In Re Stewart

46 B.R. 73, 12 Collier Bankr. Cas. 2d 86, 1985 Bankr. LEXIS 6913
CourtUnited States Bankruptcy Court, D. Oregon
DecidedJanuary 15, 1985
Docket14-33981
StatusPublished
Cited by22 cases

This text of 46 B.R. 73 (In Re Stewart) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Stewart, 46 B.R. 73, 12 Collier Bankr. Cas. 2d 86, 1985 Bankr. LEXIS 6913 (Or. 1985).

Opinion

MEMORANDUM OPINION

HENRY L. HESS, Jr., Bankruptcy Judge.

This matter came before the court upon the motion of Steven Lyle Gardner (hereinafter referred to as “Gardner”) to allow his filing of a proof of claim. The motion was filed on behalf of Gardner by William D. Bailey, Esq., and a memorandum in support of the motion was filed by John H. Durkheimer of Sussman, Shank, Wapnick, Caplan & Stiles. Kent Y. Snyder of Snyder & Altman filed a memorandum in opposition to the motion. The court has reviewed the file and memoranda and, since neither party has requested oral argument, the court has determined that oral argument is not required.

The following facts are established by the file herein and by the memoranda submitted by the parties:

1. On July 13, 1983, the debtor filed a petition under chapter 13 of the Bankruptcy Code.
2. The schedules and master address list showed Gardner as an unsecured creditor of the debtor.
3. On July 29, 1983, the court sent an “Order and Notice of Meeting of Creditors, Confirmation Hearing and Automatic Stay.” This order stated, in pertinent part, the following:
In order to share in any distribution from the estate, a creditor must file a claim, whether or not he is included in the debtor’s list of creditors. Claims must be filed within 6 months after the above date set for the meeting of creditors, except as otherwise provided by law. A claim must be filed in the Clerk’s office on an official form.
The “above date set for the meeting of creditors” referred to in this order was August 16, 1983.
4. Gardner was represented at the first meeting of creditors held on August 16, 1983.
5. On August 25, 1983, Mr. Bailey appeared on behalf of Gardner at the confirmation hearing. Mr. Bailey objected to confirmation. As a result, the court adjourned the confirmation hearing.
6. On October 12, 1983, the court confirmed the debtor’s plan.
7. On November 4, 1983, Gardner filed an objection to the debtor’s plan. This objection states, in full, the following:
Comes now Steven Gardner, creditor, and objects to Plan Confirmation for the reason that and upon the grounds that the hearing on Plan Con *75 firmation rescheduled for October 7, 1983, was not attended by the creditor because the creditor’s attorney received a letter from Sarah Louie, Bankruptcy Court Clerk, attached as Exhibit “A”, asking whether or not we had any objection to a further adjournment from the October 7, 1983 date. Debtor’s attorney called Sarah Louie and advised her that there was no objection to an additional adjournment and was advised by Sarah Louie that the October 7, 1983 confirmation hearing would be taken off and that new hearing notices would be sent out. In reliance upon this, the creditor was not represented at the October 7, 1983 hearing.
The creditor further objects to the confirmation hearing because the debt- or’s budget indicates an approximate additional $1,100.00 with which to fund the plan which would result in a substantially increased percentage of this creditor’s debt being paid during the course of the plan and, therefore, the plan has not been submitted in good faith nor is the plan in the best interest of the creditors.
DATED this 2nd day of November, 1983.
/s/ William D. Bailey, OSB #76050, Attorney for Creditor Steven Gardner This objection was treated as a motion for reconsideration of the court’s order confirming the plan.
8. On December 9, 1983, a hearing on the motion for reconsideration was held by telephone. Mr. Bailey renewed Gardner’s objections and the court scheduled another hearing.
9. Also, on December 9, 1983, a photocopy of the November 4,1983 objection to confirmation was filed with the court. Other than the dates, the only difference between this objection and the one filed on November 4, 1983 is that the December 9, 1983 objection was entitled “Objection to Confirmation” while the earlier objection was untitled.
10. On January 27, 1984, a representative of Gardner conducted a Rule 2004 examination of the debtor.
11. On July 6, 1984, an adjourned hearing was held on the motion for reconsideration of the order confirming the plan. As a result of this hearing, the court scheduled an adjourned § 341(a) meeting.
12. An adjourned § 341(a) meeting was conducted on August 28, 1984. Mr. Bailey appeared on behalf of Gardner.
13. On September 19, 1984, the court held a further adjourned hearing on Gardner’s motion to reconsider the order confirming the plan. At this hearing, the debtor argued that Gardner had no standing to object to confirmation because he had not timely filed a proof of claim. Gardner conceded that no formal proof of claim had been filed. As a result of this argument, the court requested that the parties brief the issue of Gardner’s standing.
14. Gardner has not filed a formal proof of claim.

11 U.S.C. § 1324 provides that a “party in interest may object to the confirmation of the plan.” The Bankruptcy Code does not define “party in interest”. Collier indicates that:

[A]ny holder of an allowed unsecured claim may object to confirmation of the plan on the grounds that it fails to comply with one or more of the requirements of section 1325. (Emphasis added.) Collier on Bankruptcy, Vol. 5, p. 1324-3 (15th Ed.)

Therefore, in order to be a “party in interest”, Gardner must be the holder of an allowed unsecured claim.

The debtor argues that since no formal proof of claim was timely filed, Gardner’s claim must be disallowed. As a result, the debtor argues, Gardner is not a “party in interest” and his objection must be overruled for lack of standing.

Gardner concedes that no formal proof of claim was timely filed but argues that his extensive participation in the case, combined with the filing of an objection to *76 confirmation, constitute an informal proof of claim which may now be amended.

In support of this argument, Gardner cites Fyne v. Atlas Supply Co., 245 F.2d 107 (4th Cir.1957). In Fyne, the court held that the fact that a creditor (who did not timely file a formal proof of claim) wrote to the trustee regarding his claim and “the fact that the proceeding itself shows upon its face that it was based upon proceedings taken by claimant for the collection of the claim ...” made it “unjust to deny to claimant the right to file a formal claim and participate in the distribution of the assets.” Id., at 108.

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Cite This Page — Counsel Stack

Bluebook (online)
46 B.R. 73, 12 Collier Bankr. Cas. 2d 86, 1985 Bankr. LEXIS 6913, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-stewart-orb-1985.