In Re Fisette
459 B.R. 898
Bankr. D.S.C.2011Background
- Debtor George Walter Fisette filed a Chapter 13 petition August 3, 2010, which was converted to Chapter 11 on October 8, 2010, with conversion order entered November 5, 2010.
- Debtor's original Chapter 11 plan was filed February 1, 2011 and denied confirmation on March 16, 2011; amended plan filed March 30, 2011.
- Objections to confirmation were filed by the U.S. Trustee and JPMorgan Chase Bank; a hearing was held May 10, 2011 and Chase reached a consent order with Debtor.
- Plan provides for total payments of about $2,500 per month plus a $1,250 monthly domestic support obligation; monthly cash flow appears insufficient to fund plan.
- Debtor operates a sole proprietorship, P.E. Productions, formed September 2010, with anticipated shows and substantial sponsor commitments, but income and tax returns are uncertain.
- Debtor has significant secured debt ($494,482) and unsecured debt ($230,961), with domestic support arrears and unfiled tax returns raising feasibility concerns.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Debtor's plan satisfies 1129(a)(14) on domestic support | Fisette asserts current payments satisfy 1129(a)(14). | UST contends Debtor is not current on the $1,250 monthly support for several months. | Plan cannot be confirmed; Debtor not current on domestic support. |
| Whether Debtor's plan satisfies 1129(a)(12) (payment of UST fees) | Debtor claims quarterly UST fees were mailed and may be in transit. | UST shows payment not received/posted; noncompliance with 1129(a)(12). | Plan cannot be confirmed; 28 U.S.C. § 1930 fees not shown as paid. |
| Whether plan is feasible given arrears and missing information | Debtor emphasizes future prospects and ongoing business; argues feasible with future profits. | UST cites domestic support arrears, unfiled tax returns, inadequate expense disclosures, and lack of clear financial picture. | Plan not feasible; insufficient evidence of ability to pay Class One priority and other obligations. |
| Treatment of domestic support arrearages and priority claims | Arrearages are addressed in Class One; claims deemed filed and allowed. | Arrearages and priority treatment conflict with 1129(a)(9) and lack of funds to pay. | Plan improperly alters priority/allowance process; not confirmable. |
| Impact of unfiled tax returns on feasibility and plan administration | N/A or minimal; projections rely on future filings. | Without filed returns, income and tax liability are indeterminate, creating feasibility uncertainty. | Feasibility uncertain; lack of verified tax information supports denial. |
Key Cases Cited
- In re Gyro-Trac (USA), Inc., 441 B.R. 470 (Bankr.D.S.C.2010) (court must independently evaluate plan for 1129 compliance; debtor bears burden)
- In re Landscaping Servs., Inc., 39 B.R. 588 (Bankr.E.D.N.C.1984) (court reviews 1129 requirements even with objections)
- In re Econ. Cast Stone Co., 16 B.R. 647 (Bankr.E.D.Va.1981) (confirmability standards and debtor's burden of proof)
- In re Byrd Foods, Inc., 253 B.R. 196 (Bankr.E.D.Va.2000) (burden on debtor to prove plan meets 1129 requirements)