472 B.R. 137
1st Cir. BAP2012Background
- Debtor Angel Luis Colón Martinez filed a pro se voluntary petition under chapter 11 in Puerto Rico on Oct 18, 2010, listing roughly $1.98 million in property and Allied Financial as the largest secured creditor with about $665k secured claims.
- Allied sought dismissal, arguing the case was filed in bad faith; the court denied the motion after briefing and a status conference.
- The court required the Debtor to secure counsel by early 2011; counsel was retained for opposed matters, and the Debtor’s plan/disclosure were due by Aug 15, 2011, with deadlines repeatedly extended or adjusted.
- Debtor’s counsel withdrew in mid-2011; Allied moved to convert to Chapter 7; debtor later sought extensions and a status conference occurred, with the court warning the Debtor about the need to comply with Bankruptcy Code and local rules.
- On Oct 3, 2011, the Debtor did not file a plan or disclosure on time; Allied filed a second dismissal motion; at a Nov 22, 2011 hearing the court dismissed the case with a 180-day bar from re-filing under § 109(g) for failure to comply with orders and deadlines, and for the second defective filing in a year.
- The Debtor appeals the dismissal and 180-day bar, challenging the right to counsel and the court’s decision under §1112(b) and §109(g).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Right to counsel violation | Colón | Allied/UT | Affirmed as no Sixth Amendment right applies in bankruptcy context. |
| Dismissal for cause under §1112(b) | Colón | Allied | Affirmed dismissal and held debtor’s delays and noncompliance constitute cause. |
| Best interests of creditors | Colón | Allied | Affirmed; dismissal upheld as in creditors’ best interests. |
| Section 109(g) 180-day bar | Colón | Allied | Affirmed barred filing for 180 days due to willful failures and repeated filings. |
Key Cases Cited
- Howard v. Lexington Inv'rs., Inc., 284 F.3d 320 (1st Cir. 2002) (approval of deadlines and docket management in bankruptcy)
- In re Cordova Gonzalez, 99 B.R. 188 (Bankr.D.P.R. 1989) (dismissal for delay and noncompliance favored when timely plan/disclosure and orders are ignored)
- Perez v. Fajardo Fed. Sav. Bank, 116 F.3d 464 (1st Cir. 1997) (willfulness inferred from repeated failure to abide by orders)
- In re Nelkovski, 46 B.R. 542 (Bankr.N.D.Ill. 1985) (willful pattern of noncompliance supports dismissal or 180-day bar)
- In re Pike, 258 B.R. 876 (Bankr.S.D.Ohio 2001) (successive filings in same circumstances justify 180-day disqualification)
- In re Aja, 442 B.R. 857 (1st Cir. BAP 2011) (courts may take judicial notice of bankruptcy docket; diligence required)