UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
CORBIN DIVISION
IN RE:
IRA LEE CUNDIFF
BETTY JEAN CUNDIFF
d/b/a Executive Athletic Club, Inc.
DEBTORS CASE NO. 93-60516
MEMORANDUM OPINION
This matter is before the Court on the Trustee's Objections to Claim No. 11 and Claim No. 12, filed herein on May 14, 1996. The trustee objects to all of unsecured Claim No. 11, filed by creditor Bank of Clinton County, and all of unsecured Claim No. 12 filed by creditor Monticello Banking Company, in that both claims were filed beyond the bar date of June 14, 1994. The trustee asks that both claims be disallowed in their entirety. At a hearing on the objection conducted on June 13, 1996, the creditors were given time to respond, and they filed a Memorandum in Support of Allowing Proof of Claims on June 24, 1996.
The record in this case shows that the plaintiffs filed their Chapter 7 petition in this Court on December 15, 1993. The Notice of Commencement of Case characterized this as a no asset case and set the first meeting of creditors on January 20, 1994. The meeting was rescheduled, however, for February 3, 1994. At that meeting the trustee determined that it was an asset case. This Court issued a Notice to all creditors on March 16, 1994, identifying the case as an asset case, and giving 90 days from the date of the notice to file claims, pursuant to FRBP 3002(c)(5). The last date to timely file a claim was therefore June 14, 1994.
The creditors whose claims are at issue here concede that the claims were filed late, but argue that FRBP 9006(f) should be employed to extend the time that they would have had to file their claims. That Rule provides:
(f) Additional Time After Service by Mail. When there is a right or requirement to do some act or undertake some proceedings within a prescribed period after service of a notice or other paper and the notice or paper other than process is served by mail, three days shall be added to the prescribed period.
This provision is not applicable, however, in the context of claims bar dates. In Matter of Robintech, Inc., 863 F.2d 393 (5th Cir. 1989), the court was asked to apply Rule 9006(f) to a late-filed claim in a Chapter 11 case. It noted that Rule 9006(f) is the same as FRCP 6(e) and stated:
Our own rule 6(e) precedent weighs heavily against applying rule 9006(f) in the instant case. In Carr v. Veterans Admin., 522 F.2d 1355, 1357-58 (5th Cir.1975), we held that the purpose of rule 6(e) is only to guarantee that parties served personally have no advantage over those served by mail. The rule accordingly applies only when the 'prescribed period' is fixed by the date on which notice is served.
At page 395.
In In re Roberts, 98 B.R. 664 (Bkrtcy.D.Vt. 1989), the court was faced with a situation identical to the case at bar. There the debtor filed its Chapter 7 case, and according to its schedules it was to be a no asset case. Assets were eventually realized, however, and a Notice was sent to creditors advising them of the need to file claims by a certain date. One creditor filed its claim three days beyond the bar date, and argued, as the creditors do here, that Rule 9006(f) afforded it three additional days in which to file its claim. The court held:
Where service of a notice does not trigger the running of a prescribed period of time, but rather, establishes a deadline for the filing of proofs of claims, and accordingly the time period is not measured from the actual date of service by mail, Rule 9006(f) can have no application.
At page 669. See also In re Allegheny Intern., Inc., 93 B.R. 910, 912 (Bkrtcy.W.D.Pa. 1988). Clearly, then, Rule 9006(f) does not apply in this case.
The creditors also argue briefly that the Court should apply FRBP 3002(c)(4). That Rule provides an exception to the requirement that a claim be filed 90 days after the first meeting of creditors when the claim arises from the rejection of an executory contract or unexpired lease of the debtor. They attach a copy of a 1991 document titled "Agreement" entered into by both of them with the debtor. It concerns the satisfaction of the debts to them and is a forbearance agreement from the further prosecution of a lawsuit (by one bank) and further collection efforts (by attorneys for the other bank) against debtor to collect certain sums due them from debtor conditioned upon certain periodic payments by the debtor. They state that this "Agreement" has yet to be performed. In the sense of traditional contract law, the agreement may be executory but that does not necessarily correspond to the term "executory contract" as used in Section 365 of the Bankruptcy Code. Where the non-debtor party has fully performed and the only performance left on the contract is the debtor's payment of money, the contract is not executory within the bankruptcy sense. Pacific Express, Inc. v.Teknekron Infoswitch Corporation, 780 F.2d 1482 (9th Cir. 1986). While it may be argued here that the continuing forbearance by the banks is further performance by them, the act of not proceeding with legal action does not make the contract executory.
In consideration of all of the foregoing, it is the opinion of this Court that Claim No. 11 of Bank of Clinton County and Claim No. 12 of Monticello Banking Company should be disallowed in their entirety. An order in conformity with this opinion will be entered separately.
Dated:
By the Court -
_________________________________
Judge
Copies to:
Debtor
James R. Westenhoefer, Esq., Trustee
Van F. Phillips, Esq.