Opinion
Civil Action No: 00-558, Bankruptcy Case No. 00-10992
October 11, 2001
ORDER AND REASONS
Debtors move the Court to reconsider its grant of claimants' motion for extra time to file a proof of claim. For the reasons set forth below, debtors' motion for reconsideration is denied.
I. BACKGROUND
Debtors filed these cases in the Bankruptcy Court for the Eastern District of Louisiana on February 22, 2000. On April 17, 2000, this Court withdrew the reference of these cases with respect to certain limited matters, including motions to set a bar date, motions related to the procedure for notifying claimants, and motions regarding the form of proofs of claim. The Court declined to withdraw the reference regarding claims that were settled by the parties prior to the bankruptcy proceedings. On October 6, 2000, the Bankruptcy Court entered an order requiring persons with settled claims to submit a proof of claim form by March 29, 2001. On October 30, 2000, this Court entered an order requiring all personal injury claimants to file a proof of claim form by July 30, 2001. On August 20, 2001, the Court granted claimants' motion for extra time to file a proof of claim under the "excusable neglect" provision of Bankruptcy Rule 9006(b)(1). Debtors now move the Court to reconsider its decision.
II. DISCUSSION
A. Reconsideration Standard
The Federal Rules of Civil Procedure do not formally recognize a motion to reconsider in haec verba. See Pryor v. United States Postal Service, 769 F.2d 281, 285 (5th Cir. 1985). Nevertheless, the Fifth Circuit has held that a motion for reconsideration to reinstate a case may be classified under either Rule 59 or Rule 60, depending upon the time of filing. See id.; see also Lavespere v. Niagra Mach. Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990), abrogated on other grounds by Little v. Liquid Air Corp., 37 F.3d 1069, 1075 n. 14 (5th Cir. 1994) ( en banc). Because debtors' motion was filed with the Court within ten days of the judgment granting claimants' motion, the Court treats its request to reconsider the Court's order as a Rule 59(e) motion to "alter or amend the judgment". See Pryor, 769 F.2d at 285.
The Bankruptcy Rules incorporate Rule 59 for cases under the code. See Fed.R.Bankr.P. 9023.
A district court has considerable discretion to grant or to deny a motion under Rule 59(e). See Edward H. Bohlin Co., Inc. v. Banning Co., Inc., 6 F.3d 350, 355 (5th Cir. 1993); Lavespere, 910 F.2d at 173. A court's reconsideration of a prior order is an extraordinary remedy which should be used only sparingly. See Fields v. Pool Offshore, 1998 WL 43217, at *2 (E.D. La. Feb. 3, 1998), aff'd, 182 F.3d 353 (5th Cir. 1999); Bardwell v. George G Sharp, Inc., 1995 WL 517120, at *1 (E.D. La. Aug. 30, 1995). The court must "strike the proper balance between the need for finality and the need to render a just decision on the basis of all the facts." Bohlin, 6 F.3d at 355. Courts in this district hold that a moving party must satisfy at least one of the following criteria to prevail on a Rule 59(e) motion: (1) the motion is necessary to correct a manifest error of fact or law; (2) the movant presents newly discovered or previously unavailable evidence; (3) the motion is necessary in order to prevent manifest injustice; and (4) the motion is justified by an intervening change in the controlling law. See Fidelity Deposit Co. v. Omni Bank, 1999 WL 970526, at *3 (E.D. La. Oct. 21, 1999); Jupiter v. BellSouth Telecomms., Inc., 1999 WL 796218, at *1 (E.D. La. Oct. 5, 1999); Burma Navigation Corp. v. Seahorse, 1998 WL 781587, at *1 (E.D. La. Nov. 3, 1998); Fields, 1998 WL 43217, at *2.
B. Analysis
Bankruptcy Rule 9006(b)(1) permits a bankruptcy court to extend the bar date for cause "to permit a late filing if the movant's failure to comply with an earlier deadline `was the result of excusable neglect.'" Pioneer Inv. Services Co. v. Brunswick Assocs. Ltd. Partnership, 507 U.S. 380, 382, 113 S.Ct. 1489, 1491-92 (1993) ( quoting Bankruptcy Rule 9006(b)(1)). The Supreme Court in Pioneer held that the concept of "excusable neglect" was "somewhat elastic" and could include "inadvertent delays." Id. at 392, 113 S.Ct. at 1496. The determination of whether a party's neglect of a deadline was excusable was "at bottom an equitable one, taking account of all relevant circumstances surrounding the party's omission." Id. at 395, 113 S.Ct. at 1498. Specifically, the Supreme Court announced the following considerations for courts to examine:
the danger of prejudice to the debtor, the length of the delay and its potential impact on judicial proceedings, the reason for delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith.Id.
Debtors argue that claimants failed to meet their burden of demonstrating "excusable neglect." The Court disagrees. First, debtors do not dispute that claimants acted in good faith in seeking more time. Second, because excusable neglect is not limited to errors caused by circumstances beyond the late filing party's control, claimants' stated reasons for seeking the motion were sufficient. See United States v. Clark, 51 F.3d 42, 43 (5th Cir. 1995) ( citing Pioneer, 507 U.S. at 392, 113 S.Ct. at 1496). In particular, the admitted clerical errors and investigatory oversight are understandable since claimants' lawyer filed nearly 7000 proofs of claim by the claims bar date. Third, the length of delay created by the late filing of the proofs of claim is negligible, because the claims were filed only ten days after the July 30, 2001 deadline. See In re Eagle Bus MFG., Inc., 62 F.3d 730, 739 (5th Cir. 1995) (claims asserted six to eight months after the bar date did not disrupt effective administration of case). Finally, debtors have failed to show that they will be prejudiced by claimants' filing of late claims. Debtors argue that the Court's decision will open the floodgates to innumerable other late claims. This is speculative and unsupported by any evidence. Furthermore, as no reorganization plan has yet to be approved, debtors have sufficient notice of the late claims to take them into consideration in negotiations for a settlement or a plan of reorganization. See In re Eagle Bus MFG., Inc., 62 F.3d at 737-38 ( quoting In re Drexel Burnham Lambert Group, Inc., 148 B.R. 1002, 1007 (S.D.N.Y. 1993) ("acceptance of a substantial late claim after consummation of a vigorously negotiated claims settlement and Plan of Reorganization thereon and a distribution of a major part of the assets thereunder, would disrupt the economic model on which the creditors, the debtor and the stockholders reached their agreements."). In all, equity directs that claimants' failure to meet the bar deadline qualified as "excusable neglect" under Rule 9006(b)(1). Therefore, debtors have failed to meet any of the criteria for a Rule 59(e) motion.
III. CONCLUSION
For the foregoing reasons, the Court DENIES debtors' motion to reconsider.