United States Court of Appeals,
Eleventh Circuit.
No. 95-8916.
In re LUMMUS DEVELOPMENT CORPORATION, Debtor.
LUMMUS CORPORATION, Plaintiff-Appellant,
v.
UNSECURED CREDITORS' COMMITTEE OF LUMMUS INDUSTRIES, INC. and
Michael P. Cielinski, Chapter 7 Trustee, Defendants-Appellees.
June 18, 1996.
Appeal from the United States District Court for the Middle
District of Georgia. (No. 4:95-CV-26-JRE), J. Robert Elliott,
Judge.
Before HATCHETT, Circuit Judge, HENDERSON, Senior Circuit Judge,
and MILLS*, District Judge.
HATCHETT, Circuit Judge:
Appellant, Lummus Corporation (LC), appeals the district
court's decision concluding that the unambiguous language of an
Asset Purchase Agreement between LC and appellee, Lummus Industries
(LI), did not convey as an asset LI's right to collect a debt from
an intercompany loan made to Lummus Development Corporation (LDC),
a subsidiary of LI.
BACKGROUND
LI filed a Chapter 11 petition in bankruptcy court on November
3, 1992. At that time, LI owned interests in LDC, an eventual
Chapter 7 debtor. Prior to its bankruptcy, LI made numerous
intercompany loans to LDC, totalling $4.6 million in notes
receivable that LDC owed LI. In March of 1993, with bankruptcy
*
Honorable Richard Mills, U.S. District Judge for the
Central District of Illinois, sitting by designation.
court approval, LI sold substantially all of its assets to LC.
Thereafter, LC joined with two other creditors in filing an
involuntary petition under Chapter 7 against LDC. The bankruptcy
court entered an order for relief under Chapter 7 and appointed
Michael Cielinski the Chapter 7 trustee of LDC. With the order of
relief against it, LDC filed schedules listing LI as the holder of
the notes receivable at issue in this case. Subsequently, both LC
and LI filed proofs of claim to the notes receivable. The trustee
intervened and filed objections to the proofs of claim that LC and
LI filed to determine which of the two owned LDC's notes
receivable.
On November 22, 1994, the bankruptcy court held a hearing to
determine whether the Asset Purchase Agreement between LI and LC
(the agreement) conveyed the notes receivable to LC. In an open
court opinion, the bankruptcy court ruled that the unambiguous
language and the plain meaning of the agreement did not transfer
LI's right to collect the intercompany debt from LDC to LC.
Because no ambiguity existed in the agreement, the bankruptcy court
ruled that it could not extend the agreement's language to include
the notes receivable in the assets that LC purchased from LI.
Accordingly, the bankruptcy court concluded that the notes
receivable remained an asset of LI.
On December 13, 1994, the bankruptcy court entered an order
sustaining the trustee's objection to LC's proof of claim and
overruling the trustee's objection to LI's proof of claim. On
December 22, 1994, LC filed an appeal in the district court. The
district court affirmed the bankruptcy court's decision finding
that the bankruptcy court did not err in concluding that the clear
and unambiguous language of the agreement between LC and LI did not
convey LI's right to collect the intercompany debt that LDC owed
LI. LC filed this appeal.
CONTENTIONS
Appellant LC contends that LI failed to controvert evidence
that both parties intended to transfer notes receivable as an asset
under the agreement. LC contends that if the language of the
agreement did not convey the notes receivable, the omission
resulted from a mutual mistake. LC also contends that LI led LC to
believe and rely to its detriment that the assets included the
intercompany debt that LDC owed LI. Appellees LI and Chapter 7
trustee Cielinski, on the other hand, contend the unambiguous
language of the agreement sufficiently supports the district
court's determination that LI did not transfer its right to the
notes receivable. Appellees contend no other extraneous documents
can expand the unambiguous definition of the assets transferred in
the agreement.
ISSUE
We address the following issue: whether the district court
erred in affirming the bankruptcy court's decision concluding from
the language of the Asset Purchase Agreement that LC did not
purchase LDC's notes receivable from LI.
DISCUSSION
We review the district court's decision affirming the
bankruptcy court's factual findings under the clearly erroneous
standard. In re Club Associates, 951 F.2d 1223 (11th Cir.1992).
We review the district court's interpretation of the agreement as
a conclusion of law de novo. Georgia-Pacific Corp. v. Lieberam,
959 F.2d 901 (11th Cir.1992). After a review of the record, we
find that the unambiguous language and plain meaning of the
agreement does not indicate that LI sold the notes receivable to
LC. Under Georgia law, if the agreement contains unambiguous
language, the court gives the language its plain meaning. Georgia-
Pacific Corp., 959 F.2d at 905 (citing Hunsinger v. Lockheed Corp.,
192 Ga.App. 781, 386 S.E.2d 537 (1989)). When we read the plain
language of the agreement, we find that the notes receivable
remained an asset of LI after the sale. Resolution Trust Corp. v.
Artley, 24 F.3d 1363 (11th Cir.1994). The notes receivable against
the LDC, amounting to over $4.6 million, constituted a material
asset that would have been listed specifically in the agreement if
both LI and LC intended to convey that interest to LC.
Accordingly, the district court did not err in affirming the
bankruptcy court's determination finding the agreement did not
include the notes receivable as an asset.
CONCLUSION
We conclude that the Asset Purchase Agreement between LC and
LI did not transfer as an asset to LC, LI's right to collect the
intercompany debt from LDC. Accordingly, we affirm the district
court's judgment.
AFFIRMED.