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In re Seven Oaks Partners, LP



### UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.

CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS

PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE

PROCEDURE 32.1 AND THIS COURT = S LOCAL RULE 32.1.1. WHEN CITING A

SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY

MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC

DATABASE (WITH THE NOTATION A SUMMARY ORDER @ ). A PARTY CITING A

SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT

REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second

Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley

Square, in the City of New York, on the 30 th day of January, two thousand

nineteen.

PRESENT: A MALYA L. K EARSE

D ENNIS J ACOBS

,

R OBERT D. S ACK

,

Circuit Judges.

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ X

In re Seven Oaks Partners, LP,

Debtor.

Seven Oaks Partners, LP, James M. Nugent, ESQ.,

Douglas S. Skalka, Esq.,

Debtors

‐ Appellees,

‐ v. ‐ 18

‐ 3422 Cynthia Licata,

Creditor

‐ Appellant.

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ X

FOR APPELLANT: John F. Carberry, Cummings & Lockwood

LLC, Stamford, CT.

FOR APPELLEE: James M. Nugent, Harlow, Adams &

Friedman, P.C., Milford, CT.

Appeal from a judgment of the United States District Court for the District

of Connecticut (Arterton, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED AND DECREED that the judgment of the district court be

AFFIRMED.

Cynthia Licata appeals from a judgment of the United States District Court

for the District of Connecticut (Arterton, J.) affirming the decision of the

bankruptcy court to deny her claim against Seven Oaks Partners as untimely.

Licata possessed a $500,000 judgment against Seven Oaks Partners, LP at the time

it filed for Chapter 11 bankruptcy in April 2012, but Seven Oaks failed to list her

as a creditor. In November 2012, Seven Oaks added Licata as holding a

“disputed” and “unliquidated” claim and the court set July 8, 2013 as the bar date

by which she could file a proof of claim. Licata filed a proof of claim on

September 5, 2014. Seven Oaks objected on the basis of untimeliness, the

bankruptcy court (Manning, J.) sustained the objection, and the district court

subsequently affirmed. The question on appeal is whether Licata’s failure to

timely file her claim is the result of excusable neglect. We assume the parties’

familiarity with the underlying facts and procedural history.

Licata claims that the bankruptcy court abused its discretion in disallowing

her proof of claim because Seven Oaks first omitted listing her claim, then

improperly scheduled her claim as one that was disputed and unliquidated rather

than as liquidated and reflected in a final judgment, and then failed to properly3 notify her of the proceeding. Because

‐‐ at a minimum through service on her

lawyer

‐‐ Licata had notice of the bankruptcy proceedings before the bar date, we

disagree.

“In an appeal from a district court’s review of a bankruptcy court decision,

we review the bankruptcy court decision independently, accepting its factual

findings unless clearly erroneous but reviewing its conclusions of law de novo

. ”

In re Enron Corp., 419 F.3d 115, 124 (2d Cir. 2005) (quoting In re AroChem Corp,

176 F.3d 610, 620 (2d Cir. 1999)). “Bankruptcy court decisions to deny a request

to file late are reviewed for abuse of discretion.” Id.

In bankruptcy, a “bar date” fixes the time to file a proof of claim against the

bankruptcy estate. See Fed. R. Bankr. P. 3002(c)(3). Bankruptcy Rule 9006(b)(1)

“empowers a bankruptcy court to permit a late filing if the movant’s failure to

comply with an earlier deadline ‘was the result of excusable neglect.’” Pioneer

Inv. Servs. Co. v. Brunswick Associates L.P., 507 U.S. 380, 382 (1993). “The

burden of proving excusable neglect lies with the late

‐ claimant.” In re Enron,

419 F.3d at 121.

Whether neglect is excusable is an equitable determination, “‘taking

account of all relevant circumstances surrounding the party’s omission,’

including ‘[1] the danger of prejudice to the debtor, [2] the length of the delay and

its potential impact on judicial proceedings, [3] the reason for the delay, including

whether it was within the reasonable control of the movant, and [4] whether the

movant acted in good faith.’” Id. at 122 (quoting Pioneer, 507 U.S. at 395)

(alterations in original). The “focus” of our inquiry is whether the movant was

responsible for the delay. Id.

The bankruptcy court did not abuse its discretion in denying Licata’s late

filed claim because Licata was responsible for the delay. Critically, Licata had

notice, through her lawyer, of Seven Oaks’s bankruptcy and the allegedly

erroneous scheduling of her claim as “disputed” and “unliquidated,” in

November 2012. The bankruptcy court found that Seven Oaks served notice on

Licata at five different addresses, including that of her lawyer, Ridgely Brown.

See Pioneer, 507 U.S. at 397 (“[I]n determining whether respondents’ failure to file

their proofs of claim prior to the bar date was excusable, the proper focus is upon4 whether the neglect of respondents and their counsel was excusable.”) (emphasis in

original). At a hearing on November 13, 2012, where he was representing Licata

in nonbankruptcy proceedings against Seven Oaks, Brown discussed Seven

Oaks’s bankruptcy, its impact on Licata’s $500,000 judgment, and the scheduling

of Licata’s claim. Licata was therefore on notice in November 2012. And

because she then failed to file her proof of claim until September 2014, Licata’s

neglect is inexcusable.

Licata argues that because Seven Oaks mischaracterized her claim in bad

faith, requiring compliance with the bar date will encourage future

gamesmanship by debtors; after all, had Seven Oaks scheduled her claim as

undisputed, Licata’s filing would have been unnecessary.

But the improper scheduling of a claim by a Chapter 11 debtor does not

excuse an untimely filing where the creditor had actual notice of the debtor’s

bankruptcy. See 4 Collier on Bankruptcy ¶ 523.09[4][a] (Alan N. Resnick &

Henry J. Sommer eds., 16th ed.) (citing Lompa v. Price (In re Price), 79 B.R. 888,

893 (BAP 9th Cir. 1987)). If a creditor has notice or actual knowledge of the

bankruptcy with sufficient time to timely file a proof of claim, the debt will be

discharged even though not listed or scheduled, listed or scheduled improperly,

or listed or scheduled tardily. Id. Regardless of the correctness of any

allegations of bad faith, once Licata possessed actual knowledge of Seven Oaks’s

bankruptcy and scheduling of her claim, it was her responsibility to file a proof of

claim and correct Seven Oaks’s mistaken characterization of her claim as disputed

and unliquidated before the established bar date.

Accordingly, Licata failed to demonstrate excusable neglect and the

bankruptcy court was within its discretion to deny her late filed claim.

We have considered Licata’s remaining arguments and find them to be

without merit. For the foregoing reasons, we AFFIRM the judgment of the

district court.

FOR THE COURT:

CATHERINE O’HAGAN WOLFE, CLERK