In re Snider Farms, Inc., Bankruptcy No. 87-60512.
| Court | United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Indiana |
| Citation | 83 BR 977 |
| Docket Number | Bankruptcy No. 87-60512. |
| Parties | In re SNIDER FARMS, INC., Debtor(s). |
| Decision Date | 05 January 1988 |
83 B.R. 977 (1988)
In re SNIDER FARMS, INC., Debtor(s).
Bankruptcy No. 87-60512.
United States Bankruptcy Court, N.D. Indiana, Hammond Division.
January 5, 1988.
David Thuma, Indianapolis, Ind., for Equitable Life Ins.
Richard Browne, Valparaiso, Ind. for Northern Ind. Bank and Trust.
MEMORANDUM OPINION AND ORDER1
KENT LINDQUIST, Chief Judge.
I
Statement of Proceedings
This case came on for hearing on December 16, 1987, on Application by Chapter 12 Debtor for Confirmation of First Amended Plan filed October 27, 1987, and Objection thereto filed by the Equitable Life Assurance Society of the United States (hereinafter: "Equitable") filed on December 16, 1987.
The Court by order of October 19, 1987, 79 B.R. 801, had denied confirmation of the Debtor's original plan filed June 24, 1987. This plan had been objected to by Equitable on July 28, 1987, and by Northern Indiana Bank and Trust Company (hereinafter: "NIB") pursuant to objections filed July 28, 1987. The trustee's report recommending that the Debtor's original plan should not be confirmed was filed August 3, 1987.
Although the October 19, 1987 order sustained the objection of Equitable, NIB and the trustee orally stipulated with Debtor at the hearing as to the resolution of their objections, and thus the following issues were resolved as to the Debtor's plan, and as the terms of those stipulations were incorporated into the Debtor's amended plan, are thus no longer in issue. Those portions of the plan as amended so resolved are as follows:
1. The Debtor will comply with § 1225(a)(4) by paying to the trustee for and on behalf of unsecured creditors the sum of $20,000 at 6% interest over 3 years or $7,482.20 per year (Clause 3.6; Class VI: unsecured creditors).
2. The Debtor shall pay NIB the sum of $36,400. at the rate of 9% per annum over 30 years with an annual payment of $3,543.00 as the present value of its allowed secured claim as to certain real estate owned by the Debtor in which NIB has a mortgage lien. (Clause 3.4; Class IV).
3. The Debtor shall pay NIB the sum of $82,300.00 at the rate of 9% per annum over 7 years with an annual payment of $16,353.00 as the present value of its allowed secured claim as to certain equipment and inventory owned by the Debtor in which NIB has a security interest.
Equitable is a Class II creditor, and Clause 3.3 of the Debtor's amended plan provides for Equitable as follows:
3.3 Class III: Equitable Life Assurance Society of the United States (Equitable). The Debtor shall pay the secured claim of Equitable in the amount of $521,265.00 as follows:
a. Commencing on January 15, 1988, the Debtor shall pay the principal amount as above stated in annual payments for a period of 30 years at an interest rate of 8.98% per annum, and on the same date annually thereafter. Equitable shall maintain its lien to secure payments hereunder.
b. The Debtor shall have the right to prepay all or any part of the principal indebtedness at any time.
c. In the event the Debtor shall sell any portions of said property, the net proceeds from said sale shall be paid to Equitable, one-half of which shall be applied as partial payment of the next annual principal payment, excluding interest. If said proceeds are in excess of said annual payment, then it shall be applied against succeeding annual principal payments until credited in full. The remaining one-half of said proceeds shall be applied to the principal amount of the indebtedness.
The Debtor's plan providing that the value of Equitable's allowed secured claim is $521,265.00 is the value found by the Court in its order of October 19, 1987, denying the confirmation of the Debtor's first plan. The Debtor's original plan valued said property at $424,000.00, while Equitable submitted evidence at the hearing in support of its objection to the initial plan that the value thereof was $593,175.00. Inasmuch, as the Court found that the value of the property in question was $521,265.00, the Court denied confirmation of the plan without taking further evidence on the remaining objections by Equitable or whether the Debtor had met his burden of proving that the plan had met all of the other requirements of § 1225.
The objection to the Debtor's first amended plan filed by Equitable on December 14, 1987 contained 7 separate objections (rhetorical paragraphs 4 through 11), including, among other things, that the plan was not feasible.
The Debtor objected to Equitable submitting any evidence in support of its objection in that the Court's order of November 17, 1987, setting the Debtor's first amended plan for confirmation hearing contained a bar date for objections of December 11, 1987. It is thus clear that the objection was not timely filed.
Bankruptcy Rule 9006(b)(1) grants the Court authority, for cause shown, in its discretion, to enlarge the time to perform an act required to be done at or within a specified time required by the Bankruptcy Rules or by order of the Court on motion made after the expiration of the specified period, where the failure to act was the result of excusable neglect.
Equitable made its oral motion at the hearing to allow entertainment of its late filed objection based on excusable neglect.
Attorney Thuma, counsel for Equitable, testified that through a clerical error, the exact reason being unknown, his secretary failed to cause the objection to be timely filed, that the objection has been drawn well in advance of the bar date, and that Debtor's counsel was aware of the proposed objection pursuant to previous discussions with Debtor's counsel, and at a status conference held by the Court on the Debtor's amended plan on December 1, 1987.
Attorney Gouveia, counsel for the Debtor, testified he was not aware of the objections that were to be registered by Equitable except the one going to feasibility that was discussed at the status conference.
The Court in In re Snyder, 74 B.R. 872 (Bankr.E.D.Pa.1987) addressed the issue of "excusable neglect" where there was a late-filed objection by a creditor to the proposed sale of certain property by the Debtor. The prospective purchaser argued that the creditor had no standing to oppose the motion as the objection was not timely. The Court stated as follows:
Although not statutorily defined, most courts have interpreted "excusable neglect" to mean: . . . The failure to timely perform a duty due to circumstances which were beyond the reasonable control of the person whose duty it was to perform.
In re Manning, 4 B.C.D. 304, 305 (Bankr.D.Conn.1978); accord, e.g., In re O.P.M. Leasing Services, Inc. 48 B.R. 824, 830 (S.D.N.Y.1985); In re Stern, 70 B.R. 472, 475 (Bankr.E.D.Pa.1987); In re Figueroa, 33 B.R. 298, 301 (Bankr.S.D.N. Y.1983); In re Klayer, 13 B.R. 542 (Bankr.W.D.Ky.1981). Among the factors to be considered in determining whether conduct meets this standard are
the adequacy of the notice provided, the reason for the delay, and the prejudice, if any, caused by the delay. In re O.P.M. Leasing Service, Inc; In re Figueroa.
Here, applying the provisions of Bankr.Rule 9006(e) and (f), Meridian\'s objection was but a few days late and the lateness was caused, according to Meridian, by a defect in the notice — that is, the notice\'s failure to be dated — which was not caused by Meridian. Moreover, the hearing on the trustee\'s motion did not take place until five months after the objection was filed. There was no showing of any harm or prejudice to the purchaser by the delay of a few days. Compare In re Northern Star Industries, Inc, 38 B.R. 1019 (Bankr.E.D.N.Y.1984) (after no objections were filed, the purchaser made improvements to the property exceeding $15,000.00). Therefore, I conclude that Meridian has demonstrated excusable neglect for its late filing. See In re Trails\'s End Lodge, Inc., 54 B.R. 898, 902 (Bankr.D.Vt.1985) (rejection of plan and objection to confirmation filed three days late would be considered as there was no prejudice to the debtor); In re Klayer, 13 B.R. at 542 (excusable neglect shown when notice was defective, objector\'s filing was two days late, and the debtor was not prejudiced). Cf. In re Table Talk, Inc., 53 B.R. 937, 941-942 (Bankr.D.Mass.1985) (excusable neglect would be shown if late filing objector gave notice of objection before hearing and attended hearing).
Id. at 875-76.
The Court finds that the unexplained clerical error in not getting the objection timely filed was not shown to be based on excusable neglect as to all issues except as to feasibility (11 U.S.C. § 1225(a)(6)). There was no showing, other than an unspecified intra-office snafu had occurred, that the failure to timely file the objection was beyond the reasonable control of Equitable. Neither, the contents of the notice itself nor the service thereof upon Equitable was defective. However, Equitable had advised Attorney Gouveia's associate at the status conference held on December 1, 1987, and prior to the bar date for objections, that it would raise that issue. Thus, even though the objection was untimely, the Debtor was not prejudiced as to the objection on feasibility as it was clearly prepared to submit extensive evidence on the issue. The Court thus permitted Equitable to cross-examine the Debtor in its main case, and present its own evidence in support of its objection as to feasibility and no other issue. The Debtor would be prejudiced as to the submission on any of the other enumerated objections as no prehearing or status conference was held after the objection was filed, and the final evidentiary hearing was held only two days after said objection.
Rhetorical paragraph 7 of Equitable's objection filed December 14, 1987, states that "Equitable objects to the amended plan because it is not feasible."
David E. Snider (hereinafter: "Snider") president of the Debtor, testified that...
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In re Klein, Bankruptcy No. 87 A 0535
...all other liabilities of the undersigned . . ." to be no less clear and unambiguous than the language in Stannish and National Acceptance. 83 BR 977 The Trustee's reliance on In re Hunter is misplaced. In Hunter, the issue was whether a note that stated it was secured by a mortgage, but mad......
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In re Klein, Bankruptcy No. 87 A 0535
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