Jonathan Edwin Lilly, 10-00868

Debtor Jonathan Edwin Lilly (individual) filed a Chapter 11 case with a confirmed plan that was not a liquidating plan.
Lilly filed a Request for Discharge and a Final Report and Motion for Final Decree while plan payments remain incomplete.
The court reviewed applicability of 11 U.S.C. § 1141(d)(3) (liquidating plan discharge requirements) and § 1141(d)(5) (discharge for individual debtors upon completion of plan payments or by court order for cause).
Lilly did not allege cause to grant a discharge despite incomplete plan payments, nor did he provide the notice and hearing contemplated by § 1141(d)(5)(C).
The court found substantial consummation of the plan and indicated it may enter a final decree closing the case under Fed. R. Bankr. P. 3022, but explained closing will stop U.S. Trustee quarterly fees and would require Lilly to reopen the case (paying a filing fee) to seek discharge after completing payments.
The court allowed Lilly 21 days to withdraw his Motion for Final Decree if he prefers to keep the case open to avoid reopening fees; otherwise the final decree will be entered and the discharge request was denied without prejudice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether debtor entitled to discharge now though plan payments incomplete	Lilly sought discharge now to avoid reopening later	Court (respondent) argued statute requires completion or court-ordered cause and notice/hearing	Denied without prejudice; no cause shown and no notice/hearing as required under §1141(d)(5)(C)
Whether §1141(d)(3) (liquidating-plan discharge rules) applies	Lilly implied discharge procedure like Chapter 13 might apply	Court found confirmed plan was not liquidating, so §1141(d)(3) inapplicable	§1141(d)(3) does not apply
Whether court may close case now despite pending discharge motion	Lilly moved for final decree to close case	Court noted substantial consummation permits closing but closing stops UST quarterly fees and complicates later discharge	Court will delay entry 21 days for debtor to withdraw motion; will enter final decree unless withdrawn
Whether notice and hearing required for individual Chapter 11 discharge	Lilly did not give notice or provide opportunity to oppose	Court compared to Chapter 13 practice and §1141(d)(5)(C) requirement	Notice and hearing are required; debtor failed to provide them

Aquatic Dev. Group, Inc., 352 F.3d 671 (2d Cir. 2003) (substantial consummation supports entry of final decree under Rule 3022)
Belcher, 410 B.R. 206 (Bankr. W.D. Va.) (discusses circumstances allowing discharge of unsecured debts before completion of all plan payments)