526 B.R. 111
Bankr. S.D.N.Y.2015Background
- Debtor filed Chapter 13 on September 8, 2014; claims bar date was December 30, 2014 and last day to object to confirmation was November 10, 2014.
- Ocwen (servicer for Deutsche Bank) filed an objection to confirmation on September 29, 2014.
- Debtor filed a $1 proof of claim for Ocwen on January 6, 2015; Ocwen filed its own proof of claim for $134,416.38 on January 12, 2015 (both after the bar date).
- Ocwen moved to allow its late claim, arguing (1) its objection to confirmation constituted an informal proof of claim and (2) Pioneer excusable-neglect authority should permit the late claim.
- Chapter 13 trustee and Debtor opposed: argued excusable neglect does not apply in Chapter 13, Ocwen cannot supplant the debtor-filed claim, and the objection was not intended as an informal proof of claim.
- Court denied the motion: late claims are not allowed in Chapter 13; Ocwen’s objection does not qualify as an equitable informal proof of claim; Ocwen may not amend the debtor-filed claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pioneer excusable-neglect standard allows a late proof of claim in Chapter 13 | Pioneer allows enlargement for excusable neglect; Ocwen urged application | Trustee/Debtor: Rule 3002(c) controls Chapter 13 bar date; excusable neglect does not apply | Denied — excusable-neglect (Pioneer) cannot extend Rule 3002(c) bar date in Chapter 13 |
| Whether Ocwen's objection to confirmation is an informal proof of claim | Objection was timely, stated nature/amount of debt and intent to file a claim; thus qualifies as informal proof | Trustee/Debtor: Ocwen knew the bar date, intended to file a formal claim, and cannot transform an objection into a claim; creditor is sophisticated | Denied — although the objection met first four factors, equitable (fifth) factor disfavors treating it as a claim because Ocwen was sophisticated, had actual notice, was represented, and allowance would prejudice other creditors |
| Whether Ocwen can amend the debtor-filed claim by filing its own late claim | (Implied) Ocwen’s late filing should supersede or amend the debtor-filed claim | Trustee: Rule 3004 allows debtor/trustee to file when creditor misses the deadline; creditor cannot later supersede; amendment is discretionary | Denied — court refuses to allow Ocwen to amend/supplant debtor-filed claim because allowance would prejudice Debtor and jeopardize reorganization |
| Relief available to secured creditor with disallowed claim | N/A (Ocwen implicit) | Trustee/Debtor: secured creditor still has lien remedies outside plan if claim disallowed | Held — Ocwen not prejudiced as it can enforce lien outside plan but lacks an allowed claim to receive plan distributions |
Key Cases Cited
- Pioneer Inv. Servs. Co. v. Brunswick Assocs., 507 U.S. 380 (establishes excusable-neglect standard)
- Lipman v. Kopf, 65 F.2d 366 (2d Cir.) (origin of informal proof of claim doctrine)
- American Classic Voyages Co. v. Official Comm., 405 F.3d 127 (3d Cir.) (adds equitable fifth prong to informal-proof analysis)
- Nikoloutsos v. Nikoloutsos (In re Nikoloutsos), 199 F.3d 233 (5th Cir.) (formal five-factor informal-proof test)
- Reliance Equities, Inc. v. Valley Fed. Sav. & Loan (In re Reliance Equities, Inc.), 966 F.2d 1338 (10th Cir.) (five-factor formulation including equity prong)
- In re Dumain, 492 B.R. 140 (Bankr. S.D.N.Y.) (Chapter 13 courts consistently disallow untimely proofs of claim)