In a case arising from the Chapter 11 bankruptcy of oil and gas distributor South Coast Supply Company, the Fifth Circuit found that secured creditor Briar Capital Working Fund Capital LLC waived its right to challenge a jury verdict on appeal by not filing proper post-trial motions. The dispute centered on loan repayments totaling $320,628.04 made to company executive Robert Remmert, which Briar Capital sought to recover as preferential transfers.
The underlying facts involved Remmert, South Coast's COO and Executive VP, who loaned the struggling company $800,000 during the 2014 oil price decline. South Coast repaid him through 31 checks totaling $320,628.04 before filing for bankruptcy in 2017. Under the confirmed bankruptcy plan, the preference claim against Remmert was assigned to Briar Capital, which had been the company's primary secured lender.
At trial, the jury was asked whether Briar Capital proved that the loan payments allowed Remmert to receive more than he would have received in a hypothetical Chapter 7 liquidation. The jury answered 'no,' rejecting the preference claim. Critically, Briar Capital failed to file either a Rule 50(a) motion for judgment as a matter of law during trial or a Rule 50(b) post-verdict motion.
The Fifth Circuit, in an opinion by Judge Stuart Kyle Duncan, ruled that this failure waived Briar Capital's right to challenge the evidence sufficiency on appeal, citing Supreme Court precedent from Unitherm Food Systems. The court rejected Briar Capital's argument that plain error review was still available, noting that a recent Fifth Circuit panel had specifically rejected this position. Even under plain error review, the court found sufficient evidence supported the jury's verdict, including testimony about potential asset undervaluation and other financial uncertainties.