In re TEMSCO NC Inc.

• Decision Date: 27 August 2015
• Docket Number: CASE NO. 13–06907 ESL
• Citation: 537 B.R. 108
• Parties: In re: TEMSCO NC Inc., Debtor
• Court: U.S. Bankruptcy Court — District of Puerto Rico

537 B.R. 108

In re: TEMSCO NC Inc., Debtor

CASE NO. 13–06907 ESL

United States Bankruptcy Court, D. Puerto Rico.

Signed August 27, 2015

Entered August 31, 2015

Hector Eduardo Pedrosa Luna, San Juan, PR, for Debtor.

OPINION AND ORDER

Enrique S. Lamoutte, United States Bankruptcy Judge

This case is before the court upon the State Insurance Fund Corporation's (hereinafter referred to as the “SIF”) Motion Requesting Permission to File Late Proof of Claim filed on August 25, 2014, alleging that it was not properly notified of the present bankruptcy proceeding via the CM/ECF (PACER system) because Debtor's Form B9F (Docket No. 14, Certificate of Notice) included the SIF's incorrect address (Docket No. 123). TEMSCO NC Inc.'s (hereinafter referred to as the “Debtor” or “Temsco”) filed its Reply to SIF's Objection to Plan of Reorganization, Objection to Request To File A Late Proof of Claim and Allowance of Administrative Payment on August 28, 2014 (Docket No. 134) arguing that the SIF was adequately and timely notified of the filing of the instant case because the address used by the Debtor was the one used by the SIF in several communications the SIF sent to the Debtor. The SIF on September 5, 2014 filed its Sur–Reply to Debtor's Reply to SIF's Objection to Plan of Reorganization Objection to File a Late Proof of Claim and Allowance of Administrative Payment (Docket No. 145) whereby the SIF replies that the Debtor did not include (attach) communications from the SIF in its exhibits to Docket No. 134 in which the SIF used the address the Debtor in turn had used to notify the SIF of the instant bankruptcy proceeding. The SIF argues that it has used the same address since the year 2003, which is as long as the subscribing attorney has worked in the SIF's Bankruptcy Division. Subsequently, on February 3, 2015, the Debtor filed its Motion for Summary Judgment and/or Legal Memorandums in Support Thereof (Docket No. 204) arguing that the SIF was properly notified of the Debtor's bankruptcy proceeding. The SIF filed its Legal Memorandum on February 3, 2015 (Docket No. 205). The SIF filed its Answer to Motion for Summary Judgment on February 9, 2015 (Docket No. 209) and the Debtor filed its Reply to or Response to Motions filed by the SIF on February 24, 2015 (Docket No. 227). The SIF on March 16, 2015 filed its Answer to Docket No. 227 (Docket No. 248). For the reasons stated herein the court grants the Debtor's motion for summary judgment and denies the SIF's motion for summary judgment.

Jurisdiction

The Court has jurisdiction pursuant to 28 U.S.C. §§ 1334(b) and 157(a). This is a core proceeding pursuant to 28 U.S.C. §§ 157(b)(1) and (b)(2). Venue of this proceeding is proper under 28 U.S.C. §§ 1408 and 1409.

Facts and Procedural Background

The Debtor filed the instant bankruptcy petition under Chapter 11 of the Bankruptcy Code on August 24, 2013. On August 26, 2013, the Debtor filed the list of Creditors Holding the 20 Largest Unsecured Claims and included the SIF with a claim in the amount of $40,886.79. The Debtor listed the following address for the SIF: P.O. Box 42006, San Juan, PR 00940–2006 (Docket No. 9). On the same date, the Debtor also filed a Motion submitting a list of all the creditors in which it also included the SIF with the same address as in the list of creditors holding the 20 largest unsecured claims (Docket No. 10). On August 30, 2013, the Notice of Chapter 11 Bankruptcy Case, Meeting of Creditors, & Deadline (the “Notice”) was docketed in the instant case (Docket No. 12). Said Notice disclosed that the deadline to file a proof of claim for all creditors was 12/26/13 and for a governmental unit the deadline was 02/26/14. The certificate of service of the Notice does not include the SIF in the list of persons/entities that received notice by first class mail by the Bankruptcy Noticing Center. The SIF is included in the list of persons/entities that were noticed by electronic transmission. The Notice was sent to the following e-mail address: Alejandro.Suarez@cfse.gov.pr (Docket No. 14). On September 11, 2013, the Debtor filed its Summary of Schedules. The Debtor listed the SIF or the CFSE (the acronym in the Spanish language that stands for “Corporación del Fondo del Seguro del Estado”) on Schedule E (Creditors Holding Unsecured Priority Claims) as having a disputed unsecured priority claim in the amount of $40,887. The Debtor disclosed that this claim was incurred in the year 2007 and the nature of the claim was for workmen compensation premiums (Docket No. 18). The 341 meeting of creditors was initially scheduled for September 27, 2013 (Docket Nos. 12 & 25), but the same was held and closed on October 11, 2013 (Docket No. 32).

On February 27, 2014, the Debtor filed a Motion Requesting an Extension of Time (60 days) to File the Disclosure Statement, Reorganization Plan and Stipulation with PRIDCO (Docket No. 80) and the court granted the same on March 4, 2014 (Docket No. 81). On April 28, 2014, the Debtor filed a second Motion Requesting Final Extension of Time (60 days) to File Disclosure Statement and Chapter 11 Plan (Docket No. 87) and the same was granted on May 16, 2014 (Docket No. 92). On June 19, 2014, the Debtor filed a Joint Motion Informing of Settlement and Requesting an Extension of Time of Fifteen (15) Days to File Stipulation Between Debtor and PRIDCO, Disclosure Statement and Plan (Docket No. 98) and the same was granted on June 30, 2014 (Docket No. 99). On July 15, 2014, the Debtor filed its Chapter 11 Small Business Disclosure Statement (Docket No. 102) and its Chapter 11 Small Business Plan (Docket No. 103). The SIF was not included as a priority unsecured claim or as a general unsecured claim in either the Debtor's Disclosure Statement or Plan of Reorganization. On July 16, 2014, the court conditionally approved the Disclosure Statement, allowed time for filing acceptances or rejections of the plan, and provided time for filing objections to the Disclosure Statement and to the confirmation of the Plan, combined with notice thereof and of the hearing on confirmation of the Plan (Docket No. 104).

On August 25, 2014, the SIF filed a Motion Requesting Permission to File Late Proof of Claim (Docket No. 123) alleging that it was not properly notified of the present bankruptcy proceeding via the CM/ECF (PACER system) because Debtor's Form B9F (Docket No. 14, Certificate of Notice) included the SIF's incorrect address (Docket No. 123). The SIF argues that late filed claims may be permitted in cases where notice to the creditor was materially deficient or misleading. On August 25, 2014, the SIF filed proof of claim # 47–1 in the amount of $25,772.53 as a priority claim for worker's compensation insurance premiums. On August 25, 2014, counsel for the SIF filed a Motion Requesting Permission to be Excused to Appear at the Hearing of August 28, 2014 (Docket No. 124) since he will be absent from the jurisdiction of Puerto Rico until August 31, 2014 due to a prior engagement. Also on the same date, the SIF filed its Objection to the Plan of Reorganization (Docket No. 125) based upon the fact that Debtor's plan of reorganization does not include the SIF's claim (or indebtedness) and thus, does not contain adequate information pursuant to 11 U.S.C. § 1125(a)(1). On August 26, 2014, the court granted the SIF's motion requesting permission to be excused from appearing at the 08/28/2014 hearing (Docket No. 124) and noted that the hearing on the final approval of the disclosure statement and confirmation of the plan is scheduled for 08/29/2014 at 10:00am not 08/28/2014 (Docket No. 128).

On August 28, 2014, Temsco filed its Reply to SIF's Objection to Plan of Reorganization, Objection to Request To File A Late Proof of Claim and Allowance of Administrative Payment (Docket No. 134) arguing that the SIF was adequately and timely notified of the filing of the instant case because the address used by the Debtor was the one used by the SIF in several communications the SIF sent to the Debtor. Moreover, as evidenced by the SIF's web page, www.cfse.pr.gov said address corresponds to creditor SIF. Temsco further argues that, “[u]nder ordinary due process requirements, creditors operating business with various departments or divisions, etc. receive adequate notice when one such branch or department receives notice, because these creditors bear responsibility to have adequate systems in place to funnel legal notices to the appropriate personnel within the business entity. In re Frontzak, 2009 Bankr.Lexis 3817 (Bankr.N.D.Ill.2009).”

On August 29, 2014, a hearing was held in which the court ordered the approval of the disclosure statement, given that after the agreements reached and stated in open court there is no objection to the final approval of the disclosure statement, and thus, an order will be entered accordingly. The court also held that the plan (Docket No. 103) as amended and clarified, complies with Section 1129 and thus, the same was confirmed (Docket No. 137). The Order Approving Disclosure Statement and Confirming Plan was docketed on August 29, 2014 (Docket No. 138).

On September 2, 2014, the SIF filed a Motion Requesting Permission to File a Sur–Reply to Debtor's Reply to SIF's Objection to Plan of Reorganization Objection to Request to File a Late Proof of Claim and Allowance of Administrative Payment (Docket No. 142). On September 3, 2014, the court granted the SIF's motion to file a sur-reply within five (5) days to Debtor's reply to objection to plan, objection to request to file a late proof of claim and allowance of administrative payment (Docket No. 142), except for filing a sur-reply to SIF's objection to confirmation, given that an Order confirming the plan was entered on August 29, 2014 (Docket No. 138) (Docket No. 143).

The SIF filed on September 5, 2014 its Sur–Reply to Debtor's Reply to SIF's Objection to Plan of Reorganization Objection to File a Late Proof of Claim and Allowance of...