In re Omega Optical, Inc. , 476 B.R. 157 (Bankr. E.D.Pa. 2012) -
A bank filed a proof of claim in a bankruptcy that erroneously identified its claim as unsecured. After confirmation of a chapter 11 plan of reorganization that treated the claim as unsecured, the bank filed a motion to allow it to amend its proof of claim to reflect the fact that the claim was secured. Omega focused on the question of what it takes to extinguish a lien through a plan.
The debtor listed Sovereign Bank in its bankruptcy schedules as a secured creditor with a disputed claim, valuing the collateral at $10,000. The debtor's proposed plan of reorganization asserted that the bank's claim was not properly perfected, and accordingly its secured claim was reclassified as an unsecured claim under the plan - with the bank required to terminate the UCC financing statement and release all other liens upon the effective date of the plan. A confirmation hearing was held, and the bank did not object to the plan.
A couple of months after...
