Summary of a Recent
Judicial Development in
Bankruptcy

Proof of Claim Barred as Untimely because Creditor Had
Inquiry Notice of Filing Deadline

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In In re Hyde, No. 08-40841, 2009 WL 1066087 (Bankr. D. Idaho Apr. 21, 2009), the United States Bankruptcy Court for the District of Idaho held that a creditor's claim against a Chapter 12 bankruptcy debtor was barred as untimely, even though the creditor had not originally received notice of the bankruptcy and the applicable deadlines for filing claims, because it had received inquiry notice of the deadlines upon requesting and receiving the bankruptcy case number from the clerk and had 30 days after receiving notice to file a claim, yet had failed to do so.

Background

The debtor filed a Chapter 12 bankruptcy petition on September 12, 2008. Id. at *1. A creditor mailing matrix was attached to the petition, but Hobbs Farm was not listed on the matrix. Id. The Bankruptcy Noticing Center sent notice of the bankruptcy case, the meeting of creditors, and various deadlines to all creditors listed on the matrix a few days later. Id. The notice stated that the deadline to file a proof of claim was January 18, 2009, but Hobbs Farm did not receive the notice. Id. After learning that the debtor's bankruptcy case had appeared in a local newspaper, Hobbs Farm obtained the debtor's case number from the clerk's office and submitted a written request to be added to the mailing matrix, which was received and filed on December 17, 2008. Id. Hobbs Farm subsequently received various documents regarding the bankruptcy case, but claimed that none of the information mentioned any deadlines for filing claims. Id. In late January, Hobbs Farm became concerned about being an unsecured creditor, and was advised by the debtor's attorney and the bankruptcy trustee to promptly file a proof of claim. Id. Hobbs Farms' proof of claim and supporting documentation was filed with the court on January 27, 2009, nine days after the deadline had passed, and the trustee objected to the proof of claim on the grounds that it was untimely. Id.

Analysis and Holdings

The court found that none of the circumstances described in Rule 3002(c) of the Federal Rules of Bankruptcy Procedure that permit the court to extend the deadline for filing a proof of claim applied in this case, so it was "simply not permitted to equitably enlarge the time period." Id. at *2. The court acknowledged that this result seemed harsh, but explained that Hobbs Farm "was put on inquiry notice of the claims filing deadline and other information appearing in the docket of the bankruptcy case" once it requested and received the debtor's case number from the clerk. Id. The court further noted that Hobbs Farm had over 30 days to file a claim after it received notice of the bankruptcy case, and its lack of sophistication in bankruptcy matters did not excuse its failure to do so. Id.

The case was decided on April 21, 2009.