629 B.R. 772
Bankr. S.D.N.Y.2021Background
- Debtors Helios and affiliates filed Chapter 7 on Jan. 28, 2020; Alan Nisselson was appointed Chapter 7 Trustee the next day.
- Each Debtor filed a creditor matrix with its petition, but KLDiscovery (creditor for prepetition e‑discovery services) was omitted and thus did not receive formal court‑directed notices or the June 1, 2020 bar date.
- Some KLDiscovery employees received project‑related emails in Feb. 2020 referencing the bankruptcy, but KLDiscovery’s accounts‑receivable and legal decision‑makers did not learn of the bar date until October 2020.
- KLDiscovery filed a proof of claim Feb. 8, 2021 and moved under Fed. R. Bankr. P. 3002(c)(6)(A) to deem it timely, arguing the omission from the creditor matrix caused insufficient notice.
- Trustee opposed, arguing (1) filing any creditor matrix bars relief under Rule 3002(c)(6)(A), (2) employee knowledge is imputed to KLDiscovery (actual knowledge), and (3) any late claim should be subordinated under 11 U.S.C. § 726(a)(3).
- Court granted KLDiscovery’s motion: an incomplete matrix does not satisfy Rule 1007(a) for omitted creditors, employee communications did not impute actual knowledge for bar‑date purposes, and KLDiscovery’s amended claim is deemed timely as of the date of the order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether filing a creditor matrix (even if incomplete) precludes relief under Fed. R. Bankr. P. 3002(c)(6)(A) for an omitted creditor | Rule 3002(c)(6)(A) applies because omission from the matrix means debtor failed to file the list "required by" Rule 1007(a) | Filing any matrix (timely) satisfies Rule 1007(a) and thus bars Rule 3002(c)(6)(A) relief | An incomplete matrix that omits a known creditor does not meet Rule 1007(a); Rule 3002(c)(6)(A) can apply |
| Whether some KLDiscovery employees' pre‑bar‑date communications constituted "actual knowledge" imputable to the company | Trustee: employees' knowledge is imputed to KLDiscovery under agency principles, so creditor had actual notice | KLDiscovery: communications were to project personnel whose duties were unrelated to bar‑date/claims decisions; knowledge not material to those duties | Employee knowledge was not imputable here; KLDiscovery lacked sufficient notice |
| Whether insufficiency of notice (if shown) warrants extension under Rule 3002(c)(6)(A) and changes claim priority | KLDiscovery: extension appropriate because omission prevented reasonable opportunity to file | Trustee: permitting relief dilutes distributions and late claims should be subordinated under § 726(a)(3) | Rule 3002(c)(6)(A) relief warranted; claim deemed timely (not subordinated) up to the date of the order |
| Remedy/Timing: What period of extension applies where creditor already filed late | KLDiscovery: seek deeming of already filed claim as timely | Trustee: opposes substantive relief | Court deemed the filed amended claim timely as of the date of the order (allowed extension retroactively) |
Key Cases Cited
- In re Mazik, 592 B.R. 812 (Bankr. E.D. Pa. 2018) (creditor omitted from list can obtain relief under Rule 3002(c)(6)(A))
- In re Vanderpol, 606 B.R. 425 (Bankr. D. Colo. 2019) (granting Rule 3002(c)(6)(A) relief despite issues with debtor's matrix)
- Schlant v. FDIC, 248 B.R. 32 (W.D.N.Y. 2000) (discussed by parties regarding matrix filing consequences)
- In re XO Communications, Inc., 301 B.R. 782 (Bankr. S.D.N.Y. 2003) (due‑process requirement that known creditors receive reasonable notice of bar date)
- Medaglia v. United States, 52 F.3d 451 (2d Cir. 1995) (discussing debtor's obligation to file list of creditors under § 521 and Rule 1007)
- Apollo Fuel Oil v. United States, 195 F.3d 74 (2d Cir. 1999) (agency‑knowledge principles: imputing agent knowledge to principal requires materiality to agent's duties)
- Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568 (1988) (constitutional‑avoidance canon of statutory interpretation)
- Catskill Mountains Chapter of Trout Unlimited, Inc. v. EPA, 846 F.3d 492 (2d Cir. 2017) (preferring statutory interpretation that avoids constitutional problems)