United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

____________ FILED January 30, 2024 No. 23-30040 Lyle W. Cayce ____________ Clerk

In the Matter of German Pellets Louisiana, L.L.C.; Louisiana Pellets, Incorporated,

Debtors,

Raymond James & Associates, Incorporated; George Longo; Danyal Sattar,

Appellants,

versus

Craig Jalbert,

Appellee. ______________________________

Appeal from the United States District Court for the Western District of Louisiana USDC No. 6:22-CV-5050 ______________________________

Before King, Willett, and Douglas, Circuit Judges. Dana M. Douglas, Circuit Judge: Case: 23-30040 Document: 00517050352 Page: 2 Date Filed: 01/30/2024

No. 23-30040

Louisiana Pellets (LAP)1 built a wood processing facility with hopes of mass-producing fuel pellets. Hope turned to disappointment when financial challenges caused the entity to close shop and file for bankruptcy just months after its manufacturing began. LAP’s bankruptcy process culminated in a Chapter 11 confirmation plan that transferred its remaining assets into a liquidation trust managed by the appointed trustee, Craig Jalbert. A year after the trust’s creation, third parties assigned certain legal claims to the trust that Jalbert pursued in state court. The claims involved misstatements made by another party, Raymond James & Associates, as it helped raise funds to construct LAP’s facility. In response to Jalbert’s filing, Raymond James asserted affirmative defenses, citing a pre-bankruptcy indemnity agreement it made with LAP. The issue in this case is whether Raymond James may maintain those defenses against the assigned claims. The answer, in short, is no: The express language of the confirmation plan enjoined Raymond James’s defensive maneuver. And, in any event, the post-confirmation trust is the wrong entity against whom to invoke LAP’s indemnity obligation. On these grounds, we AFFIRM the bankruptcy court’s ruling. I The Constitution gives Congress the power to establish “uniform Laws on the subject of Bankruptcies throughout the United States.” U.S. Const. art. I, § 8, cl. 4. With that authority, Congress created the Bankruptcy Code, which provides a framework for debtors to “reorder their affairs, make peace with their creditors, and enjoy ‘a new opportunity in life

_____________________ 1 Though this case involves several parties, including LAP’s affiliated entity, German Pellets, this opinion refers to the Appellees as “LAP” and the Appellants as “Raymond James” for clarity.

2 Case: 23-30040 Document: 00517050352 Page: 3 Date Filed: 01/30/2024

No. 23-30040

with a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.’” Grogan v. Garner, 498 U.S. 279, 286 (1991) (quoting Loc. Loan Co. v. Hunt, 292 U.S. 234, 244 (1934)). To achieve those objectives, the Code establishes formal debt-discharging procedures, organiz