Wiscovitch v. Puerto Rico Electric & Power Authority (In re PMC Marketing Corp.)
482 B.R. 74
Bankr. D.P.R.2012Background
- Debtor PREPA sought dismissal of the Trustee’s March 2, 2012 complaint as time-barred.
- Debtor argues the two-year deadline under §546(a)(1)(A) expired March 18, 2011 without a timely extension.
- Interim Trustee’s status purportedly prevented §546(a)(1)(B) extension benefits.
- Creditor argued §702(b) allows permanent-trustee election to occur until the 341 meeting closes.
- Trustee contends she was elected permanent trustee on Sept. 23, 2010 within §546(a)(1)(A) period or that extensions validly tolled the period.
- Court holds PREPA’s motion to dismiss should be denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether meeting closure sine die ends the §546 deadline | Trustee elected permanent trustee Sept. 23, 2010 within §546(a)(1)(A) | Meeting continued sine die, no definite closure; deadline expired | Denied; court adopts both approaches to conclude meeting closed after Sept. 23, 2010 and deadline tolled |
| Whether interim-to-permanent status affects §546(a)(1)(B) extensions | Interim trustee did not obtain §546(a)(1)(B) extension | Permanent status not achieved by March 18, 2011, so extension not available | Denied; court finds extension available if proper election occurred within §546(a)(1)(A) window |
| Effect of Rule 2003(e) amendment on meeting closure | Amendment clarifies need for written notice of adjournment | Rule 2003(e) prior practice allowed sine die continuances | Denied; amendment clarifies closure mechanism but does not alter outcome |
Key Cases Cited
- In re Newman, 428 B.R. 257 (1st Cir. BAP 2010) (bright-line and case-by-case approaches to closing a meeting; permissible to conclude meeting when not properly announced)
- In re Cushing, 401 B.R. 528 (1st Cir. BAP 2009) (case-by-case approach factor guidance for determining reasonableness of delay)
- In re Cherry, 341 B.R. 581 (Bankr.S.D. Tex. 2006) (case-by-case approach supports flexibility but limits indefinite postponement)
- In re Dutkiewicz, 408 B.R. 103 (6th Cir. BAP 2009) (bright-line rationale cited for finality and certainty in meeting closure)
- Peres v. Sherman (In re Peres), 530 F.3d 375 (5th Cir. 2008) (factors for reasonableness of delay in adjourning meetings)
- In re McGowan v. Ries (In re McGowan), 226 B.R. 13 (8th Cir. BAP 1998) (illustrates consequences of indefinite adjournment in §546 context)
- Lamie v. U.S. Tr., 540 U.S. 526 (2004) (statutory text as starting point for bankruptcy interpretation)