U.S. v. Noland,
116 S.Ct. 1524 (1996) (Justice Souter) (9:0) http://supct.law.cornell.edu/supct/html/95-323.ZS.html
to the U.S. Court of Appeals for the 6th Circuit
A bankruptcy court may not
equitably subordinate claims on a categorical basis in
derogation of Congress's priorities scheme.
Pioneer Inv. Services Co. v.
Brunswick Assocs. Ltd. Partnership,
113 S.Ct. 1489 (1993). (Justice White) (5:4)
to the U.S. Court of Appeals for the 6th Circuit
Late filed claims may be
allowed as a result of "excusable neglect." A
determination of whether respondents' failure to timely file
was excusable should focus upon whether the neglect of
respondents and their counsel was excusable.
Gran v. Internal Revenue
964 F.2d 822 (8th Cir. 1992)
The debtor and the
Internal Revenue Service disputed whether the debtors'
investment was a sham, and whether the IRS had mets its burden
of production with respect to its proof of claim. The Court
stated that a transaction will not be given effect according
to its form if that form does not coincide with the economic
reality and is in effect a sham. The presence or absence of
economic substance is determined by viewing the objective
realities of the transaction, namely, whether what was
actually done is what the parties to the transaction purported
to do. In addition, the Court held that under 11 U.S.C. §
502, a proof of claim filed in a bankruptcy proceeding is
deemed allowed unless a party in interest objects, and a party
correctly filing a proof of claim is deemed to have
established a prima facie case against the debtor's assets.
The objecting party must then produce evidence rebutting the
claimant or else the claimant will prevail. If, however,
evidence rebutting the claim is brough forth, then the
claimant must produce additional evidence to prove the
validity of the claim by a preponderance of the evidence.
United States v. Zieg (In Re Zieg),
206 B.R. 974 (D. Neb. 1997)
Confirmation does not
preclude reconsideration of the Internal Revenue Service's
allowed claim on the debtor's objection. Debtor admitted that
1986 income tax return was fraudulent. The IRS filed a proof
of claim that was allowed, and the plan was confirmed to pay
all priority claims in full. After confirmation, debtors
objected that tax claims were not priority claims. Bankruptcy
and district courts agreed that the IRS claim was a tax
specified in 11 U.S.C. § 523(a)(1)(C) and thus was not
entitled to priority under 11 U.S.C. § 507(a)(8)(A)(iii). IRS
argued that 11 U.S.C. § 1327(a) and confirmation precluded
debtor's object to its claim. 11 U.S.C. § 502(j) provides
that a claim that has been allowed or disallowed may be
reconsidered for cause. A motion for reconsideration can be
filed at any time before the case is closed. The bankruptcy
court may consider a 11 U.S.C. § 502(j) motion even after a
chapter 13 plan has been confirmed.
In Re Zieg,
194 B.R. 469 (Bankr. D. Neb. 1996). aff'd United
States v. Zieg (In Re Zieg), 206 B.R. 974 (D. Neb.
Taxes for 1986 were
assessable in a chapter 13 case filed in 1992 because taxing
authority proved that embezzled income was greater than 25% of
the income actually claimed in 1986. Tax claims for willfully
omitted income and for filing fraudulent returns are
nondischargeable in chapter 7 under § 523(a)(1)(C), but are
dischargeable in chapter 13 at the completion of payments
under a plan. Because of the exception in § 507(a)(8)(A)(iii),
such claims are not entitled to priority in a chapter 13 case,
aff'd, 206 B.R. 974 (D. Neb. 1997).
In Re Geringer,
Neb. Bkr. 99:50 (Bankr. D. Neb. March 4, 1999) (Judge Mahoney)
Debtor's amended objection to
the interest portion of the claims filed by a purchaser at a
tax certificate sale was overruled. Pro se debtor provided no
statutory or case law authority for his position that
purchaser at a tax sale may not continue to receive the
benefit of the statutory rate of 14% from and after the date
of the tax sale. The Court held that the law remains the same
in 1999 as it was in 1894 when the Nebraska Supreme Court
decided Adams v. Osgood, 42 Neb. 450, 650
Laughlin v. Jensen,
148 B.R. 315 (D. Neb. 1992), Neb. Bkr. 92:542, remand Neb. Bkr.
92:288 (Urbom, J.)
In Re Carr,
134 B.R. 370 (Bankr. D. Neb. 1991), Neb. Bkr. 93:123 (Judge
The Court concluded, "as a
general matter, that if an amended proof of claim is filed
after confirmation of a Chapter 13 plan and after the court
has entered an order allowing claims, the amended proof of
claim does not become an allowed claim unless the moving party
makes a motion to reconsider claims under Bankruptcy Rule
3008, or takes some other appropriate action.…in Nebraska,
once the original claim has been allowed by court order,
another court order is required to allow an amended
United States of America v. Carr,
142 B.R. 351 (D. Neb. 1992), Neb. Bkr. 92:56, affirming
In Re Carr, 134 B.R. 370 (Bankr. D. Neb.
1991) (Judge Warren K. Urbom).
The appellant/creditor/IRS of Carr
I appealed the Bankruptcy Court's decision
disallowing an amended proof of claim by the IRS and
discharging the debtor's obligation to the IRS for income
taxes for the 1985 tax year. The District Court stated that
neither the Bankruptcy Rules nor the Bankruptcy Code supports
the appellant/IRS assertion that the amended claim has
"automatic" effect absent objection by the debtor.
The IRS should have moved for reconsideration of its claim or
taken some action before the debtor completed
payments under the plan.
[There was an interesting turn
of events. Both the Bankruptcy Court and District Court
assumed that all payments had been made under the plan.
However, early on in the case the Trustee had filed a motion
for some trustee fees. The Bankruptcy Court had specifically
reserved ruling on the issue at that time but retained
jurisdiction over that issue in its order of July 1, 1991.
That meant that debtor had not completed making payments under
the plan. Hence, this District Court ruling and the Bankruptcy
Court's deferred decision gave the IRS another chance.
In Re Carr,
159 B.R. 538 (Bankr. D. Neb. 1993), Neb. Bkr. 93:545 (District
Judge Richard Kopf).
The issue before this court
was: what is to be done when there is an ambiguity in the plan
such that a statement in the confirmed plan provides that the
debtor will pay 100% of all priority claims, yet the amount
and number of payments provided for in the plan do not yield
enough money to accomplish what the plan provides.
The District Court explained
Local Bankruptcy Rule 27 adopted after In Re Stein,
63 B.R. 140 (Bankr. D. Neb. 1985) and found that the amounts
set forth in the Trustee's Motion to Allow Claims govern the
amount of the priority claims here. The Trustee's fees were
set forth in that motion, and the debtor never objected to
them so they were properly allowed.
The Court stated that the
special claims of the Standing Chapter 13 Trustee constituted
a priority claim pursuant to 11 U.S.C. § 507. The confirmed
Chapter 13 plan unequivocably stated in section II that the
"claims entitled to priority under 11 U.S.C. § 507 shall
be paid in full…." A debtor is not entitled to a
discharge order in a Chapter 13 case until "after
completion by the debtor of all payments under the plan…."
See 11 U.S.C. § 1328(a). On the facts of this case, the
debtor had completed making the $100 per month payments
provided for in the plan, yet the debtor had not paid the
claims entitled to priority under 11 U.S.C. § 507.
Since those priority
claims had not been paid, the Court concluded that the
Bankruptcy Court was correct and that the debtor was not
entitled to a discharge order pursuant to 11 U.S.C. § 1328.
Since the 11 U.S.C. § 507 claims had not been paid, payments
under the plan had, in fact, not been completed. Therefore,
the plan could be modified pursuant to 11 U.S.C. § 1329 to
provide for payment of the unpaid section 507 claim.
In Re Swan,
98 B.R. 502 (Bankr. D. Neb. 1989)
Court used Estus
factors and denied confirmation of a three-year plan that paid
attorney's fees in full and $90 toward unsecured debt of
approximately $14,000. The major unsecured claim in this case
arose out of assault and battery. The Court also ruled that
fees for debtor's counsel are administrative expenses allowed
under 11 U.S.C. § 503, entitled to priority under 11 U.S.C.
§ 507, and entitled to full payment under 11 U.S.C. § 1322.
In Re Dunn,
83 B.R. 694 (Bankr. D. Neb. 1988)
Although 11 U.S.C. § 1302
incorporates 11 U.S.C. § 704(6) and requires that the
trustee, if advisable, oppose the discharge of the debtor, the
trustee lacks standing to oppose the dischargeability of a
In Re Stein,
63 B.R. 140 (Bankr. D. Neb. 1985).
Plan and order of confirmation
do not constitute objections to proof of claim. Where plan and
confirmation order value creditor's collateral below the
amount stated in the creditor's proof of claim, the proof of