447 B.R. 254
Bankr. W.D. Ark.2011Background
- Sysco Arkansas, LLC filed a state court judgment against Debtor in 2009 (~$33,000) and sought garnishment pre-petition.
- Debtor filed a voluntary Chapter 13 petition on April 8, 2010; Sysco was not listed as a creditor on the petition.
- Notice of Chapter 13 Case and bar date (Aug 10, 2010) was issued but not forwarded to Sysco.
- Debtor’s Schedule F listed Sysco as “Sysco c/o Paul Hickey” with a $33,000 judgment but did not amend the creditor matrix.
- Sysco filed a late proof of claim on Oct 8, 2010 (claim 12-1) after learning of the bankruptcy in Sept 2010; Debtor objected Jan 5, 2011; Sysco answered Feb 4, 2011.
- The court overruled Debtor’s objection and allowed Sysco’s claim under equitable due-process principles.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sysco’s claim was timely filed under Rule 3002(c). | Harris argues untimely filing; lack of notice. | Sysco failed to receive proper notice; not timely. | Sysco’s claim is allowed; equitable considerations override strict timeliness. |
| Whether Sysco received proper notice of the bar date. | Not explicitly stated; focus on notice to Sysco. | Debtor did not list Sysco in the creditor matrix; no notice. | Sysco did not receive proper notice due to omission from the creditor matrix. |
| Whether due-process/equitable grounds permit late filing of a claim in Chapter 13 when no notice was given. | Argues for strict application of rules; no equitable relief. | Courts split; debtor’s omission can warrant equitable relief. | Court adopts equitable approach; permits late filing and allows Sysco’s claim. |
Key Cases Cited
- In re Griggs, 306 B.R. 660 (Bankr. W.D. Mo. 2004) (notice to counsel can satisfy notice to the creditor; due process considerations considered)
- In re Cole, 146 B.R. 837 (Bankr. D. Col. 1992) (due process and equitable relief for creditors with no notice)
- In re Smith, 21 F.3d 660 (5th Cir. 1994) (strict interpretation of rules vs. equitable relief; due process concerns)
- In re Rose Exterminator Co., Inc., 135 B.R. 637 (Bankr. E.D. Mo. 1992) (due process requires notice of claims bar date; relief may be allowed)