You are here
Opinions
| Case Title | Date & Status | Case Number(s) | Judge & PDF | Summary | |
|---|---|---|---|---|---|
|
In re Liquid Transport, Inc. (Internal Ref: Opinion 101) |
Oct-7-1983 UNPUBLISHED |
82A-1715 |
Judge Allen |
Former chairman of chapter 11 creditors committee submitted an application for reimbursement of his time and expenses, as an administrative expense under 11 U.S.C. § 503(b)(3)(D). Finding that chairman had significantly expedited and furthered the proceedings, the court allowed his expenses. However, noting that § 503(b)(3)(D) provides reimbursement for expenses but does not provide compensation for services, the court denied chairman's compensation claim. | |
|
In re Mounteer (Internal Ref: Opinion 102) |
Oct-7-1983 UNPUBLISHED |
81A-2157 |
Judge Clark |
Chapter 13 debtors proposed a plan that paid secured creditors first, general unsecured claims second, and priority claims under 11 U.S.C. § 507 last, and the IRS objected. The court determined that 11 U.S.C. § 1322(a)(2) requires full payment of § 507 priority claims, but does not require payment of those claims in any particular order. However, relying on § 1322(b)(1), the court ruled that unsecured claims may be treated differently, under certain circumstances, so long as the different treatment does not result in unfair discrimination. Applying the four-part test in In re Wolff, 22 B.R. 510 (9th Cir. BAP 1982), the court concluded that debtor's failure to offer a reasonable basis for the discrimination prevented them from establishing Wolff's acceptable discrimination factors. The court then suggested that concurrent payment of the IRS and other unsecured creditors, on a pro rata basis, would likely not be discriminatory under § 1322(b)(1). | |
|
In re Read (Internal Ref: Opinion 100) |
Sep-20-1983 UNPUBLISHED |
81C-1756 |
Judge Clark |
Where chapter 7 debtor failed to list creditor's claim in time for timely filing of a proof of claim, the court held that claim to be nondischargeable under 11 U.S.C. § 523(a)(3). | |
|
In re Jones, 32 B.R. 951 (Bankr.D.Utah) (Internal Ref: Opinion 98) |
Sep-16-1983 PUBLISHED |
82C-0407 |
Judge Clark |
Chapter 11 debtor proposed a plan providing that allowed secured claims in default would receive deferred cure and compensation payments, which debtor asserted would leave those claims unimpaired pursuant to 11 U.S.C. § 1124(2). The payments were to commence 30 days after the plan's effective date. The court questioned whether cure and compensation payments under § 1124(2) could be deferred, even if sufficient interest was added to compensate for the deferral. The court considered two approaches to determining impairment, which were (1) strict construction of § 1124(1) and (2), such that a plan that alters rights in any way not expressly permitted by those provisions is considered an impairment; and (2) scrutinizing the protections offered by § 1129(b) to determine impairment only as necessary to prevent wrongs. The court found that debtor's plan left the secured claims "impaired" under both approaches, and held that cure and compensation payments must be completed by the effective date of the plan to avoid impairment. | |
|
In re Laita (Internal Ref: Opinion 99) |
Sep-16-1983 UNPUBLISHED See 98.pdf |
82C-0322 |
Judge Clark |
Adopting its own decision in In re Jones, 32 B.R. 951 (Bankr. D. Utah 1983) [98.pdf], the court ruled that all creditor classes that did not receive full cure and compensation payments required by 11 U.S.C. § 1124(2) on or before the plan's effective date were impaired. | |
|
Bingham v. Martensen (In re Martensen) (Internal Ref: Opinion 97) |
Sep-11-1983 UNPUBLISHED |
82PM-1228 |
Judge Clark |
Shortly before filing his chapter 13 petition, debtor and plaintiff entered into a contract in which debtor agreed to serve as plaintiff's sales manager as an independent contractor. Plaintiff filed an adversary proceeding in debtor's bankruptcy asserting various claims arising out of their contract. Debtor moved to dismiss, claiming lack of subject matter jurisdiction. In the alternative, debtor requested that the court abstain from hearing the dispute. The court ruled that resolution of the jurisdiction issue was unnecessary because abstention was appropriate, as debtor had already made the final payment on his plan. Since the outcome of plaintiff's claims would therefore have no effect on the administration of debtor's plan, the motion to dismiss was granted. | |
|
In re Bastien (Internal Ref: Opinion 96) |
Aug-4-1983 UNPUBLISHED |
83C-0225 |
Judge Clark |
Chapter 7 debtors were ordered by the court to pay their tax refunds and wages to the trustee. Debtors failed to comply and, instead, filed a petition under chapter 13. The chapter 13 petition was dismissed for debtors' failure to file schedules, and debtors filed a second chapter 13 petition. On trustee's motion, the court dismissed debtors' chapter 7 case, with prejudice. Debtors then moved to "cancel" their chapter 7 case in order to include the claims in that case in their pending chapter 13. The court ruled that debtors had not shown cause to vacate the chapter 7 dismissal, and ordered debtors to show cause why their chapter 13 case should not be dismissed as an abusive filing. | |
|
Anderson v. Stacey (In re Anderson) (Internal Ref: Opinion 94) |
Jul-28-1983 UNPUBLISHED |
81PC-0674 |
Judge Clark |
Defendant had obtained a judgment against debtor/husband, and his lien attached to real property jointly owned by husband, wife, and husband's mother. Defendant foreclosed his lien, and purchased husband's interest in the property in the foreclosure sale. Prior to expiration of husband's six-month redemption period under state law, husband and wife filed their chapter 7 bankruptcy petition. Husband died shortly thereafter. In wife's adversary proceeding, the court held that the automatic stay had tolled the running of the redemption period. The court then considered whether the joint tenancy between husband, wife, and mother had been severed by the sheriff's sale, and concluded that an execution purchaser does not acquire title to the property until after the redemption period. Therefore, when husband died during the bankruptcy, his interest in the property automatically passed to his wife and mother. Finally, the court held that wife could avoid defendant's lien pursuant to 11 U.S.C. § 522(f) because it impaired the homestead exemption provided her by Utah law. | |
|
In re Pace (Internal Ref: Opinion 95) |
Jul-28-1983 UNPUBLISHED |
83C-0198 |
Judge Clark |
Chapter 7 debtor was discharged in a prior chapter 7 case. Post-discharge, debtor and creditor entered into a reaffirmation agreement regarding creditor's debt, and creditor later obtained a default judgment against debtor in state court, based on non-payment under the agreement. In this chapter 7, the court ruled that the reaffirmation agreement was invalid because the protections mandated by 11 U.S.C. § 524 were not provided. Creditor did not respond to the court's order to file briefs regarding the effect of the state court judgment, and its claim was therefore disallowed, and the state court judgment ruled void. Creditor was ordered to return to debtor any amounts collected pursuant to that judgment. | |
|
Weatherston v. Fairbourn (In re Fairbourn) (Internal Ref: Opinion 93) |
Jul-28-1983 UNPUBLISHED |
81P-0498 |
Judge Clark |
The court entered judgment in plaintiffs' favor on their non-dischargeability claim against debtor. More than a year later, debtor sought relief from that judgment under Fed. R. Civ. P. 60(b)(6), asserting that his trial counsel had committed malpractice. The court denied the motion, concluding that debtor's 14-month delay in seeking relief was not a "reasonable time" within which such a motion must be made. Moreover, debtor had not alleged facts that would justify relief under Rule 60(b)(6), even if his claim had been timely, and any claim debtor might have that was based on his attorney's malpractice would have to be pursued against the attorney in a separate action. In the action between plaintiffs and debtor, any neglect by debtor's attorney would be attributable to debtor. | |
|
In re Neiheisel, 32 B.R. 146 (Bankr.D.Utah)In re PlantIn re CooperIn re Poyner (Internal Ref: Opinion 92) |
Jul-26-1983 PUBLISHED |
82C-0354, -0384, and -0410; and 81C-1981 |
Judge Clark |
Debtors challenged the constitutionality of the Utah Exemptions Act, Utah Code Ann. §78-23-1 through 78-23-15, under the United States Constitution, alleging that the Act violated the supremacy clause. Debtors asserted that the Utah Act, which did not exempt certain items of personal property that debtors wished to exempt, and that would be exempt under federal law, frustrates the federal "fresh start" policy in bankruptcy. The court disagreed, holding that 11 U.S.C. § 522(b) allows a state discretion with respect to its exemptions, and does not require that state exemptions be comparable to, or concomitant with, the federal exemptions. Therefore, Utah's Exemptions Act, which was passed pursuant to the federal opt out provision in § 522, was valid. | |
|
In re Stewart, 32 B.R. 132 (Bankr.D.Utah)In re Fairbourne (Internal Ref: Opinion 91) |
Jul-24-1983 PUBLISHED |
82C-0011 and -0159 |
Judge Clark |
Trustees in two chapter 7 cases objected to debtors' exemption claims in prepetition wages. The court held that the Utah Exemptions Act, Utah Code Ann. §78-23-1 through 78-23-15, prohibits the use of 11 U.S.C. § 522(d) exemptions by Utah debtors. However, § 78-23-15 does not prohibit Utah debtors' use of exemptions that are provided by Utah laws outside of the Exemptions Act, of which there are many. Moreover, pursuant to 11 U.S.C. § 522(b)(2)(A), Utah debtors may also claim federal exemptions that are provided by federal statutes other than § 522(d). Together, Utah Code Ann. § 70B-5-105 and Utah R. Civ. P. 64D exempt Utah debtors' wages in bankruptcy, even though they are technically garnishment laws and do not specifically state that they are applicable in bankruptcy. Non-bankruptcy exemptions need not specify that they apply in bankruptcy cases in order to do so. | |
|
Am.-Strevell, Inc. v. Termicold Corp. (In re Am.-Strevell, Inc.) (Internal Ref: Opinion 90) |
Jul-22-1983 UNPUBLISHED |
82PM-0379 |
Judge Clark |
Unpaid warehouseman refused to deliver stored goods to chapter 11 debtor-in-possession where debtor's demand was not accompanied by an offer of adequate protection. The court held that, under Utah Code Ann. § 70A-7-209(4), warehouseman would not have lost its lien if it had delivered the goods to debtor in response to the demand, and did not lose the lien for refusing to release the goods, because the refusal was justified by debtor's failure to include a reasonable offer of adequate protection. The court noted that both common sense and prudent practice require the parties to attempt to negotiate adequate protection prior to requesting a court determination. Finally, the court found that the parties' contract, under which debtor relinquished possession and control of frozen turkeys to warehouseman, was clearly a bailment, rather than a lease, and was not avoidable under 11 U.S.C. § 545. | |
|
Kojima v. Stevens (In re Stevens) (Internal Ref: Opinion 89) |
Jun-30-1983 UNPUBLISHED |
82PC-0828 |
Judge Clark |
In an action to determine dischargeability under 11 U.S.C. § 523(a), the court held as follows: (1) a non-dischargeable judgment entered by a bankruptcy court is a judgment entered "for and on behalf of the United States District Courts" in a "district court civil proceeding," under In re Color Craft Press, Ltd., 27 B.R. 962 (D. Utah 1983), so that postpetition interest on the judgment is governed by 28 U.S.C. § 1961; (2) pre-judgment interest in dischargeability actions is awardable at the contract rate if there is a contract, or at the legal rate if there is not; (3) pursuant to In re Cowart, Civ. No. 81-0929J (D. Utah Sept. 20, 1982) (Jenkins, J.), punitive damages are not awardable in non-dischargeability actions, notwithstanding contrary case law from other jurisdictions; (4) a state court's default judgment that is based on the operative facts underlying their dischargeability action in bankruptcy has no res judicata effect; and (5) although collateral estoppel is a viable doctrine in non-dischargeability actions, the bankruptcy court will not give collateral estoppel effect to a default judgment. | |
|
In re Escobar (Internal Ref: Opinion 88) |
Jun-24-1983 UNPUBLISHED |
80C-2417 |
Judge Clark |
Creditors had a claim against chapter 11 debtors that arose from liens that had been attached to their residence. Numerous hearings were held and numerous orders entered, which set the amount of creditors' claim and credited debtors for liens they were able to have released from creditors' property. However, creditors had also incurred expenses in defending some of the lien claims. The court denied debtors' motion to deem creditors' judgment satisfied finding that, since the court's last order, debtors had only paid the attorney's fees they were ordered to pay and provided one release of a $2,050 lien, which was significantly less than the $7,103.51 plus interest the court had determined was owed to creditors. The court further rejected debtors' assertion that they could now show that they were not responsible for some of the liens on creditors' home, noting that debtors had shown substantial disregard for the court's orders and had been given numerous opportunities to make such a showing, and had failed to do so. | |
|
In re ColeIn re LandersIn re PhelpsIn re Mascaro (Internal Ref: Opinion 87) |
Jun-23-1983 UNPUBLISHED |
81M-0299, 80M-2353, 79M-1520, and 81M-0565 |
Judge Mabey |
The court considered four chapter 13 cases in which creditors had failed to file timely proofs of claim under Bankruptcy Procedure Rule 13-302(e). The court first held that Rule 13-302(e) was not inconsistent with the new Bankruptcy Code and, therefore, that it continued to apply in Bankruptcy Code cases. Under Rule 13-302(e), a secured creditor that failed to file a proof of claim before the conclusion of the meeting of creditors will be treated as unsecured. An unsecured creditor's failure to file a proof of claim within six months of the creditors meeting will receive no disbursements under the plan. The new Code, however, allows the debtor or trustee to file a proof of claim on behalf of a creditor that did not timely file one, and there is no time limit placed on that action. Therefore, where debtors had filed such proofs on behalf of their creditors, the claims were preserved. The court further held that a provision for payment of a creditor's claim under a debtor's plan amounts to a consent to the claim by the debtor, which has the same effect as debtor filing a proof of claim on creditor's behalf. With respect to untimely proofs of claim filed by the IRS, none of which was included in debtors' plans, the court concluded that taxes become "payable" on the date the returns are originally due, not when the returns were filed, nor when the tax was assessed. Therefore, all but one of the IRS claims were barred by Rule 13-302(e), but a claim that had become payable postpetition was allowed by 11 U.S.C. § 1305(a)(1). | |
|
In re Career Concepts, Inc. (Internal Ref: Opinion 86) |
Jun-13-1983 UNPUBLISHED See 73.pdf |
81C-1939 |
Judge Clark |
In accordance with the court's previous ruling that debtor's attorneys could not represent debtor in its chapter 11 proceedings because they were not "disinterested," attorneys submitted an application for fees incurred in representing debtor in its converted chapter 7 case. The court denied some of the claimed fees as having been incurred prior to the conversion, and others because they related to attorneys' attempts to obtain payment for their chapter 11 services. Based on those exclusions, attorneys had been slightly overpaid for the remaining services, and were directed to remit the overpayment to the chapter 7 trustee. | |
|
Amalgamated Concrete Corp. v. Mast Constr. Co. (In re Amalgamated Concrete Corp.) (Internal Ref: Opinion 85) |
Jun-10-1983 UNPUBLISHED |
82PC-0728, -1187 |
Judge Clark |
In a removed case based on state law, defendant's jury trial demand was denied by the court as untimely under interim Bankruptcy Rule 7004(g) and Local Rule 11(a), and defendant was deemed to have waived trial by jury. Although Rule 11(a) allows such waivers to be set aside for good cause, an oversight by counsel was not good cause. Defendant's motion to transfer the case from the bankruptcy court to the district court, which had been improperly filed with the bankruptcy court, was referred to the district court for disposition. | |
|
Red Mountain Mining Co., Inc. v. Reeves (In re Reeves) (Internal Ref: Opinion 84) |
May-31-1983 UNPUBLISHED See 50.pdf |
82PC-0709 |
Judge Clark |
Court granted debtor's motion to dismiss corporate plaintiff's claim, as the motion had not been opposed. Debtor's motion for summary judgment on the dismissal of individual plaintiff's claim was denied, as debtor's motion was based on state law fraud, while plaintiff's 11 U.S.C. § 523(a)(2)(A) dischargeability claim against debtor was governed by federal, rather than state, law. | |
|
Ute-Cal Land Dev. Corp. v. Kenai Oil & Gas, Inc. (In re Ute-Cal Land Dev. Corp.) (Internal Ref: Opinion 83) |
May-23-1983 UNPUBLISHED |
82PC-1219 |
Judge Clark |
Debtor filed an adversary action asserting that defendant had failed to make royalty payments required under the parties' lease, and seeking to terminate the parties' contract. Debtor and the purchaser of oil from defendant agreed that purchaser would thereafter pay royalties directly to debtor, leaving only the lease termination to be determined by the court. However, the court exercised its discretion to abstain from hearing the lease dispute, concluding that the state had a comprehensive regulatory system in place to deal with oil and gas production and drilling activity that was uniquely situated to fashion an appropriate remedy. Therefore, the court considered debtor's claim to be premature, as state administrative remedies had not been exhausted. | |
|
Commercial Sec. Bank v. Contractors Realty & Dev., Inc. (In re Contractors Realty & Dev., Inc.) (Internal Ref: Opinion 82) |
May-13-1983 UNPUBLISHED |
83PC-0405 |
Judge Clark |
Secured creditor obtained chapter 7 trustee's and debtor's agreement to relief from stay to foreclose its lien, then prepared an order indicating that trustee would be divested of any interest in the property, even though there had been no abandonment. Trustee objected, and the court held that nothing in the Bankruptcy Code allowed property to be removed from the estate in the manner proposed, and that trustee had sound reasons to object. Some of the interests retained by the estate are redemption rights, the right to purchase the property at the foreclosure sale, the right to recover surplus proceeds, and the right to object to the manner in which the property sale is conducted. In this case, the trustee had indicated an intent to abandon the property, but the time for filing objections to abandonment had not yet run. Until abandonment, an owner's rights are vested in the trustee on behalf of the estate. After abandonment, those rights would automatically return to debtor. | |
|
Andersen v. Haycock (In re Haycock) (Internal Ref: Opinion 81) |
May-11-1983 UNPUBLISHED |
81C-0405 |
Judge Clark |
Plaintiffs needed funding for a condominium development project, and went to debtor, in his capacity as president of an escrow company, to obtain "offshore" funding. Ultimately, the expected funding did not come through, and plaintiffs lost their commitment fee, which debtor had paid on their behalf to the lender. Plaintiffs filed an adversary complaint in debtor's bankruptcy, alleging non-dischargeability under 11 U.S.C. § 523(a)(2)(A) and (a)(4). With respect to plaintiffs' fraud claim, the court held that no fraudulent intent had been shown. The court then considered the fiduciary defalcation claims, ruling that only one of plaintiffs' two fiduciary claims involved fiduciary duty, which was debtor's alleged mishandling of plaintiffs' funds. The court concluded that debtor's promise to pledge accounts receivable to cover plaintiffs' funds if their loan was not funded was not fiduciary in nature, despite it being a duty that was imposed by the same contract as debtor's fiduciary duty, since the claim did not involve placement of property into debtor's custody. Rather, promises made by debtor regarding his or his company's money were contractual only. Finally, the court determined that plaintiffs had failed to show a defalcation in debtor's handling of their commitment fee since debtor had, in fact, paid the money to the lender as he was instructed to do in the parties' contract. Judgment was entered in favor of debtor. | |
|
Christenson v. Brown (In re Brown) (Internal Ref: Opinion 80) |
May-9-1983 UNPUBLISHED |
83PC-0100 |
Judge Clark |
The court considered two arguably inconsistent state statutes with respect to foreclosure of liens on real property. Creditor held a note from debtors and a non-debtor corporation, which was in default and was secured by trust deeds on two separate properties, one of which was debtors' residence. Debtors filed their chapter 11 petition while creditor was in the process of executing its trust deeds, which stayed any foreclosure of debtors' residence. Creditor proceeded with foreclosure of the property owned by the corporation, applied the sales price to the note obligation, and sought relief from stay to execute on debtors' residence. After revaluing the foreclosed property, and directing creditor to apply the full value to debtors' obligation, the court considered debtors' assertion that, under Utah Code Ann. § 15-1-32, plaintiff had waived any deficiency that might exist from the first property sale because it did not bring a deficiency action within 3 months after execution of the trust deed. Creditor countered that Utah's "one action rule," set forth in Utah Code Ann. § 78-371-1, required it to exhaust the property securing the debt before initiating a deficiency action. The court determined that debtors' position would effectively force creditor to choose between its two remedies, which were foreclosure and deficiency, since foreclosure of one trust deed, followed by a deficiency action, would preclude foreclosure of the other trust deed, while foreclosing both properties would preclude a deficiency judgment. The court held that the 3-month rule did not apply until all of the secured property was foreclosed, after which creditor would be required to initiate a deficiency action within 3 months. However, the court noted that the situation might be different if creditor was shown to be responsible for a delay in foreclosing the secured properties. Since debtor had no equity in their residence, creditor's motion for relief from stay was granted. | |
|
In re Johnson (Internal Ref: Opinion 79) |
Apr-27-1983 UNPUBLISHED |
82C-1948 |
Judge Clark |
Chapter 13 debtors moved to disallow creditors' proof of claim, which listed their claim as secured. The court held that chapter 13 debtors do not have 11 U.S.C. § 544 "strong-arm powers," which may only be exercised by chapter 13 trustees. Allowing debtors to exercise such powers, absent a chapter 13 provision that specifically grants them to debtors, as does 11 U.S.C. § 1107(a) in chapter 11 cases, would do violence to the rules of statutory construction. | |
|
In re Brundle (Internal Ref: Opinion 77) |
Apr-19-1983 UNPUBLISHED |
81C-1793 |
Judge Clark |
In her prepetition divorce action, debtor was awarded a $7,000 judgment against her ex-husband. Credit union, which held a judgment against debtor, obtained a garnishment judgment against debtor's ex-husband for the amount he owed to her. Debtor then filed a chapter 7 petition, in which she claimed the divorce award to be exempt. Postpetition, the state court reinstated credit union's garnishment judgment, which had previously been stayed, after ex-husband's appeal of the divorce award was denied. Debtor, who did not attempt to avoid credit union's lien on her divorce award, received a discharge in her bankruptcy. The court held that the garnishment lien survived debtor's bankruptcy, as it was still valid under the state court's prepetition stay order, which order allowed credit union to take action on the garnishment order after disposition of the appeal. However, the state court's postpetition reentry of the garnishment judgment violated the automatic stay, and was therefore void. The court held that credit union was free to enforce its lien, despite debtor's claim in bankruptcy that the divorce award was exempt, because 11 U.S.C. § 522(c)(2) permits enforcement of valid liens against exempt property. Debtor could still seek to avoid the lien under § 522(f), even post-discharge, but might be required to reimburse credit union's expenses as a condition of lien avoidance. | |
|
In re Vasilacopulos (Internal Ref: Opinion 78) |
Apr-19-1983 UNPUBLISHED |
82C-1031 |
Judge Clark |
The bankruptcy court certified facts regarding trustee's application for criminal contempt against debtor, and transferred the proceeding to the district court pursuant to the district court's interim rule governing bankruptcy matters post-Marathon (N. Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982)). | |
|
Semi-Serv., Inc. v. W.R. Hurst, Inc. (In re W.R. Hurst, Inc.) (Internal Ref: Opinion 76) |
Apr-8-1983 UNPUBLISHED |
82PC-1470 |
Judge Clark |
Creditor's non-dischargeability claim under 11 U.S.C. § 523(a) against corporate chapter 11 debtor was dismissed because that provision does not apply to corporate debtors. Plaintiff's other claims against debtor were dependent upon a right to adequate protection, which creditor was not entitled to because it was an unsecured creditor. Finally, creditor's claimed right to offset $4,500 it owed to debtor failed for lack of mutuality, as well as because the debt arose postpetition. Debtor's counterclaim for the $4,500 was granted on the pleadings. | |
|
Intermountain Constr., Inc. v. Munro (In re Munro) (Internal Ref: Opinion 75) |
Apr-4-1983 UNPUBLISHED |
82PC-0287 |
Judge Clark |
By asserting that its counsel did not see an order to show cause, which had been delivered, until after the action had been dismissed, plaintiff failed to establish excusable neglect that would justify relief from the order of dismissal. Where failure to comply with legal requirements results from a litigant's own procedures, the failure is not due to "excusable neglect." Nonetheless, since defendant's counsel did not object to setting aside the dismissal, the motion for relief was granted, but on condition that plaintiff's counsel pay $100.00 to defendant's counsel and that, should defendant prevail at trial or on a motion for summary judgment, defendant's attorney's fees would be assessed against both plaintiff and its counsel. | |
|
In re Career Concepts, Inc., 76 B.R. 830 (Bankr.D.Utah) (Internal Ref: Opinion 73) |
Mar-30-1983 PUBLISHED See 86.pdf |
81C-1939 |
Judge Clark |
The court denied all compensation sought by attorneys acting as counsel for corporate chapter 11 debtor-in-possession under 11 U.S.C. § 327(a), based on fact that attorneys were not disinterested. As the father and brother of debtor's principal officer, attorneys were relatives, insiders, and interested parties, and could not be disinterested, as is required. Attorneys' assertion that they relied on the court's appointment of them was rejected on the ground that it was their duty to acquaint themselves of the legal requirements for representation of debtors, and it was not up to the court to discover their relationship with a corporate employee. Nonetheless, there is no disinterest requirement for attorneys representing chapter 7 debtors, and attorneys would be allowed to submit applications for services they rendered after conversion of debtor's case to chapter 7, which application would be subject to all requirements of law. | |
|
In re Envirowest, Inc. (Internal Ref: Opinion 72) |
Mar-30-1983 UNPUBLISHED |
81C-2203 |
Judge Clark |
With respect to an untimely claim received by letter in a chapter 7 case, the court indicated that the claim could be treated as, and receive the priority of, one of three subsections of 11 U.S.C. § 726(a), which were (a)(2)(A), (a)(2)(C), or (a)(3), depending on the circumstances. Claimant could file a proof of claim with a motion for extension of the time for filing, supported by an affidavit showing good reason why his neglect in failing to timely file should be excused. If such a motion were granted, claimant's claim would be treated as a timely filed claim under subparagraph (a)(2)(A). There are also two ways the claim could be treated as an untimely claim: (1) if claimant could establish that he did not receive notice of the filing deadline in time to file a timely proof of claim, and his claim was filed prior to distribution, his claim would satisfy subparagraph (a)(2)(C); or (2) claimant could simply file a tardy proof of claim and it would be treated in accordance subparagraph (a)(3). |
