APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION
510 N.E.2d 1045, 157 Ill. App. 3d 757, 110 Ill. Dec. 14 1987.IL.871
Appeal from the Circuit Court of Cook County; the Hon. Alan E. Morrill, Judge, presiding.
JUSTICE SCARIANO delivered the opinion of the court. HARTMAN and BILANDIC, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SCARIANO
The Chicago-Milwaukee Real Estate Corporation appeals from a summary judgment awarding $415,000 to the plaintiff Gina Schroeder (Schroeder) as compensation for the wrongful death of her husband, which occurred in 1981 when the truck he was driving collided with a train owned and operated by the Chicago, Milwaukee, St. Paul and Pacific Railroad Company (the railroad), the predecessor of CMC. The trial court found that a settlement agreement was reached on November 21, 1985, between Schroeder's counsel and an attorney for the trustee of the railroad, which was at that time in reorganization proceedings in Federal court, and that the agreement was enforceable against CMC as the railroad's successor. We affirm.
Several years prior to the filing of this suit, in December 1977, Federal District Court Judge Thomas R. McMillen approved the railroad's petition to be placed in chapter VIII bankruptcy reorganization, and a trustee was named to take over the operation of the railroad. Subsequently, in August 1979 Richard B. Ogilvie (Ogilvie), a partner in the Chicago-based law firm of Isham, Lincoln & Beale (Isham), was appointed trustee and was granted broad powers to operate the ongoing business of the railroad, as illustrated by the reorganization court's order (order No. 1), approving the railroad's petition for reorganization:
"4. The Debtor [Trustee] is authorized in its discretion, from time to time until further order of this Court, out of funds now or hereinafter in its possession, to pay all or part, without limiting the generality thereof:
c. All claims for injuries, death or loss or damage to employees, passengers or others arising from the operation of its railroad and properties.
6. Pending further order of the Court, the Debtor is authorized and empowered to institute or prosecute in any court or before any tribunal of competent jurisdiction all such suits and proceedings as may be necessary in its judgment for the recovery or proper protection of its property or rights, and to liquidate, compromise, adjust or make settlement, by written agreement or consent judgment or otherwise, of any thereof; and likewise to defend and liquidate, compromise, adjust, or make settlement of any actions, proceedings or suits now pending against the Debtor or which may hereafter be asserted or be brought in any court or before any officer, department, commission or tribunal to which the Debtor is or shall be a party; . . .." (Emphasis added.)
Order No. 1 also specifically reserved to the reorganization court the authority and jurisdiction to limit both the time within which suits could be brought and claims settled.
Pursuant to the powers delineated in order No. 1, Ogilvie sold the core assets of the railroad and filed a plan of reorganization (the plan) which was modified and confirmed by the reorganization court on July 12, 1985. The plan provided that on the "Consummation Date" the railroad would cease to exist and the reorganized company would be the owner of all the assets of the railroad free and clear of all liens and encumbrances except as specifically provided in the plan or in an order of the reorganization court. However, the plan did not provide a definite consummation date.
On November 12, 1985, the reorganization court entered "Order No. 866: Final Decree" (final decree) which established November 25, 1985, as the consummation date. Moreover, intending to clarify "certain matters involved in the consummation of the Plan and the discharge of the Trustee," the final decree also directed that:
"Five days before the approved Consummation Date, the Trustee shall file with this Court and serve on the parties a report showing the amount of Allowable Claims paid prior to the Consummation Date and the resulting amount ...