In re Roberts
Decision Date | 31 March 1989 |
Docket Number | Bankruptcy No. 87-00053. |
Citation | 98 BR 664 |
Court | U.S. Bankruptcy Court — District of Vermont |
Parties | In re Edward ROBERTS, d/b/a Roberts Construction, Debtor. |
Raymond J. Obuchowski, Mayer, Berk & Obuchowski, South Royalton, Vt., trustee, pro se.
Fred I. Parker, Langrock, Sperry, Parker & Wool, Burlington, Vt., for creditor Gordon N. Owen, d/b/a G.N. Owen & Sons (Owen).
Owen moves the Court, under Rules of Practice and Procedure in Bankruptcy Rule 3008, to reconsider the disallowance of its claim and the allowance of the trustee's final accounting. Owen argues that because the Bankruptcy Clerk's Office notified it by mail of the ninety (90) day period within which to file a proof of claim under Bankruptcy Rule 3002(c)(5), by virtue of Rule 9006(f), Owen had an additional three (3) days within which to file its claim. The trustee disagrees.
The facts are straightforward and are not disputed. Debtor filed its voluntary Chapter 7 petition on March 17, 1987. According to the debtor's filed schedules, there was no estate from which any dividend could be paid to creditors. On March 24, 1987, the Court issued a Notice Order setting the first meeting of creditors and indicating that it was unnecessary to file claims at that time. Assets were eventually realized and, on August 4, 1987, the Bankruptcy Clerk mailed a "Notice to Creditors and Other Parties in Interest of the Need to File Claims." The Clerk's notice advised creditors they must file their proofs of claims in this case on or before November 2, 1987.
Owen dated and mailed its proof of claim to the Bankruptcy Clerk on October 30, 1987. The proof of claim was received and file stamped by the Bankruptcy Clerk's Office on November 5, 1987, three days beyond the bar date. Owen received notice of the filing of the trustee's report and final account, and notice of a hearing for approval of same between November 17, 1988 and November 29, 1988.2 Included in the final account was the trustee's disallowance of Owen's claim against Debtor in the amount of $4,479.26 as not being timely filed. The trustee's report and final account were heard and approved by the Court on December 19, 1988. Neither Owen, nor counsel for Owen, appeared at the hearing. On December 27, 1989, Owen filed its "Motion to Reconsider Disallowance of Claim and Allowance of Final Account." After a February 6, 1989 hearing on the motion to reconsider, we reserved decision.
The Rules of Practice and Procedure in Bankruptcy provide us with the initial framework for an analysis of this dispute. Bankruptcy Rule 3002(c)3 governs the time within which proofs of claims must be filed in Chapter 7, Chapter 12,4 and Chapter 13 cases. The case law in this Circuit consistently regards the prescribed time period allowed for the filing of proofs of claims set forth in Rule 3002(c) as a statute of limitations barring late filing.5In re Nohle, 93 B.R. 13, 15 (Bkrtcy.N.D.N.Y. 1988) (citing cases). Accord, Associated Container Transportation Australia Ltd. (In re Black & Geddes, Inc.), 58 B.R. 547, 552-53 (S.D.N.Y.1984). "This . . . filing requirement is a mandatory nondiscretionary statute of limitations, and may not, therefore, be extended by the courts once it has expired." Lazar v. Sullivan (In re Sullivan), 36 B.R. 771, 772 (Bkrtcy.E.D.N. Y.1984). See, In re Alstead Automotive Warehouse, Inc., 16 B.R. 924 (Bkrtcy.E.D. N.Y.1982).
In In re Valley Fair Corp., 4 B.R. 564 (Bkrtcy.S.D.N.Y.1980), a Chapter XI Act case involving a dispute whether the period of time Ordered by the Court for the filing of a claim by the creditor constitutes a statute of limitations, Judge Babitt held:
It is no longer a litigable issue, and needs no citation of abundant authority, that the period fixed by statute for the filing of claims against the assets of an estate is a statute of limitations, mandatory and inexorable, peremptory and unyielding even to the exercise of some equitable power. . . . Internal proof that no deviation was contemplated by Congress is found in . . . former Rule 906(b). . . .
Id., at 566-67. (parentheticals supplied for clarity).
These Courts have found that the rule is to be strictly construed "because the purpose of a claims bar date is to provide the debtor and its creditors with finality and to insure the swift distribution of the bankruptcy estate." In re Nohle, supra, at 15, citing, In re Johnson, 84 B.R. 492, 494 (Bkrtcy.N. D.Ohio 1988) and In re Good News Publishers, Inc., 33 B.R. 125, 126 (M.D.Tenn. 1983). We agree. Furthermore, implicit in Rule 3002(c) is the restriction that the ninety (90) day time period for filing proofs of claims cannot be enlarged unless one of six exceptions are germane. The terms of Rule 3002(c) permit an enlargement of the time within which to file a proof of claim only in the presence of certain very narrowly constructed situations such as for the filing of a claim by an infant or incompetent person, or in the event there remains a surplus after all other allowed claims have been satisfied.
Rules of Practice and Procedure in Bankruptcy Rule 9006(b) governs the Bankruptcy Court's authority to enlarge time. We are empowered by virtue of Rule 9006(b), upon a showing of excusable neglect, to extend the time constraints for undertaking a required act. The express language of that subsection, however, states that such a showing may not be made to extend the time period prescribed in Rule 3002(c) for the filing of Chapter 7, 12, or 13 claims. See, Rules of Practice and Procedure in Bankruptcy Rule 9006(b)(3). See also, In re Popular Fruit & Produce, Inc., 21 B.R. 185 (Bkrtcy.S.D.N.Y.1982).
We note that inherent in the strict time requirements of the Bankruptcy Rules is the assumption that a creditor has received notice. If notice is given as required by Bankruptcy Rule 2002 save circumstances which fall under the enlargement provisos of Rule 3002(c), the time prescribed for the filing of a Rule 3002 proof of claim is quite simply an absolute bar date.
Notice, or rather, lack thereof, is not an issue here. Owen received notice of a no-assets bankruptcy filing which subsequently realized assets. Owen's proof of claim is one which we categorize as a Rule 3002(c)(5) proof of claim. Subsection (5) is technically an exception to the claims bar date mandated by 3002(c). The enlargement afforded by Rule 3002(c)(5), however, is, in this Court's eyes, separate and unique from the other five subsections of Rule 3002(c). Whereas the other five subsections may truly modify the 90 day time limit to a time frame unspecified, subsection (5) provides the original 90 day time frame directed by subsection (c). The distinction made in subsection (5) is only an adjustment of when the 90 days begin to run.
Subsection (5) cannot realistically be termed an enlargement provision. The original 90 day time frame is not enlarged because it never originally existed. In a noticed no-assets case, either a creditor's common sense or the Clerk of the Bankruptcy Court, or both, stall the necessity of filing a claim. Hence, the 90 day period commencing from the date of the § 341(a) meeting, prescribed in Rule 3002(c), never begins to run—at least not in a practical sense. When assets are realized, a new 90 day period is created under subsection (5).
Accordingly, while we recognize an absolute bar date is created under Rule 3002(c), save certain explicit circumstances permitting enlargement under Rule 3002(c)'s subsections, we also hold that a Rule 3002(c)(5) proof of claim, by its nature and because of its nature, does not qualify for departure from the absolute bar date.
The heart and soul of this contested matter rests then in our understanding of Rule 9006(f), and whether we perceive it as applicable to an absolute bar date.
Owen suggests that Bankruptcy Rule 9006(f)6 affords it an additional three days within which to file its claim. Owen's claim was received and file stamped by the Bankruptcy Clerk three days beyond the bar date, and therefore, according to Owen, by the power of Rule 9006(f)'s three day extension provision, the claim is not untimely filed. Owen does not provide us with case law which might support its argument. Owen instead reminds us "the basic premise for allowance of a reconsideration request is that reconsideration should be granted `according to the equities of the case.'" "Bankruptcy Code § 502(j)." (Owen's "Memorandum in Support of Motion to Reconsider," pg. 1). We, of course, agree and have indeed granted its request for reconsideration. But Owen continues further—buttressing with a plea to our equitable nature which states: (Owen's "Memorandum in Support of Motion to Reconsider," pp. 1-2).
Pondering for a moment this appeal to our equity,7 we are disturbed by Owen's inference that, through a judicial interest towards evenhanded treatment to creditors, (and which equitable treatment should encompass, according to Owen, those holding disallowed claims as well), we may betray an absolute bar date which gives us no discretionary power to enlarge the time for filing a Rule 3002(c) proof of claim. In re Nohle, supra; In re Kragness, 82 B.R. 553, 556 (Bkrtcy.D.Or.1988). See, In re Owens, 67 B.R. 418, 423 (Bkrtcy.E.D.Pa. 1986); In re Whitten, 49 B.R. 220, 222-23, 13 BCD 42 (Bkrtcy.N.D.Ala.1985); In re Ryan, 54 B.R. 105, 106 (Bkrtcy.E.D.Pa. 1985); In re Markey, 33 B.R. 332, 333-34 (Bkrtcy.N.D.Ohio 1983).
As we have already said, Rule 9006(b) explicitly excludes Rule 3002 proofs of claims from enlargement except as expressly provided in Rule 3002 its...
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