The noteholders appealed the Proposal Trustee's disallowance of their unsecured claims in the BIA proposals of several subsidiary corporations.
The Trustee had determined that the subsidiaries' guarantees were limited to an initial US$3 million advance and did not cover a subsequent US$12 million advance, and that the initial advance had been fully satisfied by a property transfer.
The Superior Court upheld the Trustee's interpretation of the guarantees but found an error in the debt allocation, ruling that US$828,000 of the guaranteed debt remained outstanding and should be recognized as an unsecured claim.
