In re Omega Optical, Inc.
, 476 B.R. 157 (Bankr. E.D.Pa. 2012) –
A bank filed a proof of claim in a bankruptcy that erroneously
identified its claim as unsecured. After confirmation of a
chapter 11 plan of reorganization that treated the claim as
unsecured, the bank filed a motion to allow it to amend its proof
of claim to reflect the fact that the claim was secured.
Omega focused on the question of what it takes to
extinguish a lien through a plan.
The debtor listed Sovereign Bank in its bankruptcy schedules as
a secured creditor with a disputed claim, valuing the collateral at
$10,000. The debtor's proposed plan of reorganization
asserted that the bank's claim was not properly perfected, and
accordingly its secured claim was reclassified as an unsecured
claim under the plan – with the bank required to terminate
the UCC financing statement and release all other liens upon the
effective date of the plan. A confirmation hearing was held,
and the bank did not
