In the

United States Court of Appeals

For the Seventh Circuit

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No. 04-1009

IN RE: OUTBOARD MARINE CORPORATION,

Debtor.

APPEAL OF: TRAVIS BOATS & MOTORS,

INCORPORATED, doing business as

TRAVIS BOATING CENTER,

Appellant.

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Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 03 C 8532—Milton I. Shadur, Judge.

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ARGUED SEPTEMBER 8, 2004—DECIDED OCTOBER 18, 2004

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Before BAUER, MANION, and KANNE, Circuit Judges.

BAUER, Circuit Judge. Appellant-Creditor Travis Boats

& Motors, Incorporated (“Travis Boats”), appeals from a

bankruptcy court order that disallowed its claim in the

Outboard Marine Corporation (“OMC”) Chapter 7 bankruptcy proceeding for failure to timely file a proof of claim.

The Notice of Claims Bar Date required creditors to mail

their proofs of claim to a designated post office box so as to

be received by the OMC claims agent by November 15,
2 No. 04-1009

2002. Travis Boats faxed its proof of claim to counsel for the

OMC bankruptcy trustee on November 15, 2002. The

trustee objected to the claim as untimely, and the bankruptcy court sustained the objection, disallowing Travis

Boats’ claim. The district court affirmed. We affirm the

bankruptcy court’s conclusion about the timeliness of Travis

Boats’ claim, but we reverse the court’s decision to disallow

the claim.

I. Background

On December 22, 2000, the OMC debtors filed voluntary

petitions for relief under Chapter 11 of the United States

Bankruptcy Code. On August 20, 2001, the cases were converted to a Chapter 7 liquidation, and a trustee was appointed

on August 24, 2001. The trustee subsequently determined

that a distribution to OMC’s general unsecured creditors was

possible, and sought authority from the bankruptcy court to

fix a claims bar date. On July 16, 2002, the bankruptcy

court set a claims bar date of November 15, 2002 (“Bar

Date”), and approved the Notice of Bar Date.

Because the trustee anticipated a significant number of

claims, he sought the bankruptcy court’s permission to appoint a claims agent. After receiving such permission, the

trustee charged the agent with cataloguing the proofs of

claim that were received both before and after the agent’s

appointment. To streamline the claims procedure, the claims

agent designated a post office box as the repository for all

proofs of claim.

On or about August 15, 2002, the trustee served the

Notice of Bar Date on all of OMC’s known creditors by first

class mail. In the Notice, the trustee informed OMC’s creditors about the impending liquidation of OMC’s assets, and

warned them that they may not be paid on their claims

against OMC if they failed to timely file the enclosed proof
No. 04-1009 3

of claim form. The Notice also specified the method of transmittal, and emphasized that the claims had to be received

by the bar date:

File our Proof of Claim by sending it to:

OMC Claims Agent

P.O. Box 560

Waukegan, IL 60079-560

To be timely, all Proofs of Claim must be filed so as to

be RECEIVED by the OMC Claims Agent on or before

the Bar Date. Proofs of Claim are deemed filed only

when actually received by the OMC Claims Agent. 

Any questions, please call the OMC Claims Agent at

(312) 602-2299.

App. 1 (emphasis in original). The phone number listed on

the Notice automatically connected to a voicemail message

system, where the messages would be retrieved by counsel

for the trustee. The OMC claims agent received more than

5300 proofs of claim asserting claims against OMC in excess

of $3.5 billion.

On the Bar Date, Travis Boats mailed a proof of claim in

the amount of $1,138,216.90 to the OMC claims agent at the

address provided on the Notice. That claim was received by

the OMC claims agent on December 9, 2002, and assigned

Claim No. 5354. Although the Notice of Bar Date did not

provide creditors with a fax number, counsel for Travis Boats

also transmitted by facsimile a duplicate of Claim No. 5354

to counsel for the trustee on the Bar Date. According to

Travis Boats, counsel for Travis Boats was given the fax

number when he called the telephone number provided in

the Notice and asked for the fax number. Upon receipt of

the faxed proof of claim, counsel for trustee mailed it to the

OMC claims agent, who received it on November 21, 2002,

and assigned Claim No. 5293.
4 No. 04-1009

On July 11, 2003, the trustee filed an omnibus objection

to numerous claims, including Claim No. 5293 and Claim

No. 5354. The trustee objected to the Travis Boats claims as

untimely. Travis Boats filed a response to the trustee’s

objection with respect to Claim No. 5293 (the facsimile proof

of claim), but did not oppose the trustee’s objection to Claim

No. 5354 (the proof of claim transmitted by mail). After a

hearing, the bankruptcy court entered an order sustaining

the trustee’s objection to both of Travis Boats’ claims. Travis

Boats then filed a motion for reconsideration of the court’s

order, which the court denied. The bankruptcy court’s decision was affirmed on appeal to the district court.

II. Discussion

On appeal, Travis Boats argues that it complied with the

Notice of Bar Date by faxing its proof of claim to the OMC

claims agent on the Bar Date. In the alternative, Travis

Boats asserts that its faxed claim should be deemed timely

pursuant to Rule 5005(c) of the Federal Rules of Bankruptcy

Procedure, or that its claim should be characterized as a

timely-filed informal claim. In addition, Travis Boats maintains that the courts below erred in disallowing the claim,

instead of subordinating the claim under 11 U.S.C. § 726(a)(3).

Appellate courts, like district courts, review a bankruptcy

court’s legal conclusions de novo, but a bankruptcy court’s

factual findings will be reversed only if clearly erroneous.

See In re Lifschultz Fast Freight, 132 F.3d 339, 343 (7th Cir.

1997). “A finding is ‘clearly erroneous’ when although there

is evidence to support it, the reviewing court on the entire

evidence is left with the definite and firm conviction that a

mistake has been committed.” Anderson v. Bessemer City,

470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518

(1985). 
No. 04-1009 5

A. Timeliness of Travis Boats’ Proof of Claim

Travis Boats first challenges the bankruptcy court’s finding that its proof of claim was untimely, a factual finding

that we review for clear error. Travis Boats argues that it

complied with the Notice of Bar Date by timely faxing its

proof of claim to the OMC claims agent. According to Travis

Boats, transmission of its proof of claim by facsimile was

appropriate because the Notice did not specify an exclusive

method of filing. Travis Boats also maintains that when

counsel for Travis Boats called the telephone number listed

in the Notice, the person that answered the phone provided

him with a fax number and that person did not state that

facsimile transmittal was prohibited.

Travis Boats’ arguments on this issue are unpersuasive.

The Notice of Bar Date only permitted one method of transmittal: claimants were required to mail proofs of claim to a

designated post office box so that they would be received by

the OMC claims agent by November 15, 2002. The Notice did

not provide creditors with a fax number or mention any

other possible method of transmittal. Given the lack of

ambiguity in the Notice, it was unnecessary to explicitly

state that mailing the proof of claim to the designated post

office box was the exclusive method of transmittal.

Rather than following the simple instructions contained

in the Notice, Travis Boats faxed its proof of claim to counsel for the trustee on the Bar Date. Counsel for the trustee

then forwarded the fax to the designated post office box,

where it was received by the claims agent on November 21,

2002, six days after the Bar Date. Under the plain terms of

the Notice of Bar Date, the proof of claim was untimely

because the OMC claims agent did not receive the claim at

the designated post office box on or before the Bar Date.

Travis Boats’ belated telephone call to the OMC claims

agent does nothing to change the result. Presumably on or

just before the Bar Date, Travis Boats called the telephone
6 No. 04-1009

number listed on the Notice, which was automatically connected to a voicemail message system. The caller from

Travis Boats somehow reached a human operator, possibly

by pressing “0” for the operator, and requested the law firm’s

fax number in order to fax its proof of claim to the law firm.

Travis Boats fails to articulate how this telephone interaction undermines the bankruptcy court’s conclusion about

the timeliness of its proof of claim. The court-approved

Notice of Bar Date governed the filing of claims, and the

phone operator at a law firm cannot amend such an order.

We find no error in the bankruptcy court’s conclusion that

Travis Boats’ eleventh-hour fax was not a timely-filed proof

of claim under the terms of the Notice of Bar Date.

B. Bankruptcy Rule 5005(c) and Informal

Proof of Claim

Travis Boats also advances two equitable arguments in an

effort to avoid the effect of its untimely filing. First, Travis

Boats claims the benefit of Rule 5005(c) of the Federal

Rules of Bankruptcy Procedure, which grants the bankruptcy court equitable discretion to backdate papers like a

proof of claim that are “erroneously delivered” to the wrong

official in a bankruptcy proceeding. Second, Travis Boats

asserts that its facsimile transmission amounted to an

informal proof of claim because it stated the existence,

nature, and amount of the claim, and because it evidenced

Travis Boats’ intent to hold OMC liable for its debt. However, Travis Boats waived these arguments by not raising

them until its motion for reconsideration. See Mungo v.

Taylor, 355 F.3d 969, 978 (7th Cir. 2004) (“Arguments raised

for the first time in connection with a motion for reconsideration . . . are generally deemed to be waived.”)

Even if we were to consider Travis Boats’ arguments about

Rule 5005(c) and the informal proof of claim, we would still

affirm the bankruptcy court. Both arguments are premised
No. 04-1009 7

on equitable considerations, and the equities militate against

Travis Boats in this instance. Perhaps most importantly,

Travis Boats has not offered any convincing justification or

explanation for its untimely filing. Despite having actual

knowledge of the Bar Date and being represented by

counsel at all relevant times, Travis Boats failed to timely

file its proof of claim. As noted by the district court, Travis

Boats’ problem is a “self-inflicted wound,” and it has no one

to blame but itself for this predicament. This is not the case

of an unsophisticated claimant confused by complex terms

in a bankruptcy notice. Indeed, Travis Boats cannot claim

that it did not understand the terms of the Notice because

it also mailed a duplicate copy of its proof of claim to the

designated post office box, though the claim was mailed on the

Bar Date and received after the Bar Date. Moreover,

although Travis Boats’ $1.1 million claim is a small fraction

of the approximately $3.5 billion in claims against OMC, it

is not a de minimis claim that would have no effect on the

payout to the creditors with timely-filed claims. Finally,

making exceptions for claimants that do not comply with the

requirements of the claims procedure may adversely impact

efficient judicial administration in a large bankruptcy like

this one, and the bankruptcy court is in the best position to

weigh these considerations. For all of these reasons, we

reject Travis Boats’ invitation to characterize its proof of

claim as timely.

C. Disallowance of Travis Boats’ Claim

Travis Boats’ final argument is one that will likely make

no practical difference in this bankruptcy proceeding. Under

11 U.S.C. § 726(a)(3), when a proof of claim for an unsecured debt is tardily filed in a Chapter 7 proceeding (with

an exception not applicable here), it is subordinated to the

timely-filed unsecured claims and the other claims listed in

11 U.S.C. § 726(a)(1) and (2). In this case, the bankruptcy
8 No. 04-1009

court disallowed Travis Boats’ untimely claim rather than

subordinating it. The district court, presumably relying on

representations by counsel, ruled that the question of

whether Travis Boats’ claim should have been subordinated

rather than disallowed was moot because OMC’s assets will

be exhausted by the timely-filed claims. However, at oral

argument, counsel for the trustee could not offer us any

specific information about OMC’s assets in relation to the

timely-filed claims, and the record does not provide definitive evidence on this issue. As a consequence, though it may

make no practical difference in the end, we reverse the

bankruptcy court’s decision to disallow the claim, and we

hold that Travis Boats’ untimely claim is subordinated to the

timely-filed claims in accordance with 11 U.S.C. § 726(a)(3).

III. Conclusion

For the reasons stated herein, we AFFIRM the bankruptcy

court’s conclusion that Appellant-Creditor’s proof of claim

was untimely. However, we REVERSE the bankruptcy court’s

decision to disallow the proof of claim, and hold that the

claim is subordinated to the timely-filed claims.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—10-18-04