Wednesday, January 22, 2014

Chapter 11 Ballots not Counted as did not Conform to Official Form

In the case of Bakes v. The Official Committee of Unsecured Creditors, et al., 2007 WL 542150 (S.D.Fla. 2007) the Court noted that voting on chapter 11 plan is governed by rules designed to insure the integrity and manageability of the voting process. FRBP 3018. In this case the form did not conform to the official form and therefore the votes submitted whould not be counted.

The Court noted that the two empty boxes on the official form 14 are the essential feature of the official ballot form. In this case, the form did not give the creditors the choice to accept or reject as they were pre-marked to state a rejection and gave the impression that the voter was not entitled to make a choice. The Court note that pre-market ballots have been held to be improper per se. In re Gulph Woods Corp., 83 B.R. 339 (Bkrtcy.E.D.Pa.1988) and that pre-marked ballots create confusion as a creditor may receive more than one ballot.