In re Kramer

552 B.R. 702, 2016 Bankr. LEXIS 2552, 2016 WL 3632810
CourtUnited States Bankruptcy Court, E.D. Michigan
DecidedMarch 29, 2016
DocketCase No. 15-46671
StatusPublished
Cited by1 cases

This text of 552 B.R. 702 (In re Kramer) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Kramer, 552 B.R. 702, 2016 Bankr. LEXIS 2552, 2016 WL 3632810 (Mich. 2016).

Opinion

OPINION AND ORDER DENYING DISCHARGE IN A CHAPTER 7 CASE, AND CANCELLING THE MARCH 30, 2016 HEARING ON SHOW-CAUSE ORDER

Thomas J. Tucker, United States Bankruptcy Judge

I.Introduction

On March 15, 2016, the Court entered an order entitled “Order to Show Cause Why Debtor Is Eligible for a Discharge” (Docket # 153, the “Show-Cause Order”), which stated, in part:

[I]t appears that the Debtor Keith Kramer received a discharge under 11 U.S.C. § 1141, on April 22, 2010, in a case that was commenced within 8 years before the April 28, 2015 filing of this case. It therefore appears, that the Debtor Keith Kramer is not eligible for a discharge in this case. See 11 U.S.C. § 727(a)(8).

(Id. at 3, Part III.) The Show-Cause Order further stated:

IT IS ORDERED that:
1.' No later than March 28, 2016, the Debtor must file a written response to this Show-Cause Order.
2. No later than March 28, 2016, any party in interest, including the United- States Trustee and any creditor, may file a written response to this Show-Cause Order.
3. If the Debtor does not timely file a written response, as required by ¶ 1 above, the Court will construe that failure to mean that the Debtor does not oppose the entry of an order denying discharge in this case, based on 11 U.S.C. § 727(a)(8).
4. Unless the Court has entered an order denying discharge ' before March 30, 2016, the Debtor and the attorney for the Debtor must appear before this Court on March 30, 2016 at 10:00 a.m. in Courtroom 1925, and show cause why the Debtor is eligible for a discharge in view of 11 U.S.C. § 727(a)(8). Any other party in interest may also appear and be heard at this hearing, regarding the § 727(a)(8) discharge issue.
5. If the Court does enter an order denying discharge before March 30, 2016, the March 30, 2016 hearing will be deemed cancelled, as no longer necessary.

(Id. at 3-4, Part III.)

II. Responses to the Court’s Show-Cause Order

A. Debtor’s failure to respond

The Debtor did not file any response to the Show-Cause Order by the March 28 [704]*704deadline. Consistent with the Show-Cause Order, quoted above, the Court construes this to mean that the Debtor does not oppose the entry of an order denying discharge in this case, based on 11 U.S.C. § 727(a)(8).

B. The United States Trustee’s response

Two responses were filed to the Show-Cause Order. First, the United States Trustee (the.“UST”) filed a response on March 25, 2016 (Docket # 160), agreeing that the Debtor is not eligible for a discharge in this case, based on 11 U.S.C. § 727(a)(8). But the UST notes that he has an adversary proceeding pending that alleges additional grounds under 11 U.S.C. § 727(a) for denying the Debtor’s discharge in this case, which if successful would have a more comprehensive effect than a denial of discharge based only on § 727(a)(8). Because of this, the UST requests the following:

[T]he U.S. Trustee respectfully requests that the Court either continue the show cause order until the U.S. Trustee’s amended complaint is resolved (whether by waiver or as the result of a trial), or, in the alternative, that the Court permit the U.S. Trustee’s case to go forward even if the Court denies the Debtor’s discharge under 11 U.S.C. § 727(a)(8.)

(Docket # 160 at 2).

Because the Court concludes that § 727(a)(8) clearly precludes a discharge in this case, a conclusion the UST agrees with, there is no good reason for the Court to delay entering an order denying discharge on that ground. But the Court will consider the alternative requested by the UST, by entering a separate order in the UST’s pending adversary proceeding (Adv. Pro. No. 155460) that permits the UST and the Defendant-Debtor to be heard on the question whether that adversary proceeding should be dismissed as moot. ■

C. Talmer Bank and Trust’s response

The second response filed to the Show-Cause Order was filed on March 28, 2016 by Talmer Bank and Trust (“Talmer”) (Docket # 168). Talmer argues that the Debtor did not receive a discharge in his 2009 Chapter 11 case.

The Court rejects Talmer’s arguments, because they are without merit. Based on the facts and the reasons stated in the Court’s Show-Cause Order, the Court concludes that the Debtor Keith Kramer did indeed obtain a discharge in the 2009 case, upon confirmation of the Debtor’s Plan in that case. This is so because the confirmed plan clearly says so — there is no doubt or ambiguity about that. And that confirmed plan binds “any creditor,” including Talmer, under 11 U.S.C. § 1141(a), and also under principles of res judicata, discussed below. (As Tal-' mer’s response indicates (Docket # 168 at 1), Talmer is the successor-in-interest of First Place Bank, who was a creditor in the 2009 case. Talmer therefore stands in the shoes of First Place Bank as a creditor in this case.)

Talmer argues that the Debtor did not receive a discharge in the 2009 case merely upon confirmation of the Fourth Amended Plan, and before making all payments required by the confirmed plan. This is so, Talmer argues, because the “notice and hearing” and “cause” requirements of 11 U.S.C. § 1141(d)(5)(A) were not met.

This argument is without merit, for at least two reasons. First, the argument is inconsistent with the fact that the Court confirmed a Chapter 11 plan in the 2009 case that clearly granted the Debtor [705]*705Keith Kramer a discharge upon confirmation. Talmer’s arguments really only challenge the correctness of this result. As such, the arguments are barred by the doctrine of res judicata, which applies to the confirmation order entered in the 2009 case. As described by the Sixth Circuit Court of Appeals:

As a general rule, the “[cjonfirmation of a. plan of reorganization constitutes a final judgment in bankruptcy proceedings.” Sanders Confectionery Prods., Inc. v. Heller Fin., Inc., 973 F.2d 474, 480 (6th Cir.1992).

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Cite This Page — Counsel Stack

Bluebook (online)
552 B.R. 702, 2016 Bankr. LEXIS 2552, 2016 WL 3632810, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-kramer-mieb-2016.