transcript of the hearing on Omnibus Objections to Claims. PRICE & BRUMFIELD, LLP 1 Opposition which consists of a partial Robert H Brumfield, III, Esq., SBN 114467 2 The hearing transcript shows a number of things. First, and most obvious, that no appearance was 2 Kunberly A. Ungar, Esq, SEN 200963 041 Greystone Plaza Building 3 in opposition to the Omnibus Objection to argue Mr Herrera's 3 841 Mohawk Street, Scitl"00 made on behalf of Mr Herrera 93309 Bakersfield, CA 4 the cour's concerns. Second, during the hearing, counsel for the Debtor 4 (661) 323-3400 position and address 5 and inaccurately presented Mr. Herrera's position to the court. Counsel for the Debtor 5 Attorevs for Creditor, Santos Gonzalez Hen-era misconstrued 10 6 attorneys at some point in October 6 states to the court that Mr. Herreraos encuse is that he changed 7 5" bar date. See transcript of hering on Omnibus Objections to Claims, page 7 after the September 8 which was submitted with a Request for Judicial Notice accompanying Debtors 8 IN THE UNITED STATES BANKRUPTCY COURT 33, lines 11-23, 9 9 IN AN9DFOR THE NORTHERN DISTRICT OF CALIFORNIA Opposition. 10 not accurately state the points of law at iss oe. Due to the SAN FRANCISCO DIVISION At the hearing, the Debtor also did 11 and authorities and the absence of counsel for Mr Herrera at the hearing, the In ren Bky. No. 01-30923 DM absence of any points 12 the equitable inquiry required by Pioneer Investment Services Co. v. gn: 20 PACIFIC GAS A,ND ELECTRIC COMPANY, Chapter I I court did not undergo oration, a California corp Ltd. Partersaip, 507 US. 380 This is a manifest injustice heaved upon REPLY TO DEBTOR'S OPPOSITION Brunswick Associates, SANTOS GONZALEZ Debtor. TO CLAIMANT applied and equitable inquiry HERRERA'S MOTION FOR 14 Mr. Henrere who was entitled to argue that the lenient standards to be Federal I.D No9 94-0142640 RECONSIDERATION OF ORDER :i-• 12 DISALLOWING CLAIM OR 88 to be undertaken militated in favor of allowing his claim. It is not the excuse for the late filing that TO EXTEND TIME ALTERNATIVELY, 13 It is TO FILE PROOF OF CLAIM determines the fate of Mr. Herrera's claim, but the way the scales tip after the equitable inquiry. 16 1 the court fails to conduct the Pioneer equitable inquiry. Batemtan v. Unite 16 Date: November 27, 2002 17 an abuse of discretion if Time: 9:30 a~m. argued Dept.: 22 2218 States Postal Serv., 231 F.3d 1220, 1224 (90 Cit. 2000), Mr. Herrenr has also strenuously 21 19 that cause exists under the applicable Pioneer standard for reversal of the Order at issue. 25 H. THE COURT MAY RECONSIDER ITS ORDER FOR CAUSE 20 t• en i .- rasnsearv'et nfll *t'W 50l vvret1e""•NI&awiV 21 "Mlitis fairly clear that what constitutes 'cause' consielent with the equities of The show-ing necessary to suppor' tl-n c c is vitl- the court s discretion. 22 IUNItER I'}IE IFNIFNT PIONEER STA-NDARD tonoideraioo i.agist be new evidence supporting or icstrovertitg a claim .or that applicable standards for a reversal of the Order." 9 23 cause likely exists undeo the Contrary to Debtor's assernon and lengthy argument following therefrom, Mr. Herrera has Collier on Bankruptcy 15" ed. revised, Chapter 3008, paragraph 3008.01(4]. 23 24 rnsapprehended a The Debtor's Opposition asserts that reconsideration should not be granted because no new 24 made no argument whatsoever regarding attorney Slater's conduct. Debtor has 25 Mr. Herrera has argued that excusable neglect facts or new legal theories were asserted on Mr. Herrera's Motion. However, whether Mr. Herrera 25 significant portion of Mr. Herneras argument. 26 tas asserted new facts or new a legal theory is not dispositive on the issue of whether 26 occurred on two levels. First i attorney Tello's failure to timely file the Proof of Claim; and Omnibus Objection to Mr. Herrera's 27 econsideration should be granted. Regardless, the new facts and new legal theory presented on 27 second, that attorney Tellh failed to adequately oppose Debtor's 28 Mr Hen-era's Motion is supported by Debtor's Request for Judicial Notice in support of its 28 claim.
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1994); In the Matter of Papp International, Inc., 189 BR. 939, 944 (Dist. Neb. 1995). Mr. Herrera has not misapprehended the test applicable to determning whether the court The Debtor concedes that it would not suffer additional material harm from having to litigate should allow Mr. Herrera's claim. The applicable test in the matter before the court is that set down the underlying claim. Debtor's Opposition at page 8. Debtor's only claim of prejudice is that it will Is in the Pioneer case. Pioneer relied heavily on the factors as enumerated in Dix v. Johnso 95 B.R. incur expenses in opposing Mr. Herrera's Motion to Allow Late-Filed Claim. Mr. Herrem's Motion 134 kB.A.P 9ý Cir 1988). Mr. Hen-era argued in his motion that the U.S. Supreme Court and the to Allow Late-Filed Claim is not a complex motion and Debtor's work has predominantly already Ninth Circuit mandate a lenient standard be applied when determining whether neglect is excusable been performed in opposing other similar motioes in its bankruptcy and in opposing Mr. Herren's and that a liberal construction of excusable neglect is appropriate. It should not be sufficient to state 4 12 Motion for Reconsidermtion. Debtor undoubtedly considered and assumed the risk in becoming that because attorney carelessness is the reason for the filing of a late-filed claim, the claim is involved in such law and motion matters when determining whether to petiton for Chapter 11 disallowed, end of inquiry. See It re Sacred Heart Hospital of Norristown, 186 BR. 891 (E.D. Pa. protection. The court should not find prejudice exists because the Debtor will have to oppose a 1995) A further inquiry is required pursuant to Pioneer. Debtor concedes that the equitable inquiry 18 basic motion. Receiving the benefits of Chapter II reorganization certainly outweigh the relative is required and strenuously argues against Mr. Herers. The argument and dialogue between expense of opposing a motion when the outcome of that motion has no bearing on the He'reca and Debtor on this issue is what should have occurred at the hearing on the Omnibus 2 reorganization wfslhiivt . 17 'bhe'sso and the court has discretion to a'lo'w a foil and fair heanng on the Debtor's objection to 23 fberr is further no pre-'idic t. De'tor so :hat there sill S11on,ci 'rt os 'grcazaton Fl-t orioras .a1-0 the competing proposed Chapter I I Plans provide that pending litioation claims, i94 "III. 14 because both of S'•: 15 2025 inch as Mr. HIenera's, are Class 8 claims. Class 8 claims are to be paid outside of the Debtor's THE EUIJTrIES WEIGH STRONGLY IN FAVOR OF ALLOWING 16 Chapter 11 Plan and hence cannot have an impact on reorganization. MR. HERRERA'S CLAIM 121 17 B. LENGTH OF DELAY AND IMPACT ON JUDICIAL PROCEEDINGS Contrary to Debtors contention, there were no repeated failures to comply with deadlines by 18 2318 The next item of inquiry before the coon is the length of the delay and its impact on judicial Mir Herrera. Mr. Herrera's attorney, Mr. Tello. missed only the deadline to file the Proof of Claim. 24 proceedings. The length of the delay has not had and will not have any significant impact on There were no other deadlines missed by Mr. Herrera. 20 25 udicial proceedings in Debtor's bankruptcy. Debtor concedes this point. Debtor's Opposition at Debtor's argument regarding what the court should consider when applying Pionl -ris in pat 21 26 page 9. "[T]he mere length of the delay alone is not in any way dispositive, except to the extent that based on cases that were pre-Pionee cases. Further, those same cases were decided by 22 17 the delay affects judicial proceedings'" In re Premier Membership Services LLC, 276 B.R. 709, orisdictionsi that, pre-Pioneer applied a strict standard of excusable neglect which was overruled 23 715 (S.D. Pla. 2002). The "floodgates" argument by Debtor should not be taken seriously when ,yPioneer, 24 there is no evidence that numerous others will file late claims should the cootn allow Mr. Herrera's A. PREIUDICE TO THE DEBTOR 21 25 claim. See Beltrami at 392. Several post-Pioneer cases state that a lack of prejudice is a primary consideration in the 26 Even if Mo. Hen-era's claim had been timely filed, or if the cootn allows Mr. Herrera's claim Pioneer analysis, See Sacred Heart at 897; In re Beltrani Enterprises, 178 BR. 389 (M.D Pa. 27 to be filed late, it will have no impact as it stands now because both of the proposed Chapter 11 28 SThe Circuit Courts that prm-Pioneer applied a strict standard of excusable neglect include Plans indicate that Mr Herrera's claim will be dealt with outside of the Plan and will not involve the Fourth, Seventh, Eighth and Eleventh. Pioneer at 387 4 3 ( I, 4-, 4, I * .i 44.. I ' * 0 " 4--- 4,', 4'
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