Bankr. E.D.N.C.: In re Barbetta, L.L.C.- Quarterly Filing Fees for Re-opened Chapter 11

Summary:

Following the confirmation of its Chapter 11 plan and closure of the bankruptcy, the Debtor was sued in state court for a pre-petition debt by a creditor that was unknown at the time of filing of the bankruptcy and unlisted in the schedules. The state court directed the Debtor to re-open the bankruptcy case for a determination of whether the debt was discharged. Facing dismissal for failure to pay quarterly fees, the Debtor argued that it should not be required to pay such fees as they were forced to reopen the case.

The court quickly rejected the argument that the Debtor, which had filed a voluntary Chapter 11, was forced to appear again. Further reviewing both the Bankruptcy Code and public policy, the court held there was no basis for not requiring payment of quarterly fees.

Commentary:

Keep in mind that there is no fee for re-opening a case for enforcement of the discharge order and no quarterly fees in Chapter 7 or Chapter 13 cases. Whether the conversion of this case to a Chapter 7, several years after the Chapter 11 Confirmation Order and discharge were entered, could have revoked the Confirmation Order (which pursuant to Rule 7001 would have required an Adversary Proceeding and would likely have been subject to the one year limitation of Rule 60(b) in granting relief from a Final Order) is questionable. Perhaps the Debtor should have just happily played B’rer Rabbit and been thrown into the Chapter 7 briar patch, since that my have increase the likelihood of discharging this debt.

For a copy of the opinion, please see:

Barbetta, L.L.C.- Quarterly Filing Fees for Re-opened Chapter 11

About

1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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