In re Evans Products Co.

In re Evans Products Co.

Opinion

 [*1003]  ORDER REOPENING CASES

THOMAS C. BRITTON, CHIEF UNITED STATES BANKRUPTCY JUDGE

United Pacific Insurance Company (United) moved on August 19 under 11 U.S.C. § 350(b) and B.R. 5010 to reopen these closed cases. It seeks modification of a permanent injunction to allow United to enforce a $ 2.3 million obligation allegedly assumed by Evans Asset Holding Company (EAHC), the liquidating corporation formed pursuant to the chapter 11 plan confirmed in these cases. EAHC has responded that the claim was barred effective November 19, 1986 by the Confirmation Order. The parties were heard August 25 and have briefed their respective contentions. I now conclude that United is entitled to the relief it seeks.

Chronology

The essential facts are not in dispute.

The debtor Evans Products Company and its subsidiaries engaged in a variety of businesses in a number of states, electing in many instances to meet their workers'  [**2]  compensation obligations by qualifying as self-insurers. Beginning in 1977, United issued surety bonds in various states to guarantee the self-insurer obligations of the debtors.

On March 11, 1985 Evans Products and its subsidiaries filed voluntary chapter 11 petitions in this court. United had actual notice of the bankruptcies and monitored the proceedings. It furnished no new bonds after bankruptcy.

On March 12, Evans Products as debtor in possession obtained permission from this court to continue and did continue discharging its obligations, and those of its subsidiaries, as a workers' compensation self-insurer with respect to both prepetition and postpetition claims. (CP 21). With respect to postpetition claims, Evans Products clearly had that authority by statute, §§ 1108, 1107(a), 363(c)(1), incident to its power to continue its "ordinary course of business." By inference, this court found  [*1004]  that the meeting of its prepetition obligations was also in its ordinary course of business.

The claims bar date for these cases was November 25, 1985. (CP 573). Though contingent and unliquidated claims are recognized in bankruptcy, ¹ United never filed a claim and neither party requested  [**3]  estimation or allowance of United's claim.

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