In re Overmyer
| Decision Date | 03 May 1983 |
| Docket Number | Bankruptcy No. 82 B 20329. |
| Citation | 30 BR 123 |
| Parties | In re Daniel H. OVERMYER, Debtor. |
| Court | U.S. Bankruptcy Court — Southern District of New York |
Reich & Reich, White Plains, N.Y., for debtor.
Stephen D. Hobt, Cleveland, Ohio, Trustee of Hadar Leasing Intern. Co., Inc.
DECISION ON MOTION FOR ORDER REOPENING TIME TO FILE COMPLAINT TO DETERMINE DISCHARGEABILITY
The Chapter 11 trustee of Hadar Leasing International Company, Inc. (Hadar) seeks to reopen the time to file a complaint under Code § 523 to determine the dischargeability of the debt owed to Hadar by this Chapter 7 debtor, Daniel H. Overmyer.
On May 29, 1982 the debtor filed his petition with this court under Chapter 7 of the Bankruptcy Reform Act of 1978. September 3, 1982 was fixed by this court as the last day to file objections to discharge under Code § 727 and complaints to determine dischargeability of debts under Code § 523. This date was extended with respect to objections to discharge under Code § 727 at the request of the debtor's trustee in bankruptcy and The First National Bank of Boston (FNBB), a creditor in this case. FNBB also obtained extensions of time for itself and D.H. Overmyer Telecasting Co., Inc. (Telecasting) to file complaints under Code § 523 with respect to dischargeability of debts. See In re Overmyer, 24 B.R. 437 (Bkrtcy.S.D.N.Y.1982), affirmed, D.C.S.D.N.Y., April 18, 1983, (83 Civ. 0029). No extension of time for filing complaints under Code § 523 was ever sought by or on behalf of Hadar prior to the September 3, 1982 expiration date. Hadar is also a corporation that was controlled by the debtor and formerly known as Overmyer Trucking Company. See In re D.H. Overmyer Telecasting Co., Inc., 23 B.R. 823 (Bkrtcy.N.D. Ohio 1982).
Hadar originally filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Southern District of New York on March 27, 1981. The case was subsequently transferred to the Northern District of Ohio at the request of Telecasting. See In re Hadar Leasing International Co., Inc., 14 B.R. 819 (D.C.S.D.N.Y. 1981). On January 25, 1982, at a hearing set by the Bankruptcy Court for the Northern District of Ohio, the Hadar creditors' committee was authorized to retain the services of Paul Morrison, Esq. as attorney for the committee. On October 13, 1982, one month after the expiration of the September 3, 1982 bar date with respect to the filing of complaints objecting to the dischargeability of debts owed by the Chapter 7 debtor, Daniel H. Overmyer, Harry W. Greenfield, Esq., the attorney for the Hadar debtor in possession, applied to the Bankruptcy Court for the Northern District of Ohio for authority to permit and instruct the Hadar creditors' committee to pursue a nondischargeability complaint in this court against the Chapter 7 debtor, Daniel H. Overmyer. The application was not granted. Mr. Greenfield also states in his affidavit submitted to this court in support of the Hadar trustee's motion to reopen the time to file dischargeability complaints that he also requested authority from the Bankruptcy Court for the Northern District of Ohio to proceed in this court on behalf of Hadar against the Chapter 7 debtor, Daniel H. Overmyer. In view of the fact that the attorney for the Hadar debtor in possession had no instructions from his client with regard to this point, his application was denied.
On November 12, 1982, two months after the expiration of the September 3, 1982 bar date with regard to the Chapter 7 debtor in this court, the Hadar creditors' committee applied to the Bankruptcy Court for the Northern District of Ohio for the appointment of a trustee in the Hadar Chapter 11 case. On January 3, 1983, the Bankruptcy Court for the Northern District of Ohio appointed Stephen D. Hobt trustee in the Hadar Chapter 11 case. Thereafter, upon reviewing the facts in the Hadar Chapter 11 case in Ohio and the proceedings in the Chapter 7 case in this court, the Hadar trustee moved to reopen the time to file a dischargeability complaint under Code § 523 against the Chapter 7 debtor, Daniel H. Overmyer, on the ground that the failure to file a timely complaint "was due to excusable neglect and to the influence the Debtor herein exercised over the Movant during the entire period for the filing of said complaint. . . ."
This is not a case where a distinction should be drawn between the rights of a prepetition debtor and those of a postpetition trustee, where the courts have said that a trustee or debtor in possession is a different entity from the prepetition debtor. See In re Kevin Steel, 519 F.2d 698 (2nd Cir.1975); In re Bildisco, 682 F.2d 72 (3rd Cir.1982), cert. granted, ___ U.S. ___, 103 S.Ct. 784, 74 L.Ed.2d 992 (1982). Here, Hadar's trustee enjoys the same rights as those of the postpetition debtor in possession. The September 3, 1982 bar date for filing objections to discharge and the dischargeability of debts owed by this debtor, Daniel H. Overmyer, expired while Hadar was operating as a debtor in possession and at a time when a creditors' committee functioned with the assistance of a duly authorized attorney for the committee. Although it has been found that Mr. Overmyer's control over Hadar was "All Encompassing", In re D.H. Overmyer Telecasting Co., Inc., supra, there remains a question as to whether Hadar's creditors' committee had an obligation to file an objection to Daniel Overmyer's discharge or the dischargeability of his debts on behalf of Hadar, or at least to extend the deadline within which to do so. Understandably Hadar, as an Overmyer-controlled entity, would be reluctant to file a dischargeability complaint against Mr. Overmyer personally after he filed his own Chapter 7 petition with this court. Now that a trustee has been appointed for Hadar who wishes to reopen the dischargeability bar date, it must be determined whether the trustee should be bound by the failure of the Hadar creditors' committee to file a dischargeability complaint in this case on behalf of Hadar or to obtain a timely extension of the time to file such a complaint.
Generally, those courts which have recognized the standing of a creditors' committee to sue on behalf of a debtor who has failed or refused to take such action have done so within the framework of an assertable right under certain conditions and not within the context of an obligation or duty imposed upon the committee. In re Monsour Medical Center, 5 B.R. 715 (Bkrtcy.W.D. Pa.1980); In re Joyanna Holitogs, Inc., 21 B.R. 323 (Bkrtcy.S.D.N.Y.1982). Indeed, where the trustee or debtor in possession has already initiated an adversary proceeding, the creditors' committee has an absolute right to intervene as a party in interest under Code § 1109(b). In re Marin Motor Oil, Inc., 689 F.2d 445 (3rd Cir.1982). However, the recognition of a creditors' committees' standing to take affirmative action on behalf of a debtor under certain circumstances does not mean that the creditors' committee is also burdened with the correlative duty of always having to take such action or be faulted for its failure to do so. Surely a creditors' committee in a specific Chapter 11 case, whose attention is focused upon the debtor's financial affairs, should not be regarded as neglectful if it fails to keep apprised of procedural deadlines in another bankruptcy case involving a different debtor. Hence, in reviewing the Hadar trustee's application to reopen the dischargeability bar date no significance will be attached to the fact that the creditors' committee in the Hadar case did not apply on behalf of the Hadar debtor in possession to extend the bar date in this case. Therefore, the basic question is whether or not this debtor's control over Hadar during the period ending on September 3, 1982 is sufficient reason for reopening the dischargeability bar date for the benefit of the Hadar trustee, who was appointed two months later.
Bankruptcy Rule 409 is made applicable under Interim Rule 4003 in cases filed under Chapter 7 of the Bankruptcy Code with respect to the time for the filing of dischargeability complaints, except that reference to Section 17c(2) of the former Bankruptcy Act of 1898 is eliminated in favor of § 523(c) of the current Bankruptcy Code. Bankruptcy Rule 409(a)(2) provides, as follows:
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