Thanks for visiting! Welcome to a new way to research case law. You are viewing a free summary from Descrybe.ai. For citation and good law / bad law checking, legal issue analysis, and other advanced tools, explore our Legal Research Toolkit — not free, but close.
In re Taj Graphics Enters., LLC
Citation: 601 B.R. 451Docket: Case No. 09-72532
Court: United States Bankruptcy Court, E.D. Michigan; April 19, 2019; Us Bankruptcy; United States Bankruptcy Court
Thomas J. Tucker, United States Bankruptcy Judge, presided over a Chapter 11 bankruptcy case involving a claim objection by the Debtor, TAJ Graphics Enterprises, LLC, against Prime Financial, Inc. After an evidentiary hearing that included witness testimonies and review of evidence and arguments, the Court issued its findings. The Court partially sustained and partially overruled the Debtor's objection, resulting in Prime Financial receiving an allowed nonpriority unsecured claim of $1,356,044.45. The Court confirmed its jurisdiction over the matter under 28 U.S.C. sections 1334 and 157, designating the proceeding as a core matter due to its nature of arising in a bankruptcy case. The Debtor, managed by Robert Kattula, contends that Prime’s claim of $2,237,000, which stems from a previously confirmed Chapter 11 plan in 2004, is invalid. Prime's claim includes $1.2 million from the earlier plan plus $1,037,000 in interest. The Debtor argues that this claim had already been satisfied in full, presenting multiple theories to support this assertion. The Debtor filed its first Chapter 11 bankruptcy case on December 23, 2003, under Case No. 03-75414. A combined plan and disclosure statement, referred to as the '2004 Plan,' was filed on June 30, 2004, and characterized as a 'liquidating plan of reorganization.' The plan was amended on September 1, 2004, and confirmed by court order on September 29, 2004. Initially, the 2004 Plan described the Debtor as a real estate holding company owning five parcels of industrial property in Cleveland, Ohio, later amended to four parcels. Prime was identified in the Debtor's Schedule D as a junior secured creditor with a $1.2 million claim, categorized entirely as unsecured. Prime did not file a proof of claim, nor was there any objection to it, resulting in an allowed claim of $1.2 million under statutory provisions. The plan treated Prime's claim as Class I, specifically the 'Allowed Secured Claim of Prime Financial,' confirming the claim amount of $1.2 million. The 2004 Plan stipulated that the Debtor would repay the 'Prime Financial Indebtedness' in full by five years after the Effective Date, defined as the first business day following the tenth day after the Confirmation Date. Given that the confirmation order was issued on September 29, 2004, the Effective Date was October 12, 2004. Consequently, the Debtor was required to pay Prime's claim by October 12, 2009. The 2004 Plan outlines specific requirements for handling Prime's Class I claim of $1.2 million. Key provisions include monthly payments beginning six months after the Effective Date, calculated by amortizing the claim over 15 years at a fixed interest rate of 17% per annum. This results in monthly payments of approximately $18,000. Due to the payment structure, a balloon payment of about $1.081 million will be due by October 12, 2009, as the monthly payments alone will not settle the claim within the required five-year period. The Plan does not explicitly address early repayment of the claim. Additionally, the Plan grants Prime a lien against all real estate owned by the Debtor to secure the claim, which encompasses all related rights, rents, and profits. The Debtor is identified as owning four parcels of real estate in Cleveland, Ohio, categorized into two groups: the "Rockefeller Property" (2777 and 2779 Rockefeller Drive) and the "Transport Property" (2727 and 2655 Transport Road). The 2004 Plan involved the Debtor leasing portions of the Transport Property to General Environmental Management, LLC for $4,000 per month and to Waste Water Management, Inc. for $1,500 per month, without specific mention of equipment classified as 'Real Estate.' K. B Capital, LLC, owned by Robert Kattula and his family, held a first mortgage on the Real Estate for $2.4 million, acquired from Finova Corporation. Under the Plan, the Debtor's Real Estate was to be sold at a pre-confirmation auction, with K. B being the only bidder, submitting a credit bid of $2.4 million plus additional payments, including a minimum of $30,000 or enough to cover priority claims, $32,000 for a state-court Receiver, assumption of $1.2 million debt to Prime, and payment of estimated secured property taxes of $155,027.80. The original Plan stipulated the sale would be free from all liens except secured taxes and debt to Prime. However, the confirmed 2004 Plan was amended, allowing K. B to transfer the Transport Property to GEM or its designee. This transfer had to occur by September 30, 2004, unless extended by the Debtor. Similar provisions applied to the Rockefeller Property, which K. B could sell to either itself or to Water and Wastewater Laboratories, Inc. by the same deadline. The confirmation order, filed on September 29, 2004, specified that the Transport Property would be sold to GEM or its designee under 11 U.S.C. 363. Prime did not oppose the Plan and voted in favor of it, thus binding both parties to the confirmed Plan under 11 U.S.C. 1141(a) and granting the confirmation order res judicata effect. Prime holds a claim against the Debtor for $1.2 million plus interest, established during the confirmation of the Debtor’s Plan in the 2003 case, which must be addressed according to the payment terms of the 2004 Plan. The primary issues for the Court are whether Prime's claim has been paid and the applicable interest rate. The 2004 Plan specifies that Prime's claim will be paid in full within five years from the Effective Date, at an 'Interest Rate' defined as the higher of: (a) 5% or the interest on a five-year treasury note published on the Confirmation Date (September 29, 2004), or (b) the contract rate, or (c) an interest rate determined by a Final Order of the Bankruptcy Court. On the Confirmation Date, the five-year treasury note yielded 3.375%, making the applicable rate at least 5%. The contract rate for Prime's loans is 17% per annum, which is undisputed. The Court notes that no Final Order has been issued that alters the interest rate from these two options. Initially, both the Debtor and Prime agreed that the applicable interest rate was 17%. However, during closing arguments, the Debtor's counsel contended that the definition of 'Interest Rate' was ambiguous. The Court dismissed this late argument and confirmed that the applicable interest rate on Prime's claim under the 2004 Plan is 17% per annum. Prime's amended proof of claim, central to the Claim Objection, amounts to $1.2 million plus interest at a 17% contract rate as per the 2004 Plan. The Debtor did not contest this interest rate during the evidentiary hearing, nor did Debtor's counsel or any witness challenge it until the conclusion of the hearing. Testimony from Prime's President, Aaron Jade, confirmed his understanding that the applicable interest rate was 17%, and Debtor's attorney explicitly acknowledged this rate during cross-examination. Despite acknowledging the rate, Debtor's closing briefs did not dispute the 17% interest. After the hearing, the Debtor engaged new counsel who argued the 2004 Plan's ambiguity regarding the interest rate but did not refute the evidence suggesting a 17% rate. The 2004 Plan states that the interest rate is defined as either a minimum of 5% or a prime rate, the contract rate, or another rate determined by the Court, indicating a potential ambiguity in the determination of the applicable interest rate. The court addresses ambiguity regarding the applicable interest rate on a $1.2 million claim under the 2004 Plan, specifically whether it is set at 17%. Mr. Morris confirms that 17% was the contract rate for loans guaranteed by TAJ prior to the confirmation of the 2004 Plan and acknowledges that, until now, there has been no dispute from the Debtor on this rate. The court notes that the Debtor forfeited any argument against the 17% rate due to its late introduction and prior admissions by counsel. Even if the definition of 'Interest Rate' in the 2004 Plan is ambiguous, evidence, including testimony from Prime's representative and admissions from the Debtor's counsel, clarifies that both parties understood the applicable rate to be the 17% contract rate. The court finds that the 5% rate provided in the 2004 Plan is not relevant to the established dealings between Prime, K.B., and the Debtor. Additionally, Prime's amended proof of claim complies with Federal Rules of Bankruptcy Procedure, specifically Rule 3001, which establishes it as prima facie evidence of the claim's validity and amount, having been properly executed and conforming to the official form requirements. Prime's amended proof of claim fails to comply with Rule 3001(c)(1) as it does not include necessary supporting documents related to the Debtor's confirmed Plan from the 2003 Case. Although this constitutes a technical violation, the relevant documents are public records. Consequently, Prime's claim does not qualify as 'prima facie evidence' under Rule 3001(f), which requires the claimant to provide evidence establishing the right to payment. Despite this, Prime successfully presented ample evidence during the evidentiary hearing. Even if the claim were deemed prima facie valid, the Debtor could counter it by presenting adequate evidence to refute the claim. The Debtor's objection to Prime's claim is based on a defense of payment, asserting that Prime's claim was fully satisfied. Under Michigan law, this defense is an affirmative one, placing the burden of proof on the Debtor, which is consistent even if federal common law applied. The confirmed 2004 Plan indicates that Michigan law governs the matter. Therefore, the Debtor must prove its defense of payment by a preponderance of the evidence. The Supreme Court's ruling in Raleigh v. Illinois Dep't of Revenue established that in bankruptcy claim objections, the burden of proof aligns with nonbankruptcy law. Specifically, when a Chapter 7 trustee objects to a claim, he bears the same burden that the debtor would if the case were outside bankruptcy. In Raleigh, the Supreme Court noted that state law governs the substance of claims in bankruptcy, and the burden of proof is a substantive aspect of the claim itself. In this context, the creditor Prime demonstrated its burden of proof regarding its amended claim, requiring a minor adjustment to the interest calculation. Interest on Prime's $1.2 million claim began accruing on the Effective Date of the 2004 Plan (October 12, 2004) rather than October 1, 2004, at a rate of 17% per annum until the debtor's petition was filed (October 21, 2009). Consequently, the calculated interest totals $1,025,030.14, slightly less than the claimed interest amount of $1,037,000.00. Therefore, Prime has substantiated an allowable total claim of $2,225,030.14. Additionally, Prime refutes the debtor's claims of payment, providing evidence that no payments were made, thus shifting the burden to the debtor to prove otherwise by a preponderance of the evidence. The Debtor asserts that Prime's $1.2 million allowed claim from the Debtor's 2003 Case was fully paid in October 2004, shortly after the confirmation of the 2004 Plan. Under the 2004 Plan, Prime's claim was to be paid in full with interest by October 12, 2009. The Debtor's argument for disallowing Prime's claim in the current Chapter 11 case hinges on the assertion that this claim was settled in early October 2004. Prime disputes this, claiming no payments were made on the 2003 Case claim. Supporting the Debtor’s position are testimonies from President Robert Kattula and bookkeeper Dusica Simovski, alongside several admitted documents. Prior to the 2003 Case, the Debtor had guaranteed two loans from Prime to K. B: the K. B Cleveland loan (originally $525,000, refinanced to $1.425 million) and the Luna Pier loan ($1.25 million), totaling $2.675 million in guaranteed debt. However, Kattula negotiated with Prime’s President, Aaron Jade, to reduce the Debtor's allowed claim to $1.2 million. The Debtor claims that two wire transfers in October 2004 constituted full payment of Prime's claim. Specifically, on October 1, 2004, a wire transfer of $1,813,228.85 from GEM to Prime was made, which included a payoff of the K. B Cleveland loan amounting to $1,235,491.12. Following this, on October 4, 2004, Prime refunded $471,710.44 to K. B. Ultimately, Prime retained $1,341,518.41 from the transfer, which included the payoff for the K. B Cleveland loan and additional amounts applied to other debts owed by K. B. GEM, which had leased part of the Debtor’s Transport Property, made the payment as part of a settlement agreement involving a $1.95 million promissory note to K. B, stemming from a settlement agreement dated July 30, 2003. Kattula directed GEM to apply the payment toward K. B’s debts to Prime. Numerous parties are involved in the settlement agreement, including K. B, the Debtor, Kattula, GEM, and Prime. The Debtor disclosed terms of the settlement in the 2004 Plan Amendments filed on September 1, 2004, stating that GEM is required to pay K. B $1,950,000 under a Settlement Agreement and Mutual Release, which is available for review by interested parties. GEM has the option to purchase the Transport Property from the Debtor for $500,000, contingent upon the payment obligation being fulfilled. The Plan assumes all executory contracts unless they are subject to rejection, and the Debtor does not plan to reject any contracts with GEM, intending to assume the Settlement Agreement. The Debtor claims that all funds transferred to Prime on October 1, 2004, totaling $1,341,518.41, should be recognized as a payment toward Prime's $1.2 million claim, asserting that these funds were Debtor's property and not K. B's. This assertion is based on an assignment of K. B’s assets to the Debtor on October 1, 2004, which the Debtor claims was documented by a signed "Assignment" prepared by K. B's attorney, Joseph Ostrowski. Testimony from Kattula and the Debtor's bookkeeper indicates that Kattula signed this document on the same date, which was witnessed by Simovski. Kattula allegedly sent the assignment document to Prime’s President, Jade, in October 2004; however, Jade contests this, stating he was unaware of the assignment until late 2007 or 2008. The Assignment document, although drafted by an attorney, contains several typographical errors and grammatical issues. It indicates that K. B assigned his rights to TAJ Graphics, Enterprises, LLC for a consideration of $681,000, acknowledging the transfer of all claims, without any warranties. The Assignment grants Assignee the authority to pursue both known and unknown claims, with Assignor appointing Assignee as attorney in fact to enforce these claims and collect judgments as if the Assignment had not occurred. All costs related to enforcing the claims will be covered by Assignee TAJ Graphic Enterprises, LLC. The document, executed by Assignor Robert T. Kattula in the presence of witness Dusica Simovski, reflects that the Debtor paid K. B. $681,000 for the assignment of K. B.’s assets. Kattula detailed that this amount consists of a $471,000 refund from Prime, stemming from a prior wire transfer, and $210,000 in net proceeds from the sale of the Rockefeller Property to Hagel. The Court, however, rejects the Debtor's claim that this payment to Prime was made by the Debtor, asserting instead that it was a payment from K. B. to Prime on a debt owed by GEM. The Court found that the alleged Assignment document was not signed by Kattula or Simovski on the noted date but later, deeming their testimony not credible. The court's skepticism is supported by the document's wording, which suggests it was not drafted by an attorney, contradicting Kattula and Simovski's claims regarding attorney involvement. The document inaccurately refers to Assignor’s rights in a manner inconsistent with its intended legal framework. The assignor appoints the assignee as attorney in fact, as stated in Paragraph C of the document. The document is signed by Mr. Kattula personally, rather than as a representative of either party, and appears to have been poorly copied from other documents. The second paragraph contains an incomplete sentence referencing prior agreements, yet no such agreements were presented as evidence by the Debtor. The Court concludes that the document was likely not drafted by attorney Ostrowski, but rather hastily assembled by Kattula or Simovski. This raises questions about the credibility of both Kattula and Simovski, especially since they claimed Ostrowski drafted the document. The Assignment document states that the Debtor provided $681,000 as consideration for the assignment of K. B's assets; however, Kattula acknowledged that $471,000 of this amount originated from a refund that belonged to K. B, implying that the Debtor essentially used K. B's own funds in this transaction. Therefore, the true consideration provided by the Debtor is reduced to $210,000, contradicting the stated amount in the document. This inconsistency further suggests that the document was not professionally drafted and undermines the testimony of Kattula and Simovski regarding the Assignment. Additionally, Simovski’s testimony regarding her witnessing the document on October 1, 2004, is inconsistent with her earlier deposition. Simovski acknowledged during the evidentiary hearing that she was not employed by Kattula or the Debtor as of October 1, 2004, but she claimed she was interviewing for a position with Kattula on that date when asked to witness the signing of an Assignment document. She testified that the document was drafted by in-house counsel Ostrowski, who was present during the signing. However, in her earlier deposition, she stated that she first met Kattula in late October or early November 2004. During the hearing, she corrected her deposition, asserting that she indeed met Kattula on October 1, 2004, despite no corroborating evidence supporting this claim. Evidence established that she began working for Kattula and K. B on October 11, 2004, and her inconsistent testimony undermined her credibility. The Court concluded that she did not witness Kattula's signature on the Assignment document on October 1, 2004. Subsequently, Simovski and Kattula back-dated the Assignment document to October 1, 2004, despite having signed it much later. Evidence indicated Simovski had previously back-dated other documents, including one dated February 18, 2004, which she could not have witnessed since she had not met Kattula at that time. Additionally, Ostrowski filed a lawsuit in January 2005 on behalf of K. B, alleging that K. B had assigned claims against the City of Cleveland to the Debtor, contradicting the Assignment document's assertions. This inconsistency suggests the Assignment was not signed until after January 2005. Furthermore, K. B was involved in multiple lawsuits after the alleged October 1, 2004 assignment without mentioning it until at least 2007. In an email dated October 5, 2006, Simovski and Kattula indicated that the asset assignment from K. B to the Debtor occurred in 2005. Simovski expressed concerns in an email about the issuance of Form 1099s for 2005, arguing they should have been addressed to the Debtor instead of K. B. She noted that K. B assigned its assets to TAJ Graphics Enterprises in 2005, indicating no prior assignment to the Debtor. A subsequent email from Kattula's attorney, Ostrowski, referenced an assignment of K. B's assets to the Robert T. Kattula Irrevocable Trust dated October 2, 1995, but did not mention any assignment to the Debtor occurring in 2004. This suggests the Assignment document was not signed before February 25, 2005, and no assets had been assigned to the Debtor by that date. Peter Schneiderman, Prime's attorney responsible for loan documents, testified he was unaware of any assignment of K. B's assets to the Debtor and had not seen the Assignment document until the current bankruptcy litigation, which began after the Debtor filed for bankruptcy in 2009. His involvement included drafting loan agreements for K. B, Kattula, and related entities shortly after the alleged October 1, 2004 assignment. Given K. B's significant borrowing from Prime shortly thereafter, it would have been expected for Kattula to disclose any asset assignment had it occurred, yet no such disclosure was made. Additionally, Kattula did not inform Schneiderman about the alleged assignment during a later transaction in November 2005. Jade, another party involved, only learned of the alleged assignment years later, providing further evidence against the claim that the Assignment document was signed in 2004. There is no corroborative evidence to support Kattula and Simovski's assertion regarding the timing of the Assignment. Robert Gigliotti, an accountant hired by Kattula in October 2004, provided key testimony regarding an Assignment document related to asset transfers between K. B. and the Debtor. Initially, Gigliotti stated he received the signed Assignment document from Simovski in early to mid-2005. However, he later acknowledged a fax dated July 15, 2005, that included this document, but could not confirm if he had seen it prior. Gigliotti was tasked with accounting work reflecting the asset assignment, which he did not begin until May or June 2005. His work papers revealed that not all assets were recorded as transferred. K. B.’s 2004 tax return indicated significant assets that contradicted claims of a complete transfer on October 1, 2004. Gigliotti’s 2004 federal tax return for the Debtor, completed in August 2005, inaccurately stated that it was the Debtor's first return and included false information about the Debtor's formation and history, leading him to believe the Debtor was a new entity without prior records. The findings suggest the Assignment document was likely signed much later than claimed, around late February 2005, and that the $1.8 million wire transfer on October 1, 2004, was not made by or on behalf of the Debtor. A payment of $681,000 was made solely by K. B, not validly assigning any assets to the Debtor, even if the Assignment document was signed by Kattula and Simovski on October 1, 2004. At that time, the Debtor lacked legal authority to engage in the transaction outlined in the Assignment document, as the confirmed 2004 Plan from the 2003 case had not yet become effective; it would only take effect on October 12, 2004. Consequently, the alleged assignment occurred just two days after the confirmation order while the Debtor was still in bankruptcy, which prohibited such non-ordinary course transactions without prior notice and a hearing per 11 U.S.C. § 363(b)(1). The Bankruptcy Code mandates that any use, sale, or lease of estate property outside the ordinary course of business requires notice to creditors and an opportunity for objections, a process not adhered to in this instance. Furthermore, the confirmed 2004 Plan did not authorize any transactions resembling the one described in the Assignment document. Notice to all creditors, including Prime, was required under 11 U.S.C. § 363(b)(1) for the transaction detailed in the alleged October 1, 2004, Assignment document. Since no such notice was given and no objections were filed, the Debtor lacked legal authority to execute the transaction on that date. Consequently, the Court determined that the Debtor did not enter into the transaction with K. B, despite the sworn testimony of Kattula and Simovski. The Debtor was represented by experienced Chapter 11 counsel, who would have advised against the transaction as it violated bankruptcy law and contradicted the confirmed Chapter 11 Plan. If the transaction had occurred, it would not be effective against Prime due to lack of notice, as established in case law, including Austin v. BFW Liquidation, which underscores that sales conducted without required notice can be set aside or deemed voidable. Moreover, the Court found that the Assignment document itself failed to actually assign any assets from K. B to the Debtor. The document contained incomplete language and the Debtor did not produce any related "Purchase, Sale or Operating Agreements" to substantiate the assignment. No attorney participated in drafting the Assignment document, and neither K. B nor the Debtor signed it, further invalidating the purported assignment. Kattula was the sole signatory of the Assignment document, which he signed in his individual capacity, not on behalf of K. B, a limited liability corporation (LLC), or the Debtor. The document lacked any indication that Kattula was acting on behalf of either party, rendering the assignment ineffective. The absence of legal counsel in drafting the document contributed to its flaws. Even if the Assignment had been validly signed on October 1, 2004, the Court concluded that the $1.8 million wire transfer to Prime on that date could not be classified as a payment from the Debtor; it was deemed a payment from K. B instead. The Assignment's language indicated that it only allowed the Debtor to collect K. B's claims, not to transfer ownership of those claims. Specifically, the third paragraph of the document appointed the Debtor as K. B's attorney-in-fact for enforcement purposes, which is inconsistent with an ownership transfer. Thus, the purported assignment did not transfer K. B's assets to the Debtor, and the wire transfer was ultimately a payment from K. B to Prime. Additionally, even if the assignment had occurred, the $1.8 million payment was a settlement of K. B's prior obligations under a promissory note assigned to Prime, further indicating it was not a payment by the Debtor. The document titled "Assignment of Promissory Note," signed by K. B through authorized agent Robert Kattula, includes a July 2003 promissory note for $1.95 million from GEM to K. B. This assignment, dated August 21, 2003, transferred rights under the GEM note to Prime Financial, Inc., establishing Prime as the payee. This assignment occurred over a year prior to K. B's alleged asset transfer to the Debtor on October 1, 2004, indicating it was intended to secure K. B's debt to Prime related to the K. B Cleveland loan. Consequently, any asset transfer on October 1, 2004, would not have included rights to payment under the GEM note since K. B had already assigned those rights to Prime. The payment made by GEM to Prime on October 1, 2004, amounting to $1.8 million, cannot be considered a payment by or on behalf of the Debtor. Kattula acknowledged signing the August 21, 2003 assignment but contested the attached promissory note as incorrect, failing to produce an alternative version during the hearing. The court determined that the note attached to the assignment was the sole correct note, which was settled by GEM's payment to Prime. Additionally, substantial evidence refutes Kattula's and the Debtor's claims regarding the October 1, 2004 assignment. They argued that all K. B's assets were transferred to the Debtor on that date, but the assignment did not include any real estate, specifically the Luna Pier property owned by K. B. Federal income tax returns for 2005-2008, originally filed by Kattula, indicated no assignment of K. B's personal property to the Debtor. While the Debtor presented amended tax returns claiming no assets due to the 2004 assignment, these returns were filed in November 2008 following an IRS audit and did not reflect any economic activity during those years, contradicting the assertion of a complete asset transfer. The amended tax returns for K. B were filed in November 2008, over four years after K. B's assets were supposedly assigned to the Debtor on October 1, 2004. Simovski acknowledged that K. B's tax returns for 2005-2007 indicated economic activity, with funds deposited and checks issued from K. B's accounts during 2005. Accountant Gigliotti testified that the IRS deemed K. B an alter ego of Kattula for tax purposes, requiring K. B's economic activity to be reported on Kattula's personal tax return, contradicting Simovski's claim that the tax returns were amended due to a lack of economic activity. Additionally, the Debtor contends that $900,000 of the $1.8 million wired to Prime on October 1, 2004 should be considered Debtor-owned property as a payment on Prime's $1.2 million claim under the 2004 Plan. Kattula asserted that GEM, which leased property from the Debtor since July 2001 at $25,000 per month, owed the Debtor $900,000 in unpaid lease payments, calculated over 36 months. Kattula claimed this amount was part of a $1.95 million promissory note from GEM to K. B, despite the note being payable only to K. B and the rent owed to the Debtor. The Court rejected this theory, finding Kattula's testimony unconvincing and lacking supporting evidence. No written lease agreement was presented, and prior statements indicated GEM was paying only $4,000 per month in rent since July 2003, contradicting Kattula's claims. The evidence presented did not substantiate the Debtor's assertions regarding ownership of the funds or the alleged lease agreement. GEM's obligation to pay a $1.9 million promissory note to K. B does not substantiate the Debtor's claim regarding lease claims against GEM. The settlement agreement does not indicate that any portion of the note included payment for the Debtor's lease claims, particularly not for an amount as high as $900,000. Evidence contradicts the Debtor's assertions about this rent claim, as the Debtor's plan and disclosure statements in the 2003 bankruptcy case, as well as filed schedules, did not acknowledge any claim for overdue rent owed by GEM. The only reference to a potential debt was a vague mention of a "GEM potential lawsuit" with an unknown value listed as an asset. Consequently, the court concluded that the $1.8 million wire transfer on October 1, 2004, was a payment by K. B to Prime, not a payment by or on behalf of the Debtor towards Prime's $1.2 million allowed claim under the 2004 Plan. On October 4, 2004, the Debtor's bankruptcy counsel transferred $468,660.09 to Prime, originating from the sale of the Debtor's Transport Property to GEM for $500,000, which was part of the 2004 Plan and an agreement with GEM. Kattula stated that he promised Prime’s President to pay this amount once the Debtor received the proceeds. After deducting fees, the counsel wired the remaining funds to Prime. The Debtor argues that since the funds were derived from the sale of its real estate, the transfer should be recognized as a payment towards Prime's $1.2 million claim under the 2004 Plan. Prime's President, Jade, informed Kattula that a specific wire transfer would be allocated to the Debtor. The Debtor argues that this transfer should be recognized as a payment from itself to Prime, supported by instructions from the Debtor's bankruptcy counsel, which included a reference to "TAJ Graphics" on the wire transfer request. Prime asserts that the $468,660.09 wire transfer was not proceeds from the Debtor's real estate sale, claiming that the property belonged to K. B, who purchased it at an auction before the 2004 Plan's confirmation. However, the Court found that the Transport Property was still owned by the Debtor when sold, clarifying that K. B chose to have the Debtor sell the property to a third party. Consequently, the wire transfer to Prime on October 4, 2004, is deemed a payment from the Debtor. Prime retained $189,315.28 from this transfer at Kattula's request and sent the remaining $279,344.81 to K. B. The retained amount was applied towards the K. C Group Loan, a loan Prime provided to K. C Group, LLC, which was personally guaranteed by K. B and others. The Court notes that the two wire transfers made shortly after the 2004 Plan's confirmation resulted in Prime receiving over $1.7 million, significantly exceeding the $1.2 million required by the 2004 Plan. The Debtor made wire transfers totaling $1,424,806.40 to Prime in October 2004, which exceeded the $1.2 million obligation under the 2004 Plan by $224,806.40. At the time of these payments, no interest had accrued on Prime's claim since interest began only on the 2004 Plan's Effective Date of October 12, 2004. Kattula, representing the Debtor, claimed the excess was for delinquencies on other loans owed to Prime, but the Court found this explanation unconvincing. Instead, the Court determined that the October 1, 2004 wire transfer of $1,235,491.12 was not a payment by the Debtor, supporting this conclusion in a separate part of the opinion. Conversely, the Court recognized the October 4, 2004 wire transfer of $468,660.09 as a valid payment by the Debtor, sourced from proceeds of a real estate sale. Although Prime transferred $279,344.81 of this payment to K. B, the Debtor received none of it back, leading to a reduction of Prime's allowed claim by $468,660.09. Consequently, Prime's allowed claim was decreased to $731,339.91, which would accrue interest at 17% per annum from October 12, 2004, resulting in an additional $624,704.54 in interest, totaling Prime's claim to $1,356,044.45. This total may be further reduced if the Debtor proves additional payments towards the debt owed to Prime. The Debtor provided testimony to support its claim that the October 2004 wire transfers to Prime fully satisfied its financial obligation under the 2004 Plan. Kattula claimed that Prime's President, Jade, verbally confirmed multiple times that the Debtor's obligation was settled, though this acknowledgment was not documented as Jade refused to provide written confirmation. The Court found Kattula's testimony not credible, contradicting other substantial evidence indicating that the Debtor's obligation to Prime remained unsatisfied as of October 2004. Simovski, another representative of the Debtor, testified that a Prime employee named Jan informed her that a $1.8 million wire transfer was allocated to settle the K.B. Cleveland loan, with the remainder applied to other debts. She stated that Jan explicitly confirmed the $1.2 million debt from the 2004 Plan was cleared, and that Jade reiterated this in 2006. In a subsequent meeting with Jade, Simovski articulated her findings regarding the loans, to which Jade responded that the $1.8 million would address TAJ's obligations under the plan. She asserted that after these confirmations, the $1.2 million obligation was never mentioned again in conversation or paperwork, leading her to believe it was resolved. Jade even questioned why she was inquiring about TAJ, stating, "TAJ is done." The Court finds Simovski's testimony unpersuasive and lacks credibility, partly due to her possible misunderstanding of prior conversations with Jade and Prime's internal bookkeeper, Jan Hubler. Jade provided credible testimony regarding a meeting in the third quarter of 2006 with Kattula and Simovski, where the topic of loans to Kattula-related entities was discussed, including the unexpected mention of TAJ Graphics. Jade believed that the Debtor had dissolved based on the 2004 Plan, which called for asset liquidation and dissolution, and he had not been informed of any asset assignment from K. B to the Debtor until late 2007 or 2008. During this meeting, Jade's realization that the Debtor had not dissolved prompted him to send a notice of default to Kattula, K. B, and others regarding outstanding loans. The Court concludes that neither Jade nor anyone from Prime informed Kattula or Simovski that the Debtor's debt under the 2004 Plan had been fully paid. A letter from Prime to Kattula dated June 6, 2006, which listed several notes, did not mention any debt from the Debtor to Prime, as Prime had never lent money directly to the Debtor. Instead, the Debtor had only guaranteed certain K. B debts to Prime, which were acknowledged in the 2004 Plan. The Debtor asserts that its debt to Prime under the 2004 Plan has been satisfied, despite Prime's claim of non-payment. The Debtor points out that Prime did not seek relief for any default during the Debtor's 2003 bankruptcy case, even though the case was reopened twice for matters related to the 2004 Plan. The Court finds the Debtor's argument unconvincing, noting there was no payment default; rather, the Debtor made an early payment of $468,660.09 on October 4, 2004, which exceeded 26 monthly installments owed under the 2004 Plan, covering payments through May 2007. Additionally, Prime's President, Jade, was under the impression, until late 2006, that the Debtor had been dissolved and was unaware of any undisclosed asset transfers to the Debtor. This lack of knowledge contributed to Prime's inaction regarding enforcement of payment obligations under the 2004 Plan prior to the Debtor's subsequent Chapter 11 filing in 2009. Furthermore, the Debtor contends that if the $1.2 million claim under the 2004 Plan was not fully paid by the 2004 wire transfer, it was settled through later events, specifically referencing the foreclosure of the Luna Pier property in December 2007. The Debtor argues that the foreclosure sale is relevant to demonstrate that the debt to Prime under the 2004 Plan was ultimately satisfied, as the original debt stemmed from guarantees related to loans made by K. B, including the Luna Pier loan. The claim of $1.2 million in the 2003 Case is solely based on two loan guaranties: the K. B Cleveland loan and the Luna Pier loan. The K. B Cleveland loan was fully paid by a wire transfer from GEM to Prime on October 1, 2004. The Debtor contends that if the Luna Pier loan was also paid off, it fulfills the debt obligation to Prime under the confirmed 2004 Plan. Prime disputes this, asserting that the Luna Pier loan remains unpaid and that the Debtor guaranteed additional loans beyond the two in question. Prime acknowledges that if all loans guaranteed by the Debtor were paid off, the debt under the 2004 Plan would also be settled. However, Prime's concession is contingent upon the Debtor having guaranteed all loans to K. B and related entities, not just the two loans cited by the Debtor. The Court concludes that the only potentially unpaid loan guaranteed by the Debtor is the Luna Pier loan. While both parties agree on the guarantees, the K. B Cleveland loan is confirmed as fully paid. Prime claims the Debtor guaranteed other loans, but the Court finds no evidence supporting this assertion. Specifically, the K. B Plus loan and the Waste Path II loan were not guaranteed by the Debtor, as they were secured by other Kattula family members and trusts. Prior to the 2003 bankruptcy filing, the Debtor signed two Pre-Petition Guaranties. On December 13, 2001, the Debtor guaranteed a $525,000 loan from Prime to K. B, which later became part of the K. B Cleveland loan. On August 19, 2003, the Debtor further guaranteed the K. B Cleveland loan of $1.425 million. Both Pre-Petition Guaranties included a commitment to cover all current and future "Obligations" of K. B to Prime. Additionally, a Post-Petition Guaranty Reaffirmation was signed on March 23, 2004, reaffirming the August 19, 2003 guaranty while the Debtor's 2003 bankruptcy case was pending. Prime asserts that the Debtor guaranteed additional debts of Kattula-related entities through three documents signed post-bankruptcy filing: a Cross Collateralization/Cross Default Agreement (October 10, 2004), a Mortgage Modification Agreement (January 7, 2005), and an undated Cross Collateralization/Cross Default Agreement (March 10, 2004). However, no language in these documents imposes liability on the Debtor, as they were not signed by the Debtor. The Pre-Petition Guaranties and the Post-Petition Guaranty Reaffirmation established that the Debtor guaranteed both existing and future debts of K. B to Prime, but these obligations predated the confirmation of the Debtor's 2004 Plan on September 29, 2004. Prime's claim against the Debtor in the 2003 case was contingent and unliquidated, reliant on K. B's potential failure to repay its loans. The 2004 Plan allowed Prime's claim in a liquidated amount of $1.2 million, thereby converting the nature of the Debtor's obligation from a guaranty to a fixed right to payment with interest, eliminating any existing guaranties for K. B's debts. A $1.2 million claim under the 2004 Plan replaced a prior contingent, unliquidated claim from Prime based on the Debtor's guarantees of the K.B. debt. This substitution rendered the Debtor's obligation to Prime fixed, independent of K.B.'s loan defaults or any amounts owed. The terms of the 2004 Plan and relevant case law establish that the confirmation of the Plan discharges all claims from creditors against the Debtor, constituting a complete settlement. Specifically, the Plan stipulates that, barring certain exceptions, entities are precluded from asserting further claims related to actions prior to the Confirmation Date. Case law reinforces that the confirmation process effectively transforms pre-confirmation debts into new claims defined by the Plan, treating it as a binding contract between the Reorganized Debtor and creditors. This process is recognized as having res judicata effect, ensuring that once a reorganization plan is approved, it replaces prior obligations. The 2004 Plan, confirmed on September 29, 2004, binds both the Debtor and Prime under 11 U.S.C. § 1141(a) and case law establishing the res judicata effect of confirmation orders, such as Browning v. Levy. Consequently, Prime's claim under the 2004 Plan remains unchanged by any subsequent payments made to Prime by parties other than the Debtor, including any payments related to the Luna Pier loan, which the Debtor guaranteed. The Court emphasizes that the status of the Luna Pier loan, including whether it has been paid down or off, does not impact Prime's claim against the Debtor. The Court also rejects the Debtor's assertion that the Luna Pier loan was paid off, noting that although payments were made on it after the confirmation of the 2004 Plan, the loan balance never fell below $987,000 and was over $1.3 million as of October 21, 2009. After K.B. defaulted on the Luna Pier loan, Prime foreclosed on the property, successfully bidding $325,000 at the December 13, 2007, sheriff's sale. K.B. did not redeem the property within the statutory redemption period, resulting in Prime becoming the owner. As of the end of December 2007, K.B. owed Prime $1,312,061.73 on the Luna Pier loan, which, after applying the $325,000 credit from the foreclosure bid, resulted in a balance of $987,061.73. This balance also reflects credits totaling $400,154.71 received in 2006 and 2007 under a Memorandum of Understanding (MOU). No further payments were made to Prime by Kattula, K.B., or related entities after May 2005. Thus, the outstanding balance of the Luna Pier loan was confirmed to be $987,061.73 at the end of 2007. Interest on the Luna Pier loan balance accrued at a contractual default rate of 19% per annum, resulting in a total owed to Prime of at least $1,325,664.47 as of October 21, 2009, the date the Debtor filed for bankruptcy. This amount excludes additional claims for real estate taxes and legal fees that Prime contends it is entitled to under the loan documents. The amount owed is slightly less than $1,356,044.45, which is the balance calculated by the Court regarding Prime's claim under the 2004 Plan on the same petition date. The Court rejected the Debtor's argument that the Luna Pier loan should be considered paid in full due to a 2007 foreclosure, citing Mich. Comp. Laws Ann. 600.3280. The Debtor claimed that the property was worth over $1 million, significantly more than the $325,000 bid by Prime at the foreclosure sale, and argued that this should credit the loan accordingly. This statute allows a defendant to argue against a deficiency judgment by demonstrating that the property's value at sale was higher than the bid amount, thus reducing the debt owed. In this case, the burden of proof lies with the Debtor to establish that the property's value exceeded the foreclosure sale price and to what extent. This requirement is consistent with Michigan law, where the debtor must affirmatively prove their defense against a deficiency judgment. The court determined that the Debtor failed to prove that the Luna Pier property's value exceeded the $325,000 foreclosure sale price on December 13, 2007. Evidence included two earlier appraisals: one from August 2002 estimating the property’s "As Is" market value at $1.2 million, and another from February 2006 valuing it at $1.24 million. Both appraisals predated the foreclosure sale, with no expert testimony provided to support their findings. Testimony from Kattula regarding a vague $5.5 million appraisal was deemed insufficient, lacking documentation and detail about the appraiser and the appraisal date. Kattula also mentioned a potential buyer named "Jim," who allegedly offered between $1.6 million and $1.8 million for the property, but no written evidence of this offer was presented. An email from Steven Cohen indicated Jim could pay $1.5 million, contingent on several conditions regarding property issues, but again lacked crucial details about the offer. Overall, the evidence presented did not substantiate the Debtor's claims of higher property value. A purchase offer for the Luna Pier property was made at $1.3 million, which was rejected by Kattula as too low, despite Jade believing it was a fair offer. Jade communicated this rejection to Kattula, emphasizing the offer's merit in relation to K. B's debt to Prime on the Luna Pier loan. Jade noted that since K. B acquired the property in 2002, there had been minimal development, and while some expenditures were claimed between 2004 and 2006, they did not enhance the property's market value. Following a significant economic downturn in mid- to late-2007, Jade provided a written appraisal from October 12, 2007, valuing the land at $250,000, which did not account for existing structures. He arrived at a bid amount of $325,000 by adding $75,000 for the building's value. Jade indicated that earlier appraisals from 2002 and February 2006 were unreliable due to their age and market conditions, as they were conducted well before the foreclosure sale date. His testimony regarding the depreciation of the property's value following the economic downturn was unchallenged by the Debtor. Jade's testimony indicates that the evidence presented by the Debtor fails to establish, by a preponderance of the evidence, that the Luna Pier property was valued higher than the $325,000 bid amount at the December 13, 2007 foreclosure sale. The Debtor did not meet the burden of proof required under Mich. Comp. Laws Ann. 600.3280. Regarding the "Memorandum of Understanding" (MOU) transaction, the Debtor claims that an agreement signed on November 16, 2005, should be considered as payment of its debt to Prime. However, the Court rejects this claim, noting that the MOU was part of a complex restructuring involving multiple agreements between Prime and Kattula-related entities, which did not alter the Debtor's obligations under the confirmed 2004 Plan. The MOU transaction involved restructuring three loans from Prime to Kattula and related entities, including Waste Path Sanitary Landfill, LLC. Key aspects included a change in ownership of Waste Path, the transfer of approximately 600 acres of land around the landfill to Prime Calvert, LLC, and the transfer of landfill operating equipment to Calvert Machinery, LLC. Additionally, the restructuring involved the assumption of $1.77 million of debt owed by Kattula and related entities, reducing their total obligation to Prime. The MOU, signed only by Kattula and Jade (representing Calvert Properties, LLC), outlined how Waste Path's revenue would be prioritized, with a portion allocated to cover outstanding promissory notes payable to Prime, including the Luna Pier loan. The Memorandum of Understanding (MOU) established a profit-sharing arrangement between Calvert Properties, LLC (CP) and Robert Kattula regarding Waste Path Sanitary Landfill, LLC (WPSL). The MOU details the allocation of WPSL's annual revenue after covering certain expenses and debts. It specifies a five-tier distribution of revenue: 1. **First Tier**: All operating expenses and working capital necessary for WPSL. 2. **Second Tier**: Payment of any outstanding debts owed by WPSL to third-party creditors. 3. **Third Tier**: Payments to Prime Financial, Inc. for bringing current all outstanding notes due from various entities affiliated with Kattula, excluding a specific $1,250,000 promissory note. 4. **Fourth Tier**: Monthly payments to Prime to keep current on all notes until fully paid, with interest set at 17% and a ten-year amortization schedule. 5. **Fifth Tier**: Any remaining revenue (after covering CP's operating expenses) is to be shared equally (50-50) between CP and Kattula. In the event of WPSL's sale, proceeds will first address outstanding debts, sale expenses, and then any amounts due to Prime, excluding the previously mentioned promissory note. Amounts due to Prime under assigned notes related to Robert Kattula and affiliated entities must be settled first. The distribution of remaining net sale proceeds is tiered based on the amount: 1) Proceeds of $10 million or less are split evenly between Calvert Properties and Robert Kattula (50% each); 2) For proceeds greater than $10 million but less than $20 million, the first $10 million is split as above, and any excess is divided 25% to Calvert Properties and 75% to Kattula; 3) For proceeds exceeding $20 million, any amount above that threshold is split equally between Calvert Properties and Kattula. Kattula's handwritten notations in the Memorandum of Understanding (MOU) specified that the Luna Pier loan was included in distributions, necessitating payments to Prime to bring the loan current. The MOU and related documents do not indicate that the Luna Pier loan was discharged or reduced, and no credible evidence of any agreement to eliminate this debt was presented. The Debtor claimed that proper accounting would show enough funds to cover the Luna Pier loan and other debts to Prime, but Prime provided substantial evidence that Waste Path's revenue was insufficient to exceed Tier 3 distributions during 2006-2012. Payments on the Luna Pier loan only occurred in 2006 and 2007, totaling $400,154.71, with credible support from testimonies of Waste Path's managing member and Prime's president. The Debtor's accounting expert did not address the allocation of Waste Path revenue under the MOU's distribution tiers. Adler asserted that Kattula and related entities had fully repaid all loans to Prime by 2008 or 2009. In response, Prime provided strong rebuttal evidence through Gerald Gabriel, its accounting expert, whose testimony was deemed more credible by the Court. Gabriel concluded that as of the petition date on October 21, 2009, Kattula owed Prime $483,376.53 on the K.B. Plus loan, $241,688.30 on the Waste Path 2 loan, and $1,352,453.22 on the Luna Pier loan. By October 31, 2012, the owed amounts were $509,549.05 for the non-Luna Pier loans and $1,892,918.95 for the Luna Pier loan. The Court agreed with Gabriel's findings, with a minor exception regarding the Luna Pier loan balance at the petition date, which it calculated as $1,325,664.47 plus additional claims for real estate taxes and legal fees. No payments or credits were reported on the Luna Pier loan post-petition. The Court found Adler's opinions lacked persuasive support, as they were effectively countered by Gabriel's analysis. The Debtor also cited a letter signed by Prime's President Jade in November 2005 to assert the Luna Pier loan was paid off; however, the letter was prepared at Kattula's request and did not substantiate the Debtor's claims. Prime has received mortgage funds for Luna Pier Truck Depot from K. B Capital and TAJ Graphics Enterprises, L.L.C. This mortgage is cross-collateralized with other loans held by the Kattulas with Prime in Kentucky. Prime will subordinate its mortgage up to $3,800,000 in favor of Business Loan Express (BLX) and will not receive payments from Luna Pier concerning the Kentucky mortgages. It is anticipated that the Kentucky entities will significantly reduce their obligation by January 3, 2006, after which Prime intends to terminate the Luna Pier mortgage. Despite the assertion in a letter that the Luna Pier loan had been paid off, both Jade and Kattula knew this was false. The court found that the letter was misleading, as Kattula had acknowledged multiple times that the loan was still outstanding. For instance, an agreement signed by Kattula on May 10, 2005, extended the maturity date of the Luna Pier note, confirming it was not paid off. Prime's attorneys sent multiple notices of default regarding the loan, indicating it was still due, and Kattula did not contest these notices. Notably, the BLX letter was sent just before Kattula and Jade signed a Memorandum of Understanding (MOU) on November 16, 2005, which included provisions for Luna Pier loan payments, further suggesting the loan was not paid off. Kattula admitted in testimony that the loan was unpaid as of October 31, 2005, corroborated by his emails shortly before the MOU was signed. As part of the MOU transaction, the Luna Pier loan was to be paid off using funds from the Kentucky closure funds. However, evidence provided does not support Kattula's claim regarding this payment. The MOU and related documents, executed after Kattula’s emails in November 2005, do not indicate that the loan was to be deemed paid off by the closure funds. Instead, the MOU includes hand-written notes by Kattula stating that payments under Tier 3 would be partially allocated to the Luna Pier loan, contradicting his assertion. Additional documents reveal that Kattula admitted after the November 2005 BLX Letter that the loan had not been paid off, and the BLX Letter's claim of the loan's payment was false, known to both Kattula and Jade. Consequently, this letter cannot support an estoppel claim against Prime, as neither Kattula nor the Debtor relied on it, nor did Business Loan Express suffer any detriment from it since no loan was made. The Debtor also claimed entitlement to funds in the Kentucky closure fund, which served as a security deposit required for landfill operations. The court rejected this claim, clarifying that the fund was under the control of Waste Path, which held rights to it, subject to Kentucky's regulations. At the time in question, the closure fund amounted to approximately $1.278 million. K. B acquired the assets of a Kentucky landfill, which were later assigned to Waste Path through an "Assignment and Assumption Agreement" dated March 24, 2004. These assets included rights to a closure fund, which Kattula acknowledged in a March 15, 2006 email. The Debtor's defense regarding the closure fund is based on a "Purchase Agreement for Membership Rights of Waste Path Sanitary Landfill, LLC" signed on September 9, 2004, between K. B as seller and Dan Sills and Joy Hubb as buyers. K. B was the sole member of Waste Path before selling a 100% membership interest to Sills and Hubb for $3 million, with each acquiring a 50% share. The Purchase Agreement required Sills and Hubb to pay K. B $2 million by December 31, 2004, and to substitute the current closure funds, which were pledged to the Commonwealth of Kentucky, by the same date. Any substitute funds would count towards the outstanding balance of the purchase price. Additionally, K. B financed the $3 million purchase price through a loan to Sills, Hubb, and Waste Path, secured by a $3 million promissory note. This note stipulated a 12% annual interest rate, monthly payments of $30,000 starting October 1, 2004, and a balloon payment of the remaining balance due by December 31, 2005. However, Sills and Hubb were unaware that the membership shares they purchased were encumbered, as they had already been pledged to Prime as collateral for a previous loan. In May 2004, Prime extended a $600,000 loan to Kattula, K. B, Waste Path, and associated parties, with Kattula pledging his 100% membership interest in Waste Path as collateral under a "Security and Pledge Agreement." Prime retained this collateral, which remained encumbered when Sills and Hubb purchased the membership shares on September 9, 2004, a fact Kattula concealed from them. Kattula misrepresented in the sale agreement that the membership shares were "free and clear of all liens and encumbrances." Sills and Hubb only discovered the prior pledge to Prime in October 2005, after Kattula failed to inform Prime of the sale, constituting a breach and an event of default under the loan documents. The Debtor claims a breach of contract regarding the failure of Sills and Hubb to "substitute" the Kentucky closure fund and pay it to K. B by December 31, 2004, which they did not do. The Debtor argues ownership of this claim through an assignment from K. B. However, two critical flaws undermine the Debtor's position: first, Prime had no obligation to substitute or pay the closure fund, as this duty lay solely with Sills and Hubb under the September 9, 2004 Agreement, of which Prime was unaware until October 2005. Second, the obligation was canceled in the November 2005 MOU transaction, which also restructured the membership interests in Waste Path, negating any claim the Debtor might have regarding the closure fund. Thus, there is no valid basis for the Debtor's assertions concerning the closure fund obligation. The MOU and related transaction documents do not indicate that the Luna Pier loan was to be settled by the closure fund, nor do they suggest any obligation for Prime to pay any part of the Kentucky closure fund to the Debtor, Kattula, or any related entity. The Court found no credible evidence of any such agreement between Prime and the Debtor or Kattula-related entities. The Debtor was unable to prove that any debt to Prime under the confirmed 2004 Plan had been partially or fully satisfied, except for a specific wire transfer on October 4, 2004. Consequently, the Court will enter an order partially sustaining and partially overruling the Debtor's Claim Objection, recognizing Prime's allowed, non-priority, unsecured claim for $1,356,044.45 in this bankruptcy case. The opinion incorporates a list of admitted evidence and notes the presence of one exhibit not included in that list, alongside various references to claims and relevant statutory provisions. The discussion includes details about payment calculations under the 2004 Plan, though the appropriateness of using interest compounding for the calculations remains uncertain but is deemed immaterial to the case's disputes. The Debtor's monthly payments to Prime and a 5-year balloon payment are outlined in the 2004 Plan, with estimates referenced from various documents. The only equipment listed in the Debtor's Schedule B consists of office furniture valued at $2,000, which aligns with the liquidation analysis. K. B holds a secured claim of $2.4 million, while Prime's secured claim is $1.2 million. The 2004 Plan Amendments indicate that K. B was the sole qualified bidder at auction and upon confirmation of the plan, would acquire the real estate free of liens under Section 363 of the Bankruptcy Code. The governing law for the plan is stipulated as the laws of Michigan, unless federal law applies. The Supreme Court's commentary on the Bankruptcy Rules clarifies that the burden of proof for claims is not specified, particularly regarding disputes by trustees. Prime's interest calculations assume it is not entitled to post-petition interest on its claim, which is accurate because the real estate securing its claim was sold, leaving Prime as an unsecured creditor without entitlement to post-petition interest under 11 U.S.C. § 502 and § 506. Unsecured creditors in bankruptcy do not accrue post-petition interest on their claims, with interest ceasing as of the petition date, as established in *United States v. Ron Pair Enterprises, Inc.* and *In re Fesco Plastics Corp., Inc.* The interest is calculated as simple interest without compounding, which is consistent with the confirmed 2004 Plan of the Debtor's 2003 Case. Prime's amended proof of claim reflects this assumption, calculating interest on a $1.2 million claim as $1,031,178.08 using simple interest based on an October 1, 2004 start date. The total interest would significantly increase to $1,456,670.38 if compounded annually. Testimony during the evidentiary hearing confirmed that no payments were made on Prime's claim, contradicting the Debtor's theories of payment. The K. B. Cleveland loan, evidenced by a promissory note dated August 21, 2003, and two Guaranty Agreements, was guaranteed by the Debtor. The first Guaranty Agreement is dated December 18, 2001, and the second is dated August 19, 2003. The Luna Pier loan, secured by real estate and personal property of K. B., is also backed by a Guaranty Agreement. Prime alleged that the Debtor guaranteed additional loans, but the Court found that the Debtor was only responsible for the K. B. Cleveland and Luna Pier loans, rejecting Prime's broader claims. The list of outstanding notes omits the K. B Cleveland loan/note, suggesting it was paid off. Testimony from Kattula and Levy confirms this, with Kattula acknowledging a note payable to K. B, not the Debtor. A promissory note for $1.95 million related to the GEM was initially not admitted into evidence due to Kattula's denial that a certain document was a copy of it. However, another copy was later accepted as part of an assignment to Prime dated August 21, 2003. This note secured a $1.425 million loan to K. B. Kattula claimed there was a later settlement agreement that superseded a July 30, 2003 agreement but failed to produce any documentation for it, while Jade testified that only one settlement agreement exists, as reflected in the provided documents. Kattula’s assertion of multiple agreements was contradicted by his lack of evidence and the testimony of Jade. Kattula also had Simovski, a non-lawyer, prepare legal documents improperly, including a mortgage that misrepresented its drafter. Additionally, an IRS audit found no documentation for a purported $681,000 payment from the Debtor to K. B, as testified by accountant Robert Gigliotti, indicating a lack of substantiation for this transaction. E-mail exchanges between Simovski and outside accountants from October 11 to October 14, 2004, were referenced (PX-W), highlighting testimony from Robert Gigliotti. The credibility of Kattula was challenged by testimony from Dan Sills, managing member and controller of Waste Path Sanitary Landfill, LLC, who indicated that Kattula's character for truthfulness is poor, based on their extensive dealings. Sills stated that Kattula often tailored his answers to suit his interests rather than providing factual responses. In contrast, Sills expressed a positive view of Aaron Jade, stating that all his business interactions with Jade were honest, and he was unaware of any dishonesty in Jade's dealings with Kattula or his companies. Further testimony indicated that prior to October 2006, Kattula or his representatives had not informed Sills that K. B. assigned any of its assets to the Debtor, nor did they communicate this to Glen O'Connell or Joy Hubb. Various testimonies from Sills, O'Connell, and others corroborated the lack of communication regarding asset transfers. Gigliotti’s engagement by Kattula was initially estimated to have begun in August or September 2004, but he later clarified that his firm was not engaged until October 2004. The document also references several promissory notes and includes numerous citations of testimonies regarding various aspects of the case. A note receivable of $2.9 million from Waste Path Sanitary Landfill was recorded as an asset of K. B rather than being transferred to the Debtor, indicating that significant income was also recognized as K. B's rather than the Debtor's. The 2004 tax return for K. B contains discrepancies, as it shares the same Employer Identification Number (EIN) as the Debtor's bankruptcy petition, suggesting a connection between the two entities. Under 11 U.S.C. § 363(b)(1), a trustee or Chapter 11 debtor may engage in transactions, including the sale or lease of estate property, without a court order unless a timely objection is filed. As of October 1, 2004, local bankruptcy rules required notice for such transactions, with a 15-day objection period. Prior to the Debtor's bankruptcy filing in December 2003, Kattula facilitated the transfer of real estate from K. B to Luna Pier Truck Depot, LLC, a Kattula-owned entity, without notifying Prime. After Prime discovered this transfer, arrangements were made for Luna Pier Truck Depot, LLC to assume liability for the associated loan. Kattula executed a transfer of the Luna Pier real estate to DA Enterprises, a Kattula-owned entity, without notifying Prime, which discovered the transfer through a title search. Testimonies reveal that Kattula rolled $900,000 in rent owed by GEM into a $1.95 million promissory note and that a lease agreement for this amount existed, although no written documentation was produced during the hearing. Kattula later sold the property to ESG, a company created by GEM's owners. Kattula also testified about a wire transfer of $279,000 from GEM to Prime in October 2004, which was related to delinquent rent and environmental liabilities. Kattula asserted that Prime did not retain this amount but instead wired it to K.B., which was current on its loans at that time. Multiple testimonies and legal documents discussed include various financial transactions and agreements related to these dealings. The Court rejects Kattula's claim of a third wire transfer to Prime in early October 2004, citing a lack of evidence beyond Kattula's vague testimony. The record only supports two wire transfers on October 1 and October 4, 2004. Kattula correctly notes a transfer of approximately $279,000 from Prime to K. B on October 5, 2004, as confirmed by K. B’s bank statement, which indicates a transfer of $279,344.81. However, this transaction was part of a larger $468,660.09 transfer that Prime received on October 4, 2004. Prime's bookkeeper, Jan Hubler, was employed until January 2006 but did not testify during the evidentiary hearing. Various testimonies referenced Hubler’s close work with Mr. Jade and discussed meetings and documents related to the 2004 Plan, which indicated that the Debtor would dissolve upon the closure of the bankruptcy case. The bankruptcy case was initially closed on November 1, 2005, reopened on June 2, 2006, and again after settlement. It was finally re-closed on November 17, 2006, and reopened a second time on April 2, 2007, for further creditor enforcement of the confirmed 2004 Plan, before being re-closed again on May 24, 2007. Additional documents referenced include the Sheriff’s Deed and mortgage related to the Luna Pier property, loan documents for K. B Plus and Waste Path II loans, and various guaranty agreements. Loan documents for the Waste Path III loan are referenced, specifically PX-78. The Court interprets the Post-Petition Guaranty Reaffirmation as affirming the Debtor's existing liability under the Pre-Petition Guaranty from August 23, 2003, without imposing new obligations. The Court emphasizes that any interpretation suggesting the imposition of new obligations would render the document ineffective due to restrictions on incurring post-petition debts without prior Court approval, as outlined in 11 U.S.C. 364 and 549(a). The Debtor did not seek such approval or provide notice for the Post-Petition Guaranty Reaffirmation. The 2004 Plan was amended to clarify that certain provisions did not apply to the State of Ohio's Attorney General's Office. Evidence regarding the Luna Pier loan history is referenced, noting an error in the foreclosure sale date and bid amount in the PX-128 document. The appraisal indicated various projected market values for the property upon completion, but was only used to explain the foreclosure bid price, not to ascertain the property’s actual value at the time of the sale. Gerald Gabriel’s testimony indicates that a purchase offer made in 2006 occurred prior to a significant decline in the real estate market. The Debtor's accounting expert, Adler, acknowledged he lacked expertise in real estate valuations and was unable to contest Jade's assertion that property values dropped sharply in 2007. Adler attempted to use an appraisal from October 2007 to argue against the decline in property values, but the appraisal did not support his claims. Kattula confirmed signing all agreements related to a Memorandum of Understanding (MOU) that aimed to restructure Waste Path's debts and ownership. The Court found the May 15, 2006 Escrow Agreement did not fulfill any disputed agreements. Various testimonies and reports, including those from Adler and Gabriel, were admitted into evidence, which included details about loan amounts and Debtor's arguments regarding property values during foreclosure. Kattula and Jade both testified regarding the origin of a letter's language and its subsequent distribution. The primary distinction between exhibits PX-15 and PX-48 is that PX-15 includes Prime's fax number at the top. Peter Schneiderman, Prime's lead attorney for loan transactions with Kattula, testified he had no recollection of drafting the letter to Business Loan Express (PX-48) and only became aware of it during the current litigation. He acknowledged that the letter states the Luna Pier debt is paid. An October 31, 2005 email (PX-49) indicates that the $1,250,000 Luna Pier note would be repaid from K.B.'s recovery of closure money or through the sale or financing of Luna Pier, which presents contradictory implications regarding the source of payment. According to the MOU executed on November 16, 2005, Kattula and K.B. waived any rights to recover the Kentucky closure fund. In a November 14, 2005 email (PX-50), Kattula committed to paying off the Luna Pier loan by December 31, 2005. Subsequent communications indicated the total owed to Prime increased to $3,125,000 after the MOU transaction. The Michigan Supreme Court’s definition of equitable estoppel is outlined, emphasizing that one party can induce another to believe in certain facts to which they justifiably rely, and that denying those facts would cause prejudice. Relevant documents, including the Escrow Agreement and Security and Pledge Agreement, detail asset assignments related to Waste Path and its financial obligations. Kattula claimed that Prime was aware and consented to a sale of membership interests in September 2004, but the court found this testimony not credible. The Debtor argued claims were assigned under an October 1, 2004 document and a June 1, 2006 assignment; however, pertinent language was not identified in the MOU transaction documents.