Court Opinion

ID: 9843209
Source: CourtListenerOpinion
Date Created: 2023-09-24 02:30:41.082922+00
Date Added: 2024-06-11T09:15:01.150392
License: Public Domain

MERRITT, Circuit Judge,
dissenting.
I disagree with the panel’s result and its analysis in this case. Our focus should be whether Barlow’s failure to file a proof of claim or vote on the reorganization plan is “excusable neglect,” not whether Barlow’s actions amounted to an informal proof of claim or vote. See Bankruptcy Rule 9006(b). Whatever may have gone on in the bankruptcy court below, this is clearly the rule to be applied and applying it in this case is an easy call for me. Bankruptcy Rule 9006(b) specifically allows a court to enlarge the time for a party to file a late claim in two circumstances: where the request is made prior to expiration of the original period, or if the original period has expired, where the failure to act was the result of “excusable neglect.” In Pioneer Inv. Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380, 388, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993), the Supreme Court interpreting 9006(b) ruled that courts are permitted to accept on motion late filings caused by inadvertence, mistake, or carelessness, as well as by intervening circumstances beyond the party’s control. The Court found that the determination whether neglect is excusable is by and large an equitable one and that all relevant circumstances surrounding the party’s omission should be taken into account — for example, the danger of prejudice to the debtor; the length of the delay and its potential impact on the proceedings; the reason for the delay; whether the delay was within reasonable control of the late party; and whether the late party acted in good faith. Id. at 395, 113 S.Ct. 1489.
Considering these factors, it is clear that there would be no prejudice to the debtor. Based on Barlow’s various motions, debtor was on full notice of Barlow’s intention to collect the judgment that it was owed. In fact, it was the Barlow’s pursuit of his judgment award that drove the debtor into Chapter 11 bankruptcy. Allowing the late filing would also cause little impact on the bankruptcy proceeding itself. All of the other creditors were aware of Barlow’s desire to collect from the debtor, and the debtor had in an earlier version of its reorganization plan accounted for the debt Barlow was owed. Furthermore, and most important, Barlow and his counsel acted in complete good faith. No one argues that Barlow intentionally failed to file a proof of claim. Barlow filed a number of motions with the bankruptcy court which established Barlow’s claim and gave full notice to the bankruptcy court and all interested parties.
For these reasons, I would allow Barlow to file on the basis of excusable neglect. “No harm, no foul” is the maxim we should follow here, not some rigid, technical procedural rule that makes little sense as applied to this case. I would not simply defer to the bankruptcy judge here. Our review is de novo, and the District Court’s *613reasoning is much more balanced and persuasive.