Case Information
*1 1:23-11200
#9.00 Debtors' Fourth Omnibus Motion For An Order Disallowing Improperly
Classified Claims
Docket 1282 Judge:
On August 12, 2024, the debtors filed a stipulation (the "Stipulation") [doc. 1404] between the debtors and McKesson Medical-Surgical, Inc. ("McKesson"). On August 14, 2024, the Court entered an order approving this Stipulation to resolve the objection to the classificiation of McKesson's claims [doc. 1407]. Given that the Stipulation resolves the debtors' objection to McKesson’s claims, the Court will deny the motion as to McKesson’s claims as moot.
The Court will grant the motion as to the claims of: (1) Daphne Ibea; (2) Doorstep Dysphagia Diagnostic & Speech Pathology; (3) Elite Healthcare Resources; (4) Gregg J. Gittler, PC dba Gittler & Berg; (5) Joanna M. Flaherty-Moran, MS RD; (6) Steven D. Moore; (7) Select Rehabilitation, LLC; (8) Skilled Nursing Pharmacy; (9) United Healthcare Staffing Inc.; and (10) Mandy Williams.
Regarding the disputed priority claim of Recovery Nursing Agency, the Court will continue the hearing to September 5, 2024 at 3:00 p.m.
As concerns the proof of claim filed by Fabienne Ouapou-Lena, the Court will reclassify this claim as an unsecured nonpriority claim.
Ms. Ouapou-Lena has filed a proof of claim against Windsor Elmhaven Care Center, LLC and Windsor Hampton Care Center, LLC (together, the "Relevant Debtors") in the total amount of $5,286.43, $3,125.00 of which is asserted to be a priority claim under 11 U.S.C. § 507(a)(4) and $2,161.43 of which is asserted to be a priority claim under 11 U.S.C. § 507(a)(5). Ms. Ouapou-Lena's last day of employment with the Relevant Debtors was approximately February 15, 2023. The Relevant Debtors filed their bankruptcy petitions on August 23, 2023.
11 U.S.C. § 502(a) provides that a proof of claim ("POC") is deemed allowed, unless *2 a party in interest objects. Fed. R. Bankr. P. 3001(f) provides that a POC executed and filed in accordance with the rules constitutes prima facie evidence of the validity and amount of the claim. "To defeat the claim, the objector must come forward with sufficient evidence and show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves." Lundell v. Anchor Const. Specialists, Inc. , 223 F.3d 1035, 1039 (9th Cir. 2000) (internal citation omitted). “If the objector produces sufficient evidence to negate one or more of the sworn facts in the proof of claim, the burden reverts to the claimant to prove the validity of the claim by a preponderance of the evidence. The ultimate burden of persuasion remains at all times upon the claimant." Id . (internal citations omitted); In re Laptops Etc. Corp. , 164 B.R. 506, 522 (Bankr. D. Md. 1993) (burden shifts to claimant, who has ultimate burden of persuasion as to validity of its claim, "upon objection to the claim coupled with the admission of probative evidence which tends to sufficiently rebut the prima facie validity of the claim").
Under 11 U.S.C. § 507(a)(4), priority claims for wages, salaries or commissions must be earned within 180 days before the date of the bankruptcy filing or the date of the cessation of the debtor's business, whichever occurs first. A claim for any wages, salaries or commissions earned by qualifying individuals prior to the applicable 180- day period is not entitled to priority.
Similarly, under 11 U.S.C. § 507(a)(5), priority claims for contributions to an employee benefit plan must arise from services rendered within 180 days before the date of the bankruptcy filing or the date of the cessation of the debtor's business, whichever occurs first.
Because Ms. Ouapou-Lena's employment with the Relevant Debtors ended more than 180 days prior to the filing of the Relevant Debtors' chapter 11 petitions, and the Relevant Debtors did not cease operations within 180 days after the termination of her employment, the Court will reclassify Ms. Ouapou-Lena's claim, as set forth in her POC, as being a nonpriority unsecured claim.
In the debtors' reply, the debtors raise additional issues regarding the amount of Ms. Ouapou-Lena's claim. In the motion, the debtors did not discuss those issues, and Ms. Ouapou-Lena has not had an adequate opportunity to respond to them. Consequently, at this time, the Court will not rule on those issues concerning the amount of Ms. *3 Windsor Terrace Healthcare, LLC Ouapou-Lena's nonpriority unsecured claim.
Regarding the holders of claims which have been reclassified from priority unsecured claims to nonpriority (general) unsecured claims, and which claims are placed in Class 4 of the debtors' chapter 11 plan, as soon as practicable, the debtors must serve these creditors with a blank plan ballot to elect the treatment option under Class 4 which these creditors choose, as the holders of Class 4 claims.
These creditors will have until two weeks following the date of entry of the plan confirmation order to provide counsel for the debtors (by mail or email) with their completed plan ballot selecting the treatment for their allowed Class 4 claims. For any of these creditors who/which do not return a ballot by that time, the allowed Class 4 claims of those creditors will have the treatment under Class 4 which the plan (if it is confirmed) provides in that situation.
The debtors must submit an order within seven (7) days. Party Information Debtor(s):
Windsor Terrace Healthcare, LLC Represented By Ron Bender Juliet Y. Oh Movant(s):
Represented By Ron Bender Ron Bender Juliet Y. Oh Juliet Y. Oh *4 Monica Y Kim Lindsey L Smith Robert Carrasco Beth Ann R. Young