Opinion
23-20430-PES
09-26-2023
In the Matter of:Brian Christopher Schuck Debtor
Chapter 13
DECISION SUSTAINING OBJECTION TO CLAIM # 14
Paul E. Singleton, Judge U.S. Bankruptcy Court.
This case is about whether the Court should accept Lantech, Inc.'s untimely filed proof of claim under the informal proof of claim theory. Lantech filed an adversary proceeding complaint before the deadline for filing a proof of claim. It also filed a proof of claim on the deadline, but it used the wrong cause number. Lantech filed its proof of claim with the correct cause number after the deadline. It states this Court should treat the complaint and the incorrectly filed proof of claim as informal proofs of claim and permit its claim to be paid in the Chapter 13 plan. Debtor Brian Schuck objects.
The Seventh Circuit and Bankruptcy Rule 3002(c) do not allow untimely claims. The Seventh Circuit recognizes the informal proof of claim doctrine but has not provided guidelines. The Court:
• rejects the informal proof of claim theory under these circumstances,
• determines Lantech's claim is tardy,
• sustains Debtor Brian Schuck's objection, DE 32, and
• disallows Claim # 14.
Findings of Fact
The key facts are not in dispute:
1. Schuck filed his Chapter 13 petition on March 23, 2023.
2. Under Bankruptcy Rule 3002(c), the deadline for filing proofs of claim was June 1, seventy days after Schuck filed his petition.
3. Lantech filed its adversary proceeding complaint on June 1.
4. It filed its proof of claim on the same day but filed it with the wrong cause number.
5. On June 2, after the proof of claim deadline, Lantech filed proof of Claim # 14 with the correct cause number.
Law
The Bankruptcy Code and the Seventh Circuit disallow tardy claims. Section 502(b)(9) of the Code directs the Court to allow a claim, "except to the extent that proof of such claim was not timely filed." 11 U.S.C. § 502(b)(9). The Seventh Circuit stated courts "must disallow the claim-if the creditor's proof of claim is not timely filed." In re Pajian, 785 F.3d 1161, 1163 (7th Cir. 2015).
Bankruptcy Rule 3002(c) lists specific circumstances when a court may enlarge the time for filing a proof of claim. Accord Fed. R. Bank. P. 9006(b)(3). Bankruptcy Rule 3002(c) does not list informal proof of claims as a circumstance to extend the deadline. In re Fink, 366 B.R. 870, 873 (Bankr. N.D. Ind. 2007). Courts have no equitable authority to allow late-filed proofs of claim except as expressly set out in Bankruptcy Rule 3002(c). Matter of Greenig, 152 F.3d 631, 635 (7th Cir. 1998); In re Fink, 366 B.R. at 872-73; In re Harris, 341 B.R. 660, 662 (Bankr. N.D. Ind. 2006).
A minority of courts have allowed informal proof of claims. Wilkens v. Simon Bros., Inc., 731 F.2d 462, 464 (7th Cir. 1984). Under some circumstances, the Seventh Circuit has stated that a court may allow a creditor to file an informal proof of claim. Id. at 465. Yet the Circuit has established no guidelines. In re Harper, 138 B.R. 229, 243 (Bankr. N.D. Ind. 1991); Fink, 366 B.R. at 874.
In Scott, a case from our Circuit, Judge Bayt allowed a timely filed adversary complaint to cure a tardily filed proof of claim. In re Scott, 227 B.R. 832, 834 (Bankr. S.D. Ind. 1998). Judge Bayt held the proof of claim related back to the date the creditor filed the complaint and denied the debtor's motion to disallow the claim. Id.
Judge Grant sits in this Circuit, and at least twice has reached the opposite conclusion as Judge Bayt. First, in Fink, Judge Grant did not allow a timely filed complaint and motion for relief from stay to relate back to the deadline for filing a proof of claim. Fink, 366 B.R. at 877. The Fink creditor filed an adversary complaint and a motion for relief from stay before the proof of claim deadline. But the creditor filed its proof of claim late. Id. at 872. Judge Grant concluded the complaint and motion were what they were purported to be. Id. at 877. They were not informal proofs of claims. Id. at 877. Judge Grant disallowed the claim.
In Harris, Judge Grant addressed when a proof of claim is initially filed timely but contains the wrong cause number. Harris, 341 B.R. at 662. The Harris creditor did not realize its mistake until after the deadline lapsed. Id. at 662. It filed its proof of claim with the correct cause number and argued the claim related back to the date of the earlier filing. Id. at 663. Judge Grant rejected the argument and concluded the informal claim must be filed in the appropriate case. Id. at 662, 664, and 665-66.
Analysis
Lantech filed its proof of claim late. Under section 502(b)(9) and the Seventh Circuit in Pejian, the Court must disallow it. Consistent with Bankruptcy Rule 3002(c), an informal proof of claim is not a specific circumstance where this Court can extend the proof of claims deadline.
The Seventh Circuit has not stated whether a timely filed adversary complaint or a timely filed proof of claim with the wrong cause number are informal proofs of claim and can relate back to the proof of claims deadline. This Court declines to follow Scott and, instead, follows Fink and Harris.
Lantech's complaint is what it purports to be. It is a complaint. It is not an informal proof of claim. Lantech filed its proof of claim with the wrong cause number. When it filed the claim with the correct cause number, the deadline already lapsed. To be considered an informal proof of claim, it should have had the appropriate cause number. It did not. The Court finds Claim # 14 is tardy and denies it.
Conclusion
The Court:
• declines to accept the informal proof of claim theory,
• determines Lantech's claim is tardy,
• sustains Debtor Brian Schuck's objection, DE 32, and
• disallows Claim # 14. A separate order will be entered.
It is SO ORDERED.