In re Hart Ski Mfg. Co., Inc., Bankruptcy No. 3-80-200

• Decision Date: 25 July 1980
• Docket Number: Bankruptcy No. 3-80-200,Adv. No. 80-0092.
• Citation: 5 BR 326
• Parties: In re HART SKI MFG. CO., INC., a Minnesota Corporation, Debtor. BEATRICE FOODS CO., Plaintiff, v. HART SKI MFG. CO., INC., Aetna Business Credit, Inc., and the Unsecured Creditors' Committee of Hart Ski Mfg. Co., Inc., Defendants.
• Court: U.S. Bankruptcy Court — District of Minnesota

5 B.R. 326 (1980)

In re HART SKI MFG. CO., INC., a Minnesota Corporation, Debtor BEATRICE FOODS CO., Plaintiff, v. HART SKI MFG. CO., INC., Aetna Business Credit, Inc., and the Unsecured Creditors' Committee of Hart Ski Mfg. Co., Inc., Defendants.

Bankruptcy No. 3-80-200, Adv. No. 80-0092.

United States Bankruptcy Court, D. Minnesota, Third Division.

July 25, 1980.

Steven B. Nosek of Wagner, Johnston & Falconer, Ltd., Minneapolis, Minn., Floyd Babbitt of Chatz, Sugarman, Abrams, Haber & Fagel, Chicago, Ill., for plaintiff.

John A. Yilek and Bruce C. Faulken of Doherty, Rumble & Butler, St. Paul, Minn., for defendant Hart.

Richard D. Holper and John C. Thomas of Kutak, Rock & Huie, Minneapolis, Minn., for defendant-intervenor Aetna Business Credit, Inc. (Aetna).

William I. Kampf, St. Paul, Minn., for defendant-intervenor the Unsecured Creditors' Committee of Hart Ski Mfg. Co., Inc. (Creditors' Committee).

Findings of Fact, Conclusions of Law, and Order

JACOB DIM, Bankruptcy Judge.

FINDINGS OF FACT

1. Hart filed its petition for relief under Chapter 11 on February 13, 1980.

2. Accompanying its petition, Hart filed a schedule of its creditors, among which was listed Beatrice. None of said creditors was scheduled as disputed, contingent or unliquidated.

3. On March 4, 1980 Hart filed an amended schedule showing Beatrice as a disputed creditor.

4. The record is devoid of any notice to Beatrice that the schedules had been amended.

5. On March 5, 1980 notice was sent to all creditors that the deadline for filing proofs of claim was June 9, 1980.

6. Beatrice made the following appearances between February 13, 1980 and June 9, 1980:

a) March 20 and 27, 1980 hearings on the motion of Beatrice to vacate or modify Order of February 13.

b) April 3, 1980 motion of Creditors\' Committee to reconsider sale;

c) April 8, 1980 First Meeting of Creditors and motion to authorize post-petition advances by Aetna to Hart;

d) April 10 and 11, 1980 hearings on motions of Hart and the Creditors\' Committee;

e) April 24, 1980 hearing on the sale of equipment by Hart;

f) May 2, 1980 Continued First Meeting of Creditors;

g) May 8, 1980 hearing on Beatrice\'s amended motion for relief; and,

h) June 4, 1980 hearing on complaint of Beatrice.

7. No formal proof of claim was filed by Beatrice prior to June 9, 1980. Beatrice, however, has continually contended that it was a secured creditor of Hart in the amount of $632,263.90.

8. In its Answer dated March 13, 1980, its Amended Answer filed May 8, 1980 and its Complaint in this action filed May 12, 1980, Beatrice attached all the documents evidencing the claim of Beatrice, including the security agreement, the promissory note, and the financing statements.

CONCLUSIONS OF LAW

1. The issue is whether Beatrice has sufficiently complied with the filing requirements of 11 U.S.C. § 1111 and Interim Rule 3001 which require that a creditor whose claim is scheduled as disputed must file a proof of claim within the time prescribed.

2. Under the Bankruptcy Act, the prior rule was well settled. "The informal presentation of a claim, not sufficient to constitute a valid `proof of claim' may be amended to conform to the requirements of the Bankruptcy Rules, particularly Rules 301 and 302, and Official Form No. 15, where the record contains all the facts necessary to establish a bona fide indebtedness and the circumstances under which it was incurred." Collier on Bankruptcy (14th Ed.) § 57.11(1), pp. 195-196, and cases cited therein.

3. The prior rule of law was adopted in the Eighth Circuit in In re Faulkner, 161 F. 900 (8th Cir. 1908) and has been commented on or applied in Tarbell v. Crex Carpet Co., 90 F.2d 683 (8th Cir. 1937) and In re Uhlenhopp, 508 F.2d 412 (8th Cir. 1975). In accord, Sun Basin Lumber Co. v. United States, 432 F.2d 48 (9th Cir. 1970); In re Franciscan Vineyards, Inc., 597 F.2d 181 (9th Cir. 1979).

4. The standards enunciated by these cases require that the creditor have put on the record sufficient information to ascertain the existence, nature and amount of the claim and that the creditor indicate an intention to assert the claim against the estate before the time for filing claims has expired.

5. The new Bankruptcy Code has not altered the substantive law in this area. The underlying purpose is the same; to provide the trustee or the debtor-in-possession with adequate notice of the claim against the estate. The filing of a proof of claim is a ministerial act which does not alter the legal and equitable relationships involved.

6. The Court is not unmindful of the need for a cut-off date for filing claims for the efficient and orderly administration of the bankruptcy case. But this cut-off time does not apply to claims clearly and sufficiently asserted within the filing period set.

7. The information supplied by Beatrice in its various pleadings was sufficient to establish the debt and determine the nature and amount of the claim. Hart, Aetna and the Creditors'...