629 B.R. 340
Bankr. E.D.N.Y.2021Background
- Debtor Online King LLC filed a Chapter 11 petition and elected Subchapter V on July 10, 2020; Subchapter V requires the debtor alone to file a plan within 90 days (§ 1189(b)).
- The 90-day deadline expired on October 8, 2020; the Debtor did not file a plan or seek an extension before that date.
- On October 21, 2020 the Debtor moved (signed by counsel, without affidavits) for a retroactive 90‑day extension, citing only generalized reasons: workload, Jewish holidays, competing demands, and the COVID‑19 pandemic.
- The court considered (1) whether it may grant retroactive (nunc pro tunc) relief under § 1189(b) in light of the Supreme Court’s decision in Acevedo Feliciano and (2) whether the Debtor met the substantive § 1189(b) burden to justify an extension.
- The record showed the Debtor previously represented it would file within 90 days, filed monthly operating reports showing continued operation, and continued to prosecute other matters near the deadline; the Motion lacked factual support or declarations.
- The court denied the Motion: it concluded § 1189(b) permits discretionary retroactive relief but the Debtor failed to meet the stringent, evidentiary burden required to justify an extension.
Issues
| Issue | Debtor's Argument | Opposing Argument | Held |
|---|---|---|---|
| May the court grant a retroactive (nunc pro tunc) extension of the § 1189(b) 90‑day plan‑filing deadline after it has expired (post‑Acevedo)? | The court may exercise discretion to extend the period retroactively under § 1189(b). | Some authorities question retroactive relief after Acevedo; parties pointed to limits on nunc pro tunc relief. | Court: § 1189(b) is silent on timing and implies the court may grant retroactive relief; thus court need not decide whether Acevedo categorically forbids such relief here. |
| Does § 1189(b) require a motion for extension be filed before the 90‑day deadline? | No explicit timing requirement in § 1189(b); Debtor filed after the deadline. | Practical argument that moving before deadline is required by other Code provisions and to avoid dismissal risk. | Court: No statutory requirement to file before expiration (contrast § 1121); but moving after deadline is risky because failure to file a plan is "cause" under § 1112 and the debtor bears the burden. |
| Did the Debtor meet its burden under § 1189(b) to justify a 90‑day extension? | Extension needed because of negotiating workload, Jewish holidays, competing demands, and COVID‑19 disruptions. | Motion lacked affidavits/evidence, was filed after deadline, and record contradicted claimed impediments. | Court: Denied—reasons were conclusory and unsupported; burden under § 1189(b) is stringent and Debtor failed to show circumstances beyond its accountability. |
Key Cases Cited
- Roman Catholic Archdiocese of San Juan v. Acevedo Feliciano, 140 S. Ct. 696 (2020) (limits and clarifies use of nunc pro tunc orders)
- In re World Trade Ctr. Lower Manhattan Disaster Site Litig., 758 F.3d 202 (2d Cir. 2014) (discusses inherent power to enter orders with retroactive effect)
- Duncan v. Walker, 533 U.S. 167 (2001) (statutory omission/inclusion canon—expressio unius)
- In re Lundberg, 621 B.R. 561 (Bankr. W.D.N.Y. 2020) (interpreting identical § 1221 to permit retroactive extensions where appropriate)
- In re Ventura, 615 B.R. 1 (Bankr. E.D.N.Y. 2020) (discusses SBRA purpose to streamline Subchapter V and expedited process)
- In re Seven Stars on the Hudson Corp., 618 B.R. 333 (Bankr. S.D. Fla. 2020) (explains heightened standard for extensions under Subchapter V)
