man admittedly this is not a terribly complex case may not be terribly interesting as been suggested by many people including the us trustee that it was without prejudice so it could be refiled  but we do think it's terribly important and that's why we have it in front of you because it goes to the heart of notice expedia and due process when a debtor finds himself  go ahead and a change of circumstance and with a hearing that was set in this case on june the twenty fifth and which actually took place as an emergency on june the second without proper notice to the debtor  debtor had every intention of attending the june twenty fifth scheduled hearing he had every intention contrary to the district judge findings of having a plan of reorganization by then he had every intention of trying to work with the trustee h recently lost i'm sorry to interrupt but what would the debtor have said at that hearing that would have had a different made a difference in the in the outcome of the case the fact was that there was no amended or new plan of reorganization in effect in the one that was on record was not a viable plan both in terms of visibility is illustrated by the debtors monthly report and because of the decisions that decided against your client validity the questions of validity of the mortgage i can't speak exactly to which issues could or could not have been brought up here what i'm asking you to do is to tell me what tell us what the batter would have stated that would have made a difference by two yeah i mean i beez the presupposing since i didn't represent him at the district court level just just entered the case at the appeals level but the i do know that based on the record that the trustee at the district court level did have communication with his pri counsel about an amended plan but there was no play on file is that correct correct but that there were there was a i think the counsel's dismissed at the end of may maybe may twenty ninth something like that there would have been a whole month to try  to get an amended plan in and two because the other thing is most importantly in this order i think it goes to the fact that this is a court said found that he has no intention of ever reorganizing and that certainly wasn't the case and i don't know that there's anything in the record a plan was submitted a plan that had no payments in it but there was a plan submitted so the core of this issue is whether someone should have the notice and opportunity to actually show up for the dismissal hearing i don't think that under the rules he was given enough time to even show up to the party now whether the results would have been the same i mean i can't say but the reason we're in front of you all is for you all to determine at what stage is someone entitled under your code and your rules to have the opportunity to show up to the hearing even if the the district court did argue that he wasn't an eviden extent judge preston was raising ok assume that your client there was a procedural due process violation with respect your client your client and it gets assume your client did not get proper notice of the hearing proper notice that the case was going to be the missed if we assume that there was a you know if we assume there was a violation of if the hearing have been held on june twenty fifth he would have been able to put something into the record early show up to the hearing like iran at a bit of a disadvantage because i was not able to actually speak to directly who was the trustee until till i got involved at the very end so you know i can't really speak to what would or would not have happened but i do know that the record shows that they were that the the john darche had asked for an amended plan that they were supposed to have given him one and they were discussing about the fact that if if it looked like the feel like the plan and that's the other frustrating thing about the whole situation is that the creditors will have not complained at all the situation i know that that th deutsche bank is here and they are agreeing with the trustee i understand that but they've never raised any of these the diminution of the estate they never filed anything negative i mean as far as mr half we knew at the time his lawyers were working to put wearily could and he certainly can't today i mean i don't i don't think there's any reason that this all can't be started over from scratch but the reason that we're here is for you all to discuss and think to that person when they don't get notice and what is the nature of an emergency you know the the grounds for the emergency i just don't see that they were there at all or was it your client declining to appear for a deposition that some didn't say flat out nobody made no effort as far as i can tell from the record made no effort to to meet the trustee on common ground to effectuate his deposition which they were entitled to do well i can't i can't speak to what happened to just a quick level but i can speak to the actual conclusion which is on page nine of the order that she said he didn't have to address judgeships that he didn't have to address the deposition issue that he didn't have to address the trustees motion for sanctions based on whatever happened with the depositions  d made this dismissal simply on twelve o eight c so that issue was raised by the by the trustee but that issue was not part of the order he said it was moved it was but the strange thing is that motion on the discovery was the grounds to hold emergency hearing in the first place so you've got a situation where he was granted an emergency hearing based on an issue that wasn't even brought up but was brought up  liberty to do whatever the court wants to do but i can't argue one way or the other i mean i wasn't there so i mean of course the district court's always at liberty with a district court chosen just to to say that that issue is moot he believed that he had  you know a cause to to just dismiss the case wholeheartedly going back to your point in judge harper in judge questions comments assuming that there is a violation of procedure due process what would have happened if june twenty record that we have here today since we're in the court of appeals you know i mean i can't i can't presuppose the factual circumstances but if you go back and compare it to maybe like a criminal matter just because somebody you know doesn't get their  process and we don't know whether the jury will find them guilty the second time around if their due process was violated or and i'm just being dramatic here in going to the current you know the far the far extreme of all of this is that i mean whether the results are the same  not should not actually matter to the fact that the opportunity we heard was not given and the nature of the emerge i also want you all to to i'm hoping right now opinion on the nature of emergency hearings of these natures  troubles me a little bit that you're suggesting that the court needs to reverse the lower the trial court on the dismissal but can't show that there's any prejudice imposed on the debtor here the prejudice is that how would we ever know what he was going to present how do we know that he would have been able to get to get to come to a meeting of the minds with a trustee who's the only person who has a problem with all this you come before us and you say i can't tell you what the  motion to dismiss that that i'm just basing it on the record that's all i have if you have any more questions i still struggle with the harm true mr half in this case because the other we point out that it's been pointed out some other possibilities to forget those for a second again if if he was afforded his right to be heard either on june second or june twenty five what we have told the judge and with i guess some specifics about the plan because that seems to be the tipping point here there was no plan proposed that was available for i want to review those things so that's that's my struggle well it's i can't show prejudice because he never got he never got a chance to say anything i mean if you want me to presuppose things there could have been a plan that had third party contributions because part of what the trustee had a problem with is that he didn't think that the hearer had enough income to support any plan well so how what about third party comp you know a guy named bob could come in and finance the entire planet i mean or a wife named heather right so i mean you know that the fact that he didn't get the reason this has been appealed and not sort of from scratch you could have i mean there's an argument is it more economical to remain and get a plan put in because that would be that would be what would happen if you or me in this case a plan would be put in probably the next day so or to start over but i can't i can't really concern myself i don't just socom me i'm i'm concerned with the fact that if this happened to mr happy it's going that that it's going to happen to many other people and that's why i'm in and front of you i'm not here to want to waste your time i think it's a really important issue even though it's not terribly interesting or sexy but i think it's an where you have a lot more in the last minute or two that there would be possibly a plan with third parties in that's that your point there was never an opportunity for which you have to bring those points up i guess i have the second or the twenty fifth of june and there are notes in the record that mr darty was willing to consider withdrawing his motion to dismiss if you could just see an amended plan that looked like it could be funded and he wasn't he wasn't against an amended plan i mean he wasn't going my way or the highway i mean he was just waiting to get the plan fair enough thank you company americas i will be speaking for ten minutes and mr sour will be speaking for five minutes on behalf of deutsche bank the united states trustee would ask this court to affirm the decision of the bankruptcy court for the eastern district of kentucky dismissing mr chapter twelve back because the bankruptcy court did not abuse its discretion in finding three separate and independent grounds existed to dismiss mr hafitz case first mr happy's unreasonable delay that was prejudicial to his creditors second the continuing loss to and diminution of the bankruptcy estate which clearly demonstrated that there was no reasonable likelihood of rehabilitation in this case and third mr happy to confirm a chapter twelve plan this is the case that at every point has been about delay mr happy's attempts to delay the foreclosure proceedings on the south carolina home attempts to delay the foreclosure proceedings on the kentucky farm and attempts to delay the inevitable dismissal of this chapter twelve case this case was filed in april of two thousand and fourteen on the eve of the foreclosure of the south carolina property and subsequent to the filing mr half you requested an extension of time to follow the plan there was a five month delay in following it the a purse and only chapter twelve plan that is on the docket in this case at the hearing of on confirmation of that chapter twelve plan mr happy again asked for more time and he asked for time to avoid the lanes of deutsche bank and bank of america because the only way the chapter twelve plan would be successful is if he was able to follow adversary proceedings to avoid those liens the court granted him more time at that juncture and he did fall adversary proceedings to avoid those lanes however the adversary proceedings were not successful he voluntarily dismissed the adversary proceeding against bank of america and deutsche bank was successful in obtaining dismissal of the adversary proceeding against it in the bankruptcy court the united states trustee filed a motion to dismiss the chapter twelve bankruptcy case in january of two thousand and fifteen at that time the case had been pending for nine months mr having requested a continuance of the united states trustees motion to dismiss when it was first set for hearing and the united states trustee originally opposed that continuance but then due to adverse weather conditions agreed to allow for a continuance of the motion the motion was not set for a date certain at that time at the continuance of the the motion subsequent to that hearing mr happy father motion to stay the entire bankruptcy proceeding and deutsche bank oppose that motion to stay the entire bankruptcy proceeding as did the united states trustee and that motion to stay the entire bankruptcy case was denied and that is what is on appeal as part of this appeal  as well that was the original appeal in this case and after the denial of the stay of the courts that the united states trustees motion to dismiss for a hearing on june twenty fifth the united states trustee attempted to south carolina where they were located at the time however the united states trustee did not receive any reasonable response and was facing the june eleventh discovery deadline on the motion and on may twenty eighth when mr happy did not appear for his scheduled deposition the united states trustee filed the motion to dismiss as a sanction and requested the expedited hearing based on the looming june eleventh discover a motion to dismiss or was it just a motion for saying question it was actually a motion to dismiss as a sanction so there was dismissal contemplated in the united states trustees motion in the communications prior to  the the motion being filed the united states trustee had indicated to miss mckeever and mr happy that he would seek dismissal as a sanction and so that motion specifically requested not just general sanctions  it was captioned motion to dismiss case as a sanction for failure to cooperate with discovery and that is docket number one thirty three in the bankruptcy case and that motion was e mailed to the addresses where the u s trustee had communicated with both mrs mckeever and mr happy you know is also mailed to them at their addresses that were on record with the bankruptcy court that is my twenty eight yes your honor that is correct and it's unclear to me whether notice of the hearing that was conducted by the bankruptcy court on this motion for saying i'm going to call it motion for sanctions to avoid confusion whether notice of hearing or notification of the hearing was ever sent to mr cathy can you clarify that for me yes your honor the united sates trust a trustee gave notice of the shorten the motion to shorten time which did have the exact hearing date in the motion and also communicated that the hearing would be hearing date the the motion says notice of hearing please take notice that this motion will be heard by the court on june second two thousand and fifteen at one pm in the second floor courtroom us bankruptcy court one hundred vine street lexington kentucky that's docket number one thirty four on the bankruptcy court dock at the time that the hearing was held on june second the case had been pending for fourteen months the united states trustees motion to dismiss had been pending for four months mr half east plan that was of the proposed avoiding the liens had been pending for eight months and it had been four months since the dismissal of the last adversary proceeding with deutsche bank in or with bank of america and i believe was the doj bank case that was disposed of last versus the bank of america case all this time mr happy was enjoying the benefit of the automatic stay and living in the kentucky and south carolina properties and his creditors had no resolution and were not getting paid the bankruptcy court determined that pursuant to section twelve  c one that there was an unreasonable delay that was prejudicial to creditors and that mr happy was unlikely to reorganize and was instead only engaging in actions to delay the case that's the price bankruptcy court properly dismissed mr happy's case for unreasonable delay that was prejudicial to creditors the bankruptcy court also found a second grounds for dismissal of mr half his case under twelve o eight c nine for continuing loss to or diminution of the bankruptcy  state and the absence of a reasonable likelihood of rehabilitation mr hatfield filed monthly operating reports with the bankruptcy court that indicated he had lost money during the course of the bankruptcy case on a monthly basis he did not have sufficient income to meet his expenses and over the course of the bankruptcy case he had a net operating loss of seven thousand eight hundred dollars which clearly shows continuing loss to in diminution of the bankruptcy estate the second part of the test under twelve zero eight c nine is whether the debtor has a reasonable likelihood of rehabilitation and there is no reasonable likelihood of rehabilitation where the evidence establishes that the debtor cannot confirm a plan the plan that was on the docket was unconfirmable after the adversary proceedings were dismissed against bank of america and against george bank and also the monthly operating reports showed that any plan that provided for payment to either of those creditors would not be feasible because there was not sufficient income to make payments to  motion to dismiss i can understand that but where there was a i'm up between the time the hearing was held and the time of the scheduled hearing on the motion to dismiss the debtor had a month in which to come up with a plan and propose it and your out of the debtor could have come up with a plan but based on the monthly operating reports any plan would have not been feasible and so there would be no ability to confirm the plan even if they presented an alternate plan that provided for payment because there was it was not it would not be feed a feasible plan what about mckeever suggestion that there could have been third party funding and your honored there's no evidence of any of that in the record that those were possibilities and there's not been any  and and if i may a few make hard right your honor i believe that the bankruptcy court had don't with the case and was very familiar with the case and the fact that the debtor had not complied and was not taking action that showed a likelihood of compliance and that this was a case that was really just an attempt to delay and with that knowledge that there was no point in going forward for any further delay in the case and that at this point there would have been nothing different in the time period that would have been and the time the court granted the motion on june sixth and then there was when the actual order was entered dismissing the case and so it would have been the gente the june twenty fifth hearing but there was nothing that would indicate that things were going to turn around at this point in the case there was no evidence presented in the letter that was sent by mr happy to the court which the court addressed it was sent on the day of that hearing on june second and that didn't provide any further evidence that the court would see that anything different would occur between now and june twenty entirely sure what the district court intended by that language but out of an abundance of caution given billeted just nature of the relationship among the parties we have read it conservatively out of not move forward with  there is no amended plan in the record no request to submit an amended plan no proposal to fix what has now been definitively held to be an unconfirmable  cases in the eastern district of kentucky go to this is circuit back down that we think conclusively establish the validity of that lien if there is any doubt about that this adversary proceeding in order that the bankruptcy judge entered on february second of two thousand and fifteen conclusively resolved it rejected all of the debtors challenges to the validity of the ling that's february twenty fifth teen now mr filed an appeal to the bankruptcy appellate panel and then after last the six circuit appeal in one of those preceding cases dismissed it with prejudice so as a matter of law the case ra judicata the validity of door to bang slain is confirmed it's established and cannot be challenged here now my friend on the other side is made a fairness point no we haven't had an opportunity to a end the claim this was a move so fast i think that takes this out of context of the litigation that has been going on for ten years in the eastern district of kentucky she has filed repeated quiet title actions two separate quite parallel actions has been a declaratory judgment action to at least two appeals to the six circuit she has known that the her challenge and the debtor's challenge to validity of door to bang sling was fifteen so that's three months before the bankruptcy court dismissed the plan so she knew at least for three months that this bankruptcy court considered this plan unconfirmable because her valid due to banks lien was valid so this this claim of unfair surprise never got a chance really falls flat when you consider the litigation and its totality and we still haven't heard the way that this could be fixed or speculation that oh maybe a third party could come in ten years later in this these proceedings have been going on for a decade now the mortgage was signed in two thousand and seven they defaulted in two thousand eight haven't made a single mortgage payment since two thousand and eight and that's what i think your honor i hope doesn't get missed from the bankruptcy court order looking at the entirety of this litigation both in the eastern district and the six circuit which he lays out in his order dismissing adversary for proceeding fourteen five zero four four that  a record cite here looks like document number twenty six in the five zero four four adversary proceeding he really put it in context and that the other thing that i would point out for the answer question because your claim basically stands in the position of the liens been held valid you just want to foreclose or get paid i mean it's one of the other strikes me yes or that's what we want we hope this can bring be brought to finality so there's no doubt that we can move forward with the foreclosure in the eastern district of kentucky and the issue of payment is rather it's a private or over terms that you can accept it seems to me well we're always open and willing to discuss those terms and force and we haven't we haven't had much success with that you never know thank you