Opinion
Case No. 8:06-cv-1311-T-30EAJ.
November 7, 2006
ORDER
THIS CAUSE comes before the Court on an appeal from the Bankruptcy Court Order Disallowing Claim No. 212 dated May 11, 2006, concerning Appellant's request to amend his earlier claim to change it from an unsecured claim to a secured claim. Appellant contends that the Bankruptcy Court decision was an abuse of discretion pursuant to the factors enunciated in In re: Int'l Horizons, Inc., 751 F.2d 1213 (11th Cir. 1985). At the hearing, the Bankruptcy Court heard argument of counsel including their proffers and determined that the Estate had relied to its detriment on the earlier filed claim, and that it would not be equitable to allow Appellant to convert its claim from unsecured to secured. The Bankruptcy Court relied primarily on the existing court record in reaching its conclusions. Appellant argues that it was thereby prohibited from exploring the issues of reliance and detriment through discovery and cross-examination of witnesses.
Given the extremely heavy caseload carried by this district's Bankruptcy Court, it is understandable why the Bankruptcy Court relied on the record in making its determination. However, Appellant is entitled to an evidentiary hearing on these issues to explore whether the Estate relied to its detriment and whether such reliance was justified in accordance with the factors contained in In re: Int'l Horizons.
It is therefore ORDERED AND ADJUDGED that:
1. The Bankruptcy Court Order Disallowing Claim No. 212 dated May 11, 2006, is REVERSED and REMANDED to the Bankruptcy Court for further proceedings consistent with this Order.
2. The Clerk is directed to CLOSE this file.
DONE and ORDERED.