In re Brunson, 486 B.R. 759

Fifteen objections to unsecured claims filed by creditors Brunson; case pending in bankruptcy court under 28 U.S.C. §1334/ §157; court may finally determine allowance or disallowance of claims.
Eastern/Northern District Texas decisions (Davis, Armstrong) discussed to re-examine standards for disallowing claims based on documentation.
Debtors filed Chapter 13 on April 25, 2011 with Schedule F listing 26 unsecured debts; objections targeted 20 claims totaling about $111k; many objections unresolved and default procedures used.
Court reviews N.D. Armstrong framework and Rochester decision; after amendments to Rule 3001, concludes lack of documentation alone does not disallow a claim; tests propriety of blanket, non-substantive objections.
Debtors’ objections were brought under contested-matter rules; court declines default disallowance and overruns the objections for lack of legally sufficient grounds; adheres to majority view that insufficient documentation alone is not a basis to disallow a claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether lack of documentation alone can disallow a claim under §502	Debtors argue lack of documentation justifies disallowance.	Creditors argue Rule 3001 amendments limit disallowance to §502 grounds.	No; objections overruled for lack of legally sufficient grounds.
Effect of 2011 Rule 3001 amendments on claim objections	Debtors rely on new remedies (c)(2)(D) to preclude evidence.	Creditors contend amendments streamline process but do not create new disallowance grounds.	Amendments do not create new disallowance grounds; remedies exist for missing information, not automatic disallowance.
Whether default judgment process is appropriate for unresolved objections	Debtors sought default orders to sustain objections.	Creditors did not respond; default could be granted under rules.	Default orders not required; objections overruled without prejudice to future, legally sufficient objections.
Whether the N.D. Armstrong framework should control in this district	Debtors advocate Armstrong approach (disallow for lack of docs).	Arguments outdated; now minority view.	N.D. Armstrong’s view rejected; court adopts majority view and overrules Rochester/Armstrong implications.
Impact of documentation requirements on good faith and plan confirmation	Blanket objections undermine plan; case involves good faith in plan.	Creditors’ blanket objections not dispositive if docs later provided.	Good faith not defeated; lack of docs alone not a basis for disallowance.

In re Armstrong, 320 B.R. 97 (Bankr.N.D.Tex. 2005) (prima facie validity of claims; documentation requirements; burden shifting; good faith in plan)
In re Taylor, 132 F.3d 256 (5th Cir. 1998) (contested matters under Rule 9014; standard for default judgment)
In re Davis, 2011 WL 1302222 (Bankr.E.D.Tex. 2011) (discussion of documentation and objection burdens; reliance on Rule 3001)
In re Padilla, 379 B.R. 643 (Bankr.S.D.Tex. 2007) (proper use of Rule 3001 and substantive rights; admissibility of documentation)
In re Sacko, 394 B.R. 90 (Bankr.E.D.Pa. 2008) (flexible application of rules in claims resolution; practical balancing)