In Re: Wayne E. Bell, Jr., Debtor. Wayne E. Bell, Jr. v. Deborah Bell

LEVAL, Circuit Judge: appeal This question raises the whether the conversion a bankruptcy case from Chapter Chapter 11 to 7 triggers a new period filing objections for property claimed exempt during proceeding. We hold that it does not. Moran, Illinois, *The Honorable B. James Senior Unit- silting by designation. tricl of Judge ed States District for the Northern Dis- objections to a debtor’s period in the for impression of first question is a This A new exemptions. claimed Appeals.1 Courts objections incompa- furthermore would debtor) (the Bell, appeals E. Jr. Wayne proper- the debtor’s substantive tible with of the United States judgment timely un- ty rights exempted for the District Vermont District Court 522(i). We, therefore, der C.J.) Murtha, an or- (J. affirming Garvan the conversion of a case from hold States of the United der 11 to 7 does not initiate (Francis District of Vermont for the Court exemptions Bankr.J.). Conrad, On G. proceed- during claimed case from the debtor’s ing.2 filed an Chapter 7 trustee previously certain assets objection to Applying this rule of law the undis- debtor, on the exempt by claimed as (1) we conclude: facts of this case puted that, exemption, claiming ground objection to debt- timely the last date for them. had undervalued the debtor 13, 1997; was June or’s the trustee’s court sustained (2) objection to 7 trustee’s argument rejecting debtor’s objection, on November exemption, debtor’s filed filed that, objection'was because untimely; as of June conclusion of the days after the within 30 522(l), 1997, § of 11 by operation Chapter meeting of exempt as was ex- claimed untimely Fed. R. it was proceeding, (4) therefore, longer it no formed empt; 4003(b). review, the district On Bankr.P. § estate and had part of the U.S.C. or- bankruptcy court’s court affirmed debtor, free of claims. revested a case der, that the conversion of holding Accordingly, we vacate the district triggers a Chapter 11 to Chapter from and judgment court’s remand. exemptions, new for post- of the from the conclusion running meeting of creditors. We dis-

conversion I. BACKGROUND agree. Proceedings A. Facts and Below The only that require not Because Rules not in straightforward facts are The of the days within 30 objections be filed 13, 1996, Bell, Wayne E. June dispute. On creditors, see meeting of the conclusion debtor) (the petition filed a bank- Jr. 4003(b); 522(0, also but Rule 11. The debtor ruptcy creditors itself be con- meéting that the exemptions his state law elected take days of the order vened within 522(b)(2). Among to 11 U.S.C. pursuant relief, Rule see U.S.C. exempt he claimed as on the assets that 2003(a), conversion does and because 490 shares relief, C were his Schedule the order for change the date of (“Rockwell’s”), a Inc. Quality, 348(a), that Rockwell’s we conclude see 11 U.S.C. corporation, of which closely-held Vermont the limitations does not reset bankruptcy We under- court. Appellate tained Bankruptcy Pan- 1. We that the note Eighth recently ruling applies only to conver- Circuit has held that our el for the score Chapter 13 converted from where a case was note Chapter 11 to 7. See sions from 7, had a new 7 trustee accompanying text. infra, and claimed day period to debtor's 30 exemptions. (In Alexander), v. Jensen-Carter See Alexander support bankruptcy Leading commentators BAP 239 B.R. 911 Cir. re Bankruptcy holding. on See 9 Collier Quite 1999). apart be- differences 4003.03[1], (Lawrence ¶ King P. at 4003-8 Chap- Chapter 7 a Chapter 13 to tween a Norton, 1999); ed., 2 William L. ed. rev. 15th Chapter 7 we find ter 11 to n Jr., 2d & Practice Norto Law objection to factually in that an distinct (Supp.2000). § 46:33 n. 9 timely exemption raised in the had been proceeding previously sus- director, is, officer and On principal he November 1997—that days after the Original restaurant in Man- conclusion of the operates which small chester, Vermont, Meeting Quality. known The trustee filed an as —the objection to the claimed exemp debtor’s valued these shares at debtor $490 tion of the 490 of Rockwell’s stock shares exempt and claimed the whole $490 ground on the that the had debtor under exemption. catchall under Vermont’s their At a 2740(7).3 hearing estimated value. 12, § Vt. Stat. Ann. tit. 6, 1998, January bankruptcy court sus 12, 1996, the August United On objection tained the trustee’s to the ex convened a of cred States trustee emption; rejected the court the debtor’s 341(a) (the itors that, objection argument because the had representative “Original Meeting”). thirty days not been filed within States trustee examined the United creditors, Original Meeting it was unt then debtor and the ad imely.5 The bankruptcy court entered a journed to November 1996. The meet January written order to this effect on ing May was never reconvened but on review, 1998. On court af district filed his Plan and when court, holding firmed the Disclosure the clerk entered on Statement bankruptcy proceeding when a is convert the docket sheet the notation “Terminate a Chapter proceeding ed from to a Meeting.”4 Deadline Re: First It is undis Chapter proceeding, thirty-day puted objection that no was raised to the objection period begins run from the during the debtor conclusion of the post-conversion meeting proceedings. these (In of creditors. See Bell Obuchowski Bell), (D. 1:98CV111, slip op. No. at 3 24, 1997, September the case was On 8, 1998). appealed.6 Vt. June Debtor proceeding, pur- converted to § suant to 11 and an inter- U.S.C. B. Relevant Law appointed, pur- im 7 trustee was § suant 701. to U.S.C. On October When an individual peti meeting another of creditors was bankruptcy tions for he is entitled to claim (the convened “PosNConversion Meet- property exempt certain as from the es 522(b) adjourned § ing”). meeting This was to No- tate. See 11 (allowing U.S.C. 13,1997. vember debtor to elect to take exemptions provid- 12, 2740(7) provides ferently § 3. Vt. only Stat. Ann. tit. an because it was directed at the exemption aggregate exemption, for “the debtor’s interest value of the we do not address issue, any property, $400.00 appear in value, not to exceed that on which commentators $7,000.00 plus up any split. of unused Compare Bankruptcy 9 Collier on ¶ 4003.03[3], specified exemp- (“[T]he amount of other [certain at 4003-12 debtor’s val- tions].” property exemption purposes uation of the accepted objec- must be once the deadline for Otherwise, passed. tions has that deadline bankruptcy 4. It is settled law that a court has meaningless.”) would be with 1 Robert E. authority indefinitely to conclude an ad- Martin, See, Ginsberg Ginsberg & Robert D. journed meeting. e.g., and [F], (Bankr.N.D.Ohio 1994). § Bankruptcy Martin on B.R. 6.01 6-18 922-23 ("An event, Supp.) any objection ed. 1998 party argues Origi- neither that the to the valua- Meeting property exempt pur- was tion of debtor's claimed as nal not "concluded” for poses commencing 30-day objection objection exemption of differs from an to an 4003(b). days under Fed We need be raised R.Bankr.P. within 30 of the 341 issue, meeting.”). therefore do treat not address this properly See Fed. concluded. 28(a)(8)-(9), 28(b); R.App. City P. LoSacco v. 6. During pendency appeal of Middletown, Cir.1995). (2d F.3d trustee sold all of its interest Bell, ap 490 shares of stock to Deborah wife, party having argued appeal pellant’s 5. Neither former who was substituted as objection appellee the trustee’s should be treated dif- on November law); 522(i) § state or ed federal id. period for the objections to a (requiring debtor to file list of debtor’s claimed exemptions, pursuant exempt); claimed as R. 4003(b). Fed. Bankr.P. Fed. R. Bankr.P.

4003(a). Any creditor bankruptcy and the may objections

trustee file to the debtor’s II. DISCUSSION of property exempt. list claimed as See A. Standard Review 4003(b).7 However, Fed. R. Bankr.P. ab- circumstances, special objec- sent these In an appeal from a district tions must be filed days “within 30 after court’s review of a bankruptcy court rul the conclusion of the meeting of creditors ing, our review of court is 2003(a).” pursuant to held Rule Id. If no independent plenary. See FCC v. made, objections are then “the property Communications, NextWave Personal Inc. exempt claimed as ... is exempt.” 11 (In re NextWave Personal Communica 6220). U.S.C. tions, Inc.), (2d Cir.1999) 200 F.3d curiam). (per accept We its factual find The Bankruptcy provides ings clearly erroneous, unless but review “[wjithin reasonable after the its conclusions of law de novo. See id. title, order relief a case under this the United States trustee shall convene Analysis B. preside at a creditors.” 11 341(a). The debtor argues plain U.S.C. mean- Rules 5220) ing of 11 U.S.C. together read requires Procedure “a with Rule meeting of controls the outcome be held no fewer this case: unless timely objections than 20 and no days more than 40 after filed, property exempt claimed as the order for relief.” ex- commencement Here, empt. (1) dispute there is no voluntary case 11 con were filed within days stitutes order for relief. See 11 the Original Meeting conversion of a creditors and initially no extension of that brought under time limit was sought one chapter the Bank 4003(b). or obtained. See ruptcy Fed R. BankrJP. Code to a case chap-, under another Therefore, he argues ter the property also constitutes “an order for relief 5220). exempt. chapter to which the case is converted,” but “does generally not effect If the case had been in Chap a change ... the date of the order for ter 7 or inception since its and 348(a). relief.” conversion, had involved no argument this

On Bankruptcy the would be Bankruptcy unassailable. The expressly provide Rules that a new time Rules expressly limit a bankruptcy court period shall commence for filing the from extending period the time objec for claims, pursuant 3002, tions, to Fed. R. 4003(b) Bankr.P. except provided as in Rule for the filing of a complaint objecting 9006(b)(3) to itself. See Fed. R. Bankr.P. discharge, pursuant (“The to Fed. R. Bankr.P. may court enlarge the time for tak for filing and complaint a ing 4003(b) action under Rule[ ] ... ... a obtain determination dischargeability, only to the extent and under the conditions pursuant rule[].”). Fed. R. Bankr.P. 4007. See By [that] stated its terms 1019(2). R. However, 4003(b) Fed. Bankr.P. Rule Rule allows an extension of 1019(2) includes no reference to a period new objections time for filing only if the pertinent 4003(b) part, 2003(a) In Rule reads: Rule any or amend- any trustee may objec- creditor file supplemental ment to the list or schedules tions empt the list of unless, claimed as ex- period, within further such time is days within 30 after the conclusion of granted by the court. meeting pursuant held creditors meeting of which determine” thirty-day within granted extension objections in a for period determines the & Taylor v. Freeland In period itself.8 case). that we concede While 118 conversion

Kronz, 112 S.Ct. 503 U.S. case, directly control this not Taylor does (1992), Supreme Court L.Ed.2d 280 Rule 9006 the strictures 522(i) it and Rule both and 11 U.S.C. interpreted wary of be that “courts should Chapter 7 counsel 4003(b) a holding that strictly, operation of modifying the validity of a contest the not trustee could expedient.” they deem policy pe- for reasons thirty-day exemption once (Bankr. Brown, 722, 725 178 B.R. In re no exten- objections had run for riod E.D.Tenn.1995). period, within obtained sion had been had no notwithstanding that gives contends Appellee exemption. claiming the for colorable basis objections. Textu- for period new rise to a “Deadlines opined: Supreme Court for for a new ally, argument results, they but to unwelcome may lead R. Bankr.P. Fed begins- with objections they produce act and parties to prompt objections provides which at finality.” Taylor, 503 U.S. days after “within 30 may filed simple a 1644. Were S.Ct. held meeting of creditors conclusion of objections therefore, case, the trustee’s 2003(a).” turn, Fed. to Rule under the untimely would be barred Bankr.P.2003(a) that a requires R. binding Rules themselves Bankruptcy no fewer ... be held creditors “shall precedent. days after than 40 20 and no more than See also for the order However, the dissent appellee and relief.” States that United (providing 11 to from that conversion argue credi- convene trustee shall different result. See produces “[wjithin time after a reasonable tors Taylor did Because Br. at 6-9. Appellee relief”). aof The conversion order for two conversion between not concern Chapter 7 “consti- Chapter 11 to Code, from they Bankruptcy chapters for relief.” any tutes an order compel does not holding argue its therefore, 348(a). argues that op. Appellee, dis. in this case. particular result (1) an “order conversion is re de because the also In n. see & post relief,” convening of a (Bankr. it Kleinman, requires creditors, because however, (“The meeting of S.D.N.Y.1994) Taylor counted period for a conversion the effect of did not address creditors, meeting not the conclusion Taylor does holding ... and the Rules case].”); the text of the [this the outcome of dictate (Bankr. requires a new time plainly B.R. Put sim- converts. objections when a case 1994) purport (Taylor N.D.Ohio “does Further, 9006(b)(3)). circuit mandate of Rule Writing majority, Thomas in Justice for 638, Kronz, strictly the uniformly U.S. 112 Taylor construed v. & 503 courts have Freeland (1992), 1644, 4003(b) did not L.Ed.2d 280 S.Ct. to extend under Rule power of courts 9006(b)(3). expressly and discuss Rule 30-day period: mo within the the deadline to ex- limiting power of courts narrowly granted, not extension must tions for the the rule period objections, for tend the v. period. See Clark merely filed, within the precluding provides "identifiable reason” an 1255, (In Brayshaw), 912 F.2d Brayshaw re by Justice arguments advanced equitable ("There Cir.1990) (10th simply is no 647, 112 S.Ct. id. See at Stevens in dissent. construing wording room J., ("[Tjhere (Stevens, dissenting) i$ 9006(b) 4003(b) permit granting an or Rule tolling prin- ordinary why reason identifiable outside the objections time to file extension of should not apply other ciples that contexts limit.”); Rog accord original thirty-day time bankruptcy proceedings....”). apply also 595, Laurain), (In 113 F.3d v. re ers Laurain Zidell, (In Alaska Coastal v. Forsch re Inc. Cf. (Mat (6th Cir.1997); Stoulig v. Traina Cir.1990) (no 598-99 Lines, (9th Inc.), F.2d 1428 Cir.1995). Stoulig), F.3d ter depart power exists to equitable ply, because there is a new meeting of period new to previously claimed creditors there is a new object. exemptions. While we reach this conclu- sion on the basis of statutory construction deny We do not the superficial appeal of alone, we also find unpersuasive those low- reasoning. this It adopted by the er courts that have held that our conclu- lower argues courts vigor dissent sion ignores policy of the Code and the ously that appeal. affirm it we See dis. “practicalities” of its administration. op. post at 206-07. reasoning The same has been endorsed several C. Statutory Construction See, courts. e.g., In re 175 B.R. Kleinman, at In re de at B.R. 1. The Post-Conversion Meeting was 768-69; Bergen, Matter 163 B.R. not a “meeting held pur- (Bankr.M.D.Fla.1994); LaRossa ” 2008(a) suant to Rule (In

Leydet Leydet), re 150 B.R. 643- (Bankr.E.D.Va.1993). reject We it be Read “[laterally,” In Hava cause we find it incompatible with both the nec, neither Rule language purposes and the of the Code. 2003(a) nor Rule supports appellee’s argument. See op. dis. post also at 207. The Bankruptcy presents three Although it is true that a conversion “con significant appellee’s (1) bars reading: stitutes order for relief’ under 11 the PosNConversion Meeting was not “a 348(a), U.S.C. that very section also meeting of creditors held to Rule states that a conversion “does not a effect 2003(a),” R. Fed Bankr.P. in that change in the of ... date the order for it was not convened days within 40 added). Id. (emphasis Here, relief.” (2) relief; order of objec- debtor’s voluntary filing petition tions is not within the specifically enumer- on June constituted ated exceptions to the general rule that an “order for relief.” See 11 the date of the “order for relief1’ is unaf- The date of that “order for relief’ was the fected by see 11 U.S.C. date commencement of the volun 348(a), (b), therefore this pe- limitations tary case. See id. 348(a), Under section riod remains by conversion; unaffected conversion leaves that date unchanged; ac allowing a period is all cordingly, provisions of the Code that incompatible with the previously effected keyed are to that date are also unaffected exemption debtor’s by conversion. F & M Marquette 522(¿) al- impermissibly Richards, Nat’l Bank v. 780 F.2d procedural lows a rule abridge a sub- (8th Cir.1985); 3 Collier on Bankruptcy stantive right, see 2075. We ¶ 348.02, (Lawrence at 348-6 ed., P. King develop each of arguments these below. rev.1999). 15th ed. The time periods for We, therefore, agree cannot with the holding meeting of creditors established dissent case presents 341(a) choice section and Rule between policy positions, two both with keyed to Hence, “the order for relief.”9 “strong support.” textual op. post Dis. at meeting of creditors “pursuant convened 206. We hold when a 2003(a)” case is converted to Rule is convened within 40 from Chapter 11 to there days (subject 60)10 is no to extension to turn, periods In 2003(a) time the of Rule 9. Original We note Meeting that the of credi- 10. strictly tors, may 12, 1996, "[t]he court August not en- on enforced — was convened large taking the for time days action under Rule[ ] after the order for relief. Rule 2003(a)." 9006(b)(2). ... Fed R. Bankr.P. meeting allows a up be to to convened “ In the Bankruptcy 'may prohib- days not' is from the place for relief order the where itive, permissive.” and not designated meeting for regularly the is "not 102(4) ("Rules construction”). of by the staffed United States or an trustee (or case, the to from the date of conclu- began run this within order for relief—in 14, i.e., 60) meeting, May of the vol- of that the commencement sion days of 13, 11, exemptions objection to filed Any on June 1997. untary under 13, Meeting of June 1997 was therefore untime- after 1996. The Post-Conversion objec- ly. the 7 trustee’s until October Because creditors was convened 1997, until 16, 1997, order was not filed November months after the tion sixteen case, of “meeting untimely.11 the was for In this it relief. 2003(a)” pursuant to Rule held

creditors 4003(b) Origi- the referred to Rule reading is not authorized Appellee’s August on Meeting, nal convened by specifically the enumerat- any of the commencement shortly general after rule exceptions ed to the case, not the Post-Conver- “order that the date the for of relief’ later year over a Meeting sion convened by is conversion unaffected to after the conversion 1019(2) expressly provides that Rule periods time for reject triggers construc conversion therefore the We filings Rules 4004 and 4007. literally, ... Rule under “[r]ead tion that period for a new during provide which It does not time permits 30-day periods two exemptions filing objections to objections may made to for be 4003(b). appellee dispute Debtor In re 175 Rule a debtor.” of significance of the this silence. Debtor B.R. at 921. Because there one date 4003(b) Rule conver that the exclusion of (regardless argues the for relief of order 1019(2)’s 348(a), sion), precise listing can of new there be from Rule see U.S.C. 60) (or periods that must be taken be inten- only days from time one deadline 40 preclude any tional and to similar treat- meeting pur date the of creditors held for 2003(a). period Any objections to Rule ment of the time appeal suant Rule 4003(b). 4003(b) argues Debtor unavailing, because under Rule is therefore 4003(b) only an would be an unwarrant- timely Rule filed such extension allows provided list expansion after of the exclusive objections days those “within 30 ed filed 1019(2). Appellee responds meeting of creditors in Rule conclusion 2003(a).” extension is an pursuant not to allow the unwarrant- held Rule (Bankr. plain meaning Rule Halbert, ed restriction W.D.Tex.1992) post-conver disallowing in that extension (holding “meeting of credi- required meaning to elect limits meeting sion creditors trustee, only tors” to the first creditors pursuant Leydet, 150 in a converted case. See In re is not of creditors 2003(a)). Here, only meeting According argument, B.R. at 643. to this to Rule 1019(2) makes no reference ex- time was the Rule convened within that Therefore, periods tending Rule time under Rule Original Meeting. 4003(b)’s “meeting 30-day meaning time because meeting.” may timely be within may preside at the converted case still who assistant matter, we While the record is silent periods pre-con- established in the infer that this must have occurred example, For this scenario version case. 9006(b)(2) present prohib- because Rule involuntary might proceed- where happen an any periods its extension the time estab- ing brought event, 2003(a). any lished under neither voluntarily 7. Sim- converts Meeting argues party, Original ilarly, meeting of untimely. of creditors was itself being might adjourned “conclud- without ed,” objections pe- thereby tolling 30-day objections first filed 11. We do not hold that only We that conversion of itself post-conversion meeting riod. hold following can timely. be- give Where the extension of the time never be does not rise swiftly entry chapters happens tween after objections. period to file relief, objections original order filed in

213 (Bankr.W.D.Wis.1986) (“The any so embraces plainly express of creditors” that meeting of creditors the reference Bankruptcy intent of Rule 1019 im- which Leydet, “unnecessary.” was plements preserve any section 348 tois 643; In B.R. at see also prior action in taken the case to conver- (“For all appears[,] that B.R. at ¶ sion”); 348.08, 3 Collier on 1019(2) might of well have draftsmen Rule 1019, at App. 348-22 n. & id. at language of Rule concluded (reproducing Advisory 1019-29 Com- 4003(b) sufficiently clear to assure (“This mittee Note to Rule 1019 rule ... to the trustee could claims implements 348 of the Code.... The chapter following the conclusion of the any rule is not intended ac- to invalidate the case had been meeting after tion superseded taken in the case before converted.”); op. dis. at 208. post accord 7.”12)). chapter its conversion to reject appellee’s argument. We above,

First, of as noted text Rule short, designed In section 348 is 4003(b) any “meeting does not to of refer precisely resetting avoid of dead but “the of cred creditors” rather peri lines and the reopening of limitations 2003(a).” to Rule itors held As appellee ods that the advocates. To effect above, restriction explained limits the 348(a) purpose, this section establishes the days fol that, general in rule a converted lowing the conclusion of cred dates of filing, the commencement of (or 60) days itors convened within the case and the order for relief remain Second, for relief.” Rule 1019 is “order unchanged by the except as implement intended to (b) expressly provided in subsections and independently and cannot be construed (c). relief,” As to “the order for subsec that section. To understand Rule 1019 we 348(c) 348(b) specific tions and enumerate 348. must look section rule, exceptions general to the out setting a those sections where converted purpose The of section 348 is to the date of the shall as preserve already conversion serve actions taken in the case Indepen date of the “order for relief under this Kepler before conversion. See (Matter Ford), 1019(2) 913, turn, chapter.”13 give B.R. Rule can dence Bank 1221, 1146(b), 1201(a), 1228(a), 1301(a), language note that Rule 1019 We title, was amended in 1997 delete terms and "the order for this “superseded "original petition.” case” and chapter” chapter relief under this in a Advisory note to the 1997 Committee which a case has been converted under 348, imple- Amendment clarifies that 706, 1112, 1208, section or 1307 title of this continuity mented intends means such case such the conversion of phrase 'superseded conversion cases. “The chapter. case' deleted it the errone- because creates (c) 365(d) title Sections and this impression a ous case re- apply a case that been has converted a new case that is from the sults in distinct under section Similarly, 'original original phrase case. title, as if the were conversion order petition’ erroneously is deleted it im- because the order for relief. plies petition that there is second with re- converting Of those sections relevant to case spect to a converted case. See 348 of the 727(a)(10) 727(b) into sections and 728(a) advisory Fed. Code.” R. Bankr.P. 1019 com- dischargeability; concern sections Amendments, reprinted mittee's note to 1991 (and 728(b) provisions special are taxation Bankruptcy App. Collier in 9 applicable their own terms where 1019-33. 11); case converts from 701(a) and section appointment to the of the inter- relates exceptions enumeration of these (c) §§ in full: im trustee. None of these relates reads right (b) to the or the claim Unless the court for cause orders oth- 365(d) erwise, per- 701(a), 727(a)(10), object thereto. Sections 342 and in sections 728(a), 728(b), 1110(a)(1), 1102(a), executory tain to contracts notice 1121(b), 1121(c), 1141(d)(4), 1146(a), unexpired leases. for the date triggers a new exceptions enumerated only these to effect a point to to for relief. Unable Neither section order rule.14 general to the position, the 702(b) her supports for the elec- that (providing provision section nor to redraft implicitly “[a]t 7 trustee asks us appellee tion of conspic- under section held that is provision creditors a meeting of to include excep- 341”) enumerated among these inappropriate is It would be uously absent. 348(c) Moreover, subsection tions. —set do so.15 to that shows Con- margin clearly in the out — 1019(2) circum- is of Rule The reach the lan- precisely to draft knew how gress 1019(2) § Rule by U.S.C. scribed admin- apply general a necessary to guage 4003(b) not because Rule to fails mention 341) (section special in the istrative rule 4003(b) is so clear of Rule language that such converted context of a among listed expressly not be it need credi- meeting of to the keyed deadlines on con- extended rules deadlines with date of run from the tors were reset 225, but be- version, op. post see dis. acci- it as regard cannot We conversion. authorization statutory there is no cause Congress dental unintentional time to extending the 348 for under section precisely its section omitted exemptions.16 object to claimed to which as circumstances list of drafted id., Congress could noted, 1019(2) ambiguous exception,” ex- example, as Rule For enumerating the 4004(b) clearer in have been not Rules tends the deadlines Code to of the and subsections complaints ob- exact sections 4007(c), govern rules which those exception applies. None of which determination discharge and the jecting to 1019(2) extension an excepted sections authorizes dischargeability of debt. objections. the time to file reference in 1987 include was amended holding & M in F codify the rules to these Richards, F.2d Marquette Bank v. misperceives Nat'l respect, the dissent 16. In one Cir.1985). Bankr.P. 1019 Fed R. "there is no holding. We do not hold that our 1987 amend- advisory note to op. committee’s meeting Dis. § after conversion.” ments, ("the Collier reprinted majority in 9 id. at 225 post at see also held, 1019[2], That case App. op at 1019-31. rejected an Congress ... concludes alternative, triggered an meeting that conversion post-conversion portunity a for sixty-day for creditors”). post-conver only extension a We hold op- complaints because dischargeability automati meeting not of creditors does sion includes which keyed eration of the order periods cally reset time spe- provisions relief, pro one of the Code's otherwise section 348 for unless general rule of cifically excepted from the meeting every of cred section 341 vides. Not ("For 348(a). at 26 See 780 F.2d mandatory meeting required section sub itors is a debts, the dischargeability Bankr.P.2003(a). 341(a) purposes and Fed. R. section relief in the order for trig meeting conversion becomes is every of creditors And not (citing proceeding.” converted entry order for relief. gered by of an 727(b))). 348(b)'s to 11 U.S.C. reference dies or example, Chapter 7 trustee if a For in the statutory exists authorization such No section 322 resigns, qualify or fails to present case. 324, creditors under section or is removed meeting at a Smith, may vote for a successor trustee 499 U.S. States v. 15. See United according procedures set (1991) of creditors 113 L.Ed.2d 111 S.Ct. 703(a), §§ 702. See U.S.C. out in section ("Where cer Congress explicitly enumerates requires 702(b). election trustee exceptions are exceptions tain ... additional 702(b). ”) (internal meeting See 11 of creditors. quotation implied ... not to be "held meeting would omitted); of creditors That Commissioner marks Clark, citation 341,” id., but such under section S.Ct. 489 U.S. mandatory creditors "a not (noting that where L.Ed.2d R. Bankr.P. and Fed. subsection qualified policy an general statement 2003(a), date of the order effect on the exception nar has usually exception, read the we relief, reset the not therefore does opera primary preserve rowly in order Clark, Here, order for relief. periods keyed to that provision”). unlike tion of gives every meeting Clearly, principle favor invoked the where the Court objections to to a renewed rise exceptions in order reading of ing narrow exemptions. reading of a "somewhat reject expansive S. A objections period new incompa- 541(a)(6), § is id. is property of the estate.

tible with substantive 11 But property acquired post-petition by the effect of 522(1) § U.S.C. and impermissibly debtor does not estate; enter the it re procedural allows a abridge rule to separate mains the property of the debtor. right substantive Casey Hochman, See v. 1347, 963 F.2d (10th Cir.1992) 1351 (stating “general rule Savings United Ass’n v. Tim post-petition Associates, acquisitions Ltd., bers Inwood Forest are property 484 of debtor”); of 365, 371, 626, U.S. 108 accord In re S.Ct. Winom Tool L.Ed.2d Die, Inc., (1988), & (Bankr. teaches 173 B.R. “[statutory con E.D.Mich.1994); struction ... is a holistic see endeavor.” Even also 5 Collier ¶ if (as the Code 541.03, and Rules left it ambiguous (“In at 541-9 to 10 not) they do whether general, resets the property conversion ... subsequently ac objections deadline for 4003(b), quired under Rule by the debtor does not become only the conclusion that it “pro does not property estate, but, of rather, be duces a substantive effect compati that is comes the personal debtor’s property, ble with the rest of the law.” Timbers clear of all claims that are discharged in of Assocs., Inwood Forest 484 U.S. at case.”). the bankruptcy 108 S.Ct. 626. Because the result advocat by ed the appellee and the dissent conflicts Such after-acquired property

with well-settled law on effect of 11 includes property that exits the estate and 522(Z) § U.S.C. on the debtor’s property revests in the debtor through the exemp rights, reject we must it.17 process. tion As already noted, the Code provides that “[u]nless a party in interest voluntary, joint, or invol objects claim], [to the debtor’s untary petition proper filing of applica ty claimed chapter exempt ble as ... is exempt.” of the Code constitutes a com 522(i) added). (emphasis mencement of the case It and “creates an estate ... well-settled [comprised, law that except the effect as otherwise of this self- provided, legal executing all equitable exemption of] or is to property interests remove of the from debtor in the estate property and to as the com vest it debt mencement Owen, or. See 305, 308, case.” Owen v. 500 U.S. 541(a)(1). Thereafter, property of S.Ct. L.Ed.2d 350 (when the estate is distinct from the property property exempt, becomes it the debtor. Property acquired (and by “withdrawn the es from the estate hence tate creditors) after the commencement of the from the for the benefit of the 541(a)(7), see 11 U.S.C. debtor”); together Peat, with Marwick, Redfield “[pjroceeds, product, rents, offspring, (In Robertson), Mitchell & Co. re 105 B.R. profits of or from property estate,” (Bankr.N.D.Ill.1989) (“The of the effect is no result different regards case of 17. consistency As with the overall scheme, when the procedures election set statutory we holding note that our out in by operation 702 are section invoked that the of case section 701 rather than 703. section We do trigger period does not a new dispute that a comports also with the rule that may required be in order to elect a that the debtor is entitled to trustee when case is Chap- converted from claim are those that were in effect and to ter 11 into Marquette 7. See F M & which he was entitled at Bank,

Nat'l op. F.2d at post original dis. at and not the time of the only We hold Beshirs, that such a is not conversion. 236 B.R. mandatory meeting required (Bankr.D.Kan.1999) under sec- (Chapter Chap to13 341(a) tion conversion); and Fed. R. (In Bankr. ter 7 DiBraccio v. Ferretti re that it Ferretti), has effect on the (Bankr. limitations 889-90 4003(b). established S.D.Fla.1999) Fed. R. Bankr. See In (Chapter 13 to 7 con Halbert, version) 146 B.R. at cases). (collecting being estate virtue has left the claim of allowance automatic operation exempted by the 30-day expiration exemption due 522(i) differently from treated law, should is, well-settled by virtue left the estate that has property and end in the Debtor property revest the under 11 U.S.C. estate”) (inter plan of confirmation its status 1141(b). property of now the omitted); Both and citation quotation nal marks bankruptcy debtor, of part no the Halbert, at 188-89 the form 146 B.R. re accord In of jurisdiction the estate, beyond Brown, B.R. cases); re 178 In (collecting bankruptcy court. the cases); Tur see also (collecting at 726-27 Turner), (In 724 F.2d re Ermiger ner v. short, to have a In J.) (where Cir.1983) (2d (Friendly, 388, 341 upon to opportunity exempt already “reclaimed” has a debtor and revest- exempted previously property estate, dispute over from the property ed be re must somehow in the debtor ed sufficiently “related is not property such appellee the estate. But to the stored federal to sustain bankruptcy case to” the that in provision the identifies predeces the jurisdiction identical pre of by the estate recapture the effects 1334(b)). § to 28 U.S.C. sor Cf. conver upon exempted property viously (in does 1123(c) if the debtor Chapter § Chapter 11 Chapter to a ease from sion of plan and the reorganization propose not a' rever not effect such 348 does 7. Section by a credi proposed plan approves court (In Lybrook), re Lybrook Robb v. sal. See the provide for tor, may not plan such (Bankr.N.D.Ind.1989) 611, 613 exempted property “use, sale, or lease” as a (“[Section not be read should 348] consents). Quite simply, the debtor unless to designed It not act. is nullification belongs exempted has been property that rather, but, gone has before change what subsequent conversion debtor. to the date they exist on the to leave matters 11 to case from bankruptcy of the 321 conversion.”), B.R. 135 aff'd the to disturb nothing Chapter 7 does (7th (N.D.Ind.1990), F.2d 136 Cir. 951 aff'd property. in that rights debtor’s Ford, B.R. at 916 1991); 61 Matter of (“The Bankruptcy intent of express has otherwise property Where 348 is to implements section which in revested 11 estate left the prior case taken in the any action preserve difficulty in debtor, have had no the courts conversion.”); 3 Collier on to a conversion recognizing ¶ 2; App. 348.08, n. 9 id. & at 348-22 prop nothing recapture “does 1983Adviso (reproducing at 1019-29 Brown, B.R. at erty.” (“This Rule 1019 Note to ry Committee 1141(b), “the confirma Under implements rule ... property of all of the plan vests tion intended rule is not Code.... prop debtor.” Once in the the estate super taken any action invalidate “does not reenter it erty has so vested chapter conversion its seded case before of conver in the event chapter 7 estate 7.”)). Die, Inc., 173 Tool & sion.” re Winom property rule is general Peoples v. While Carter see also B.R. at be- post-petition BNW, Inc.), by the (In acquired re Co. Bank & Trust estate, debtor, to the not (Bankr.S.D.Ala.1996) longs 838, 848-50 B.R. excep- provided elsewhere Congress has (once reorganized has property vested chapters some it Under tions. to 11 U.S.C. entity pursuant Chapter 11— code—but jurisdiction; bankruptcy court’s beyond the for an provided expressly has Congress confer neither can “property expanded or definition vacate confirmation jurisdiction nor acquired property includes which the es estate” within recapture property der Thus, Chap- by the debtor. post-petition tate). why property reason is no There family reorga property farm all (providing ter 12 estate— nizations) including “property after-acquired property defines part “in addition to the estate” to include estate 1306(a)—was 541 ... all property section included in specified (In specified in such Calder), of the kind v. estate. See Calder Job re (10th acquires Cir.1992); section that the debtor after 973 F.2d 865-66 Matter (7th Cir.1991) of the case but before commencement Lybrook, 951 F.2d 136 dismissed, closed, (Posner, J.); (In or convert the case is Armstrong Lindberg ed ti chapter to a case this Lindberg), 735 F.2d Cir. (emphasis tle.” 11 add 1984). But see v. Continental Bobroff ed). provision, courts held (In (3d Under re Bobroff), Bank 766 F.2d post-conversion estate under Cir.1985) (suggesting in dicta that after- Chapter property acquired included the 7 part acquired property should not be of un by petition after the the debtor post-conversion Chapter the 7 estate be der 12 but before conversion. Chapter Chapter the cause would deter use of (In See, White), Phillips v. e.g., White 13). In the Reform Act of (10th Cir.1994) (upon 25 933 F.3d 1994, Congress split, circuit resolved this Chapter of a 12 to a conversion case greatly mitigated potential impact but the Chapter 7 the debtor’s after-ac 1306, by § of 11 11 enacting U.S.C. U.S.C. the quired property property becomes of 348(f). 348(f), § § 11 Under U.S.C. case); 7 Chapter estate in the Chapter proceeding, conversion of the 13 (Bankr. Mutchler, 752 after-acquired property part form does not D.Mont.1989); Brownlee, Matter 93 of of the converted the case estate—unless (Bankr.S.D.Iowa 1988). B.R. 665 faith, was converted in 11 bad see U.S.C. would, course, Property acquired so of 348(f)(2). § cases bad faith conver in any exempt property include revested sion, the converted estate includes all the debtor. 13 defined in Chapter property, estate 1306—ie., § 11 faith U.S.C. the bad con Chapter 13 a substantive contains verter receives Act treatm pre-Reform ly provision. 11 identical U.S.C. ent.19 1306(a).18 § Accordingly, before 1994 Chapter appeals upon Congress most held that has not included in 11 courts also comparable 13 7 a Chapter Chapter provision conversion from to to sections part: 7 our Chapter reads relevant conversions—the limit of hold- Section in 18. includes, ing. according majority Before to the Property of the in estate addition view, estate property specified to in the converted would have includ- the section 541 property speci- property ... after-acquired Chapter this title all of the kind the ed all 13 acquires (including fied in such section that the debtor property acquired by the debtor earnings performed by from services [and through exemptions). the effect of That Con- the debtor] the after the commencement of gress mitigate chose to the effect of 11 U.S.C. closed, dis- case but before the case good filings, in the case of faith but 1306 missed, chap- a or converted to case under excluding not to to the chose do so extent of 7, 11, ter or 12 of this title.... estate, exempted property from the converted nothing argument that does to undermine our 348(f)(1) 19. reads dissent Chapter Congress has in the case of never property include the estate ex- in converted provision expands a enacted empted Chapter estate in from but still place. in never estate the first There has been possession of the debtor at the time of §§ parallel provision conversion, even cases in those where Congress Chapter point Our within good is in such conversion faith that other consciously designed Chapter work 11 to dif- acquired post-petition property is not includ- Chapter ferently Chapter 13 from 12 is op. post ed in the converted estate. See dis. Congress proper reading. the fact that has sub- certainly 226-27. unaffected This workings helps sequently modified the What is clear is how it the dissent's less argument in context 1207(a)(1) 1306(a)(1) that could include after the conclusion of that And untimely. creditors are because con- acquired by the property in the estate not change version does date of the initial See Koch petition. debtor after relief, 348(a), order for see F.2d Cir. Myrvold, not reset limita- 1986) conversion does obtained (property period filing objections a debt- tions petition original after the Further, exemptions. or’s a new but conversion to 7 does before objections would estate). derogate post-conversion belong property rights debtor’s substantive Chapter 12 or provisions While timely exempted under U.S.C. may support lent those have 522(1). We therefore hold that: The appellee’s position had the debtor’s 11 to chap of those conversion arisen under one give 7 does not rise to a new ters, provisions of comparable absence to the debtor’s claimed compels contrary res exemptions.21 ult.20 Applying this rule of law to the undis- Therefore, only we conclude not puted we facts this case conclude: position have appellee’s does little objection timely the last date for to debt- Code, it foundation in the text of the advo 13,1997; or’s claimed was June directly that cates result conflicts with (2) Chapter objection 7 trustee’s to 11 substantive effect of U.S.C. exemptions, filed on debtor’s November 522(Z). Moreover, it inasmuch relies 19, 14, 1997, untimely; as of June 4003(b)—in procedural rule—Rule on 1997, 522(1), operation of 11 by derogation of the substantive debtor’s the property exempt claimed as became her is property rights, argument expressly part 11 exempt; it no formed of the longer (Bankrupt barred. See § 541 estate but in the revested “rules cy abridge, enlarge, shall not debtor, clear of claims that dis- all modify any right.”). substantive in the charged proceedings. D. Policy Considerations 4003(b) requires Because Rule objections holding statutory rest days that be filed within of While we our construction, of the conclusion courts have ruled 2003(a), Chapter Chapter held to see Rule from Rule to gives period objections and because the to a for credi rise 2003(a) per- tors held under Rule must primarily by be held have been troubled their relief, days ception policy within 40 for see of the consequences order adverse 2003(a), In objections interpretation.22 made six months of our our their view holding Our is limited to from 21. If the debtor files amended schedules of conversions 20. exemptions on then a renewed Chapter Chapter express 11 to 7. We view would, course, period objections for conversions, particularly on the of other effect proper provides a because Rule also 7, those from to on the period thirty-day object running from time to However, period objections. to file be- "any the date the debtor files amendment statutory provi- cause of the differences in the supplemental the list or schedules.” But disagree we sions noted above with those trig- objections such a renewed is distinguish courts decline to between gered by con- debtor’s amendment not the 11, See, Chapters conversions from 12 or 13. Moreover, scope version itself. ("In e.g., Bergen, at 379 Matter 163 B.R. objections to the claims. is limited amended exemptions context of con- 7, appear version there does Finding statutory directive inconclu- distinguish right be cause to ambiguous, poli- sive and cy these courts turn to 11, cases.”). from 12 or 13 holdings. support their rationales ("When Leydet, faced 150 B.R. at holding “urges impractical and unrealis- fear that contrary our holding invites abu- interpretation tic of the bankruptcy pro- sive filings solely for the Kleinman, cess.” In re de purpose at of claiming baseless exemptions 769. Because we find that this precisely and immunizing them post-conver- drafted statute and the rules promulgated sion challenge in 7 proceed- under it unambiguously See, foreclose a new ings. e.g., 175 B.R. at (“A objections, may gov- we not be contrary holding would increase See, erned by policy e.g., potential considerations.23 ”); for abuse.... Matter of Co., Estate Bergen, v. Nicklos Drilling Cowart 163 B.R. at op. post dis at 469, 475, 505 U.S. S.Ct. Under this scenario—in the words of (1992) (“In L.Ed.2d 379 Judge a statutory con- Conrad “many debtors below— struction could ... beginning point file a Chapter must be have their statute, language hearing, claim exemptions, when a their speaks statute clarity judi- with to an then convert Chapter issue and the trustee cial inquiry into the would meaning, statute’s be forever barred from objecting.” all but the most We extraordinary circum- find these fears overstated for several stance, finished.”). First, it reasons.24 Unless leads to exemptions individual results, “absurd or are rarely futile” United issue States 11 filings, Ass’ns, Trucking American because few U.S. individuals file under Second, (1940), Chapter. S.Ct. 84 L.Ed. argument prem- we must what ised on Congress enforce com- belief that only has trustees have the expertise manded agree whether or not we with its the incentive to objec- raise Nevertheless, policy choices. we tions. have con- policy

sidered the arguments advanced dissent and those courts that have First, we note reached contrary the result. We do not only available to individual debtors. find arguments their compelling. § See 11 U.S.C. (stating in perti part

nent “an individual may debtor ex empt ”). from of estate ... the 1. ruling Does our encourage abusive They are not partnerships available to or conversions Chapter 11 to 7? from See, corporations. e.g., SA Matter of Courts concluding Auto-Jack, Inc., that policy consider- 99, F.Supp. 380 100 compel ations finding (N.D.Cal.1974) that conversion (holding corporations gives period rise to a objections new for are not to claim exempt entitled property); possible interpretations with two Bell), 98CV111, of bank- the No. slip op. at 3 (Bankr.D. 8, 1998). ruptcy code Vt. June and rules I am inclined to choose interpretation the that makes practical disagree 23. We with those decisions that find sense.”); Kleinman, In re de 172 at 769 B.R. that the Code and the Rules are inconclusive ("The authorizing objection rule period and reading either the allow advanced represents only practical construction of See, appellee. e.g., In re Hava law.”); 175 at 924 B.R. nec, ("Nothing 175 B.R. at 923 in the lan (“[T]he bankruptcy of realities administration guage Bankruptcy of Code or the Federal finding militate in objection favor a new Bankruptcy Rules compels Procedure ...."); other.”); Bergen, see also Matter choice 163 of one result or the Matter of in ("There (“|T]he Bergen, 163 nothing B.R. at B.R. at 380 Leydet, 379 Court in admit- in Bankruptcy Code or which fore Rules ting decision, authority there was its closes subsequent to upon 'practical relied any sense' and de- case.”). of creditors in a converted added)). (emphasis fined rule of law." adopts op. post dissent this view. See dis. dissent "set[s] aside” the text of the 226. "practicalities.” the Rules to focus on Dis. op. post at And both the court district particularly misplaced These fears are in and the bankruptcy court below stressed this tary. where the conversion was involun-

policy (In See Bell v. concerns. Obuchowski 220 109(e).25 many more consequence, As a 101(41) (defining “person” 11 Chapter file under may debtors individual categories mutually exclusive

include had to file would have previously 13 who corpora- “individual, partnership bankrupt- if they sought Chapter tion”). that individ- now settled it is While liquidation wished avoid cy relief but Chapter petitions their may file uals short, In indi- Chapter 7.26 proceedings in engaged they are or not whether likely Chapter 11 are filing under viduals see Toibb sole proprietors, business as shrinking class. to be a small 111 S.Ct. Radloff, 501 U.S. (1991), 11 was hy- L.Ed.2d confirm the note that the data We reorgani- individual, for business intended non-business primarily pothesis (cit- 162, 111 zations, S.Ct. 2197 occur- filings see id. at are an uncommon Chapter 11 turn, Chapter 85,377 petitions history). ing legislative rence. Of in the twelve-month vehicle not an attractive filed in Circuit simply 11 is 30, 1999, only ending September Its bankruptcies. consumer individual 1.0%) (or than were less requiring greater complex, procedures are (or less insignificant filings and cred- to court and reporting disclosure 0.12%) non-business, individual were 95-989, than at 3 S.Rep. No. See itors. Chapter 11. See Judi- filings under 5787, 5789. reprinted in U.S.C.C.A.N. States Courts: United cial Business higher than fees are 271 tbl. F- the Director Report Annual Compare and 13. Chapters those subsequently 2.27The number of cases 1930(a)(1) fee of (filing $155 necessarily a sub- Chapter 7 is convert to 1930(a)(3) 13) id. Chapters 7 and with group.28 already insignificant of this set in non-railroad fee of (filing $800 11). fees pay must additional And debtors may claim ex- only individuals Because dismissal or quarter until very each few individuals emptions and because $10,000 depending on ranging from we do not share petitions, $250 file id. that have antici- disbursements. of those courts size the fears 1930(a)(6). Further, Chap- filings under rush of abusive pated a courts increased Inasmuch as these have significantly ter ll.29 Act Reform abuse really concerned about eligible of those been limits on the debts conversions, these raising the limit file under scope hold- $100,000 $250,000 beyond of our concerns are debt unsecured Finally, the Court noted ing. Supreme debt from limit secured the on and already Rules in the Code and $750,000. Taylor, $350,000 See U.S.C. Of onward, are similar. 27. nationwide pro- § The statistics From 1998 25. 1,354,376 petitions filed in the statutory index- limits shall be vides that these 8,982 0.66%) (some Chap- period, were adjusted every three same to inflation linked 0.05%) (a only were 744 mere ter for unsecured years. The limits current $269,250 $807,750 See id. individual. re- debt are secured Dollar spectively. of Certain See Revision Code, 63 Fed. Bankruptcy Chapter in The Amounts individual fil- 28. number of (1998). Reg. exemptions are rele- ings in which claimed 1,354,376 significant. Of the bank- vant is 385,262 (or nationally, 13, ruptcy petitions filed (Reorganization) and Chapter Both 26. 28.4%) majority of Chapter the vast were an Indi- (Adjustment Debts of 28.0%) which, 379,215 (or were individual. Income) bankrupt- Regular allow With vidual See id. general, liquidation. cy relief without however, advantageous indi- for an it is more that individual either does not eligible to file under data show who is vidual common general- Chapter petitions are more Chapter chapter 13. See to file under Death, bankruptcy courts districts where the Gargotta, Taxes and those ly Craig A. trigger does not that conversion Am. have held Act of Reform objections. (Jan.1995). J. 10 Bankr.Inst. significant provide against deterrents such negotiate freely the terms of the reorga- of bankruptcy proceedings. abuse plan nization (subject to the statutory safe- Taylor, U.S. S.Ct. guards 1129). of 11 § U.S.C. Whatever 727(a)(4)(B) see also 11 U.S.C. (allowing the limitations on sophistication of indi- of discharge presentations denial creditors, vidual creditors form committees claims); fraudulent Rule 1008 (requiring protect their common interests and fre- filings to “be or verified contain an un- quently experienced hire counsel to ad- sworn declaration” under penalty perju- vance their goals. common We are not ry); Rule (providing for sanctions persuaded by the argument that these for signing certain documents not “war- same parties creditor represen- their —or by existing ranted law or a nonfrivolous tatives —lack sophistication sufficient argument extension, modification, for the appreciate significance of failing to file reversal of existing law” or lacking or timely objections. Further, puts the Code unlikely to have “evidentiary support”); 18 creditors on notice that conversion inis U.S.C. 152 (imposing penalties criminal many cases the right. debtor’s See 11 cases). for fraud in bankruptcy incentive, As to lack of reorganization because the plan may not Second, argument that our (absent provide any consent) creditor holding creates opportunity for abusive receive a distribution a present with value filings premised is on the belief only less than it would receive were the object trustees will to improperly claimed debtor liquidated see 11 exemptions. While a trustee as a party 1129(a)(7), creditors have a direct interest object entitled to a debtor’s financial interest in challenging objections exemptions, claimed so too are the credi 11 proceeding. tors. Unlike the primary respon trustee’s 704(1), sibilities under 11 U.S.C. which 2. Does our ruling render the role of trustee, are exclusive to the see Matter of purposeless? trustee Perkins, 902 F.2d Cir. We similarly unpersuaded 1990), right to object can be exercised argument that our holding renders the by creditors. Were the right role of 7 trustee meaningless exemptions exclusively trustee’s, in a ease converted from (if 11. This appellee’s fears not her argu textual argument premised ment) the mistaken as- would be better founded—and our sumption that to a objecting debtor’s holding would indeed remove the debtor’s exemptions is the primary role of claim of any effective trustee. scrutiny. But this is not the case.

We also find unpersuasive argument The duties of a Chapter 7 trustee 11 creditors lack either the are set in detail in out nine subsections sophistication or the incentives to exercise of 11 duty 704. The to review See, right object. their to e.g., and, In re Ha to, if necessary object claimed exemp vanec, 175 B.R. (“chapter at 924 11 credi tions is nowhere specifically mentioned— tors ... likely are to have neither the although it is subsumed general within the expertise interest nor [object duty claimed to “investigate the financial affairs of exemptions]”); Bergen, 704(4). B.R. at the debtor.” 11 U.S.C. Our (without trustee, objections a must be holding merely precludes component one creditors, fact, made and “[i]n ex single the duty among nine enumerated emptions may be of importance little to a duties of the trustee. It hard to is see how creditor the stages earlier of a Chapter this renders the trustee purposeless. In ”). 11 case ... sophistication, fact, As to lack of course, primary the purpose of the premised 11 is assumption on the collect, trustee —to liquidate and distribute parties that the sophisticated are enough estate property thereby closing the estate Bankruptcy of the order the to VACATE with the compatible isas expeditiously “as proceed- for further REMAND and Court parties”- clearly [the] interests best — 704(1); ings. holding. our survives v.Co & Trust Valley Bank Yadkin see Hutchinson), F.3d (In re

McGee Judge MORAN, District Senior Cir.1993) close the “duty to (4th (noting (dissenting). ‘main trustee’s is the expeditiously estate today that the trust- holds majority ” omitted)); Hoyt v. (citation Estes & duty’ have Chapter 7 case in a and creditors ee Co.), (In Inv. re Riverside-Linden Crake by an initiated if the case rights fewer Cir.1991) (describ- 320, 324 F.2d con- Chapter 11 and then individual under 704(1) ex- to close estate duty ing section involuntarily) (voluntarily or verted responsibility” “overriding peditiously if case have they than would Chapter trustee). under originally filed had been of statu- maxim the debatable

Relying on construction, est ex- unius expressio objections, tory policy considered Having alterius, majority concludes construction clusio that our conclude cannot we Advisory Bankruptcy and “impractical” and Congress to an leads Code the situation the reali- have considered “ignores holding Committee “illogical” for a opportunity E.g., rejected In an process.” us before and ties certain, and meeting of creditors post-conversion 644. For B.R. at Leydet, newly appointed opportunity result we an conclude we cannot object to the debtor’s 7 trustee statutory construction through reach peo- exemptions. reasonable claimed or futile.” While “absurd Con- the balance over ple may disagree It its overstates case. majority countervailing between has struck gress position ie., contrary concludes that — statutory the current interests majority of adopted by position statutory scheme, find we because the lower court bankruptcy courts it does and because be clear directive appeal” only “superficial this case—has result, well- to an absurd not lead policy considerations. solely on rests statutory inter- principles of established is, however, clear There Maj. op. at 210. it. must enforce pretation we respect to in the Code with ambiguity 11 to in a appropriate procedures III. CONCLUSION strong There is conversion. Chapter the clos- positions, both support for reasons, textual hold that we foregoing For the does decision1 Supreme Court from est bankruptcy case policy and there result compel either create Chapter 7 does not 11 to in favor of both weighing considerations previ- object to the debtor’s for a ripe The issue interpretations. judgment exemptions. The ously by the decision clarifying amendment is REVERSED District Court Supreme Court. with instructions is REMANDED will have objection by the trustee concedes, untimely Taylor v. Freeland majority 1. As had colorable if Kronz, no effect even 112 S.Ct. 503 U.S. & Mr. exemption. claiming the (1992), support basis for can read L.Ed.2d considered, Rules Bell’s Broadly the case position. either ambiguity re- which produce an Procedure should proposition that courts stands Taylor does interpretation. judicial quires language ignore plain with not tinker or objec- a second the conflict. If unjust not resolve result merely to avoid simply Taylor required, would period is tions microscope is particular case. If in a 30- objections filed more than further, prop- dictate that for the case stands lowered meet- creditors post-conversion days after objection thirty-day osition absolute, untimely. 4003(b) ing would is prescribed Rule I. A Objections nization, Post-Conversion Period generally trustee plays a Required.

is more limited role than would a trustee appointed to oversee a liqui- argument objec in favor of a new dation. The majority’s approach will leave tions following post-conversion the new op- trustee without an meeting of has creditors been well-stated portunity object claimed See, on numerous e.g., occasions. In re which received little or no scrutiny when Alexander, 239 B.R. 914-15 Cir. reorganization was the focus. 1999) As the Ha- 7); BAP (Chapter 13 to Chapter In observed, vanec court (Bankr.E.D.Mich. job “[t]hat will nec- Wolf, re 244 B.R. 754 essarily be 2000) left 11 creditors (Chapter 7); In re who likely (Bankr. have neither the interest 175 B.R. 923-24 expertise nor 1994) 923; to do so.” 175 (same); B.R. at N.D.Ohio Bergen, In re see Bergen, also In re (Bankr.M.D.Fla.1994) (same); B.R. B.R. at In Kleinman, re de Kleinman, 172 B.R. re de 767-769 (Bankr.S.D.N.Y.1994) (same); In Ley

det, (Bankr.E.D.Va.1993) 150 B.R. 641 II. The Alternative Position (same); (In Weissman v. Carr re Weiss has majority principal two reasons man), (M.D.Fla.1994) 173 B.R. 235 (Chap for concluding that objections a second 7); Jenkins, ter 13 Chapter 162 period prohibited is by the Code: the lim- (Bankr.M.D.Fla.1993) (same). B.R. 579 ited lists of extended periods time enumer- Briefly, the logic is as follows: The con- ated in 11 U.S.C. 348 and Bankruptcy version of a bankruptcy case one 1019(2), Rule and the resulting “recapture” chapter to another an order for constitutes of previously exempted property if a sec- 348(a). relief. 11 U.S.C. Within a rea- objections ond period is Al- allowed. sonable time after the order for relief in a though I concede that position neither the United trustee States particularly tidy, I do not majori- find the must preside convene and meeting at a ty’s reasoning sufficiently persuasive to 341(a); creditors. 11 U.S.C. see also overcome the obvious advantages of af- Fed. R. Bankr.P. (establishing fording newly-appointed limits). Thus, when a brought case trustee an opportunity to the 11 is Chap- converted to a debtor’s exemptions. ter 7 proceeding, a new meeting of credi- tors is convened. This new meeting is not a. Exceptions Enumerated and Exten- continuation meeting sions pre-conversion case, separate but is a Section provides, 341 of Title 11 in rele- meeting for a new which trustee must be part, vant selected. F Marquette M& Nat’l Bank v. (a) Within a reasonable time after the Richards, (8th Cir.1985) 780 F.2d order for title, relief in a case 348(e)). (citing Federal Rule the United States trustee shall convene Procedure provides preside at a meeting of creditors. that the any may “trustee or creditor file (b) to the list of property claimed The United States may trustee con- exempt days within 30 the conclu- vene a any equity security after sion pur- of creditors held holders. ” 2003(a).... Thus, suant to Rule read calling for the commence- together, provisions establish a ment of a 30-day objection period after the objections period second begins following creditors, meeting of not specify does post-conversion creditors meeting. whether it to both applies meetings in a

This result makes sense. Because the just converted first one after goal proceeding reorga- 1019(2) the initial order of relief. Rule

224 position, of this support in majority the of certain the extension addresses analogous argument rejected an case, actually a but conversion upon the periods dis- period for 4003(b). considering the time This while Rule mention does not it court held complaints.2 The argues, chargeability omission, majority the intentional required meeting of creditors to omit a new decision Congress’ from follows Chap- Chapter 11 to from circum- upon conversion of enumerated the § from list 341 M, (citing at 780 F.2d of “the order 7. F date ter & in which the stances 348(e) Advisory Commit- conver- and the date of the to the is reset relief’ 1019(2) (“A Rule tee Note to sion order. super- in the held may have been creditors petition under his filed The Debtor here 341(a) of the required by seded case The com 1996. Chapter 11 on June the dispense with would not but that constitutes voluntary of a mencement liquidation ensuing one the to hold need Chapter.” such for relief “an order case.”)).3 converted The case was § 301. 11 U.S.C. Septem Chapter 7 on the from as to is also instructive F & M to 11 U.S.C. According 1997. on a ber majority’s reliance of the soundness 348(a), also “constitutes conversion Para- construction. canon of questionable chapter to the for relief (2) para- an order used to be Rule 1019 graph Section is converted.” (2) the case which (3), was deleted until graph however, that “ex 348(a), state goes Advisory redundancy. eliminate (c) (b) and subsections provided in cept as amendments to the 1987 note Committee not section, does conversion] [the of this indicates that filing of of the the date change effect expanded to rule is of the “paragraph of the the commencement the petition, aof of conversion the effect include (empha Id. ease, the order or relief.” to a 11 or 13 case added). Therefore, the according to sis case from case. On for the the majority, purpose case, 13 to a Chapter 11 or con deadline, “meeting of creditors” within which a new parties have 341 and section vened relating to complaints or to file claims meeting convened 2003(a) solely discharge or granting days of the commencement 40 or within This amend- of a debt. dischargeability 40 or ie. within voluntary holding and consistent with ment is 211. 13, 1996. op. at maj. See days of June F Mar- in & M of the court reasoning Richards, F.2d Bank v. Nat’l quette v. Rich- Nat’l Bank Marquette F & M Cir.1985).” (8th Cir.1985), cited ards, F.2d 24 "Meanwhile, 1121(b). "debtor, at concluded that F & M court 2. required to been bottom, have interprets for self-serv- section 341 section days order claiming forty because a meet- after the than ing purposes in held later previous converting in the ing was held of creditors Id. In cases for relief." should proceeding, his does effec- issue of "the to file in which only opportunity one have play until after tively into focus come regardless dischargeability complaints, their ap- and a statement plan disclosure is filed converted case was that his fact confirmation, that, at after proved, and construe Chapter. We decline to another 1129(a)(7) inter- 'best in effectuation narrowly." F.2d rules so statutes Id., at 759. test.” est creditors’ practicalities, Considering these Wolf the second until that "Not court concluded pointed out recently bankruptcy court One is there hearing, after § 341 Chap- proceeding under unlike a debtor incentive, focus, interest has the trustee who exclu- Chapter 11 debtor has ter ex- importance of and awareness days after plan for 120 right to file a sive emption at 758. issue....” Wolf, B.R. for relief. In order provides suggests The note the Committee that the of the services interim approved of the F & decision simply M trustee conclude duly when the trustee dischargeability sought regarding elected 702 qualifies codify Nothing in the in the it rules. 702, however, provides Section advisory notes indicates that the Commit- may person creditors elect to serve as one rejected provisions tee considered and at the meeting trustee convened possible deal with a host of other effects of §to 341. And as the majority repeatedly 150 B.R. Leydet, conversion. See insists, there is meeting after 643; In B.R. at 924 conversion. The result majori- under the (“[T]his compelling.... omission is not ty’s logic is that ap- the interim trustee appears, For all that the draftsmen of pointed in cases converted to 1019(2) might have well concluded may replaced not be one elected 4003(b) language of Rule creditors. The term “interim” is now sufficiently clear to assure that the trustee meaningless. following could to claims the conclu- application-of Or major- consider.the sion of the meeting creditors ity’s rule to 11 303(g), which al- converted.”). after the case had been lows court in an involuntary liquidation There logical problems are other with appoint case to an interim trustee to take the majority’s reliance on the enumerated possession of property the debtor’s and to 348(b) (c). exceptions example, in For operate any pending business of the debtor 1102(a) section for a (calling meeting n petition. trial on the involuntary pro- holding creditors unsecured claims and al- keyed vision is to the first order of relief lowing meeting equity security hold- in and is included the list of enumerat- ers) is on the list in section but exceptions. ed It reads phrase does not contain the “the order for Chapter.” say relief under this It does anyAt time after the commencement of practicable that “[a]s soon as after the involuntary case under Chapter 7 of order for relief under 11 of this this title but before an order for in relief title, the ap- United States trustee shall case, court, request party of a ” point a committee of creditors.... Pre- interest, after notice to the debtor and (and sumably notwithstanding inexact if hearing, necessary preserve drafting), the inclusion of this section property prevent of the estate or to 348(b) meeting intends that a of creditors estate, may loss to the order United practicable be called as soon as after con- appoint States trustee to an interim version to 11. For cases convert- trustee under section 701 of this title to majority ed to argues, there possession take is to be no an analogous because operate any estate and to business of the provision did not make the list.4 relief, debtor. Before an order for may regain possession proper- problems. That in turn further creates ty possession in the ordered Section is included among the enu- trustee appointed under if the provisions provides, merated this subsection those circumstances, debtor files such bond as the court re- promptly after conver- appoint quires, sion the trustee shall “an conditioned on the debtor’s ac- U.S. interim good counting delivering trustee.” That is all well and for and to the trust- ee, replace until one tries to the interim trust- if there is an order for relief in the value, ee in the converted case. Section such property, E.D.Mich.2000). wonders, goes against additionally, This what some called the One have position "universal” "that in a conversion sit why Congress provide would for a second hearing uation a second section 341 is man reorganization to address a dated under Fed.R.Bankr.P. 2003.” In the plan, liquidation but not a of the estate. (Bankr. Wolf, Matter post-conversion lieves a regains possession, the debtor the date bankruptcy courts con- prohibited. The is property. of such result, however, point to the sidering this pe- the time § 303(g). Without such a regime for abuse under potential the court being reset riod to “encourag[e] it would debtors because Chapter to 7 involuntarily converted a case exemptions simply by filing increase their au- not the Chapter 11 would have from converting 11 and fragile assets. certain thority preserve period.” In re 30-day the after examples, it is clear these few From 175 B.R. at 924. a trustwor- simply expressio unius debate comes tangle.5 procedural The thy guide through abstract property focus when there is sharply into 7 the 11 to conver- Practicalities b. first successfully exempted during the sion and, conversion, the after phase of case opportunity object. trustee seeks Thus, necessary to set aside it becomes Bankruptcy Appellate Panel for the The interpretations competing in Alexander v. Jensen- Eighth Circuit dispute: what the crux of the focus on (In Alexander), B.R. 911 239 Carter and creditors have rights do the trustee 1999), problem re BAP had no Cir. will now be learning that the estate after post-conversion meeting of credi quiring and, difficult, is the more what liquidated, corresponding objections period tors and a property suc- after conversion status the fact that 13 light phase exempted during an cessfully earlier successfully objected to the trustee had bankruptcy case? exemption prior claim same homestead has concluded that commentator One gave The court no conversion. indication objections period for a new argument it have allowed the whether would second from when the conversion is strongest objection if the first had been unsuccessful 12 to 7 or from objection at all. or had been there 7, property because ac- 13 to frequent In the of the more 13 post-petition now ex- context quired by the debtor conversion, Congress 7 has considered plicitly property of estate becomes question presented to the one analogous an ongoing case 1207(a)(1) 1306(a)(1). developed thought lines of had See Thom- here. Two determining appropriate date for Ray, Chap- on the Conversion Effects of Periods, property 14-May what would be considered 7 on Time ter Selected (1995). is converted. Because estate when Several Am. Bankr.Inst. J. date of the augmentation provi- circuits held analogous there is no 11, petition should be the date for original sion for a case converted estate, see, contents of the commentator, majority, measuring be- like indication, construction”); provi aid to Ford v. us1 as but an 5. Without some that other 531, States, 593, 612, reject for the U.S. 47 S.Ct. were considered list United sions ed, expres (1927) ("[The we cannot be confident that "the maxim] L.Ed. is often exclusion of others.” See servant, of one is the sion dangerous but a master to valuable Huddleston, U.S. v. & MacLean Herman of statutes or docu follow in the construction 683, 375, 23, 103 S.Ct. 74 L.Ed.2d 548 387 n. ‘exclusio’ is often the result ments. The (1983) "expressio (rejecting application unius accident, or and the maxim inadvertence noting that such exclusio alterius” est application ought applied, be when its not to "long to the have been canons subordinated inconsistency injustice.”). ... leads to will the details that courts construe doctrine assumption that all canon "rests on the omis dominating conformity an act in with its of general purpose”); deliberate, drafting legislative sions in Corp., v. SEC Joiner assumption we know to be false.” Custis & n. 64 S.Ct. U.S. 350-351 485, 501, U.S., S.Ct. U.S. (1943) "treat[ing] (citing other cases L.Ed. J., (Souter dissenting). L.Ed.2d 517 'expressio alteri- unius est exclusio the maxim (3d if e.g., Bobroff, 766 F.2d 797 Cir. tions remains in the debt- 1986), possession. or’s held that date of while another used, Ly see In re conversion would (7th Cir.1991).

brook, F.2d 136 Con split passed resolved the when it

gress

Bankruptcy Reform Act on October specified which the converted only property “of

estate consists

estate, peti as of the date of tion, possession that remains in the orof KIRSCHNER, D.D.S., Howard J. is under the control Plaintiff-Appellant, date conversion....” 348(f)(1)(A) added). (emphasis Con KLEMONS, D.D.S., Jay Goldman, Ira gress’ purpose enacting this section was D.D.S., Catone, Louis Director of the to eliminate the disincentive that section Discipline, Office of Professional 1306(a)(1)placed party on a wanted Mills, Richard P. Commissioner of the Chapter file under 13 but also wanted the Depart- New York State Education option convert to ment, Hayden, Carl T. Chancellor of H10766, H10770, H10752-01, at Cong.Rec. Regents the Board of of the Universi- and H10772. the 1994 amend Without ty York, State of New John ment, 7 estate converted 1-5, 1-5, Does Jane Does Defen- property acquired by would include dants-Appellees. original debtor after he filed the Docket No. 99-9173. petition, though after-acquired even property apply origi rule did not to cases Appeals, United States Court of nally filed under Second Circuit. clause, Under that section’s second how- Argued: May ever, property owned the debtor at the Sept. Decided: filed, petition previously if even exempt, part listed as would be estate, provided

converted that it remains possession the debtor’s on the date of reasonably

conversion. chose Congress

distinguish after-acquired between and ex- cases,

empt to 7 and the just if

distinction makes as much sense If begins 11.6 exempt proper-

debtor chooses to alienate

ty before' so be it. But

purpose overseeing liquidation of an

estate once the case has been converted to the trustee and creditors opportunity

should have the to evaluate previously exemp- indicates, majority argues there are a 6. The that the absence of a the above discussion provision procedural holes to be filled in the similar for cases converted from number 11 to 7 and the best position. 11 confirms their If the context of conversions ambiguous gap-fillers Congress’ explicit Code and Rules were not on the will come from But, here, presented might closely analogous problems. agree. issue I instructions on

Case Details

Case Name: In Re: Wayne E. Bell, Jr., Debtor. Wayne E. Bell, Jr. v. Deborah Bell

Court Name: Court of Appeals for the Second Circuit

Date Published: Sep 20, 2000

Citation: 225 F.3d 203

Docket Number: 1998

Court Abbreviation: 2d Cir.