Case No. 13-15760 MER; Order entered January 28, 2015 (Post-Confirmation Modification of Chapter 11 Plan and Substantial Consummation)

The reorganized debtor requested the post-confirmation modification of its Chapter 11 plan of reorganization under 11 U.S.C. § 1127(b), and a creditor objected. Section 1127(b) provides a fixed time period for a reorganized debtor to modify a confirmed Chapter 11 plan after confirmation and before substantial consummation of the confirmed plan. "Substantial consummation" is defined in 11 U.S.C. § 1101(2). Even if the proposed modification is sought within this narrow window, a plan may be modified only if circumstances warrant such modification, and the Court confirms the proposed modified plan after notice and a hearing.

The Tenth Circuit has not addressed the issue of substantial consummation in the context of a proposed Chapter 11 plan modification, but has applied "substantial consummation" as a factor in the equitable mootness doctrine. The Court followed the Tenth Circuit's prior application of § 1101(2) to address whether the reorganized debtor's confirmed plan was substantially consummated, and further analyzed whether circumstances warranted the requested confirmation. In this matter, the Court concluded the confirmed plan had been substantially consummated thereby barring the requested modification, and even if the modification was requested within the statutory window, circumstances did not warrant the requested modification.