California Department of Health Services v. Bicoastal Corp. (In Re Bicoastal Corp.)

242 B.R. 43, 1998 U.S. Dist. LEXIS 22685, 1998 WL 1148901
CourtDistrict Court, M.D. Florida
DecidedSeptember 30, 1998
Docket89-8191-BKC-8P1, 91-356-CIV-T-24C, 92-1177-CIV-T-22C
StatusPublished
Cited by1 cases

This text of 242 B.R. 43 (California Department of Health Services v. Bicoastal Corp. (In Re Bicoastal Corp.)) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Department of Health Services v. Bicoastal Corp. (In Re Bicoastal Corp.), 242 B.R. 43, 1998 U.S. Dist. LEXIS 22685, 1998 WL 1148901 (M.D. Fla. 1998).

Opinion

ORDER

BUCKLEW, District Judge.

This cause comes before the Court on Appellant Hudson’s appeal of the bankruptcy court’s order denying Hudson’s Notice of Motion and Motion to Permit Late Filing of Claim. Appellant Hudson filed its initial brief on September 2, 1992 (Doc. No. 3). Debtor/Appellee Bicoastal (“Bi-coastal” or “Debtor”) filed its response on September 28, 1992 (Doc. No. 9) and Appellant filed its responsive brief on October 13,1992 (Doc. No. 10).

The issues before the Court are as follows:

(a) Whether the bankruptcy court was correct in concluding that notice by publication was sufficient to provide Hudson with notice of the bar date for filing claims in the Debtor’s Chapter 11 case.
(b) Whether the bankruptcy court was correct in concluding that Hudson’s tardiness in seeking to file its claim was not the product of excusable neglect, in that Hudson did not file its motion to permit the late claim until over, one year had passed after it learned that the bar date for filing claims had expired.
(c) Whether the bankruptcy court was correct in concluding that the granting of Hudson’s motion to file its late claim would be prejudicial to the Debtor and the entire Chapter 11 estate, in that the claim is contingent and unliquidated and would therefore need to be estimated or liquidated before it could be allowed.

Standard of Appellate Review

This Court is required to accept the bankruptcy court’s factual conclusions unless they are found to be clearly erroneous. Bankruptcy Rule 8013. Questions concerning the bankruptcy court’s application of the law are reviewed de novo. In re Schlein, 8 F.3d 745 (11th Cir.1993); Israel Discount Bank Ltd. v. Entin, 951 F.2d 311 (11th Cir.1992).

This case arises out of the bankruptcy court’s decision not to allow Hudson to file an untimely claim. A bankruptcy court’s decision regarding the extension of a bar date is within that court’s sound discretion. Accordingly, it will not be set aside absent a finding that the bankruptcy court abused its discretion. In re GAC Corp., 681 F.2d 1295, 1301 (11th Cir.1982).

Facts

The Debtor’s predecessor-in-interest, Singer Company (“Singer”), owned property located at 2350 Washington Avenue in San Leandro, California a decade prior to the filing of the Debtor’s Chapter 11 case. The property was operated in such a fash *45 ion as to cause environmental contamination. Appellant Hudson owned property adjacent to Singer’s property. In 1988, Hudson learned that its own property was contaminated. Hudson then sought to identify potentially responsible parties, learning in mid-1990 that Singer might be such a party. Meanwhile, on November 10, 1989, the Debtor filed its petition for relief under Chapter ll. 1

The bankruptcy court found that “soon after” 2 the filing of the Chapter 11 petition, Hudson became aware that the “successor corporation of Singer,” Bicoastal, had filed its Chapter 11 petition. Nonetheless, as the bankruptcy court noted, Hudson did not file a claim with the bankruptcy court at that time. Rather, Hudson waited until July or August of 1991 to move to file a late claim, approximately one year after it learned of the bankruptcy-

The bankruptcy court originally established the claims bar date as December 31, 1989. This date was later extended to January 31, 1990. It is undisputed that the Debtor did not list Hudson as a creditor on either of its initial or amended schedule of liabilities. Moreover, the Debtor did not serve Hudson with formal, written notice of the claims bar date. Rather, the Debtor, as ordered by the bankruptcy court, “caused a copy of the Notice to be published on one occasion at least twenty (20) days prior to the Bar Date in each of the following publications: national editions of The Wall Street Journal and New York Times, together with local newspapers in cities where the Debt- or has maintained a business location.... ”

In denying Hudson’s motion to file a late claim, the bankruptcy court stressed the one year gap between when Hudson learned of Bicoastal’s bankruptcy and when Hudson filed its motion. The bankruptcy court also expressed concerns about the nature of Hudson’s claim, noting that it is a “contingent, unliquidated claim [which] would have to be estimated or liquidated in this Court pursuant to Section 502(c) of the Code before it could be allowed.” The bankruptcy court concluded, “[i]n sum, the fact that Hudson did not attempt to file a claim in the Debtor’s case for a full year after it admittedly know [sic] of the Debt- or’s case supports the Debtor’s objection to the relief from the claims bar date Hudson now seeks.”

Discussion

In light of the bankruptcy court’s finding that Hudson’s claim was “unliqui-dated and contingent,” the Court finds that publication was sufficient to provide Hudson with notice of the bar date. The Supreme Court addressed this issue in Tulsa Professional Collection Serv. v. Pope, 485 U.S. 478, 490, 108 S.Ct. 1340, 99 L.Ed.2d 565 (1988). The Court noted actual notice must be provided to all known or reasonably ascertainable creditors. Id. However, publication notice will suffice for creditors who are not reasonably ascertainable. “Nor is everyone who may conceivably have a claim properly considered a creditor entitled to actual notice. Here ... it is reasonable to dispense with actual notice to those with mere ‘conjectural’ claims.” Id. Accordingly, given the bankruptcy court’s factual determination that Hudson’s claim was “conjectural,” the Court finds that publication notice was sufficient.

The Court also finds that the bankruptcy court correctly concluded that Hudson’s tardiness in seeking to file its claim ■ was not the product of excusable neglect. Hudson contends that its neglect in failing to file a claim by the bar date is per se excusable because Hudson did not know of, and could not reasonably have discovered, the Debtor’s bankruptcy case until approximately six months after the bar date. *46 Hudson maintains that this is the only-issue because there was and is no deadline for creditors who learn of the bankruptcy case after the claims bar date to file a motion to permit the late filing of a claim. Accordingly, Hudson concludes the bankruptcy court erred in analyzing whether Hudson satisfied the excusable neglect standard. The Court disagrees.

The United States Supreme Court elaborated on the definition of “excusable neglect” in Pioneer Investment Services Co. v. Brunswick Associates,

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Cite This Page — Counsel Stack

Bluebook (online)
242 B.R. 43, 1998 U.S. Dist. LEXIS 22685, 1998 WL 1148901, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-department-of-health-services-v-bicoastal-corp-in-re-flmd-1998.