540 B.R. 347
Bankr. N.D. Ill.2015Background
- Debtor Faye Pantazelos filed Chapter 13 on March 13, 2015; original Schedule F listed unsecured debt (later amended) and included an FDIC claim from the closure of New Century Bank labeled "unknown," disputed and unliquidated.
- Trustee moved to dismiss under 11 U.S.C. § 109(e) arguing Debtor’s noncontingent, liquidated unsecured debt exceeded the statutory limit ($383,175); FDIC’s complaint in separate litigation alleged >$33 million in damages and named Debtor among defendants.
- FDIC sued in 2013 on theories of negligence, breach of fiduciary duty, and gross negligence arising from prepetition loans (2005–2008); litigation was in discovery and no proof of claim was filed by FDIC in the bankruptcy.
- Debtor amended schedules twice, reducing total listed unsecured debt to $291,561.11; Trustee relied on FDIC’s pleaded total damages to assert ineligibility.
- Court framed the central legal question as whether the FDIC claim is "contingent" and/or "liquidated" for purposes of the § 109(e) debt cap as of the petition date.
Issues
| Issue | Plaintiff's Argument (Trustee) | Defendant's Argument (Pantazelos) | Held |
|---|---|---|---|
| Whether FDIC claim is contingent | Debt should be included because FDIC’s claimed damages show liability exceeding limit | Claim is contingent (disputed/unliquidated) so should be excluded from §109(e) tally | Not contingent — events giving rise to liability occurred prepetition; claim is noncontingent |
| Whether FDIC claim is liquidated | Trustee treated FDIC’s pleaded total as effectively determinative of debt amount | Claim is unliquidated because amount is not readily ascertainable from complaint or agreement | Unliquidated — damages depend on extensive factfinding and allocation among multiple defendants |
| Whether to consider litigation pleadings / proofs of claim | Trustee relied on FDIC complaint’s $33M figure to support dismissal | Debtor noted no proof of claim filed and complained that complaint does not fix Debtor’s share | Court may look beyond schedules but here complaint does not establish an ascertainable liquidated amount and no proof of claim was filed |
| Overall eligibility under §109(e) | Case should be dismissed as debts exceed statutory cap when FDIC amount is included | Debtor remains under the statutory unsecured-debt limit without a liquidated FDIC claim and is eligible | Debtor eligible for Chapter 13; Trustee’s motion denied |
Key Cases Cited
- Stern v. Marshall, 131 S. Ct. 2594 (U.S. 2011) (on constitutional authority of bankruptcy judges to decide core bankruptcy matters)
- Knight v. Commissioner (In re Knight), 55 F.3d 231 (7th Cir. 1995) (contingency and liquidated/unliquidated distinctions for eligibility)
- Mazzeo v. United States, 131 F.3d 295 (2d Cir. 1997) (definition of liquidated claim and ascertainability)
- United States v. Verdunn (In re Verdunn), 89 F.3d 799 (11th Cir. 1996) (liquidation assessment where value depends on future factfinding)
- Barcal v. Laughlin (In re Barcal), 213 B.R. 1008 (8th Cir. BAP 1997) (reliance on schedules and proofs of claim for §109(e) determinations)