Matter of Christopher ( 1994 )


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  •                     United States Court of Appeals,
    
                                   Fifth Circuit.
    
                                    No. 93-1894.
    
             In the Matter of Charles Simpson CHRISTOPHER, Debtor.
    
                    SEQUA CORPORATION, et al., Appellants,
    
                                           v.
    
                    Charles Simpson CHRISTOPHER, Appellee.
    
                                   Aug. 15, 1994.
    
    Appeal from the United States District Court for the Northern
    District of Texas.
    
    Before KING and SMITH, Circuit Judges, and KAZEN,* District Judge.
    
         KING, Circuit Judge:
    
         Charles Simpson Christopher was sued by Sequa Corporation and
    
    Chromalloy American Corporation in New York state court in early
    
    1989.     At the time the suit was filed, the plaintiffs had actual
    
    knowledge    that   Christopher    had      earlier   filed   for   Chapter   11
    
    bankruptcy.     His plan of reorganization was confirmed in August
    
    1989.     Christopher later brought an adversary proceeding against
    
    Sequa Corporation and Chromalloy American Corporation, and the
    
    bankruptcy     court   held    that    those     parties'     claims   against
    
    Christopher had been discharged upon confirmation of Christopher's
    
    plan of reorganization.       Sequa Corporation and Chromalloy American
    
    Corporation now appeal, arguing principally that their claims
    
    against     Christopher,   which      accrued    postpetition,      cannot    be
    
    discharged consistently with the requirements of the Due Process
    
         *
          District Judge of the Southern District of Texas, sitting
    by designation.
    
                                           1
    Clause because they received inadequate notice of Christopher's
    
    bankruptcy proceedings.
    
                                    I. BACKGROUND
    
                                          A. FACTS
    
          Charles Simpson Christopher filed for reorganization under
    
    Chapter 11 of the United States Bankruptcy Code in September 1987.
    
    After Christopher filed his petition, but prior to confirmation of
    
    his plan of reorganization, he joined a group of investors known as
    
    Resolute Holdings, Inc. ("RHI").             This investment group was in the
    
    business of acquiring insurance companies.                   Among the companies
    
    that RHI was interested in acquiring were Chromalloy American
    
    Insurance Group, Inc. and its insurance subsidiaries (collectively
    
    "CAIGI").1     It appears that CAIGI was owned by Sequa Corporation
    
    ("Sequa").     The acquisition of CAIGI by RHI was effectuated on May
    
    15,   1988.        Sequa   concedes    that,       during    the   course   of   the
    
    negotiations       concerning   CAIGI,       Sequa    was    "made   aware"      that
    
    Christopher had at some prior date petitioned for bankruptcy relief
    
    under Chapter 11.
    
          RHI's dealings quickly spawned litigation, including a lawsuit
    
    filed by Sequa in New York state court against RHI, Christopher,
    
    and other entities in 1989. According to Sequa's pleadings in that
    
    lawsuit,     the   following    sequence      of    events    took   place.      The
    
    Commissioner of the Rhode Island Department of Business Regulation
    
    and Insurance ("the Commissioner") issued a Conditional Order on
    
    
          1
          According to Sequa, CAIGI later changed its name to
    American Universal Insurance Group.
    
                                             2
    May 27, 1988, approving RHI's acquisition of CAIGI on certain
    
    conditions.    Sequa received $7,000,000 from RHI on July 15, 1988;
    
    unbeknownst to Sequa, however, RHI had violated the Commissioner's
    
    Conditional Order by extracting the $7,000,000 from certain of the
    
    subsidiary insurance companies within CAIGI.          In September 1988,
    
    the Commissioner was appointed temporary receiver of those same
    
    CAIGI companies, and in a series of meetings soon thereafter the
    
    Commissioner threatened to void the transaction and force the
    
    parties to unwind the deal unless Sequa immediately restored the
    
    $7,000,000 to the source companies.        Sequa complied and returned
    
    the money.     Sequa and its wholly-owned subsidiary Chromalloy
    
    American   Corporation    (collectively,    the    "Sequa    Group"   or   the
    
    "Group")   then   filed   the   lawsuit    in   New   York    against      RHI,
    
    Christopher, and related entities and persons; the record contains
    
    an amended complaint from that lawsuit dated January 18, 1989,
    
    which includes counts for breach of contract, unjust enrichment,
    
    tortious interference with contractual relations, and fraudulent
    
    misrepresentation.
    
         Christopher's reorganization plan was confirmed on August 24,
    
    1989, in the midst of the New York litigation instigated by the
    
    Sequa Group.   Because the claims of Sequa and Chromalloy American
    
    Corporation arose after commencement of Christopher's bankruptcy
    
    case, neither entity was listed or required to be listed as a
    
    creditor in Christopher's bankruptcy proceedings, and they never
    
    filed any papers or otherwise participated in those proceedings.
    
                               B. PROCEDURAL HISTORY
    
    
                                        3
          On July 24, 1991, Christopher filed an adversary proceeding in
    
    the United States Bankruptcy Court for the Northern District of
    
    Texas seeking a declaratory judgment that certain claims against
    
    him   had   been   discharged   by   the   confirmation   of   his   plan    of
    
    reorganization.      Those claims included the claims that the Sequa
    
    Group was pursuing in its New York litigation, as well as numerous
    
    other claims against Christopher by other parties not now before
    
    this court.     On September 23, 1992, the bankruptcy court presided
    
    over trial on the merits of Christopher's complaint and the Group's
    
    defenses.     The bankruptcy court held that the Group's claims had
    
    been discharged.      Christopher v. American Universal Ins. Group,
    
    Inc. (In re Christopher), 
    148 B.R. 832
     (Bankr.N.D.Tex.1992).                The
    
    Group appealed to the district court, which affirmed the bankruptcy
    
    court's judgment without additional findings of fact or conclusions
    
    of law.     This appeal ensued.
    
                                      C. ISSUES
    
          The Sequa Group raises several arguments for reversal.                It
    
    contends that the discharge of its claims against Christopher was
    
    erroneous because (1) the discharge of its claims would violate due
    
    process as a result of the insufficient notice it received, (2)
    
    Christopher suffers from "unclean hands," (3) Christopher should
    
    have been equitably estopped from claiming discharge, and (4)
    
    Christopher waived his right to claim discharge.
    
                             II. STANDARD OF REVIEW
    
           This court reviews findings of facts by the bankruptcy court
    
    under the clearly erroneous standard and decides issues of law de
    
    
                                          4
    novo.   Henderson v. Belknap (In re Henderson), 
    18 F.3d 1305
    , 1307
    
    (5th Cir.1994);   Haber Oil Co. v. Swinehart (In re Haber Oil Co.),
    
    
    12 F.3d 426
    , 434 (5th Cir.1994).     A finding of fact is clearly
    
    erroneous when, although there is enough evidence to support it,
    
    the reviewing court is left with a firm and definite conviction
    
    that a mistake has been committed.   United States v. United States
    
    Gypsum Co., 
    333 U.S. 364
    , 395, 
    68 S. Ct. 525
    , 541-42, 
    92 L. Ed. 746
    
    (1948);   In re Henderson, 18 F.3d at 1307.    If the lower court's
    
    account of the evidence is plausible in light of the record viewed
    
    in its entirety, the court of appeals may not reverse it even
    
    though convinced that, had it been sitting as the trier of fact, it
    
    would have weighed the evidence differently.    Anderson v. City of
    
    Bessemer City, 
    470 U.S. 564
    , 573-74, 
    105 S. Ct. 1504
    , 1511-12, 
    84 L. Ed. 2d 518
     (1985).
    
                               III. ANALYSIS
    
                               A. DUE PROCESS
    
         The Sequa Group's first due process argument is that the
    
    bankruptcy court erred in discharging its postpetition claims
    
    against Christopher because the Group was not given formal notice
    
    of the bankruptcy proceedings involving Christopher.        In the
    
    alternative, the Sequa Group argues that, even if it was not
    
    entitled to formal notice, the actual notice of the bankruptcy
    
    proceedings received by the Group was insufficient to satisfy due
    
    process and so the confirmed plan cannot be res judicata as to the
    
    Group. We address the Group's second argument first, after a brief
    
    review of the law of bankruptcy applicable to the instant case.
    
    
                                     5
                                1. Legal Background
    
          Christopher      received   a   discharge     of     indebtedness    under
    
    Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 1141(d).                    This
    
    discharge is broader than that obtained in a Chapter 7 bankruptcy;
    
    while a Chapter 7 discharge deals only with debts incurred prior to
    
    the filing of the petition, § 1141(d) discharges the debtor from
    
    any debt (with certain exceptions) that arose before the date of
    
    confirmation.    3 DAVID G. EPSTEIN   ET AL.,   BANKRUPTCY § 10-30 (1992).
    
         Under § 1141(d)(2), confirmation of a plan of reorganization
    
    does not discharge an individual debtor from any debt excepted from
    
    discharge under § 523 of the Code.        The provision of § 523 that has
    
    been the focus of all attention in the instant case is § 523(a)(3),
    
    which excepts from the discharge of an individual debtor any debt
    
              (3) neither listed nor scheduled under section 521(1) of
         this title, with the name, if known to the debtor, of the
         creditor to whom such debt is owed, in time to permit—
    
                     (A) if such debt is not of a kind specified in
                paragraph (2), (4) or (6) of this subsection, timely
                filing of a proof of claim, unless such creditor had
                notice or actual knowledge of the case in time for such
                timely filing; or
    
                     (B) if such debt is of a kind specified in paragraph
                (2), (4) or (6) of this subsection, timely filing of a
                proof of claim and timely request for a determination of
                dischargeability of such debt under one of such
                paragraphs, unless such creditor had notice or actual
                knowledge of the case in time for such timely filing and
                request[.]
    
    The bankruptcy court relied on § 523(a)(3) in concluding that the
    
    Sequa Group's claims were discharged despite the Group's omission
    
    from the    schedule   of   creditors     because    the    Group   had   actual
    
    knowledge   of   Christopher's    bankruptcy.        It     is   not,   however,
    
    
                                          6
    entirely clear that this is a correct reading of § 523;                       as the
    
    Group points out, § 523(a)(3) appears to be limited to debts owed
    
    to "creditors," which is a defined term including only prepetition
    
    claimants.    11 U.S.C. § 101(10).            This is not critical to our
    
    decision in the instant case;               even if § 523(a)(3) is wholly
    
    inapplicable to the Group's claims, § 1141(d) continues to mandate
    
    that those claims are discharged if they existed prior to the date
    
    of confirmation of the plan unless some other provision of § 523
    
    applies to except those claims from discharge.                 The Group makes no
    
    argument based on § 523, premising its entire argument on due
    
    process.
    
          The focus of the Group's due process argument is the Code's
    
    failure to require any specific form of notice of bankruptcy
    
    proceedings to persons holding claims that arise postpetition. All
    
    parties agree with the bankruptcy court's holding that nothing in
    
    the Bankruptcy Code or Bankruptcy Rules requires a Chapter 11
    
    petitioner to serve notice of the Chapter 11 proceedings on parties
    
    with whom the petitioner deals postpetition.                   148 B.R. at 835.
    
    Contrary to the Group's suggestion at oral argument, we concur with
    
    the   bankruptcy    judge's   view   that     the   lack    of    such    a   notice
    
    requirement    in    the   Code   was       probably     not     the     result   of
    
    congressional oversight.      The simple fact is that parties who deal
    
    with a bankrupt postpetition are frequently entitled to priority
    
    under §§ 503 and 507 of the Code, giving them an added level of
    
    protection as compared to the prepetition claimants. Additionally,
    
    the   plan    of    reorganization      cannot      be     confirmed      under    §
    
    
                                            7
    1129(a)(9)(A) unless the plan provides for the payment in cash and
    
    in full of persons holding "claims" for administrative expenses
    
    under §§ 503 and 507.            Thus, persons holding claims against the
    
    debtor that arise postpetition are in some respects better able to
    
    protect their interests than are prepetition claimants.                     Although
    
    the    Group    makes     some   attempt       to   characterize    itself    as   an
    
    administrative "creditor," it does not make any argument based on
    
    the plan's failure to treat it as such, nor does it seek to unravel
    
    the plan almost five years after confirmation.                     The Group seeks
    
    only    to     be   allowed      to   proceed        with   its   lawsuit    against
    
    Christopher's postconfirmation assets—in other words, to avoid the
    
    discharge      of   its   claims      against       Christopher   arising    between
    
    petition and confirmation.
    
                                     2. Actual Notice
    
            The Sequa Group argues that the bankruptcy court erred in
    
    determining that it received sufficient notice of Christopher's
    
    Chapter 11 bankruptcy proceeding to satisfy the requirements of due
    
    process.       The general rule is that due process requires
    
           notice reasonably calculated, under all the circumstances, to
           apprise interested parties of the pendency of the action and
           afford them an opportunity to present their objections. The
           notice must be of such nature as reasonably to convey the
           required information, and it must afford a reasonable time for
           those interested to make their appearance.
    
    Mullane v. Central Hanover Bank & Trust Co., 
    339 U.S. 306
    , 314, 
    70 S. Ct. 652
    , 657, 
    94 L. Ed. 865
     (1950) (citations omitted).                    The Court
    
    applied Mullane in the bankruptcy context in Bank of Marin v.
    
    England, 
    385 U.S. 99
    , 
    87 S. Ct. 274
    , 
    17 L. Ed. 2d 197
     (1966), and we
    
    recently did so in the case of Grossie v. Sam (In re Sam), 
    894 F.2d 8
    778, 781 (5th Cir.1990).             See generally 5 COLLIER       ON   BANKRUPTCY ¶
    
    1141.01[4][b] (Lawrence P. King ed., 15th ed. 1994);                    Nicholas A.
    
    Franke, The Code and the Constitution:                Fifth Amendment Limits on
    
    the Debtor's Discharge in Bankruptcy, 17 PEPP.L.REV. 853 (1990).
    
          We briefly recount the bankruptcy court's findings of fact
    
    indicating that the Sequa Group had actual notice of Christopher's
    
    ongoing bankruptcy proceedings when its claims arose.                        First,
    
    Christopher's bankruptcy was discussed at a meeting during early
    
    RHI-Sequa negotiations regarding the purchase of CAIGI by RHI, and
    
    the   court    found   that    the    parties     specifically    discussed       the
    
    propriety of Christopher's participation in RHI because of his
    
    bankruptcy.      148 B.R. at 834.         The vice-president of Chromalloy
    
    American      Insurance    Group,     Inc.    also    wrote   a   letter    to    RHI
    
    concerning the prospective purchase;               the letter referred to the
    
    fact that Christopher's bankruptcy had been discussed with the
    
    Rhode Island Insurance Commissioner and requested RHI to amend its
    
    filings regarding its purchase offer to include formal disclosure
    
    of Christopher's bankruptcy.              Id.        In addition to the facts
    
    regarding notice cited by the bankruptcy court, Christopher directs
    
    our attention to a document in the record which is a letter from
    
    the Group's attorneys to the judge presiding over the New York
    
    lawsuit    dated   April      1989   in   which      Christopher's      Chapter    11
    
    bankruptcy is specifically referred to.
    
          The Sequa Group does not challenge the bankruptcy court's
    
    factual findings, but contends only that the court erred in holding
    
    that the notice given to the Group was constitutionally adequate
    
    
                                              9
    under Mullane.     The Group highlights the facts that it had no
    
    claims against Christopher at the time it received notice of
    
    Christopher's bankruptcy and that once the Group's claims arose,
    
    Christopher never notified the Group of important dates such as the
    
    deadline for filing objections to the plan of reorganization or the
    
    date of the hearing on confirmation of the plan.
    
           The Group cites a number of cases in support of its position,
    
    beginning with City of New York v. New York, New Haven & Hartford
    
    R.R., 
    344 U.S. 293
    , 
    73 S. Ct. 299
    , 
    97 L. Ed. 333
     (1953), which was
    
    decided under the Bankruptcy Act of 1898.     In that case, the City
    
    of New York owned liens on real estate owned by the railroad, and
    
    the railroad subsequently went through reorganization under § 77 of
    
    the Bankruptcy Act.   Id. at 294, 73 S.Ct. at 300.   The court set a
    
    deadline for the filing of claims, but only the railroad's mortgage
    
    trustees and creditors who had already appeared in court received
    
    notice of this order by mail.     Id.   Other creditors, such as the
    
    City of New York, were served by newspaper publication.     Id.   The
    
    Court considered whether the City's liens were discharged by the
    
    final decree in the reorganization and concluded that they were not
    
    because the judge who presided over the bankruptcy did not comply
    
    with § 77(c)(8) of the Bankruptcy Act, which required the judge to
    
    "cause reasonable notice of the period in which claims may be
    
    filed, ... by publication or otherwise."     Id. at 296, 73 S.Ct. at
    
    301.    The Court held that publication was not "reasonable notice"
    
    to the City of New York under the circumstances of the case and
    
    that the City's knowledge of the reorganization did not impose a
    
    
                                     10
    duty of inquiry on the City in order to protect its rights.           Id. at
    
    296-97, 73 S.Ct. at 301.       As the Court remarked, "even creditors
    
    who have knowledge of a reorganization have a right to assume that
    
    the statutory "reasonable notice' will be given them before their
    
    claims are forever barred."        Id. at 297, 73 S.Ct. at 301.
    
          Although City of New York is plainly similar to the instant
    
    case, it may be distinguished by the fact, which we observed in In
    
    re Sam, 894 F.2d at 781, that the Court apparently decided the case
    
    on statutory rather than constitutional grounds.          See In re Intaco
    
    Puerto Rico, 
    494 F.2d 94
     (1st Cir.1974) (applying City of New York
    
    to a similar case arising under Chapter X of the Bankruptcy Act as
    
    a matter of statutory interpretation);          In re Harbor Tank Storage
    
    Co., 
    385 F.2d 111
     (3d Cir.1967) (same).                The Tenth Circuit,
    
    however, has relied in part on City of New York in holding that a
    
    due process violation had occurred on facts similar to the instant
    
    case.     In Reliable Elec. Co. v. Olson Constr. Co., 
    726 F.2d 620
    ,
    
    621 (10th Cir.1984), a construction subcontractor ("Reliable")
    
    withdrew from a project and filed a petition under Chapter 11
    
    shortly thereafter.      The general contractor ("Olson") was told in
    
    a   telephone   conversation      with    Reliable's   attorney   that   the
    
    reorganization proceedings had been instituted, but he received no
    
    further    information    about    the    bankruptcy   proceedings.      Id.
    
    Reliable then sued Olson in state court, and Olson removed to
    
    federal bankruptcy court and counterclaimed against Reliable.            Id.
    
    Olson ultimately prevailed on both Reliable's claim and its own
    
    claim, but not until after Reliable's plan was confirmed.                The
    
    
                                         11
    bankruptcy court denied Reliable's motion requesting the court to
    
    find that Olson's claim had been discharged when the plan was
    
    confirmed.         Id. at 621-22.        The Tenth Circuit affirmed, holding
    
    that "the discharge of a [prepetition] claim without reasonable
    
    notice of the confirmation hearing is violative of the fifth
    
    amendment to the United States Constitution."                 Id. at 623.
    
           The Tenth Circuit extended its holding in Reliable Elec. Co.
    
    to cases involving creditors whose claims arise postpetition in
    
    Dalton Dev. Project #1 v. Unsecured Creditors Comm. (In re Unioil),
    
    
    948 F.2d 678
     (10th Cir.1991).             In that case, the debtor engaged in
    
    unauthorized postpetition transfers of interests in some oil and
    
    gas     properties         to   several    partnerships,      including     Dalton
    
    Development Project # 1 ("Dalton").              Id. at 679-80.    The transfers
    
    were    not    discovered        until     two   years   after     the    plan    of
    
    reorganization was confirmed, and the bankruptcy court granted the
    
    motion of the creditors committee to set aside the transfers.                    Id.
    
    at 680.    The court also held that any claim against the debtor held
    
    by Dalton was barred by the confirmation of the reorganization
    
    plan.     Id. at 681.           The Tenth Circuit reversed this holding,
    
    concluding that Reliable Elec. Co. places the burden on the debtor
    
    to provide formal notice of the confirmation hearing to a known
    
    creditor      if    that    creditor's    claims   are   to   be   discharged    in
    
    bankruptcy.        Id. at 683.
    
           We have concluded that it does not offend due process to view
    
    actual notice of a debtor's bankruptcy to a prepetition creditor as
    
    placing a burden on the creditor to come forward with his claim.
    
    
                                               12
    In In re Sam, we considered a case in which the claimant filed a §
    
    1983 lawsuit against a police officer several months after the
    
    officer had filed for bankruptcy.       In re Sam, 894 F.2d at 778.   The
    
    claimant was not listed as a creditor, and the first time he heard
    
    of the debtor's bankruptcy was eighteen days before the deadline
    
    for filing claims in the bankruptcy court, when the claimant's
    
    attorney received a notice of the automatic stay identifying the
    
    bankruptcy court, case number, and the names of the debtor and his
    
    attorney.     Id. at 778-79.   Although the claimant did not receive
    
    notice of the actual bar date until after it had passed, we
    
    affirmed the lower courts' holdings that the claim was time-barred.
    
    Id.   Rejecting the claimant's due process argument, we stated that
    
    when the claimant received the notice of the automatic stay "he was
    
    on notice that his section 1983 claim against Sam was affected by
    
    Sam's bankruptcy, and he had eighteen days to inquire as to the bar
    
    date and file his complaint or a motion to extend the bar date."
    
    Id. at 781.    "[B]ecause that notice apprised him of the pendency of
    
    the action and was timely enough to afford him an opportunity to
    
    present his objections, it satisfies constitutional procedural due
    
    process requirements."      Id. at 782.
    
          The Sequa Group argues that In re Sam is distinguishable from
    
    the instant case and that dicta in In re Sam actually supports the
    
    Group's position.     As we have already noted, the In re Sam court
    
    did not find City of New York controlling because that case
    
    "apparently was decided on statutory rather than constitutional
    
    grounds."     Id. at 781.   The In re Sam court went on, as the Group
    
    
                                       13
    points out, to distinguish City of New York on the facts;                   the In
    
    re Sam court opined that the Court in City of New York required
    
    that creditors receive actual notice of the specific bar date
    
    because under the Bankruptcy Act the setting of this date was
    
    discretionary     with   the   judge.        Under    modern    Bankruptcy    Rule
    
    4007(c), the In re Sam court observed, the bar date is established
    
    as sixty days from the first date set for a meeting of creditors
    
    under § 341(a).      Id. at 781.     The Sequa Group argues that the In re
    
    Sam   court   thus    implicitly     recognized       that    actual    notice   of
    
    bankruptcy    proceedings       in    general    is     not    constitutionally
    
    sufficient if the pertinent date is one that is set at the
    
    discretion of the debtor or the court, such as the date of the
    
    hearing on confirmation of the plan of reorganization.
    
          Although the court's opinion in In re Sam does contain dicta
    
    that arguably support the Sequa Group's position, it is the holding
    
    of the case upon which we must focus our attention.                    The precise
    
    question in that case was whether the notice received by the
    
    claimant—a notice of automatic stay, received eighteen days before
    
    the bar date, that did not even recite the bar date—was sufficient
    
    to satisfy due process.        We concluded that it was constitutionally
    
    sufficient for two reasons:          (1) the notice apprised the claimant
    
    of the pendency of the action, and (2) it was sufficiently timely
    
    to permit the claimant to present his objections.                      Id. at 782.
    
    This seems to us to be consistent with language in Bank of Marin,
    
    in which the Court considered whether a trustee in bankruptcy could
    
    hold a bank liable for honoring checks drawn by a depositor before
    
    
                                            14
    the depositor filed for bankruptcy but presented for payment after
    
    the filing for bankruptcy if the bank had no notice of the filing.
    
    Bank of Marin, 385 U.S. at 100, 87 S.Ct. at 275-76.             The Court
    
    concluded that the bank could not be held liable consistently with
    
    due process, and stated that "[t]he kind of notice required is one
    
    "reasonably calculated, under all the circumstances, to apprise the
    
    interested parties of the pendency of the action.' "           Id. at 102,
    
    87 S.Ct. at 277 (quoting Mullane, 339 U.S. at 314, 70 S.Ct. at
    
    657).
    
           The In re Sam analysis is also consistent with that used by
    
    the Eleventh Circuit in Alton v. Byrd (In re Alton), 
    837 F.2d 457
    
    (11th Cir.1988) (per curiam).           In that case, Alton filed under
    
    Chapter 11 after Byrd had filed suit against Alton in federal
    
    court.    Id. at 458.   Although Byrd was never listed as a creditor
    
    in the bankruptcy proceedings, Byrd's counsel did promptly receive
    
    a copy of the notice of Alton's Chapter 11 proceeding and automatic
    
    stay.    Id.   The notice did not indicate the date of the Chapter 11
    
    filing    or   the   date   set   for    the   creditors'   meeting,   id.;
    
    nevertheless, the court held that due process was not offended by
    
    the bankruptcy court's denial of Byrd's late-filed application to
    
    extend time to file a complaint with the bankruptcy court, id. at
    
    460.     As the court succinctly stated, "[a]t a time when he could
    
    have protected himself, creditor Byrd received actual written
    
    notice of the bankruptcy proceeding, a notice adequate "to apprise
    
    [him] of the pendency of the action and afford [him] an opportunity
    
    to present [his] objections.' "          Id. at 460-61 (quoting Mullane,
    
    
                                        15
    399 U.S. at 314, 70 S.Ct. at 2142-43).
    
          From the foregoing, we conclude that the first prong of the
    
    due process analysis from In re Sam—notice apprising the claimant
    
    of   the   pendency   of    the   action     affecting   his   rights—has     been
    
    satisfied in the instant case.          Proceeding to the second prong of
    
    the analysis, which is whether the notice was sufficiently timely,
    
    we conclude that this question must also be answered in the
    
    affirmative.       As      we   have   seen,    the    Group   had   notice    of
    
    Christopher's bankruptcy even before its claims against Christopher
    
    arose.     As we have already explained in part III.A.1, supra,
    
    claimants whose claims arise postpetition are amply protected by
    
    several features of the Bankruptcy Code.                   As even the Group
    
    recognizes,    a   strict       requirement     of    formal   notice   to    all
    
    postpetition claimants could be extremely onerous, especially for
    
    large debtors.        Thus, given the actual notice of Christopher's
    
    bankruptcy proceeding possessed by the Group, we conclude that due
    
    process is not offended in this case by requiring postpetition
    
    claimants in the Group's position to come forward and protect their
    
    enhanced rights under the Code or else lose their rights through
    
    the sweeping discharge of Chapter 11.                 This is not a case like
    
    Pettibone Corp. v. Payne (In re Pettibone Corp.), 
    151 B.R. 166
    
    (Bankr.N.D.Ill.1993), in which a Chapter 11 petitioner tortiously
    
    injures someone just prior to plan confirmation and the tort victim
    
    does not learn of the bankruptcy until after confirmation, and we
    
    accordingly express no opinion regarding the requirements of due
    
    process in such a case.
    
    
                                            16
           In sum, we conclude that the actual notice of Christopher's
    
    bankruptcy possessed by the Sequa Group was sufficient to satisfy
    
    the dictates of due process and Mullane.             We decline the Group's
    
    invitation to use the Due Process Clause to fill what appears to us
    
    to be an intentional and generally unproblematic gap in the Code's
    
    notice provisions.
    
                                 3. Formal Notice
    
            This argument need not detain us in light of the foregoing.
    
    The Sequa Group contends that due process entitled it to formal
    
    notice of the date of the hearing on confirmation of Christopher's
    
    plan of reorganization.        We have already seen that due process
    
    requires only notice that is both adequate to apprise a party of
    
    the pendency of an action affecting its rights and timely enough to
    
    allow the party to present its objections.           In re Sam, 894 F.2d at
    
    782.    In In re Sam we held that notice of an automatic stay
    
    eighteen days before a deadline for filing claims was sufficient
    
    notice to satisfy due process even though the notice of the stay
    
    did not indicate the deadline date.         Id. at 781-82.    Formal notice
    
    of the deadline was not required in In re Sam;           neither was formal
    
    notice of Christopher's confirmation hearing required by the Due
    
    Process Clause in the instant case.
    
                                B. EQUITABLE ARGUMENTS
    
           The Sequa Group next presents three arguments premised on the
    
    equitable   concepts   of    unclean    hands,   equitable   estoppel,   and
    
    waiver.
    
                                 1. Unclean Hands
    
    
                                           17
            In the Group's view, "[t]here is scarcely a debtor less
    
    worthy of the equitable discharge than Christopher."            The Group
    
    contends that Christopher cannot take advantage of the equitable
    
    remedy of discharge because he suffers from unclean hands for the
    
    following reasons:    (1) Christopher failed to serve the Group with
    
    notice of any proceedings in his bankruptcy case;         (2) Christopher
    
    deliberately concealed the Group's claims against him from the
    
    bankruptcy court and his creditors;          (3) Christopher failed to
    
    mention in the New York litigation with the Sequa Group that the
    
    confirmation of his plan of reorganization would discharge the
    
    Group's claims against him;     (4) Christopher actively defended the
    
    New York litigation while secretly seeking discharge of the Group's
    
    claims;    and (5) Christopher retained counsel in the New York
    
    litigation without prior bankruptcy court approval. The bankruptcy
    
    court   rejected   this   argument,    observing   that   nothing   in   the
    
    Bankruptcy Code or Rules requires a debtor-in-possession to serve
    
    notice of Chapter 11 proceedings upon parties with whom it deals
    
    postpetition and that the Sequa Group had actual knowledge of
    
    Christopher's bankruptcy and was on notice of the ramifications of
    
    nonparticipation.    148 B.R. at 836.
    
         The Group relies in part on dicta in Doucette v. Pannell (In
    
    re Pannell), 
    136 B.R. 430
     (N.D.Tex.), aff'd, 
    974 F.2d 172
     (5th
    
    Cir.1992) (unpublished opinion).           In that case, Doucette was
    
    pursuing fraud claims in state court against the debtor, Pannell,
    
    at the same time Pannell was going through Chapter 11 bankruptcy.
    
    Id. at 432-33. Although Doucette somehow had notice of the Chapter
    
    
                                          18
    11 proceedings, id. at 432 n. 2, Doucette did not receive notice
    
    when Pannell's case was converted to a Chapter 7 bankruptcy, nor
    
    did Doucette receive notice of the new bar dates for filing claims
    
    and dischargeability complaints then established, id. at 433.
    
    Doucette obtained a judgment against Pannell in the state court
    
    after the bar dates had passed and filed a late proof of claim and
    
    complaint for exception to discharge in the bankruptcy court, both
    
    of which the bankruptcy court dismissed for lateness.              Id.      The
    
    district court reversed the bankruptcy court on statutory grounds,
    
    holding that Doucette did not have "notice or actual knowledge," 11
    
    U.S.C. § 523(a)(3)(B), of the relevant case—the Chapter 7 case—in
    
    time to take appropriate action.         In re Pannell, 136 B.R. at 436.
    
    The Sequa Group places great stock on the court's remark that
    
    "[t]here could hardly be a more blatant case of a debtor abusing
    
    the judicial system in an attempt to defraud a creditor," id. at
    
    437, but this dictum does not warrant reversal in the instant case,
    
    in which the Group had actual knowledge of the debtor's Chapter 11
    
    bankruptcy long before the Group's claim even arose.
    
         The Sequa Group also attempts to rely on cases from various
    
    bankruptcy   courts    discussing        the   fiduciary    duties     of    a
    
    debtor-in-possession    towards    his    creditors.       E.g.,   Whyte     v.
    
    Williams (In re Williams), 
    152 B.R. 123
    , 127 (Bankr.N.D.Tex.1992).
    
    None of the cases cited by the Group persuades us                  that the
    
    bankruptcy   court    erred   in   concluding     on   these   facts     that
    
    Christopher did not have unclean hands. The Group had knowledge of
    
    Christopher's bankruptcy, and Christopher apparently violated no
    
    
                                        19
    statute or rule in failing to provide more information to the Group
    
    than    he   did.     We    find    no   error    in   the   bankruptcy     court's
    
    conclusion.
    
                                    2. Equitable Estoppel
    
            The Sequa Group next relies on the doctrine of equitable
    
    estoppel to prevent Christopher from asserting his Chapter 11
    
    discharge against the Group's claims.             Equitable estoppel requires
    
    (1) a material misrepresentation or concealment (2) made with
    
    actual or constructive knowledge of the true facts (3) with the
    
    intent that the misrepresentation or concealment be acted upon (4)
    
    by a third party without knowledge or means of knowledge of the
    
    true    facts   (5)    who       detrimentally     relies     or     acts   on   the
    
    misrepresentation or concealment.                Neiman-Marcus Group, Inc. v.
    
    Dworkin, 
    919 F.2d 368
    , 371 n. 4 (5th Cir.1990).                     The bankruptcy
    
    court rejected this argument because Christopher made no material
    
    misrepresentation          or     concealment     regarding        his   bankruptcy
    
    proceeding.     148 B.R. at 837.
    
           We reject the argument that Christopher "misrepresented" or
    
    "concealed" his bankruptcy case from the Group based on a theory
    
    that he had a duty to notify the group of such matters as the bar
    
    date for filing proofs of claims, the time for filing acceptances
    
    or rejections of the plan, or the hearing on confirmation of the
    
    plan.    As the parties have agreed, the Bankruptcy Code and Rules
    
    impose no such duty on debtors with respect to parties dealt with
    
    postpetition.       The Due Process Clause does impose certain notice
    
    obligations on debtors who file for bankruptcy, but we have already
    
    
                                             20
    concluded that those obligations were met in the instant case. The
    
    bankruptcy       court      did   not    clearly       err   in   determining     that
    
    Christopher was not guilty of any misrepresentation or concealment.
    
          We thus conclude that the Group is not entitled to relief
    
    under the equitable estoppel doctrine.
    
                                            3. Waiver
    
           Finally the Sequa Group asserts that Christopher waived his
    
    right to claim discharge from any debt owed the Group on its
    
    claims. Waiver may be established by showing that a party actually
    
    intended    to    relinquish       a     known    right      or   privilege.      HECI
    
    Exploration Co., Employees' Profit Sharing Plan v. Holloway (In re
    
    HECI Exploration Co.), 
    862 F.2d 513
    , 523 (5th Cir.1988). The Group
    
    contends that Christopher's conduct in defending the New York state
    
    lawsuit for almost two years after confirmation of his plan of
    
    reorganization manifests his intent to relinquish his right to rely
    
    on his discharge in bankruptcy.                  The bankruptcy court concluded
    
    that Christopher's "litigation of the state court claims against
    
    him did not evidence an actual intent to relinquish [his] right to
    
    discharge of the state court claims."                  148 B.R. at 837.
    
          We   do    not     agree    with    the    Group's      contention   that   the
    
    bankruptcy court clearly erred in finding that Christopher did not
    
    actually intend to relinquish his right to assert against the Group
    
    the   discharge        he    received     in     his   Chapter     11   proceedings.
    
    Christopher testified at trial that he actively defended the New
    
    York lawsuit even after receiving his discharge because his counsel
    
    advised him that the litigation of the Group's postpetition claims
    
    
                                               21
    was not affected by his Chapter 11 proceedings.     This testimony
    
    negates the inference that could be drawn from Christopher's
    
    conduct that he intended not to rely on his discharge in the
    
    Group's New York lawsuit. Indeed, Christopher's testimony supports
    
    another inference that could be drawn from his conduct—that he
    
    simply did not know he could use his discharge as a defense in the
    
    New York lawsuit.   The bankruptcy court's finding that Christopher
    
    did not intend to relinquish a known right is plausible in light of
    
    the record viewed in its entirety and so is not reversible.
    
                               IV. CONCLUSION
    
         For the foregoing reasons, we AFFIRM the judgment of the
    
    district court.
    
    
    
    
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