# Miracle Restaurant Group LLC

> United States Bankruptcy Court, E.D. Louisiana · May 13, 2025

URL: https://www.frixlaw.com/law-library/cases/11050097

## Case

- **Court:** United States Bankruptcy Court, E.D. Louisiana
- **Decided:** May 13, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11050097

## How later opinions describe it (automated extraction)

- recognizing a limited qualified immunity to bankruptcy trustees
- stating that a § 105 injunction may be appropriate where proceeding would have an adverse impact on the debtor’s ability to reorganize or deplete property of estate

## Opinion text

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA

IN RE: § CASE NO. 24-11158
§
MIRACLE RESTAURANT GROUP, § CHAPTER 11 (SUBCHAPTER V)
LLC, §
§ SECTION A
DEBTOR. §

MEMORANDUM ORDER AND OPINION

The Debtor in this case is a Delaware limited liability company that, as of the Petition Date,
operated 25 Arby’s franchises in Illinois, Indiana, Texas, Mississippi, and Louisiana. The Debtor
leases each Arby’s location and does not own any real property. After experiencing inflationary
pressures in both commodity and labor expenses in the years following the COVID-19 pandemic,
the Debtor sought bankruptcy relief under Subchapter V of Chapter 11 of the Bankruptcy Code on
June 20, 2024. Over the course of the Debtor’s bankruptcy case, the Debtor closed six restaurants,
rejected unexpired leases and franchise agreements associated with those restaurants, and
attempted to market and sell other of its restaurant franchises without success.1 The Debtor was
able to renegotiate leases and obtain lease concessions from landlords at nine locations and plans
to continue to operate its franchises at those locations, which will generate income to fund a plan
of reorganization.
On April 23, 2025, this Court held an evidentiary hearing to consider confirmation of the
Debtor’s Plan of Reorganization Under Subchapter V Dated September 18, 2024, [ECF Doc. 169],
as amended, [ECF Docs. 239, 250 & 275], (the “Plan”) (Debtor Ex. 1). Without objection, the

1 Although the court-approved sales process did not bear fruit, the Debtor recently proposed the sale
of its license agreement, leasehold interests, and inventory in one of its restaurant franchises located in Pearl
River, Louisiana, to the current lessor of that location. [ECF Doc. 279]. That sale has been approved by
this Court and is contingent upon the Debtor obtaining an Order confirming its Plan.
Court admitted as evidence the declarations of Donald Moore, the Chief Executive Officer and
managing member of the Debtor (Debtor Ex. 6), as well as Michael Elliot, founder and managing
partner of Peak Franchise Capital (Debtor Ex. 5). The Court qualified Elliot as an expert in
financial restructuring of quick-service restaurants and heard testimony from both Moore and

Elliot. In support of its Plan, the Debtor also relied upon the Certification of Tabulation of Ballots,
which evidenced that, of the classes of creditors that voted, all voted to accept the Plan but for
Woodvine Partners, LLC (“Woodvine”), an unsecured creditor of the Debtor, which voted to reject
the Plan. [ECF Doc. 306].
Several parties in interest objected to the Plan, [ECF Docs. 276, 277, 288, 293, 294 & 296].
As of the confirmation hearing, the Debtor had resolved the vast majority of the objections and
those objections were withdrawn. For the reasons stated on the record, upon review of the
evidence, the Court found that the Debtor’s Plan satisfied all of the confirmation requirements of
§ 1129(a) of the Bankruptcy Code, as incorporated by § 1191. The Court continued the
confirmation hearing to April 30, 2025, to consider the final remaining objection to the Plan lodged

by the Office of the United States Trustee (“UST”), Iris Associates, L.P. (“Iris”), and Woodvine.
This Memorandum Opinion and Order solely addresses the remaining objection.2
JURISDICTION AND VENUE
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b). The contested
matter is a “core proceeding” under 28 U.S.C. § 157(b)(2)(L) that this Court may hear and
determine on a final basis. The venue of the Debtor’s bankruptcy case is proper under 28 U.S.C.
§§ 1408 and 1409.

2 An Order containing findings of fact and conclusion of law, confirming the Plan, and incorporating
this ruling will be entered separately.
DISCUSSION
For confirmation purposes in Subchapter V cases, § 1191(a) of the Bankruptcy Code
incorporates the requirements of § 1129(a), and provides that a plan shall be confirmed if all of the
§ 1129(a) requirements are met, but for § 1129(a)(15).3 If a plan is not fully consensual, however,

a debtor may nevertheless confirm a plan if it can show the requirements of § 1191(b) are met; that
is, a debtor must show that all requirements of § 1191(a) are met (but for §§ 1129(a)(8) and
(a)(10))4 and show that “the plan does not discriminate unfairly, and is fair and equitable, with
respect to each class of claims or interests that is impaired under, and has not accepted, the plan.”
11 U.S.C. § 1191(b).
No party in interest objected on the basis of unfair discrimination or asserted that the Plan
was not fair and equitable as to any class of creditors. Woodvine, the only creditor in Class 3,
holds an allowed unsecured claim of $787,916.66 for amounts due under a promissory note.5
Under the Plan, Woodvine’s Class 3 claim will be amortized over seven years at 5.0% interest,
and Woodvine will receive monthly payments in the amount of $11,136.34 with a balloon payment

3 Section 1129(a)(15) deals with individual debtors and is not applicable here.
4 Section 1129(a)(8) is a “unanimity” requirement for confirmation under § 1129(a): each class of
creditors must either accept the plan or not be impaired under it. Section 1129(a)(10) requires that at least
one impaired class of creditors (excluding insiders) must vote to accept a plan in order for the plan to be
confirmed. “One presumed reason for [§ 1129(a)(10)] is the reasonableness of requiring some degree of
creditor support for a plan that is to be involuntarily imposed on another group of creditors,” In re 7th
Street & Beardsley P’ship, 181 B.R. 426, 431 (Bankr. D. Ariz. 1994), although “the scant legislative history
on § 1129(a)(10) provides virtually no insight as to the provision’s intended role,” W. Real Estate Equities,
L.L.C. v. Vill. at Camp Bowie I, L.P. (In re Vill. at Camp Bowie I, L.P.), 710 F.3d 239, 245 (5th Cir. 2013)
(citation omitted).
5 In February 2023, the Debtor applied to the Internal Revenue Service for Employee Retention Tax
Credits (“ERTC”) refunds for the first three quarters in 2021 in the approximate total amount of $3.5
million. On December 5, 2023, after experiencing a delay in receiving the ERTC refunds, the Debtor
executed a promissory note with Woodvine in the principal amount of $750,000 with a maturity date of
June 30, 2024. That note subordinates Woodvine to all other obligations owed by the Debtor to First
Franchise Capital, a first-position lienholder. See Plan, §§ 1.2, 1.3 & 1.5. Woodvine is entitled by be paid
from ERTC funds when those funds are remitted to the Debtor.
of $486,573 at the end of the three-year Plan term. See Plan, Art. V. The Court finds that the Plan
satisfies the requirements of 11 U.S.C. §§ 1191(b) and (c) as the Plan does not discriminate
unfairly, and is fair and equitable with respect to Woodvine.6
Article X of the Plan contains the following clause:

Notwithstanding anything contained herein to the contrary, neither the guarantors,
insiders, officers, directors, employees, nor the interest holders of the Debtor shall
be discharged and released from liability, if any, for claims and debts arising under
or in connection with the Debtor or this Subchapter V Case and/or otherwise
addressed and/or treated in this Plan. However, absent further Court order upon
notice and hearing, the exclusive remedy for payment of any claim or debt
addressed in this Plan, so long as the Plan is not in default, shall be the Plan
and all parties classified in and under Articles III and IV herein are enjoined
from taking any action inconsistent herewith, including, but not limited to, any
action to prosecute or collect any debt or claim against any guarantor, insider,
officer, director, employee or interest holder; provided however, that all

6 Section 1191(b) provides:
Notwithstanding section 510(a) of this title, if all of the applicable requirements of section
1129(a), other than paragraphs (8), (10), and (15) of that section, are met with respect to a
plan, the court, on request of the debtor, shall confirm the plan notwithstanding the
requirements of such paragraphs if the plan does not discriminate unfairly, and is fair and
equitable, with respect to each class of claims or interests that is impaired under, and has
not accepted, the plan.
Section 1191(c) and defines “fair and equitable” with respect to an unsecured creditor in relevant part:
(2) As of the effective date of the plan—
(A) the plan provides that all of the projected disposable income of the debtor to
be received in the 3-year period, or such longer period not to exceed 5 years as the court
may fix, beginning on the date that the first payment is due under the plan will be applied
to make payments under the plan; or
(B) the value of the property to be distributed under the plan in the 3-year period,
so such longer period not to exceed 5 years as the court may fix, beginning on the date on
which the first distribution is due under the plan is not less than the projected disposable
income of the debtor.
(3)(A) The debtor will be able to make all payments under the plan; or
(B) (i) there is a reasonable likelihood that the debtor will be able to make all payments
under the plan; and
(ii) the plan provides appropriate remedies, which may include the liquidation of
nonexempt assets, to protect the holders of claims or interests in the event that the
payments are not made.
11 U.S.C. § 1191(c)(2)–(3).
creditors shall retain the right to pursue any third party guarantor for any
debts not addressed in this plan and the discharge under 11 U.S.C. § 1192 shall
not apply to any third party guarantor. To the extent necessary, any applicable
statute of limitations against collection from any third party is specifically tolled
from the period of time from the Petition Date until the date upon which the Debtor
fails to cure any written notice of default as set forth in the Plan and/or any
applicable loan documents. The immediately preceding sentence shall not be
construed to apply to a landlord’s rights against any party who assigned a lease who
may remain liable under the lease under applicable law.
Plan, Art. X (emphasis added). In other words, if a creditor’s claim is treated through the Plan,
that creditor is prohibited from pursuing satisfaction of that claim from any other person, but only
for the three-year term of the Plan or the date the Debtor defaults on Plan payments and fails to
cure the default timely, whichever is first.7 Thus, the Plan proposes temporary, non-debtor
injunctions to facilitate the successful implementation of the Plan.
Citing the U.S. Supreme Court’s holding in Harrington v. Purdue Pharma L.P. (In re
Purdue Pharma), 603 U.S. 204, 227 (2024), and the Fifth Circuit’s recent opinion in Highland
Capital Management Fund Advisors, L.P. v. Highland Capital Management, L.P. (In re Highland
Capital Management, L.P.), 132 F.4th 353 (5th Cir. 2025) [hereinafter Highland II], the UST and
Woodvine object to the Debtor’s Plan solely on the assertion that Purdue Pharma and Highland
II prohibit the inclusion of temporary, non-consensual, non-debtor injunctions in a confirmed plan
of reorganization. [ECF Doc. 293; ECF Doc. 294, ¶¶ 10–18; ECF Doc. 319].

7 Iris holds an allowed unsecured claim in the amount of $610,829 for “Pre-petition lease obligations
and lease rejection damages.” Iris’s claim is classified in Class 8 with general unsecured claims and will
receive pro rata distributions from the Debtor’s disposable income over the three-year Plan term. Iris
asserts that it retains tort claims against one or more of the Debtor’s directors and officers. It similarly
objected to the Plan with the UST and Woodvine, [ECF Doc. 576], but withdrew its objection in open court
after negotiating language with the Debtor confirming and stating more plainly that it may pursue any claim
against the Debtor’s directors and officers that is not treated by the terms of the Plan.
A. The Supreme Court’s Holding in Purdue Pharma Does Not Enjoin Bankruptcy
Courts from Confirming Plans Containing Temporary, Non-Consensual, Non-
Debtor Injunctions.
As observed recently by a colleague, the Supreme Court in its Purdue Pharma opinion
explicitly noted that it was ruling on the narrow question of whether a bankruptcy
court may effectively extend to non-debtors the benefits of a Chapter 11 discharge:

Confining ourselves to the question presented, we hold only that the
bankruptcy code does not authorize a release and injunction that, as
part of a plan of reorganization under Chapter 11, effectively seeks
to discharge claims against a nondebtor without the consent of
affected claimants.

In re Hal Luftig Co., 667 B.R. 638, 662–63 (Bankr. S.D.N.Y. 2025) (quoting In re Purdue Pharma,
603 U.S. at 227); see also In re Purdue Pharma, 603 U.S. at 215 (“The question we face thus boils
down to whether a court in bankruptcy may effectively extend to nondebtors the benefits of a
Chapter 11 discharge usually reserved for debtors.”). This Court agrees with the Hal Luftig court
that an “argument that Purdue Pharma prohibits bankruptcy courts from, as part of a plan,
temporarily enjoining creditors’ collection efforts against non-debtors is without merit.” Id. at
663.
B. The Fifth Circuit’s Holding in Highland II Did Not Address Temporary, Non-
Consensual, Non-Debtor Injunctions Entered at Confirmation To Facilitate the
Successful Implementation of a Plan.
Likewise, in the course of years-long litigation in the Highland Capital Management, L.P.
case, the Fifth Circuit has been called upon to address the limits of exculpations and permanent
injunctions that can be provided through a plan of reorganization. In 2022, the Fifth Circuit
addressed an appeal that, in relevant part, challenged the scope of the non-debtor exculpation
provision in the debtor’s confirmed plan. See NexPoint Advisors, L.P. v. Highland Capital Mgmt.,
L.P. (In re Highland Capital Mgmt., L.P.), 48 F.4th 419, 435–38 (5th Cir. 2022) [hereinafter
Highland I]. The confirmed plan purported to provide a permanent release of liability, that is, an
exculpation, from post-petition lawsuits not arising from gross negligence, bad faith, or willful or
criminal misconduct for the debtor, its employees, independent directors, and Chief Executive
Officer; the reorganized debtor; an affiliated third-party entity; the unsecured creditors’ committee
and its members; trusts established through the plan as well as the trustees and board members of

those trusts; and all estate professionals. See id. at 435, 438. Citing its prior holdings in Bank of
New York Trust Co., N.A. v. Official Unsecured Creditors’ Committee (In re Pacific Lumber Co.),
584 F.3d 229 (5th Cir. 2009) (identifying the limited bases for exculpating non-debtors) and Hilal
v. Williams (In re Hilal), 534 F.3d 498 (5th Cir. 2008) (recognizing a limited qualified immunity
to bankruptcy trustees), as well as the plain text of 11 U.S.C. § 524(e),8 the Fifth Circuit limited
the exculpatory provision in the confirmed plan to the debtor, the unsecured creditors’ committee
and its members, and the independent directors. See Highland I, 48 F.4th at 437–38.
The Highland I court also addressed appellants’ objection to the plan’s open-ended
injunction and gatekeeper provisions:
The Plan’s Injunction Provision, for its part, broadly enjoined certain persons and
entities who held claims against or equity interests in Highland Capital (the
“Enjoined Parties”) from “taking any actions to interfere with the implementation
or consummation of the Plan.” It also specifically prohibited the Enjoined Parties
from suing, enforcing orders, or asserting rights of setoff so as to recover from
Highland Capital or affect Highland Capital’s property. Then, in its Gatekeeper
Clause, the provision implemented an injunction prohibiting the Enjoined Parties
from taking specific actions against the “Protected Parties,” stating:
[N]o Enjoined Party may commence or pursue a claim or cause of
action of any kind against any Protected Party that arose or arises
from or is related to the Chapter 11 Case, the negotiation of the Plan,
the administration of the Plan or property to be distributed under the
Plan, the wind down of the business of the Debtor or Reorganized
Debtor, the administration of the Claimant Trust or the Litigation
Sub-Trust, or the transactions in furtherance of the foregoing

8 Section 524 of the Bankruptcy Code governs the effect of a discharge obtained through a
bankruptcy case. Section 524(e) provides that, with limited exceptions found in § 524(a)(3), “discharge of
a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity
for, such debt.”
without the Bankruptcy Court (i) first determining, after notice and
a hearing, that such claim or cause of action represents a colorable
claim of any kind, including, but not limited to, negligence, bad
faith, criminal misconduct, willful misconduct, fraud, or gross
negligence against a Protected Party and (ii) specifically authorizing
such Enjoined Party to bring such claim or cause of action against
any such Protected party[.]
Highland II, 132 F.4th 353, 355–56 (5th Cir. 2025). The plan defined “Protected Parties”
extremely broadly to include numerous non-debtors. See id. at 356. Appellants objected to the
plan’s injunction provision as vague and the gatekeeper provision as overbroad. See Highland I,
48 F.4th at 438. The Highland I court held that “Appellants’ primary contention—that the Plan’s
injunction ‘is broad’ by releasing non-debtors in violation of § 524(e)—is resolved by our striking
the impermissibly exculpated parties.” See id. The Highland I court further held that the injunction
enjoining certain parties from “taking any actions to interfere with the implementation or
consummation of the Plan” is not overbroad or vague because “the Plan defined what constitutes
interference: (i) filing a lawsuit, (ii) enforcing judgments, (iii) enforcing security interests, (iv)
asserting setoff rights, or (v) acting in ‘in any manner’ not conforming with the Plan.” See id. at
438–39. Appellants’ objection to the gatekeeping provision concerned only that it “impermissibly
extends to unrelated claims over which the bankruptcy court lacks subject-matter jurisdiction.” Id.
at 439. Recognizing that “[c]ourts have long recognized bankruptcy courts can perform a
gatekeeping function,” the Highland I court rejected the appellants’ argument, holding that its own
precedent required it to
le[ave] to the bankruptcy court, faced with pre-approval of a claim, to determine
whether it ha[s] subject matter jurisdiction over that claim in the first instance. . . .
In other words, we need not evaluate whether the bankruptcy court would have
jurisdiction under every conceivable claim falling under the widest interpretation
of the gatekeeper provision. We leave that to the bankruptcy court in the first
instance.
Id.
The Fifth Circuit remanded the case to the bankruptcy court to conform the plan to its
ruling. In 2025, certain parties were granted leave to appeal to address “whether the bankruptcy
court erred in failing to narrow the definition of ‘Protected Parties’ used in the Gatekeeper Clause
coextensively with its narrowing of the definition of ‘Exculpated Parties’ used in the Exculpation

Provision.” Highland II, 132 F.4th at 357. The Highland II court went to lengths to clarify why
its holding in Highland I narrowed both the exculpation clause in the plan as well the gatekeeper
provision of the plan in the same manner. See id. at 358–62. In sum, the Highland II court held:
The clear weight of Supreme Court and Fifth Circuit precedent dictates our holding:
that a proper reading of Highland I requires that the definition of “Protected Parties”
used in the Plan’s Gatekeeper Clause be narrowed coextensively with the
definitions of “Exculpated Parties” used in the Exculpation Provision. Any other
reading of Highland I would improperly grant the bankruptcy court authority to
enforce what is perhaps the broadest gatekeeper injunction ever written into a
bankruptcy confirmation plan. Such authority is patently beyond the power of an
Article I court under § 105.
Id. at 362. The Highland II court thus reversed the bankruptcy court in part and remanded the case
to revise the Plan’s definition of “Protected Parties” contained in the gatekeeping provision to
comport with the definition of “Exculpated Parties” contained in the exculpation clause, that is,
“(i) the Debtor; (ii) the Independent Directors, for conduct within the scope of their duties; (iii) the
Committee; and (iv) the members of the Committee in their official capacities, for conduct within
the scope of their duties.” Id.
In sum, Highland II clarified and affirmed the scope of its Highland I decision. But
Highland II was not asked to and did not address temporary, non-consensual, non-debtor
injunctions entered at confirmation to facilitate successful implementation of a plan.
C. Neither Purdue Pharma Nor Highland II Disturbed the Fifth Circuit’s Recognition
of Temporary, Non-Consensual, Non-Debtor Injunctions in In re Zale Corp.

As discussed above, the Supreme Court’s holding in Purdue Pharma focused on the narrow
question of whether a bankruptcy court may effectively extend to non-debtors the benefits of a
Chapter 11 discharge and did not address the propriety of temporary, non-consensual, non-debtor
injunctions issued through plan confirmation. Highland II focused exclusively on the bankruptcy
court’s gatekeeping powers over claims against non-debtors. In doing so, it reaffirmed its long-
held stance that § 105(a) of the Bankruptcy Code cannot be used inconsistently with § 524(e) and

provide non-consensual third-party releases and permanent injunctions:
The Supreme Court and this court have definitively held that bankruptcy
courts may not approve a confirmation plan that non-consensually releases non-
debtors from liability related to a bankruptcy proceeding. They have also
recognized that bankruptcy injunctions, though not in themselves releases,
similarly act to shield persons and entities from liability and therefore may not be
entered to protect non-debtor not legally entitled to release.
“Although we interpret [11 U.S.C.] § 105 liberally” to allow bankruptcy
courts a range of powers, any action a bankruptcy court takes “must be consistent
with the rest of the Bankruptcy Code.” In re Zale Corp., 62 F.3d 746, 760 (5th Cir.
1995) (internal citations omitted). Notably, any bankruptcy court action must
square with the Bankruptcy Code’s edict that “discharge of a debt of the debtor
does not affect the liability of any other entity on . . . such debt.” 11 U.S.C.
§ 524(e); see, e.g., In re Coho Res., Inc., 345 F.3d 338, 342–43 (5th Cir. 2003);
Hall v. Nat’l Gypsum Co., 105 F.3d 225, 229 (5th Cir. 1997); In re Edgeworth, 993
F.2d 51, 53–54 (5th Cir. 1993).
In accordance with this principle, the Supreme Court held recently in
Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024), that the Bankruptcy Code
“does not authorize a release and injunction that, as part of a plan of reorganization
under Chapter 11, effectively seeks to discharge claims against a nondebtor without
the consent of the affected claimants.” Id. at 227. Even before Purdue Pharma,
this court had held the same: that any provision that non-consensually releases non-
debtor from liability for debts and/or conduct, and any injunction that acts to shield
non-debtors from such liability, must be struck from a bankruptcy confirmation
plan. See, e.g., In re Pac. Lumber Co., 584 F.3d 229, 252 (5th Cir. 2009) (Fifth
Circuit case law “seem[s] broadly to foreclose non-consensual non-debtor releases
and permanent injunctions); In re Vitro S.A.B. de C.V., 701 F.3d 1031, 1059, 1061–
62 (5th Cir. 2012); In re Zale Corp., 62 F.3d at 760 (“[W]e must overturn a § 105
injunction if it effectively discharges a nondebtor.”).
Highland II, 132 F.4th at 358–59.
But nothing in Highland II appears to have disturbed the Fifth Circuit’s recognition of the
use of temporary, non-consensual, non-debtor injunctions found in Feld v. Zale Corp. (In re Zale
Corp.), 62 F.3d 746 (5th Cir. 1995), a seminal case in the Fifth Circuit relied upon by numerous
panels to date to foreclose non-consensual, non-debtor releases and permanent injunctions. See,
e.g., Ad Hoc Grp. of Vitro Noteholders v. Vitro S.A.B. de C.V. (In re Vitro S.A.B. de C.V.), 701
F.3d 1031, 1059 (5th Cir. 2012); Bank of N.Y. Tr. Co., N.A. v. Official Unsecured Creditors’

Comm. (In re Pac. Lumber Co.), 584 F.3d 229, 253 (5th Cir. 2009). After holding that a permanent
injunction issued pursuant to § 105(a) of the Bankruptcy Code effectively—and thus
impermissibly under § 524(e)—discharges the debt of a non-debtor, the Zale Corp. court
acknowledged that “a temporary stay prohibiting a creditor’s suit against a nondebtor . . . during
the bankruptcy proceeding may be permissible to facilitate the reorganization process in accord
with the broad approach to nondebtor stays under § 105(a).” 62 F.3d at 760 (quoting Landsing
Diversified Props.–II v. First Nat’l Bank & Tr. Co. of Tulsa (In re W. Real Estate Fund, Inc.), 922
F.2d 592, 601 (10th Cir. 1990)). The court provided guidance to bankruptcy courts on the “unusual
circumstances” under which a § 105(a) temporary, non-consensual, non-debtor injunction could
issue:

The impropriety of a permanent injunction does not necessarily extend to a
temporary injunction of third-party actions. Such an injunction may be proper
under unusual circumstances. These circumstances include 1) when the nondebtor
and the debtor enjoy such an identity of interests that the suit against the nondebtor
is essentially a suit against the debtor, and 2) when the third-party action will have
an adverse impact on the debtor’s ability to accomplish reorganization. When
either of these circumstances occur, an injunction may be warranted.
Id. at 761 (internal citations omitted). The Zale Corp. court noted supporting cases identifying
examples of “unusual circumstances” warranting temporary injunctions: Patton v. Bearden, 8
F.3d 343, 349 (6th Cir. 1993) (“Such circumstances usually include when the debtor and the non-
bankrupt party are closely related or the stay contributes to the debtor’s reorganization.”); S.E.C.
v. Drexel Burnham Lambert Grp., Inc. (In re Drexel Burnham Lambert Grp., Inc.), 960 F.2d 285,
293 (2d Cir. 1992) (“In bankruptcy cases, a court may enjoin a creditor from suing a third party,
provided the injunction plays an important part in the debtor’s reorganization plan.”); A.H. Robins
Co. v. Piccinin, 788 F.2d 994, 1003–06 (4th Cir. 1986) (stating that a § 105 injunction may be
appropriate where proceeding would have an adverse impact on the debtor’s ability to reorganize
or deplete property of estate).

Thus, although dicta, the Zale Corp. court clearly recognized that circumstances may arise
in a bankruptcy case justifying the issuance of a temporary injunction of non-debtor actions
through the plan confirmation process. This Court finds that Zale Corp. continues to be a valid
legal proposition. Therefore, this Court overrules Woodvine’s and the UST’s objections to the
Debtor’s Plan to the extent they assert that the holdings in Purdue Pharma or Highland II ban
outright temporary, non-consensual, non-debtor injunctions issued entered at confirmation to
facilitate the successful implementation of a plan.
D. The Debtor Has Satisfied the Zale Corp. “Unusual Circumstances” Test As Well
As the Traditional Factors Governing the Issuance of Temporary Injunctions.
At trial, the Debtor presented two witnesses and documentary evidence. The UST’s
presentation of evidence was limited to cross-examination of the witnesses. Woodvine presented
no testimonial or documentary evidence. Based on the record before the Court, the Court finds
the following facts, the majority of which are uncontested:
• Donald Moore is the Chief Executive Officer and managing member of the Debtor; he
will continue to manage the Debtor’s day-to-day operations post-confirmation and
ensure that the Debtor will perform under the Plan and make all Plan payments. See
Debtor Ex. 6, ¶¶ 1, 17, 20 & 34.
• Moore guaranteed payment of the prepetition debts of the Debtor. See Debtor Ex. 6,
¶ 19.
• Robert Miller, a part-owner of the Debtor, provided significant capital to the Debtor
prepetition and guaranteed payment of the prepetition debts of the Debtor. See Debtor
Ex. 6, ¶¶ 18–20.
• Miller’s affiliated company, Captec Financial Holdings Corp. (“Captec”) provided
capital to the Debtor prepetition and guaranteed payment of certain of the prepetition
debts of the Debtor. See Debtor Ex. 6, ¶¶ 18–19.
• Patrick L. Beach serves as Captec’s Chief Executive Officer and serves as a manager
on the Debtor’s Board of Managers; Beach has provided capital to the Debtor
prepetition and guaranteed payment of the prepetition debts of the Debtor. See Debtor
Ex. 6, ¶¶ 18–20.
• The Plan proposes 36 months of payments generated by operations to creditors with
balloon payments at Month 36 to pay off the balance of unpaid secured debt, tax debt,
and administrative claims. See Debtor Ex. 6, ¶ 20; Debtor Ex. 5, ¶ 9; Hr’g Tr. Min.
10:13:34–10:37:27 (Apr. 23, 2025).
• The Debtor must fund the balloon payments at the end of the three-year Plan term by
refinancing outstanding amounts due under the Plan under one new loan. See Debtor
Ex. 6, ¶ 20; Hr’g Tr. Min. 10:13:34–10:37:27.
• The financial commitment and backing of Moore, Miller, Beach, and Captec (the
“Insiders”) is required to obtain favorable terms for refinancing or to refinance at all.
See Debtor, Ex. 6, ¶ 20; Hr’g Tr. Min. 10:13:34–10:37:27.
• If Woodvine files suit and/or successfully pursues any of the Insiders to enforce their
guaranties of the Debtor’s debts, the Insiders would not be able to support the Debtor
in refinancing the balance of its debt to make the balloon payments to creditors at
Month 36 as required by the Plan. See Debtor, Ex. 6, ¶ 20; Hr’g Tr. Min. 10:13:34–
10:37:27.
Given those findings, and particularly the fact that each of the Insiders has guaranteed
payment of the prepetition debts of the Debtor, the Court finds that the Insiders and the Debtor
enjoy an identity of interest such that a suit against any of the Insiders is essentially a suit against
the Debtor. Further, as the Chief Executive Officer and day-to-day manager of the Debtor, Moore
is vital to the Debtor’s successful reorganization; to allow Woodvine to proceed with a guaranty
action against Moore would divert the time, attention, and resources of the Debtor’s executive and
manager from effecting the Debtor’s reorganization efforts. Equally so, the Debtor’s ability to
refinance the balance of its unpaid debts at the end of the three-year Plan term is crucial to its
ability to reorganize; a guaranty suit lodged by Woodvine against any of the Insiders could
negatively affect the strength of any guaranty provided and discourage any future infusion of
capital or financing, thus adversely impacting the Debtor’s reorganization Plan and creditor
recoveries. The Court therefore finds that the Debtor has satisfied the Zale Corp. “unusual
circumstances” test warranting the issuance of a temporary, non-debtor injunction to facilitate the
successful implementation of the Plan. See 62 F.3d 746, 761 (5th Cir. 1995); see also Neutra, Ltd.

v. Terry (In re Acis Capital Mgmt., L.P.), 604 B.R. 484, 525–26 (N.D. Tex. 2019); In re Bernhard
Steiner Pianos USA, Inc., 292 B.R. 109, 116–17 (Bankr. N.D. Tex. 2002); In re Seatco, Inc., 257
B.R. 469, 477 (Bankr. N.D. Tex. 2001).
In addition to satisfying the “unusual circumstances” test, “[w]hen a bankruptcy court
issues a temporary injunction under § 105(a) as part of a confirmed plan, the bankruptcy court
must still consider the four-prong preliminary injunction test.” In re Acis Capital Mgmt., L.P., 604
B.R. at 528 (citing In re Seatco, 257 B.R. at 477). Those factors are (1) a substantial likelihood of
success on the merits, (2) a substantial threat of irreparable injury if the injunction is not issued,
(3) the threatened injury if the injunction is denied outweighs the threatened harm the injunction
may cause to the party opposing the injunction, and (4) the issuance of an injunction will not

disserve the public interest. See, e.g., Byrum v. Landreth, 566 F.3d 442, 445 (5th Cir. 2009);
Commonwealth Oil Ref. Co. v. U.S.E.P.A. (In re Commonwealth Oil Ref. Co.), 805 F.2d 1175,
1188–89 (5th Cir. 1986).
Here, all factors are met. “The first factor, when applied to a temporary plan injunction,
turn on whether the reorganization plan is likely to succeed.” In re Acis Capital Mgmt., L.P., 604
B.R. at 528. No party in interest objected to feasibility of the Plan. The record shows that the
Debtor has downsized its corporate footprint, has provided for reasonable contingencies including
a working capital reserve, and presented realistic and attainable business projections. See Debtor
Ex. 5, ¶ 10; Hr’g Tr. Min. 10:37:36–10:49:49 (Apr. 23, 2025). This Court already determined at
the confirmation hearing that the Plan—including the expectation that the Debtor will refinance
its outstanding debt with the help of the Insiders at Month 36—is feasible. That finding supports
a conclusion that the Plan is substantially likely to succeed. See In re Acis Capital Mgmt., L.P.,
604 B.R. at 528–29. Moreover, the record reflects that the opportunity for this Debtor to

successfully reorganize is seriously jeopardized if Woodvine is not temporarily restrained from its
efforts to collect the amounts that it will be paid under the Plan from any of the Insiders pursuant
to their guaranties. Thus, the Debtor faces a substantial threat of irreparable injury without the
issuance of the temporary injunction. See id. at 529.
Under the Debtor’s confirmed Plan, Woodvine will be paid in full within the Plan’s three-
year term. But Woodvine is free right now to pursue any amounts owing to it pursuant to the
guaranties that are not being paid under the Plan. And if the Debtor defaults on its Plan payments
at any time during the three-year Plan term and fails to cure the default timely, the injunction
expires and Woodvine is then free to pursue guaranty actions against the Insiders for the full
amounts owed on the debt. The only harm to Woodvine is that it may be forced to accept Plan

payment terms that it does not like. That harm is minimal compared to the harm the Debtor faces
if the temporary injunction is not granted: the Debtor forfeits its ability to reorganize. See id.; In
re Seatco, 257 B.R. at 477.
Finally, the Court finds that issuance of a temporary injunction does not disserve the public
interest. “The public has an interest in allowing businesses to reorganize instead of liquidate.” In
re Acis Capital Mgmt., L.P., 604 B.R. at 529. This Court is also cognizant that, because the
fortunes of the Debtor and the Insiders are inextricably intertwined, issuance of a temporary
injunction against Woodvine also serves to protect the Debtor’s numerous other creditors and their
rights to receive equitable distributions under the Plan. Thus, temporarily enjoining Woodvine
from proceeding with guaranty actions for debt that is being paid through the Plan “is not a
distortion of Congressional purpose.” Am. Imaging Servs., Inc. v. Eagle-Picher Indus., Inc. (In re
Eagle-Picher Indus., Inc.), 963 F.2d 855, 862 (6th Cir. 1992).
For the foregoing reasons,
IT IS ORDERED that the temporary injunction provided in Article X of the confirmed
Plan to facilitate the successful implementation of the Plan is properly issued pursuant to 11 U.S.C.
§§ 105(a) and 1123(b)(6).°
IT IS FURTHER ORDERED that the Debtor shall serve this Order via first-class U.S.
Mail on the required parties who will not receive a copy through the Court’s CM/ECF system
pursuant to the Federal Rules of Bankruptcy Procedure, this Court’s Local Rules, and any Order
limiting service in this case, and file a certificate of service to that effect within three days.
New Orleans, Louisiana, this 13th day of May, 2025.

UNITED STATES BANKRUPTCY JUDGE

° Section 1123(b)(6) provides that a plan of reorganization may “include any other appropriate
provision not inconsistent with the applicable provisions of this title.”
16

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11050097. Public record. Not legal advice.