In re General Order Governing Dismissal of Cases & Imposition of Sanctions for Incomplete Filings

210 B.R. 941, 1997 Bankr. LEXIS 1234, 1997 WL 450464
CourtUnited States Bankruptcy Court, M.D. Pennsylvania
DecidedJuly 7, 1997
DocketBankruptcy No. 92-03 (W-B)
StatusPublished
Cited by5 cases

This text of 210 B.R. 941 (In re General Order Governing Dismissal of Cases & Imposition of Sanctions for Incomplete Filings) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re General Order Governing Dismissal of Cases & Imposition of Sanctions for Incomplete Filings, 210 B.R. 941, 1997 Bankr. LEXIS 1234, 1997 WL 450464 (Pa. 1997).

Opinion

OPINION AND ORDER

JOHN J. THOMAS, Bankruptcy Judge.

On May 22, 1992, confronting a growing number of petitions not accompanied by the documentation required by 11 U.S.C. § 521(1), the Court and the Assistant United States Trustee for the district cooperated in a procedure, designed to expedite the movement of cases through the local bankruptcy system in the Wilkes-Barre Division of this district. In nominal compliance with the provisions of 11 U.S.C. §§ 707(a)(3), 1112(e), and 1307(c)(9), the Assistant United States Trustee filed a Motion for Entry of General Order Governing Dismissal of Cases and Imposition of Sanctions for Incomplete Filings, hereinafter “Standing Motion”. This Motion requests the dismissal of any case, theretofore unfiled, where the documents required by 11 U.S.C. § 521(1) were not timely filed.

[942]*942In response to the “Standing Motion”, the Court issued a General Order Governing Dismissal of Cases and Imposition of Sanctions for Incomplete Filings, hereinafter “Standing Order”, which would grant the “Standing Motion” in the absence of the timely filed documents in, as yet, unfiled cases.

As if in some conscience-clearing deference to the due process rights of the “respondents,” the debtor who files a petition without the requisite schedules and statements is notified by the clerk of the existence of the “Standing Motion” and the “Standing Order” and is warned that dismissal will occur if the deficiencies are not corrected.

The process has, in fact, resulted in the movement of bankruptcy cases through the system and the “timely” dismissal of cases where supporting documents are not filed in accordance with 11 U.S.C. § 707(a)(3).1

Despite its effectiveness, or perhaps, because of it, the “Standing Motion” and the “Standing Order” have been challenged by a “Standing Objection” filed by chapter seven debtors, Bernard F. Herron, IV, and Albina P. Herron, Bankruptcy Case No. 5-96-00187, whose case was dismissed by this procedure.

The sarcasm associated with the use of the term “Standing Objection” has not escaped the Court and will provide the impetus to reexamine the propriety of the current procedure. 11 U.S.C. § 521(1) of the Bankruptcy Code requires a debtor to “(1) file a list of creditors, and unless the court orders otherwise, a schedule of assets and liabilities, a schedule of current income and current expenditures, and a statement of the debtor’s financial affairs.”

The failure to file these documents is addressed in 11 U.S.C. § 707(a)(3) of the Bankruptcy Code in the following manner:

(a) The court may dismiss a case under this chapter only after notice and a hearing and only for cause, including — ...
(3) failure of the debtor in a voluntary case to file, within fifteen days or such additional time as the court may allow after the filing of the petition commencing such case, the information required by paragraph (1) of section 521, but only on a motion by the United States trustee.

Congress has selected the United States Trustee as the designated monitor to insure compliance with the filing of 11 U.S.C. § 521(1) documents. The legislative history suggests an explanation in the following excerpt.

This amendment is intended to address a sense of growing frustration by members of the bankruptcy community, including some judges and trustees, that the amendments made in 1984 have not entirely fulfilled their promise in restoring balance in the area of consumer debt. Much of this frustration stems from the continuing high volume of chapter 7 filings by individuals. Due to demands on the courts’ time of other more complex cases under other chapters, they are frequently unable to devote the degree of time and attention to chapter 7 consumer cases which might otherwise be desirable. As a result, the impetus is on the trustee to assure that information required by the court to carry out its responsibilities is made available to it in a timely and efficient manner. (Emphasis ours.)

132 Cong. Rec. § 5613-03 (daily ed. May, 8, 1986) (statement of Sen. Hatch).

Moreover, the decision to exclude the Court from supervising the timely filing of documents is consistent with the use of the phrase “notice and a hearing.”

Notice and a hearing in bankruptcy parlance has a special meaning as set forth in 11 U.S.C. § 102(1):

In this title—
(1) “after notice and a hearing”, or a similar phrase—
(A) means after such notice as is appropriate in the particular circumstances, and such opportunity for a hearing as is appropriate in the particular circumstances; but
[943]*943(B) authorizes an act without an actual hearing if such notice is given properly and if—
(i) such a hearing is not requested timely by a party in interest; or
(ii) there is insufficient time for a hearing to be commenced before such act must be done, and the court authorizes such act;
The legislative history explains that:
[A] hearing will not be necessary in every instance. If there is no objection to the proposed action, the action may go ahead without court action. This is a significant change from present law, which requires the affirmative approval of the bankruptcy judge for almost every action. The change will permit the bankruptcy judge to stay removed, from the administration of the bankruptcy or reorganization case, and to become involved only when there is a dispute about a proposed action, that is, only when there is an objection. (Emphasis ours.)

S.Rep. No. 95-989, at 27 (1978), reprinted in Bkr-L Ed, LEGISLATIVE HISTORY § 83:5 and H.R.Rep. No. 95-595, at 315 (1977), reprinted in Bkr-L Ed, LEGISLATIVE HISTORY § 82:1.

To lend emphasis to the congressional intent to extricate the Court from administration, the legislative history concerning 11 U.S.C. § 102 indicates,

the phrase “on request of a party in interest” or a similar phrase, is used in connection with an action that the court may take in various sections of the Code. The phrase is intended to restrict the court from acting sua sponte.

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Bluebook (online)
210 B.R. 941, 1997 Bankr. LEXIS 1234, 1997 WL 450464, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-general-order-governing-dismissal-of-cases-imposition-of-sanctions-pamb-1997.