In re Pioneer Inv. Services Co.
| Citation | 106 BR 510 |
| Decision Date | 10 October 1989 |
| Docket Number | Bankruptcy No. 3-89-01058. |
| Parties | In re PIONEER INVESTMENT SERVICES COMPANY a/k/a Premiere Restaurant Investment Company, Debtor. |
| Court | United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Eastern District of Tennessee |
Milgrim, Thomajan & Lee, P.C., Marc E. Richards, New York City, for Clinton Associates Ltd. Partnership, West Knoxville Associates Ltd. Partnership, Brunswick Associates Ltd. Partnership, and Ft. Oglethorpe Associates Ltd. Partnership.
Dearborn & Ewing, Craig J. Donaldson, Nashville, Tenn., for debtor.
Walker & Walker, P.C., John A. Walker, Jr., Knoxville, Tenn., for Committee of Unsecured Creditors.
MEMORANDUM ON MOTION TO EXTEND TIME TO FILE PROOFS OF CLAIM OR TO ALLOW FILING OF PROOFS OF CLAIM NUNC PRO TUNC
The court has before it a motion filed August 23, 1989, by four unsecured creditors, Clinton Associates Limited Partnership, West Knoxville Associates Limited Partnership, Brunswick Associates Limited Partnership, and Ft. Oglethorpe Associates Limited Partnership (Clinton, West Knoxville, Brunswick, and Ft. Oglethorpe or, collectively, the Partnerships). By their motion, the Partnerships seek an order extending the bar date for filing proofs of claim. Alternatively, the Partnerships request the court to allow the filing of their claims nunc pro tunc as of the claims bar date. The debtor opposes the relief sought by the Partnerships. The committee of unsecured creditors advised the court by a letter from its counsel received September 19, 1989, that it takes no position on the motion.
In its resolution of the issues, the court has considered supporting affidavits filed by the Partnerships together with oral testimony introduced at a hearing held September 14, 1989.1 Additionally, the court takes judicial notice of material facts of record in the debtor's bankruptcy case file.
This is a core proceeding. 28 U.S.C.A. § 157(b)(2)(A) and (0) (West Supp.1989).
The debtor filed its voluntary petition under Chapter 11 of title 11 of the United States Code on April 12, 1989. Contemporaneously therewith it filed a list of its twenty largest unsecured creditors. Included within this list are Clinton, West Knoxville, and Brunswick. The debtor requested and was granted extensions through May 17, 1989, within which to file its statement of affairs and schedules.
On April 13, 1989, a Notice For Meeting Of Creditors (Notice) was mailed by the clerk's office to parties in interest fixing May 5, 1989, as the date for the creditors' meeting required under Bankruptcy Code § 341(a). This Notice also fixed August 3, 1989, as the bar date for filing proofs of claim. Concerning the claims bar date, the Notice provides:
You must file a proof of claim if your claim is scheduled as disputed, contingent or unliquidated, is unlisted or you do not agree with the amount. See 11 USC Sec 1111 & Bankruptcy rule 3003. Bar date is August 3, 1989.
Mark A. Berlin, president of Robriste Enterprises, Inc., general partner of Clinton, West Knoxville, and Brunswick, and president of Pudding Enterprises, Inc., general partner of Ft. Oglethorpe, received and read the April 13, 1989 Notice.2 The Partnerships do not dispute the timely receipt of the Notice by Mr. Berlin nor do they dispute that Clinton, West Knoxville, and Brunswick had notice of the filing of the debtor's Chapter 11 petition. Ft. Oglethorpe, however, contends that it did not receive the April 13, 1989 Notice and that it did not, therefore, have notice of the August 3, 1989 claims bar date.
Mr. Berlin attended and participated in the May 5, 1989 meeting of creditors.3 He also attended adjourned meetings of creditors held May 19 and June 16, 1989. The Proceeding Memo filed by the United States Trustee subsequent to the May 19, 1989 creditors meeting evidences that Mr. Berlin entered an appearance in behalf of each of the Partnerships. The June 16, 1989 adjourned meeting was attended by Mr. Berlin and the Partnerships' attorney, Marc Richards.4
The debtor filed its statement of financial affairs and schedules on May 18, 1989. The Partnerships are not listed on the schedules as originally filed. However, on May 25, 1989, the debtor amended its schedules to include Clinton, West Knoxville, and Brunswick as creditors holding contingent, unliquidated, and disputed claims. Ft. Oglethorpe is not scheduled as a creditor.
The debtor's schedules, as amended, list fifteen secured creditors holding claims undisputed in amount totalling $34,290,078.26. Two secured creditors, Paul D. Powsner and Banque Worms, are scheduled as holding contingent, unliquidated, and disputed claims. The debtor does not assign amounts to these disputed claims. Paul D. Powsner filed a claim on May 16, 1989, in the amount of $609,000.
The debtor scheduled eighty-two creditors holding priority and general unsecured claims totalling $9,512,903.89. Twenty-two of these creditors are scheduled as holding priority claims totalling $508,827.43; sixty creditors are scheduled as holding general unsecured claims totalling $9,004,076.46. Claims of five of the general unsecured creditors, including Clinton, West Knoxville and Brunswick, are unscheduled as to amount and are scheduled by the debtor as contingent, unliquidated, and disputed. Circuit City Stores, Inc., a creditor scheduled as holding a disputed claim, filed a proof of claim on August 2, 1989, in the amount of $2,300,000.
On June 5, 1989, the United States Trustee filed his "Appointment of Committee of Unsecured Creditors" designating, inter alia, Clinton as a member of the creditors' committee. Mr. Berlin, representing Clinton, has served as a member of this committee since its inception.
The Partnerships retained the legal services of Marc Richards, an experienced bankruptcy practitioner,5 prior to the June 16, 1989 adjourned meeting of creditors. Concerning Richards' retention, Mr. Berlin, in his affidavit, states:
The Partnerships retained Mr. Richards as bankruptcy counsel in mid-June, 1989. At that time, I had the Partnerships\' bankruptcy file reproduced and given to Mr. Richards. I also inquired as to the timing for filing the Partnerships\' proofs of claim. Richards advised me that as there was no bar date, that the filing of the Partnerships\' proofs of claim was not a matter of urgency.
Mr. Berlin's testimony at the September 14, 1989 hearing on the Partnerships' motion is consistent with his affidavit and is not disputed by Mr. Richards.
On August 23, 1989, twenty days after expiration of the August 3, 1989 claims bar date, the Partnerships filed their proofs of claim. These claims are signed on behalf of Clinton, West Knoxville, and Brunswick by "Mark A. Berlin, President Robriste Enterprises, Inc. (General Partner)." The claim filed on behalf of Ft. Oglethorpe is signed by "Mark A. Berlin, President Pudding Enterprises, Incorporated (General Partner)." The claims are filed in the following amounts: Clinton — $1,567,650; Brunswick — $2,364,336; West Knoxville — $2,280,831; and Ft. Oglethorpe — $730,322.
The Partnerships acknowledge that their claims were filed beyond the August 3, 1989 bar date. They contend, however, that the bar date should be extended or, alternatively, that their claims filed August 23, 1989, should be allowed nunc pro tunc to August 3, 1989.
Bankruptcy Code § 1111(a) provides:
(a) A proof of claim or interest is deemed filed under section 501 of this title for any claim or interest that appears in the schedules filed under section 521(1) or 1106(a)(2) of this title, except a claim or interest that is scheduled as disputed, contingent, or unliquidated.
11 U.S.C.A. § 1111(a) (West 1979).
Bankruptcy Rule 3003(c) provides in material part:
Bankruptcy Rule 3003(c)(2) mandates the filing of proofs of claim by creditors scheduled by the debtor as holding "disputed, contingent or unliquidated" claims. Rule 3003(c)(3) directs the court to fix a bar date for filing claims, but permits the court to extend the bar date for "cause shown."
Bankruptcy Rule 3003(c)(3) must be read in conjunction with Bankruptcy Rule 9006(b). Vertientes, Ltd. v. Internor Trade, Inc. (In re Vertientes, Ltd.), 845 F.2d 57, 60 (3d Cir.1988); Biscayne 21 Condominium Assoc., Inc. v. South Atlantic Financial Corp. (In re South Atlantic Financial Corp.), 767 F.2d 814, 817 (11th Cir.1985); Dix v. Johnson (In re Dix), 95 B.R. 134, 137 (9th Cir.BAP 1988).
Bankruptcy Rule 9006(b)(1) provides:
Fed.R.Bankr.P. 9006(b)(1) (emphasis added).
Paragraphs (2) and (3) of Rule 9006(b) refer to Rules under which the court has no discretion to extend time, or can extend it only within the limits imposed in those Rules. Rule 3003 is not within the exceptions provided in these paragraphs. "Und...
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