Matter of Jandel, Bankruptcy No. 3-80-02832
| Decision Date | 30 January 1981 |
| Docket Number | Adv. No. 3-80-0659.,Bankruptcy No. 3-80-02832 |
| Citation | 8 BR 855 |
| Parties | In the Matter of Walfred T. JANDEL and Patricia R. Jandel, Debtors. Walfred T. JANDEL and Patricia R. Jandel, Plaintiffs, v. PRECISION COLORS, INC., Joseph E. Lyons, Edwin Fite, Everett C. Karas, C.J. Hoying, Donald E. Hochwalt, First National Bank, Defendants. |
| Court | U.S. Bankruptcy Court — Southern District of Ohio |
Thomas R. Noland, Dayton, Ohio, for plaintiffs.
Estabrook, Fin and McKee, John Henry, Wm. P. Smith, Dayton, Ohio, for First National Bank.
Eugene A. Jablinski, Dayton, Ohio, for David L. Penrod.
Charles W. Slicer, Dayton, Ohio, for defendants.
George W. Ledford, Englewood, Ohio, Trustee.
On 12 September 1980 Walfred T. Jandel and Patricia R. Jandel, husband and wife, filed a joint petition, statement, and schedules under Chapter 13. The occupation of Walfred was listed as President, Precision Colors, Inc. with income of $850.00 per week and of Patricia, as housewife. Among the assets scheduled were 113 shares of stock of Commonwealth Edison valued at $7,000.00, 20 shares of Standard Register Company in the name of Patricia valued at $600.00, 4 shares of Paraplegic Mfg. Company in the name of Patricia valued at $200.00. 300 Class A shares of Precision Colors, Inc. jointly held valued at $600,000.00. 1300 Class B shares of Precision Colors, Inc. jointly held valued at $65,000.00 and 50,000 shares of Shiloh Chemical Corp. no value, in the name of Walfred.
On 26 September 1980 Debtors filed their Plan pursuant to 11 U.S.C. Section 1321 to pay the creditors 100% of allowed claims, at the rate of $700.00 per month for a period of 60 months or until all creditors are paid in full prior to the expiration of 60 months. The Plan also provides that, during the term of the Plan, debtors shall sell their interests in the stock of Precision Colors, Inc. to fund full payment of all secured and unsecured creditors. First National Bank of Dayton shall be first paid from the proceeds in order to release Debtors' stock from a pledge of said shares.
On 6 November 1980 Debtors as plaintiffs filed a complaint naming as defendants Precision Colors, Inc., Joseph E. Lyons, Edwin Fite, Everett C. Karas, C.J. Hoying, Donald E. Hochwalt and The First National Bank.
Among numerous allegations pleaded are averments that First National Bank was a creditor on a loan to debtors on July 21, 1980, in the amount of $38,841.40, on a promissory note due on September 19, 1980, and a claimed pledgee as collateral for said debt of 1100 shares of Precision Colors, Inc. The Bank assigned the shares of stock to the other named defendants on October 22, 1980, upon receiving payment of the note. The shares were then voted by the assignees (or nominee) at a Board of Directors meeting at which Walfred was replaced as President and employee of the corporation, rendering him thereby unemployed.
On 22 December 1980 Defendant Precision Colors, Inc. filed a motion to dismiss the Chapter 13 petition because the total amount of unsecured debts exceed the statutory limits of 11 U.S.C. § 109(e); Defendants Precision Colors, Lyons, Fite, Karas, Hoying and Hochwalt all joined in a motion to dismiss the adversarial case for want of jurisdiction over the subject matter, and to require the release of the stock, and reinstatement to employment; Defendant Bank filed a motion to dismiss the adversarial case because the assignment of the stock is not within the purview of 11 U.S.C. § 362; and Defendant Bank also filed a motion for reconsideration of an order entered 18 November 1980 joining one David L. Penrod as a party pursuant to Civil Rule 19 because of a state court judgment and order in aid of execution to First National to hold property of Walfred T. Jandel in its possession for satisfaction of the state court judgment.
This matter came before the Court on January 22, 1981 for disposition of all of the motions, listed as follows: (1) the motion of defendants Precision Colors, Inc. et al. to dismiss the debtors' Chapter 13 proceeding; (2) the motion of defendants Precision Colors, Inc. to dismiss the debtors' adversarial matter number X-XX-XXXX; (3) the motion of defendant First National Bank of Dayton to dismiss the same adversarial matter; (4) the motion of defendant First National Bank of Dayton for the Court to reconsider its Order of November 18, 1980 joining David L. Penrod as a party to the above adversarial matter; and (5) the motion of defendant First National Bank of Dayton to strike the Answer of David L. Penrod. The following Order is based upon the pleadings, the court record, the oral argument of counsel at the hearing of January 22, 1981, on facts assumed arguendo, and on the memorandum of law submitted by the parties.
The primary thrust of all of the motions pertain to the intent and purpose of Chapter 13 and the jurisdiction of the bankruptcy court relating thereto. The fundamental issues will be addressed, applicable to all motions; and each motion will then be treated briefly thereafter because of the seriousness and ramification of the issues raised for ultimate disposition on the merits, if and when maturely entertained by and presented to the Court.
The defendants seriously urge, in essence, that the Chapter 13 process does not contemplate the reorganization of a corporation or the ownership of stock and the conduct of corporate affairs, including stock voting rights, board of directors meetings, and discharge of corporate officers. Such truisms are not gainsaid as such.
The initial inquiry in this case, however, looks to the jurisdiction nexus on the date that the Chapter 13 petition was filed. It is summarily noted that the debtor was an "individual with regular income" sufficiently stable and regular to enable such individual to make payment. He was then an employee of the corporation; and, since displacement, draws unemployment compensation as an employee. 11 U.S.C. § 101(24).
Pursuant to 11 U.S.C. § 103(a), Chapter 1, Chapter 3 and Chapter 5 apply in a Chapter 13 case. Section 541 provides that all of the debtor's interest in property, legal or equitable, and wherever located, becomes property of the estate. In addition, in a Chapter 13 case, property of any kind specified in Section 541 that a debtor acquires after the commencement of the case becomes property of the estate. 11 U.S.C. § 1306(a)(1).
The filing of a Chapter 13 petition invokes the automatic stay provisions of Section 362(a). House Report No. 95-595, 95th Cong., 1st Sess. (1977) 340, U.S. Code Cong. & Admin.News 1978, 5963, 6296.
By the grant of original jurisdiction to the bankruptcy courts over all "civil proceedings" arising under Title 11 and including as well those "arising under or related to" cases under Title 11, even the closing of case does not preclude litigation on issues after the case has been closed, such as 11 U.S.C. § 524(b) dealing with postbankruptcy discrimination against the debtor.
These elementary recitations are made to obviate the fact that the jurisdiction of a bankruptcy court does encompass all of the allegations of the complaint. Jurisdiction hopping, even for ancillary conflict resolution, has been wisely rendered passé. See Anderson, "Pervasive Jurisdiction Under the Bankruptcy Reform Act of 1978", Dayton Bar Briefs, Vol. XXVIII, No. 10, June/July 1979.
With regard to the first motion listed above, the defendants, Precision Colors, Inc. et al., claim that the debtors' Chapter 13 proceeding should be dismissed because it does not comply with the provisions of Title 11 of the United States Code. More particularly, the defendants claim that the unsecured claims listed in the debtors' Schedules amount to $156,866.58; this, they allege, is in excess of the statutory amount of $100,000.00 prescribed in 11 U.S.C. § 109(e) which section delineates the requirements for eligibility under Chapter 13. Further, the defendants claim that although the secured claims listed amount to only $175,422.90 which is well within the statutory limit of $350,000.00, the manner in which certain items are listed as "undetermined", "contingent" and/or "unliquidated" "makes it unclear as to whether the debts are accurately listed and makes it uncertain as to whether the secured debts are under $350,000.00." The defendants also claim that the debtors list possible obligations to creditors of Shiloh Chemical Corporation for which Mr. Jandel may be personally liable. They claim that they are not able to determine whether these debts are secured, unsecured, contingent or what amount they may be. Finally, the defendants state that the unsecured debt schedule contains claims designated as "undetermined"; thus, it is not possible to determine whether the statutory limits of § 109(e) have been exceeded.
After an examination of the subject schedules, we find that the debtors have complied with the requirements of 11 U.S.C. § 109(e). That section limits Chapter 13 relief to debtors who owe, "on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $100,000.00 and noncontingent, liquidated, secured debts of less than $350,000.00." (emphasis added) According to the schedule of unsecured claims, there is a contingent claim against the debtors valued at $69,000.00 and an undetermined claim against them. This leaves noncontingent, liquidated claims of $37,866.58; thus, the § 109(e) limits are met. The defendants offered no suggestion or evidence that the debtors' schedule of secured claims and unsecured claims is...
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