(Kate B.’s “Turkey Art”) (2015)
Late yesterday afternoon, I advanced $1,167 to reopen a Chapter 11 case on the issue of a post-confirmation settlement dispute. The timing really didn’t occur to me until 1 of the 23 ECF recipients emailed me a “Happy Thanksgiving” but also kidded “A Thanksgiving eve filing? Doesn’t Ward ever let you leave?” Touché. And so, that got me wondering (for “fun”): Who else is filing bankruptcy cases and pleadings when they should be at home quick-thawing a turkey (6 hours per pound?!!) or better yet, sitting down to carve it? With that question, Plan Proponent offers you its first “Happy Thanksgiving” blog post, in three parts:
Part 1: “Black Friday” is Not a Legal Holiday (Unless You’re in California)
When all else fails, you can use the Thanksgiving Holidays as your excuse for untimely filings. Indeed, a quick Westlaw search revealed that Thanksgiving is an oft-cited excuse in the context of computing time under Rule 9006. For example, earlier this year, a Montana bankruptcy court took it easy on a pro se Chapter 13 debtor with respect to the timeliness of his Chapter 13 plan filing. Rule 3015(a) required that he file his plan within 14 days of his petition date (i.e., by November 27, 2014). Because November 27 was Thanksgiving Day, the debtor had until the end of the day on November 28 (i.e., Black Friday) to file his plan. Nevertheless, he filed it on Monday, December 1. Although the court dismissed the case due to substantive confirmation defects, it held that it did not view the debtor’s “filing of his Plan on the following Monday after the Thanksgiving weekend, by itself, sufficient cause to dismiss the case.”
Attorneys, on the other hand, don’t often get such a break. For example, in Federated Food Courts, Inc., a 1998 Atlanta Chapter 11, Judge Bihary denied a motion to extend the time for assuming a commercial lease under § 365(d)(4) when the debtor filed the motion on the 61st, rather than on the 60th, day after the petition date. As it turns out, the attorney (one of our good friends at Lamberth Cifelli, no less) had filed the Chapter 11 case on Black Friday. “He knew he filed the bankruptcy case the day after Thanksgiving, and he believed the day after Thanksgiving was November 29, instead of November 28. Thus, his calculation was one day off.” The parties agreed that the late motion was the “result of an honest mistake.” Nevertheless, Judge Bihary explained that “Bankruptcy Rule 9006(b) does not give the bankruptcy court the discretion to allow a late motion to extend the time for assuming a lease, even if the mistake were the result of excusable neglect.” Motion denied. Yikes! That’s the sort of thing that could haunt Thanksgivings to come!
But then there’s the California approach, an approach that was vetted all of the way to the Ninth Circuit and even extended to the Federal Rules of Appellate Procedure. The case is Dwyer v. Duffy, a 2005 Ninth Circuit case. The facts are simple. Patricia filed her Chapter 7 case in the Central District of California. The bankruptcy notice listed November 29, 2002 (Black Friday) as the deadline for filing dischargeability objections. Vincent, Patricia’s former husband, filed his objection on the Monday after Thanksgiving. Patricia moved to dismiss the complaint because it was 3 days late. The bankruptcy court granted the motion because Black Friday is not a “legal holiday” that extends the time for filing to Monday. On Vincent’s appeal, the Ninth Circuit B.A.P. reversed, holding that Black Friday is a legal holiday.
Patricia then appealed, but the Ninth Circuit affirmed the B.A.P. In summary, the Court held that “California courts treat the state holidays recognized in Government Code section 6700 the same as the judicial holidays provided for in Civil Procedure Code section 135. We therefore hold that the day after Thanksgiving, which is a ‘judicial holiday’ under the latter section, is ‘appointed as a holiday’ by California and thus is a ‘legal holiday’ under Bankruptcy Rule 9006 for California practitioners.” See also Yepremyan v. Holder (wherein the Ninth Circuit extends Dwyer to FRAP 26(a) for federal appellate deadlines). But also see In re Cascade Oil Co. (wherein the Tenth Circuit limits FRAP 26(a) to statutory legal holidays and excludes court-established state holidays).
Part 2: Thanksgiving is Not a Legal Holiday Either (if You’re a Paralegal)
The Ninth Circuit might be confused about whether Black Friday is a legal holiday, but I think we can all agree that Thanksgiving is a “legal holiday,” at least technically. As a practical matter, though, Pacer never sleeps. Thanksgiving Day is a popular day for Chapter 7, Chapter 13, and adversary proceeding filings. Chapter 11s, not so much. Here’s a chart (the preparation of which nearly set my family’s Thanksgiving dinner back 2 hours!):
Thanksgiving Day Bankruptcy Filings (2005-2014)
|Year||Ch. 7||Ch. 11||Ch. 13||APs||Total|
It’s interesting that only 3 Chapter 11 cases have been filed on Thanksgiving Day in the last 10 years compared to 1,106 Chapter 7 and Chapter 13 cases. Of those 3 cases (2 of which were California cases), one was filed at 12:44 PM, another was filed at 5:31 PM, and the other was filed at 6:57 PM (!) on Thanksgiving. (Should we be cross-checking divorce petitions at around the same time?) However, from the handful of filings that I looked at, it appears that the attorneys (bankruptcy mills?) are signing them the day or even the week before and then the paralegals are filing them. (We should check divorce petitions for paralegals, then.)
Also noteworthy is the fact that 47 of the 69 APs were filed on Thanksgiving Day in Baltimore in connection with the Air Cargo, Inc. Litigation Trust that was created out of Air Cargo’s Chapter 11 case. I suppose some poor souls were getting a jump on filing what turned out to be, by December 31, 2006, 161 avoidance actions. (As an aside, the Air Cargo litigation resulted in a useful decision on a motion to dismiss regarding post-confirmation jurisdiction in light of Pacor, Resorts Int’l., and their progeny; Twombly (when it was relatively new); res judicata; and judicial estoppel. You can save that one for Monday.)
Finally, what about today? As of noon EST, 5 bankruptcy cases have been filed, 4 Chapter 7s and 1 Chapter 13. In fairness, 2 of them likely started out as Thanksgiving Eve filings–a Buffalo, New York Chapter 13 was filed at 00:23 today and a Hot Springs, Arkansas Chapter 7 was filed at 00:35. 2015 has some catching-up to do, but the day is still young.
UPDATE: By end of day, there were 108 filings for 2015: 63 Chapter 7s, 1 Chapter 11, 43 Chapter 13s, and 1 AP. And the Chapter 11 was the first Thanksgiving Day Chapter 11 in 5 years! La Patisserie de France, Inc., which appears to be a bakery in San Juan, Puerto Rico, filed its skeleton petition for a small business Chapter 11.
Part 3: Best Case® Can Wait; Time to Suit Up (as a Clown?)
When in doubt about your Thanksgiving priorities, you could simply follow the lead of Charles M. Tatelbaum (a/k/a Chuck” or “Chuckles”). Chuck, 72, is a creditor’s rights and bankruptcy attorney at the Tripp Scott law firm in Fort Lauderdale. The Sun Sentinel reported yesterday that, for the last 5 years, Chuck has performed as “Chuckles the Clown” in the Macy’s Thanksgiving Day Parade. He’s even a graduate of the Big Apple Circus “Clown College.” Maybe you saw Chuckles earlier this morning when he and the other clowns were leading the Tom Turkey float on NBC. Anyway, here’s a link to the story (clowns aren’t scary!)
And may your Thanksgiving Day naps be as peaceful as Kate’s!
(Kate B.) (Age 2)