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In re Fryar

United States District Court, N.D. Mississippi

March 6, 2018

IN RE ROBERT ALLEN FRYAR KATHY FRYAR
v.
GE CAPITAL SMALL BUSINESS FINANCE CORPORATION, ROLISON & SONS LOGGING, INC., ROLISON TIMBER CO., INC., ROLISON TIE & TIMBER CO., INC., GARY ROLISON, INDIVIDUALLY, MARTHA ROLISON, INDIVIDUALLY, KNOX HARDWOODS, LLC, ALVA PATTERSON, INDIVIDUALLY, PRECISION HUSKY CORPORATION, AND MIKE WEST, INDIVIDUALLY, AND UNKNOWN DEFENDANTS A-Z DEFENDANTS IN RE VIOLET GALE JUMPER TIMOTHY DEAN HOPPER OPERATORS INVESTMENT GROUP, A PARTNERSHIP; ROBERT A. FRYAR, KATHY FRYAR, EDITH CAROLYN FRYAR, GALE JUMPER HENRY E. GIPSON, DAVID SMITH, THOMAS W. LACY AND WAYNE JUMPER PLAINTIFFS INTERVENORS: HENRY J. APPLEWHITE, CHAPTER 7 TRUSTEE, AND TIPPAH ELECTRIC POWER ASSOCIATION

          OPINION

          DAVID W. HOUSTON, III UNITED STATES BANKRUPTCY JUDGE.

         On consideration before the court is a motion to approve compromise and settlement filed by Henry J. Applewhite, Chapter 7 trustee, ("trustee"); a joinder in said motion having been filed by GE Capital Small Business Finance Corporation, ("GE Capital"); an objection to said motion having been filed by the plaintiffs, Operators Investment Group, a Partnership, Robert A. Fryar, Kathy Fryar, Edith Carolyn Fryar, Gale Jumper, Henry E. Gipson, David Smith, Thomas W. Lacy, and Wayne Jumper (hereinafter collectively referred to as "OIG"); and the court, having heard and considered same, hereby finds as follows, to-wit:

         I.

         The court has jurisdiction of the parties to and the subject matter of the above captioned adversary proceeding pursuant to 28 U.S.C. § 1334 and 28 U.S.C. § 157. This is a non-core proceeding to which all of the parties have consented to this court entering a final judgment as contemplated in 28 U.S.C. § 157(c)(2).

         II.

         The OIG plaintiffs originally filed the above captioned cause of action in the Circuit Court of Tippah County, Mississippi, but it was removed to this court by GE Capital on February 12, 2008. The crux of the complaint is that GE Capital wrongfully repossessed and sold a drum debarker system, ("debarker"), which was not subject to its "blanket" lien on equipment. Consequently, the ownership of the debarker is a critical issue in this proceeding.

         On March 17, 2009, this court entered an order allowing the trustee, by and through special counsel, to intervene on behalf of the Fryar bankruptcy estate and the Jumper/Hopper bankruptcy estate. On April 24, 2009, this court entered a separate order allowing Tippah Electric Power Association to intervene.

         The parties agreed to mediate their dispute, and, following a lengthy mediation session, the parties on January 19, 2012, entered into a Settlement Agreement. (Trustee's Exhibit 1) Since the Settlement Agreement contemplated that it was subject to the approval of this court, the trustee filed the aforesaid motion which is now under consideration. The OIG plaintiffs objected to the approval of the Settlement Agreement, asserting that it had been executed by mistake.

         At the hearing on the trustee's motion, several documents were introduced into evidence, to-wit:

a. An initial invoice, dated April 5, 2000, reflected that the debarker was to be sold to Robert B. Fryar Lumber Company for a purchase price of $200, 000.00.
b. An initial appraisal was sent to Robert B. Fryar Sawmill and Lumber Company, Inc., dated July 13, 2000, which reflected a value for the debarker in the sum of $709, 000.00. This appraisal was executed by Robert C. Patterson.
c. A second appraisal was sent to OIG on July 13, 2000, which reflected the identical appraised value of $709, 000.00. This appraisal was executed by Bob Patterson.
d. A document which appears to be a bill of sale indicates that the debarker was sold to OIG for a purchase price of $165, 000.00. This document was dated September 2, 2000, and was executed by Bob Patterson.

         After the mediation had been ongoing for several hours, GE Capital represented to the other parties that the aforementioned documents had been examined by a forensic examiner who had concluded that certain signatures on the documents had been transposed. Although the court was not specifically advised, the court presumes that the questionable documents were those which purported to convey the debarker to OIG. As such, GE Capital took the position that because of this, the debarker was actually owned by Robert B. Fryar Sawmill and Lumber Company, Inc., and not OIG. Although the OIG plaintiffs thought that they owned the ...


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