Opinion
In Bankruptcy, Case No. 03-74203
March 1, 2004
OPINION
This proceeding is before the Court on Harold and Joyce Six's Objection to Chapter 12 Plan of Reorganization.
The Debtors, Jamie and Jeffrey Six, had an oral crop share lease with Harold and Joyce Six for the crop year 2003. According to the Debtors' Schedule of Executory Contracts and Unexpired Leases, the lease covers 67.3 acres.
The Debtors filed a petition pursuant to Chapter 12 of the Bankruptcy Code on September 8, 2003. The Debtors' Chapter 12 Plan of Reorganization, which was filed December 5, 2003, provides that "[a]ny executory contracts for crop share farming and custom work are reaffirmed." Harold and Joyce Six object to this provision of the Plan. They assert that the Debtors' lease with them was deemed rejected when the Debtors failed to timely assume as required by 11 U.S.C. § 365(d)(4), which provides as follows:
Notwithstanding paragraphs 1 and 2, in a case under any chapter of this title, if the trustee does not assume or reject an unexpired lease of nonresidential real property under which the debtor is the lessee within 60 days after the date of the order for relief, or within such additional time as the court, for cause, within such 60-day period fixes, then such lease is deemed rejected, and the trustee shall immediately surrender such nonresidential real property to the lessor.
It is undisputed that the lease at issue in this proceeding involves "nonresidential real property under which the debtor is the lessee." It is also undisputed that the Debtors did not file a motion indicating that they wanted to assume the lease with Harold and Joyce Six, or that they wanted additional time to decide whether to assume or reject the lease. (The Court notes that the Debtors timely filed a motion to assume an executory contract with the Farm Service Agency.)
The Debtors first argue that an order for relief was not entered in this case. The Debtors are confusing the order for relief with an order lifting the automatic stay. Pursuant to 11 U.S.C. § 301, the "commencement of a voluntary case under a chapter of this title constitutes an order for relief under such chapter." Accordingly, the Court finds that an order for relief was entered on September 8, 2003.
The Debtors concede that they did not file a timely motion to assume the lease with Harold and Joyce Six. However, they state that they "indicated at the 341 hearing of [sic] their intention to continue farming all the ground currently being farmed which included Harold Joyce Six ground."
The majority rule is that a debtor must file a formal written motion to assume a lease within 60 days of the filing of the petition. In re Payless Rental, Inc., 138 B.R. 312, 313 (Bankr. N.D. Ga. 1992). This is true even when the debtor indicates at the § 341 meeting an intention to assume the lease. In re Dublin Pub, Inc., 81 B.R. 735, 736 (Bankr. N.D. Ga. 1988) Moreover, the Debtors' statement of an intent to assume all of their farm leases at the § 341 meeting would not satisfy the requirements of § 365(d)(4) even under the cases which do not require a formal motion to assume because Harold and Joyce Six were not at the § 341 meeting. Thus, the purpose of § 365(d)(4) — to assure that landlords receive a prompt decision as to the assumption or rejection of their leases — would not have been served. See In re Flugel, 197 B.R. 92 (Bankr. S.D. Cal. 1996).
For the foregoing reasons, the objection of Harold and Joyce Six to confirmation of the Chapter 12 Plan of Reorganization is sustained.
This Opinion is to serve as Findings of Fact and Conclusions of Law pursuant to Rule 7052 of the Rules of Bankruptcy Procedure.
See written Order.