In re Wynn

573 B.R. 485, 2017 Bankr. LEXIS 2113
CourtUnited States Bankruptcy Court, W.D. New York
DecidedJuly 27, 2017
DocketCase No.: 13-20304
StatusPublished
Cited by1 cases

This text of 573 B.R. 485 (In re Wynn) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Wynn, 573 B.R. 485, 2017 Bankr. LEXIS 2113 (N.Y. 2017).

Opinion

DECISION AND ORDER CONVERTING CHAPTER 13 CASE TO CHAPTER 7 PROCEEDING

PAUL R. WARREN, United States Bankruptcy Judge

The Chapter 13 Trustee (“Trustee”) moved to dismiss this case for cause under 11 U.S.C. § 1307(c)(1), alleging unreasonable delay that has been prejudicial to creditors. (ECF No. 227). Tower Capital Management, LLC (“Tower”) and Ches-wold TL, LLC (“Cheswold”), the holders of tax liens on certain of Mr. Wynn’s real estate holdings, joined in support of the Trustee’s motion to dismiss. (ECF Nos. 257, 258). The Trustee amended his motion on July 25, 2017 to seek dismissal also under 11 U.S.C. § 1307(c)(6). (ECF No. 279). The Trustee additionally requested that the Court prohibit Mr. Wynn from filing further pleadings without leave of the Court. (Id.). The basis for the Trustee’s amended motion was that the confirmed Chapter 13 plan included a provision requiring Mr. Wynn to sell two pieces of real estates and turn over the net proceeds of sale to the Trustee, by January 6, 2017—and that material term of the plan had been breached. (See ECF No. 136).

Mr. Wynn (a pro se Chapter 13 debtor) filed a series of responses to the Trustee’s motion, as well as a number of repetitive cross-motions alleging that a conspiracy was afoot to prevent the sale of his properties, as a pretext that would lead to conversion or dismissal of his case. (See ECF Nos. 230, 231, 232, 245, 246, 255, 256, 260, 267, 273, 280, 281). Much of the relief demanded by Mr. Wynn in his cross-motions—such as expunging tax liens without payment—is without any authority under the Bankruptcy Code. And his allegations of a conspiracy against him, while doubtlessly genuine through his eyes, have no basis in fact, and no evidence is offered in support. On July 25, 2017, Mr. j Wynn filed another cross-motion, seeking to amend his plan and schedules, and requesting an additional two years to sell thé real property, expungement of tax liens, and a change of venue. (ECF No. 280).

The Trustee’s motion to dismiss did not mention conversion as an alternative form [487]*487of relief, although 11 U.S.C. § 1307(c) vests the Court with the discretion to order conversion or dismissal for cause. To ensure that Mr. Wynn had notice that the Court intended to consider both conversion to Chapter 7 and dismissal at the hearing on the Trustee’s motion, and to give the parties a full and fair opportunity to be heard, the Court issued an Order to Show Cause on July 14, 2017 rescheduling the hearing on the competing motions. (ECF No. 274). And on July 26, 2017, Mr. Wynn filed yet another pleading, this time objecting to the issuance of the Order to Show Cause. (ECF No. 281). The most recent submission repeats the claims made by Mr. Wynn in his earlier submissions. (See id.). The Court held the hearing on the Court’s Order to Show Cause, the Trustee’s motion, and Mr. Wynn’s cross-motions on July 27, 2017.

On the record before the Court and after hearing the arguments of the Trustee and Mr. Wynn—particularly Mr. Wynn’s repeated request that the Court approve the contract for sale of 38-40 Elmdorf Avenue in Rochester, but only on terms dictated by Mr. Wynn (such as free and clear of tax hens in a matter not permitted by the Code)—the Court finds that there is cause to convert or dismiss this case under 11 U.S.C. § 1307(c)(1) and (c)(6), specifically, and under 11 U.S.C. § 1307(c), generally. Mr. Wynn’s confirmed Chapter 13 plan is a “sale plan,” but he has been unable and unwilling to abide by the terms of his plan. And despite Mr. Wynn’s claims that the sale contracts are both ready to go forward, those contracts have numerous contingencies that Mr. Wynn appears unable to satisfy—or may have already failed to satisfy within the time specified in the contracts—at least if this case continues on its present course. The best interests of creditors and the Estate would be served by conversion of this case to a Chapter 7 proceeding, not by dismissal. A Chapter 7 Trustee may be able to bring about a sale of the Elmdorf Avenue and Lake Avenue properties and ensure that the interests of Mr. Wynn (in surplus equity) and creditors (in receiving payment in the manner required by the Code) are protected. Additionally, an independent Chapter 7 Trustee, with experience in selling estate assets to maximize recovery, is better suited than Mr. Wynn to get these properties sold or to determine that they are not worth selling.

This case is CONVERTED to a Chapter 7 proceeding, for cause under 11 U.S.C. § 1307(c)(1), (c)(6), and for cause generally under 11 U.S.C. § 1307(c), because Mr. Wynn has demonstrated an inability both to comply with the terms of his confirmed plan and to effectively carry out the duties required of a debtor-in-possession under Chapter 13 of the Code. The various cross-motions of Mr. Wynn are DENIED in all respects. The Chapter 13 Trustee’s request that the Court prohibit Mr. Wynn from filing further documents without leave of the Court is DENIED.

I.

JURISDICTION

The Court has jurisdiction under 28 U.S.C. §§ 157(a), 157(b)(1), and 1334(b). This is a core proceeding under 28 U.S.C. § 157(b)(2)(A). This decision memorializes the Court’s findings of fact and conclusions of law, as required by Rule 7052 FRBP, based on the record before the Court, made applicable to this proceeding by Rules 9014 and 1017 FRBP.

II.

FINDINGS OF FACT

Mr. Wynn commenced this Chapter 13 case on February 27, 2013, by filing a bare-bones petition. (ECF No. 1). At the [488]*488time of filing, Mr. Wynn was represented by William Rieth, Esq., an experienced Chapter 13 practitioner. (See ECF No. 1). The case was filed to stop a scheduled foreclosure sale of Mr. Wynn’s rental property on Lake Avenue in Rochester, by a creditor (ATF) that had purchased tax liens against the property. (See ECF No. 14, Statement of Financial Affairs ¶4). Statements, schedules, and a Chapter 13 plan were filed on behalf of Mr. Wynn, within the time required by the Court. (ECF Nos. 13,14,15,16,18). Those schedules indicated that Mr. Wynn had failed to pay property taxes for a number of years. The Chapter 13 plan provided that Mr. Wynn would pay $2,000 each month to the Chapter 13 Trustee, for 36 months. (ECF No. 15).

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Bluebook (online)
573 B.R. 485, 2017 Bankr. LEXIS 2113, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-wynn-nywb-2017.