652 B.R. 828
Bankr. N.D. Ga.2023Background
- Debtor Kevin Malin filed Chapter 7 in April 2011 and did not disclose any personal-injury claim; case closed after discharge in December 2011.
- In 2018–2019 Debtor retained counsel regarding a potential claim against the Bridgeport (CT) Diocese; the U.S. Trustee moved to reopen and a successor Chapter 7 trustee was appointed.
- In January 2019 Debtor amended Schedule B to list a “Potential personal injury claim against the Bridgeport Diocese” (valued at $1,000) and reserved the right to exempt later.
- Trustee retained special counsel (the same lawyer Debtor had retained), investigated, filed a report of assets and ultimately filed a Report of No Distribution and abandoned the claim; the case was closed again in July 2019.
- In April 2023 Debtor moved to reopen the case to amend schedules to disclose a separate lawsuit he had filed in Connecticut against a priest, Matthew Mathews; Mathews opposed and moved to intervene.
- The court held Mathews had standing to participate, concluded the Diocese disclosure encompassed the claim against Mathews (so the claim was abandoned and revested in Debtor), and denied Malin’s motion to reopen as unnecessary/meaningless.
Issues
| Issue | Malin's Argument | Mathews' Argument | Held |
|---|---|---|---|
| Standing to oppose reopening | Mathews lacks “party in interest” status | Mathews will be affected by reopening and can be prejudiced | Mathews has sufficient interest; allowed to intervene and oppose |
| Sufficiency of 2019 Schedule B disclosure | Listing the Diocese necessarily included any claim against Mathews | The Diocese listing did not specifically include Mathews; separate claims exist | Disclosure of claim against Diocese was sufficiently particular to put trustee on inquiry notice and included claim vs. Mathews |
| Effect of abandonment/revesting | Reopening needed so Debtor can amend schedules to name Mathews | Reopening would prejudice Mathews and not benefit creditors | Trustee investigated and abandoned the asset; claim revested in Debtor; reopening would be meaningless and is denied |
Key Cases Cited
- Furlong v. City of Peabody, 660 F.3d 81 (1st Cir.) (scheduling a claim puts trustee on inquiry notice; related claims may be encompassed)
- Payne v. Wood, 775 F.2d 202 (7th Cir. 1985) (schedules must give trustee enough information to decide whether to investigate)
- Nintendo Co., Ltd. v. Patten (In re Alpex Computer Corp.), 71 F.3d 353 (10th Cir.) (party-in-interest concept includes those whose pecuniary interests are directly affected)
- Chalasani v. State Bank of India (In re Chalasani), 92 F.3d 1300 (2d Cir.) (reopening is discretionary; courts decline when relief would be meaningless)
- Tarrer v. 273 B.R. 724 (Bankr. N.D. Ga.) (analysis of standing to oppose reopening)
- Lee v. Forster & Garbus LLP, 926 F. Supp. 2d 482 (E.D.N.Y. 2013) (scheduling a claim can encompass unnamed defendants when minimal investigation would reveal them)
- Bonner v. Sicherman (In re Bonner), 330 B.R. 880 (6th Cir. BAP) (broad scheduling of an accident claim can alert trustee to related personal-injury claims)
- Cole v. Fifth Third Bank, Inc. (In re Cole), 521 B.R. 410 (Bankr. N.D. Ga.) (abandonment/revesting doctrine under § 554(c))