In re Vance, Bankruptcy No. 89-04050-W.

• Decision Date: 04 October 1990
• Docket Number: Bankruptcy No. 89-04050-W.
• Citation: 120 BR 181
• Parties: In re Gary William VANCE, d/b/a Big Red Sales, d/b/a Cowboy Petes Pro World, Debtor.
• Court: U.S. Bankruptcy Court — Northern District of Oklahoma

120 B.R. 181 (1990)

In re Gary William VANCE, d/b/a Big Red Sales, d/b/a Cowboy Petes Pro World, Debtor.

Bankruptcy No. 89-04050-W.

United States Bankruptcy Court, N.D. Oklahoma.

October 4, 1990.

Kenneth V. Todd, Tulsa, Okl., for debtor.

Katherine M. Vance, Asst. U.S. Trustee, Tulsa, Okl., John E. Logan, Gen. Counsel, Executive Office for U.S. Trustees Washington, D.C., Martha L. Davis, Atty., Executive Office for U.S. Trustees.

ORDER

SUPPLEMENTING "ORDER DIRECTING

U.S. TRUSTEE TO CONCLUDE 341(a) MEETING"

FILED JULY 31, 1990

AND

DETERMINING INSUFFICIENCY OF "UNITED STATES TRUSTEE'S SHOW CAUSE STATEMENT . . ."

AND

CONCLUDING § 341(a) MEETING

MICKEY DAN WILSON, Chief Judge.

There comes on for consideration the "United States Trustee's Show Cause Statement Why the § 341(a) Meeting Should Not Be Concluded." The Court takes this opportunity, reserved in its previous "Order Directing U.S. Trustee to Conclude 341(a) Meeting," to review all arguments made by the parties in the course of this dispute and to memorialize and amplify certain findings and conclusions previously announced in open court. Accordingly the Court, upon consideration of the record herein, and pursuant to Bankruptcy Rules 9014 and 7052, finds, concludes, and orders as follows.

FINDINGS OF FACT

On December 28, 1989, Gary William Vance ("debtor") filed his voluntary petition for reorganization under 11 U.S.C. Chapter 11 in this Court. Debtor's statement of financial affairs and schedules were not filed until January 14, 1990. Pursuant to Bankruptcy Rules 2003(a), X-1006(a), a meeting of creditors was scheduled to be held on January 25, 1990. According to a so-called "Initial Trustee Report" filed January 25, 1990, said meeting was held, but "was adjourned to: unspecified date" for "Reason: to review monthly report due 2/15 and review exemptions." On May 9, 1990, the United States Trustee, Carol Park Wood, by her assistant Katherine M. Vance, ("UST") filed a ". . . Motion for Conversion or Dismissal . . ." of this Chapter 11 case, which was set for hearing on May 22, 1990. A few days before the hearing, on May 18, 1990, debtor filed his "Disclosure Statement" and "Plan of Reorganization." Also on May 18, 1990, debtor filed his "Motion for Order Directing That the 341(a) Meeting in This Case Be Concluded." At hearing on May 22, 1990, the UST's motion to dismiss or convert was determined to be moot; debtor's motion to conclude the meeting of creditors was set for hearing on June 7, 1990 and briefs ordered to be filed on or before June 4, 1990. On June 1, 1990, the UST requested a seven-day continuance of "the case," stating no reason save that "We are preparing a response and memoranda . . ." Despite the vagueness of the request and the failure to state any cause, the Court extended the deadline for filing briefs to June 11, 1990, and continued the hearing to June 28, 1990. On June 4, debtor filed his "Memorandum in Support of . . ." his motion. On June 11, 1990, the UST filed her ". . . Response . . ." thereto and "Memorandum of Law in Support . . ." thereof. After hearing on June 28, 1990, the Court granted debtor's motion on conditions, as follows: the Court directed the UST to conclude the meeting of creditors within 30 days or show cause why it should not be concluded. However, a written order memorializing this directive "from the bench" was not filed until July 31, 1990, and was not entered on the docket until August 3, 1990. On July 31, 1990, there was filed an "Order Directing U.S. Trustee to Conclude 341(a) Meeting," whose text referred to "this the 28th day of June, 1990," and provided among other things "that the Assistant United States Trustee . . . is hereby ordered to conclude the 341(a) meeting . . . within thirty (30) days of today's date or show cause why the same should not be concluded . . . that the decision and remarks of the Court in this case are hereby incorporated by reference . . . and that the Court reserves the right to make additional findings and conclusions should the Court deem the same necessary." On July 30, 1990, thirty-two days after issuance of the Court's directive "from the bench," the UST filed her ". . . Show Cause Statement Why the § 341(a) Meeting Should Not be Concluded." A hearing on debtor's disclosure statement was held on August 2, 1990, and continued to August 17, 1990; and continued again to October 4, 1990. On August 13, 1990, the UST filed her "Notice of Re-Setting the Meeting of Creditors," re-scheduling the adjourned meeting for August 24, 1990. According to a so-called "Initial Trustee Report" filed on August 28, 1990, the meeting "was adjourned to: Oct 5, 1990" for "Reason" not specified.

Any "Conclusions of Law" which ought more properly to be "Findings of Fact" are adopted and incorporated herein by reference.

CONCLUSIONS OF LAW

This is a core proceeding under 28 U.S.C. § 157(b)(2)(A), (O), 11 U.S.C. § 341, § 343, § 522(l), § 1123, § 1129.

Debtor asks the Court to order the United States Trustee, or her assistant serving in the Northern District of Oklahoma, to conclude the meeting of creditors or "§ 341 meeting" in debtor's Chapter 11 reorganization case. The United States Trustee responds that this Court lacks power to compel the method of exercise of the United States Trustee's duties in administration of bankruptcy cases, or alternatively that in the present instance the United States Trustee has not abused her discretion.

The former Bankruptcy Act provided for a "first" meeting of creditors early in the progress of each bankruptcy case, Act § 55(a), for optional interim meetings thereafter, Act § 55(d), and for a "final" meeting in some cases, Act § 55(e). The present Bankruptcy Code continues to provide for one meeting of creditors "within a reasonable time after" commencement of each case, 11 U.S.C. § 341(a), but lacks any provision for interim or final meetings. The "first" meeting originally provided an occasion for creditors to meet together, establish their claims, and elect a Trustee to administer a debtor's estate in bankruptcy, 3 Collier on Bankruptcy (14th ed. 1977) ¶ 55.01. In modern bankruptcy practice, claims are usually made by filing proofs with the Clerk and are determined by litigation before the Court, 11 U.S.C. §§ 501-502, Bankruptcy Rules 3001-3008; and though Trustees may still be elected, 11 U.S.C. §§ 702-703, Bankruptcy Rules 2003, 2006, they are usually appointed by the Court or, most recently, by the United States Trustee, with the acquiescence of creditors, 11 U.S.C. §§ 701, 702(d), 703(c). Therefore the meeting of creditors has become a less urgent and pivotal event in bankruptcy administration than it once was. But the meeting still provides an opportunity for parties in interest (Trustee, creditors, and any others) to meet with each other and to question the debtor regarding his financial affairs. It is still required by statute that a meeting be held, 11 U.S.C. § 341(a), and that the debtor attend it and "submit to interrogation under oath" thereat, 11 U.S.C. § 343. The meeting was formerly conducted by the Bankruptcy Judge, Act § 55(b), later by the Bankruptcy Clerk, Bankruptcy Rule 2003(b)(1), now by the United States Trustee, 11 U.S.C. § 341(a), Bankruptcy Rule X-1006. Under current law, the Court is positively forbidden to attend the meeting, 11 U.S.C. § 341(c). However, the Court is not and cannot be absolutely excluded from all involvement with the meeting, since the Court must determine any Trustee election in dispute, Bankruptcy Rules 2003(c), X-1006(c), and must determine any disputes over the propriety of questions asked of the debtor, see e.g. In re Connelly, 59 B.R. 421 (B.C., N.D.Ill.1986). The meeting must be held within 20-40 days after commencement of the bankruptcy case, Bankruptcy Rules 2003(a), X-1006(a). At the meeting, parties in interest may inquire into "the acts, conduct, or property or . . . the liabilities and financial condition of the debtor, or . . . any matter which may affect the administration of the debtor's estate, or . . . the debtor's right to a discharge," and in cases under 11 U.S.C. Chapters 11 and 13 into "the operation of any business and the desirability of its continuance, the source of any money or property acquired or to be acquired by the debtor for purposes of consummating a plan and the consideration given or offered therefor, and any other matter relevant to the case or to the formulation of a plan," Bankruptcy Rule 2004(a). No statute speaks to the conclusion, adjournment or continuation of a meeting of creditors; and the only Bankruptcy Rule on that subject merely provides that, if a meeting is to be continued and the date and time of continuation is announced before adjournment, no further written notice of the continuation need be given, see Bankruptcy Rule 2003(e).

The United States Trustee and her assistants are officers and employees of the United States Department of Justice. The United States Trustee program was launched on an experimental basis in selected judicial districts in 1978 and expanded nationwide in 1986, for the purpose of improving supervision and policing of, and relieving bankruptcy judges of certain "administrative" duties in, cases under the Bankruptcy Code. There are only 21 United States Trustees, each of them responsible for a considerable "region" encompassing several Federal judicial districts; but from the beginning Congress has expected the United States Trustee program to function in a decentralized manner responsive to conditions within each judicial district where bankruptcy cases may be filed, H.Rep. No. 95-595 (1977), U.S.Code Cong. & Admin.News 1978, p. 5787, pp. 101, 438, 132 Cong.Rec. 8998 (1986), and in practice the responsibilities of the office fall on the shoulders of assistant United States Trustees serving in or near the particular judicial districts. Thus, the United States Trustee for this "region" offices in Wichita, Kansas; but an...