In re Lanman
| Citation | 24 BR 741 |
| Decision Date | 16 November 1982 |
| Docket Number | Bankruptcy No. 41959. |
| Parties | In re G. Burnham LANMAN, Jr., Debtor. |
| Court | United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Illinois |
Robert M. Fishman, Levit & Miller, Ltd., Chicago, Ill., for Rohlwing Grove.
Richard A. Marsh, Schumacher, Jones, Vallely, Kelly & Olson, Chicago, Ill., for debtor.
This cause came to be heard on Rohlwing Grove Venture's (RGV) objection to Charles B. Lanman's attempt to amend his proof of claim from an unsecured claim to a priority claim for administrative rent eight months after the statutory claims period expired. The court, having carefully considered the memoranda filed by the parties, and being fully advised in the premises, hereby disallows the amended proof of claim of Charles B. Lanman.
Creditor, Charles B. Lanman (CBL), contends the following in support of his amendment: 1) that his February 3, 1981 timely proof of claim was inadvertently filed as an unsecured claim but nonetheless is sufficient to constitute a basis for amendment; 2) that the creditors of the debtor have been on notice since that time that a demand was being made upon the debtor's estate in the amount of $7,078.50; 3) that the monies advanced to the debtor for rental payments are an administrative expense and thus have priority over all other unsecured obligations to be satisfied out of the estate; and, 4) that the expiration of the claims period is not an absolute bar to the allowance of an amendment; the Bankruptcy Court sits as a court of equity and has the power to allow this amended proof of claim.
Creditor RGV contends: 1) that RGV agreed to a May, 1981 sale of debtor's assets and to a July, 1981 settlement of its claim with debtor based upon information available at that time which revealed no priority claim of CBL; 2) that the court has never authorized that the voluntary payment of rentals would have status as a priority claim; and 3) when RGV settled its claim with the debtor, it waived certain priority claims it was making for rent, and such waivers would not have been made had RGV known of the priority status now asserted by CBL.
RGV does not challenge the established proposition that rent incurred by a trustee or debtor-in-possession during their occupancy of lease premises is allowable as an administrative expense. In re Standard Furniture Co., 3 B.R. 527 (Bkrtcy.Cal.1980). Nor does RGV challenge the fact that administrative expenses allowed under 11 U.S.C. Sec. 503(b) have priority over all other unsecured obligations that are to be satisfied out of the assets of the bankrupt's estate. Also RGV does not dispute the fact that CBL's timely filing of his unsecured proof of claim is sufficient to constitute a basis for amendment. Rather, the controversy here centers around the fact that CBL has attempted to amend an unsecured claim to a priority claim after RGV settled its claim against the debtor and waived certain of its priority claims against the debtor, relying upon the unsecured status of the CBL claim.
1. On or about December 15, 1979, G. Burnham Lanman, Jr. (debtor), filed his Chapter 11 petition.
2. Sometime thereafter, RGV filed a proof of claim in the amount of $219,560.76. On or about October 20, 1980, debtor filed an objection to this claim.
3. On or about December 15, 1980, the debtor converted the proceedings from a Chapter 11 to a Chapter 7 case. A meeting of creditors was held on or about January 5, 1981.
4. On February 3, 1981, Charles B. Lanman (CBL) filed a timely proof of claim in the amount of $7,078.50 which was filed as a general unsecured claim. This claim represented monies advanced to debtor to pay 3 months rent to RGV.
5. In May, 1981, the trustee, the debtor and certain creditors (including RGV) agreed to sell certain assets of the debtor to the Mercantile National Bank of Indiana in exchange for $25,000 and the waiver of all deficiency claims by the Bank against the estate.
6. On or about July 13, 1981, the debtor and RGV agreed to settle the RGV claim of $219,560.76 for $100,000.00.
7. On March 26, 1982, CBL, without leave of court, filed an amended proof of claim in the amount of $7,078.50 as a priority claim, eight months after the statutory claims period expired.
8. On June 25, 1982, RGV filed an objection to the amended proof of claim.
In a bankruptcy proceeding, a creditor has six months after the date set for the first meeting of creditors in which to file a proof of claim. Rules Bankr.Proc. Rule 302, 11 U.S.C. However, Bankruptcy Courts may and should use discretion in allowing proofs of claim to be amended after the time for filing the claims has elapsed. Perry v. Certificate Holders of Thrift Sav., 320 F.2d 584 (9th Cir.1963). Amendments are freely allowed for the correction of misdescriptions and minor inaccuracies in a statement of substantially the same claim, but not to permit new claims after the time for filing claims has expired. In re Stevens, 107 F. 243 (D.Vt.1901). Motions to amend claims are generally allowed only where it is equitable to do so and where there is proof in the record of the bankruptcy case showing a timely assertion of a similar claim or demand against the bankrupt's estate. In re Moro Supply Co., 229 F.Supp. 129 (E.D.Ark.1963). In re Alsted Automotive Warehouse, Inc., 16 B.R. 924 (Bkrtcy.E.D.N.Y.1982).
CBL argues that the timely filing by his attorney of his proof of claim as unsecured was inadvertent but nevertheless it was sufficient to show the assertion of the claim as a...
To continue reading
Request your trial