In re Amr Corp.
| Decision Date | 09 October 2014 |
| Docket Number | Case No. 11-15463 |
| Parties | In re: AMR CORPORATION, ET AL, Debtors. |
| Court | United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York |
(I) GARY BRYANT
Before the Court is the motion of Gary Bryant for an order deeming his proof of claim timely filed pursuant to Rule 9006(b)(1) of the Federal Rules of Bankruptcy Procedure and Section 105(a) of the Bankruptcy Code. His motion is at ECF No. 11941. He asserts that he did not receive adequate notice of the bar date setting the deadline for filing claims in the above Chapter 11 cases, and therefore, the Court should deem his proof of claim timely filed.
In the alternative, he maintains that he meets the excusable neglect standard to permit a late filed claim. For the reasons that follow, the motion will be denied.
The background of this case is fairly simple. Debtors filed the voluntary petition seeking relief under Chapter 11 of the Bankruptcy Code on November 29, 2011. On March 30, 2012, the debtors filed the motion seeking to establish a deadline for filing proofs of claim. ECF No. 2086.
On May 4, 2012, the Court entered the bar date order, which established July 16, 2012, as the bar date in the debtors' cases. ECF No. 2609.
On May 18, 2012, the debtors' claims and noticing agent served, by first class mail, the notice of deadlines for filing proofs of claim, with an attached proof of claim dated May 23, 2012. ECF 2888.
On May 18, 2012, the bar date notice was mailed toMr. Bryant at 17484 Southwest 34th Court, Miramar, Florida 33029-5588, and it was not returned as undeliverable. ECF No. 3215.
On May 31, 2012, the debtors also had the bar date notice published in ten publications, including the Wall Street Journal, the New York Times, USA Today, and the Miami Herald. ECF No. 3215.
On October 21, 2013, the bankruptcy court entered the confirmation order in these bankruptcy cases. The effective date of the plan was December 9, 2013. See ECF 11402.
Almost ten months after the bar date on May 8, 2013, Mr. Bryant filed suit against AMR in the Southern District of Florida, alleging that he was forced to resign from his employment with AMR on September 18, 2011, due to race discrimination and based on retaliation in violation of Title VII. Bryant v. American Airlines, 2013-cv-21667, Dkt. 30. After being served with Mr. Bryant's complaint, AMR filed a notice of suggestion of bankruptcy with the Florida court. Id. Pursuant to 11 U.S.C. Section 362(a), the Florida court stayed those proceedings.
Mr. Bryant moved to reopen the case in early January 2014. 2013-cv-2166, Dkt. 13. In March of 2014, the Florida court entered AMR's motion to dismiss, agreeing with AMR that Mr. Bryant's claims were discharged and enjoined by the plan and confirmation order, pursuant to Section 1141(d) of theBankruptcy Code. Id. at Dkt. 30. On April 8, 2014, the Florida court denied Mr. Bryant's motion to reopen the case and set aside the dismissal. Id. at Dkt. 32.
Mr. Bryant maintains again that he did not receive adequate notice because he was not listed as an unsecured creditor. He also relies on the fact that he was engaged in mediation with AMR as an excuse for filing a late claim.
The standard of review has been well plowed by the courts. A bar date order is an integral part in the reorganization process. See In re Best Products Corp., 140 B.R. 353, 353-57 (Bankr. S.D.N.Y. 1992). It enables the parties in interest to ascertain with reasonable promptness the identity of those making claims against the estate, and the general amount of the claims, which is a necessary step toward achieving the goal of a successful reorganization. See id.
If individual creditors were permitted to postpone indefinitely the effect of the bar date order, the institutional means for ensuring the sound administration of the bankruptcy estate would be undermined. See First Fidelity Bank, N.A., v. Hooker Inv., Inc., 937 F.2d 833, 840 (2d Cir. 1991).
So the Court turns first to the issue of whether Mr. Bryant was provided with adequate notice. The constitutional standard for due process requires that known creditors in a bankruptcy case receive actual notice of the bar date. See NewYork v. N.Y., N.H. & H.R. CO., 344 U.S. 293, 296-97 (1953) (). In re R.H. Macy & Co., 161 B.R. 355, 359 (Bankr. S.D.N.Y.) (citing Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306 (1950)).
Unless a creditor is given reasonable notice of the bankruptcy proceeding and relevant bar dates, its claim cannot be constitutional discharged. See Grant v. U.S. Home Corp., 223 B.R. 654, 658 (Bankr. S.D.N.Y. 1998).
In Chapter 11, therefore, a known creditor must receive adequate notice before its claim is barred forever. See In re Best Products Corp., 140 B.R. at 357. A bar date is strictly enforced except when a known creditor is not listed on the schedules and fails to receive actual notice of the bar date. Id. at 358.
It is also well settled law that proof that a letter was properly addressed and placed in the mail system creates a presumption that the letter was received in the usual time by the addressee. See Hagner v. U.S., 285 U.S. 427, 430 (1932) (). Thus, upon proof of mailing of a properly addressed letter, a rebuttable presumption of receipt arises. See In re R.H. Macy & Co., 161 B.R. at 359.
Federal courts in New York have held "quiteuniformly" that an affidavit of non-receipt is insufficient to rebut the presumption of receipt created by proof of mailing. See Cablevision Systems Corp. v. Malandra (In re Malandra), 206 B.R. 667, 673 (Bankr. E.D.N.Y 1997); In re R.H. Macy & Co., 161 B.R. at 360 (); see also In re Horton, 149 B.R. 49, 58 (Bankr. S.D.N.Y. 1992), ( that affidavits of creditor's employees are merely general denials that a creditor received the notice, and therefore insufficient to rebut the presumption).
It is possible under certain circumstances to rebut the presumption of mailing. It does require, however, that testimony denying receipt be accompanied by detailed evidence to rebut the presumption, and that evidence includes things like tracking procedures to catalog the receipt of mail. See Hogarth v. N.Y. City Health & Hospice Corp., No. 97-CV-0625, 2000 WL 375242 (S.D.N.Y. Apr. 12, 2000). In Hogarth, the defense successfully rebutted the presumption that the letter was delivered by clearly establishing the use of detailed logs of incoming and outgoing mail that contained no record of the letter in question. See also In re Robinson, 228 B.R. 75, 82 (Bankr. E.D.N.Y. 1998), (ruling that "although the mere denial of receipt does not rebut the presumption, testimony denying receipt in combination with evidence of a standardizedprocedure for processing mail can be sufficient to rebut the presumption.").
Courts in the Second Circuit do not take this issue lightly, given the important functions served by the bar date in bankruptcy cases. This heightened burden recognizes that if a party was permitted to defeat the presumption of receipt of notice resulting from the certificate of mailing simply by giving an affidavit to the contrary, the scheme of deadlines and bar dates under the Bankruptcy Code would come unraveled. See In re R.H. Macy & Co., 161 B.R. at 360 (quoting In re Trump Taj Mahal Assoc., 156 B.R. 928, 939 (Bankr. D.N.J. 1993)).
Applying these principles here, the debtors have submitted evidence that establishes actual notice was provided to Mr. Bryant. More specifically, the debtors provided evidence that the bar notice was mailed to Mr. Bryant and was not returned as undeliverable. Moreover, the address where Mr. Bryant was served is the same address that Mr. Bryant provided in his motion.
Mr. Bryant has not provided sufficient evidence to overcome the mailbox presumption here, including any evidence regarding the tracking of his mail. Therefore, the Court deems that the debtors have met their burden of providing Mr. Bryant with actual notice of the bar date.
It is not entirely clear why the debtors considered Mr. Bryant to be a known creditor that should receive actualnotice of the bar date. I suspect it is likely because the events that formed the basis of a Florida lawsuit in the proposed claim here, took place before the bankruptcy filing, and were likely the subject of some administrative proceeding. But in the unlikely event that one considered Mr. Bryant an unknown creditor, the notice standard would be even lower, and would be satisfied here as well.
More specifically, the debtors would have provided Mr. Bryant with adequate notice as an unknown creditor by publishing the bar date, as they did, in ten local and national publications. See In re BIG, Inc., 476 B.R. 812, 824 (Bankr. S.D.N.Y. 2012) (...
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