Matter of Cent. Equipment & Service Co., Inc.

• Citation: 61 BR 986
• Decision Date: 01 July 1986
• Docket Number: Bankruptcy No. A85-00487-ADK.
• Parties: In the Matter of CENTRAL EQUIPMENT & SERVICE COMPANY, INC., Debtor. MASSEY-FERGUSON, INC. and Massey-Ferguson, Credit Corporation, Movants, v. CENTRAL EQUIPMENT & SERVICE COMPANY, INC., Respondent.
• Court: United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Georgia

61 B.R. 986 (1986)

In the Matter of CENTRAL EQUIPMENT & SERVICE COMPANY, INC., Debtor MASSEY-FERGUSON, INC. and Massey-Ferguson, Credit Corporation, Movants, v. CENTRAL EQUIPMENT & SERVICE COMPANY, INC., Respondent.

Bankruptcy No. A85-00487-ADK.

United States Bankruptcy Court, N.D. Georgia, Atlanta Division.

July 1, 1986.

R. Matthew Martin, Hansell & Post, Atlanta, Ga., for movants.

J. Michael Lamberth, Palmer, Lamberth, Bonapfel & Cifelli, P.A., Atlanta, Ga., for respondent.

MEMORANDUM OF OPINION AND ORDER

A.D. KAHN, Bankruptcy Judge.

The above-styled Chapter 11 bankruptcy case is before the Court on a Motion for Relief from Stay and a Motion to Extend Time for Filing Proof of Claim filed by Massey-Ferguson, Inc. and Massey-Ferguson Credit Corporation hereinafter referred to as "Movants". A hearing on the Motion for Relief from Stay was held on March 6, 1986, after which the Court took the matter under advisement. The Court finds these matters to constitute core proceedings within the meaning of 28 U.S.C. § 157(b)(2). The relevant facts are not in dispute and can be summarized as follows.

The Debtor filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on January 31, 1985. Movants were listed in Schedule A-1 as having a claim against the Debtor in the total amount of $219,809.02. The Debtor listed this claim as disputed. On March 2, 1985, an order entitled "Order for Meeting of Creditors, Combined with Notice Thereof and of Automatic Stay" was issued from the Clerk's Office of the Bankruptcy Court and sent to all listed creditors. That Order stated, inter alia, that

The debtor (or trustee) has filed or will file a list of creditors and equity security holders pursuant to Rule 1007. Any creditor holding a listed claim which is not listed as disputed, contingent, or unliquidated as to amount, may, but need not file a proof of claim in this case. Creditors whose claims are not listed or whose claims are listed as disputed, contingent, or unliquidated as to amount and who desire to participate in the case or share in any distribution must file their proofs of claim on or before the last day fixed for filing a proof of claim. Any creditor who desires to rely on the list has the responsibility for determining that he is accurately listed.

(emphasis added). The deadline for filing proofs of claim was set as June 27, 1985. On March 29, 1985 and June 13, 1985, the Debtor served the Movants with a Notice stating that their claim was listed as disputed by the Debtor.

After examining the Debtor's bankruptcy schedules, Movants concluded that "because secured creditors with claims totaling $423,862.09 asserted a claim against $75,975.07 in assets, there appeared to be no possibility for any dividend to unsecured creditors, such as Movants. Therefore, Movants filed no proof of claim." Motion to Extend Time for Filing Proof of Claim at ¶ 4. On August 29, 1985, the Debtor filed suit against Movants in the United States District Court for the Northern District of Georgia. Movants filed their answer to the complaint which included a "Notice of Counterclaim." Movants filed the "Notice" because they determined the counterclaim could not be filed against the Debtor because of the automatic stay imposed by § 362 of the Bankruptcy Code. Movants then filed the instant Motion for Relief From Stay seeking leave of this Court to assert their counterclaim against the Debtor.

The Debtor opposed the Motion arguing that Movants were barred from asserting the counterclaim, which arose prior to the filing of the bankruptcy petition, because they had failed to file a proof of claim. Movants then filed the instant Motion to Extend Time for Filing Proof of Claim. The Court notes that, until they filed their Motion for Relief from Stay, Movants had not been active in this case.

A. MOTION TO EXTEND TIME FOR FILING PROOF OF CLAIM

On March 17, 1986, Movants filed their Motion to Extend Time for Filing Proof of Claim. Bankruptcy Rule 3003(c)(3) provides that the Court may extend the time within which a creditor may file a proof of claim for cause. The Eleventh Circuit Court of Appeals has held that, when a creditor seeks to file a proof of claim after the bar date and when that request is made after the expiration of the time set for filing proofs of claim, the creditor must show excusable neglect. Biscayne 21 Condominium Ass'n., Inc. v. South Atl. Fin. Corp. (In re South Atl. Fin. Corp.), 767 F.2d 814 (11th Cir.1985).

In the case sub judice, there has been no showing of excusable neglect. In fact, there has been no showing of neglect at all. Here, Movants made the deliberate decision not to file a proof of claim. They assessed the Debtor's schedules and decided not to participate in the Debtor's bankruptcy case. Therefore, the Court must deny the Motion to Extend Time for Filing Proof of Claim.

B. MOTION FOR RELIEF FROM STAY

The Debtor contends that, because Movants have been barred from filing a proof of claim in the bankruptcy case, they should not be given relief from the automatic stay to pursue their counterclaim against the Debtor. If Movants are allowed to go forward, the Debtor argues, the estate will be required to expend time and money...