Opinion
Case No. 11-15859-PB7
02-28-2013
In re DAVID and ANNETTE PUCHTA, Debtors.
WRITTEN DECISION - NOT FOR PUBLICATION
ORDER ON MOTION TO REOPEN
Debtors' case was closed without a discharge because they failed to submit certificates of instructional course for personal financial management. Debtors have since obtained the required instruction, and have moved to reopen in order to file their certificates and obtain discharges.
Before the case was closed, the Court granted the motion of secured creditor Hitachi Capital America Corp. (Hitachi), for relief from stay and ordered that "Debtor is hereby ordered to immediately turnover possession of [the forklift] to Hitachi Capital America Corp." Hitachi opposes the motion to reopen on the ground that Debtor failed to comply with the turnover order.
Opposition to the motion to reopen was also filed by several of Debtors' prior employees on the ground that Debtors failed to give notice of the bankruptcy case, by failing to provide their addresses.
The UST also filed a response, and at the hearing expressed concern that objections to discharge not be precluded in the event the case was reopened.
As the Court explained at the hearing, it was inclined to reopen to provide a forum to explore and resolve these issues. However, since the periods to file objections to discharge had lapsed before the case was closed, the Court was concerned that the objecting creditors and/or the UST have the opportunity to object to discharge. At the hearing and in their post-hearing brief, Debtors agreed to have any bar date extended.
A complaint seeking exception to discharge under § 523(c) must be filed "no later that 60 days after the first date set for the meeting of creditors under § 341(a)." See Rule 4007(c). This period may be extended, but only if a motion to do so is "filed before the time has expired." Id. In this case, the 60-day period expired before the case was closed, and no motion to extend was timely filed. Under these circumstances, the Court lacks the authority to reopen or extend the time period. See In re Eaton, 327 B.R. 79, 85 (Bankr.D.N.H. 2005) (analyzing the interplay of FRBP 4007(c) and 9006(b)(3)).
The Court does, however, have authority to grant an extension of the time for filing complaints objecting to discharge under § 727. Rule 4004(b)(1), like Rule 4007(c), requires a motion to extend to be filed before the time expires. However, Rule 4004(b)(1) is subject to (b)(2) which provides:
(2) A motion to extend the time to object to discharge may be filed after the time for objection has expired and before discharge is granted if (A) the objection is based on facts that, if learned after the discharge, would provide a basis for revocation under § 727(d) of the Code, and (B) the movant did not have knowledge of those facts in time to permit an objection. The motion shall be filed promptly after the movant discovers the facts on which the objection is based.The UST has discovered that Debtor Annette has filed a request for creditor committee membership in another bankruptcy case (Bankruptcy Case No. 11-16778-MM11), asserting a claim of $32,945.36. The Debtors did not schedule this claim as an asset. The Court finds this, in addition to the concerns raised by the Employees and Hitachi, sufficient ground to extend the time to file § 727 actions in this case.
Accordingly, the Court grants the Debtors' motion to reopen. However, no discharge shall be granted until after April 30, 2013. Complaints, if any, objecting to discharge may be filed through that date. Further, Debtors are required to amend their schedules to include addresses for the prepetition employees and must serve this Order on the employees within 20 days of its entry.
IT IS SO ORDERED.
_______________
PETER W. BOWIE, Judge
United States Bankruptcy Court