588 B.R. 58
Bankr. E.D. Ark.2017Background
- Debtor Sammy Alsofari filed Chapter 13 on January 27, 2017; bar date for non-governmental proofs of claim was June 1, 2017.
- Creditor Allowey Ahmed had a prebankruptcy dispute with Debtor based on an Arbitration Agreement dividing businesses and purported debts (including a $115,500 obligation and a $100,000 obligation to a private investor).
- Ahmed received notice of the bankruptcy but did not file a formal proof of claim by the June 1 bar date.
- Prior to the bar date Ahmed’s counsel filed a Notice of Appearance and Ahmed (with counsel) attended two 341(a) meetings; Ahmed did not file any document before the bar date stating the amount, basis, and intent to pursue the claim.
- Ahmed filed objections to confirmation and a formal proof of claim (for $147,638.77) after the bar date; Debtor objected to the late proof of claim.
- The court held that the post–bar-date filings could not amend a timely informal claim because Ahmed failed to establish an informal proof of claim under Eighth Circuit law.
Issues
| Issue | Plaintiff's Argument (Debtor) | Defendant's Argument (Ahmed) | Held |
|---|---|---|---|
| Whether Ahmed’s late formal proof of claim can relate back to an informal proof of claim filed before the bar date | Formal claim is untimely and must be disallowed; no qualifying exception applies | Ahmed’s pre-bar participation (notice of appearance, attendance/questions at 341 meetings, and later objections to confirmation) suffices as an informal proof of claim or at least justifies equitable amendment | Court held Ahmed did not establish an informal proof of claim; late formal claim is not an amendment to a timely informal claim and is disallowed |
| Whether creditor participation/debtor’s knowledge can substitute for the Eighth Circuit’s documentary requirements for an informal proof of claim | Eighth Circuit test requires a writing stating nature, amount, and intent; mere knowledge/participation insufficient | Participation and debtor’s prior litigation knowledge should be considered; Fourth Circuit cases support equity-based approach | Court held debtor’s knowledge and participation do not satisfy Eighth Circuit requirements; documentary showing of nature, amount, and intent before the bar date is required |
| Whether equitable considerations (debtor’s delays in case schedule) justify excusing late filing | Bar date rules are strict; untimely claims disallowed despite delays | Debtor’s scheduling delays caused Ahmed’s responses and objections to fall after the bar date; equity favors allowing the claim | Court refused to excuse late filing for equitable reasons; no authority found to override clear statutory deadline in Chapter 13 |
| Whether the Notice of Appearance and attendance at 341 meetings constituted an informal proof of claim | Notice of Appearance and attendance lack required elements (amount, basis, intent) | These actions, combined with active participation, put parties on notice and support an informal claim | Court held Notice of Appearance and attendance did not state nature, amount, or intent and thus did not qualify as an informal proof of claim |
Key Cases Cited
- In re Faulkner, 161 F. 900 (8th Cir. 1908) (upholding strict observance of proof-of-claim deadlines and equitable administration principle)
- In re Donovan Wire & Iron Co., 822 F.2d 38 (8th Cir. 1987) (amendment to timely informal claim allowed only where record within bar period discloses claim and intent to share in assets)
- First Am. Bank & Trust v. Butler Mach. Co. (In re Haugen Constr. Servs., Inc.), 876 F.2d 681 (8th Cir. 1989) (creditor’s extensive pre‑bar written filings and active participation supported informal proof of claim)
- Maynard Sav. Bank v. Michels (In re Michels), 286 B.R. 684 (8th Cir. BAP 2002) (documents filed before bar date stating amount and intent can establish informal proof of claim)
- Pizza of Hawaii, Inc. v. Shakey's, Inc. (In re Pizza of Hawaii, Inc.), 761 F.2d 1374 (9th Cir. 1985) (Ninth Circuit’s liberal standard: motions or filings that state nature, amount, and intent can constitute informal proof of claim)
- In re Larson, 245 B.R. 609 (Bankr. D. Minn. 2000) (late-filed claims generally disallowed in Chapter 13 when objected to)