The Eastern District bankruptcy court judges in consultation with the chapter 13 trustees, practitioners and court staff who have volunteered to serve on a chapter 13 rules/liaison subcommittee, have discussed a proposed change to the method by which the chapter 13 trustees pursue additional information from debtors before deciding whether to recommend or object to plan confirmation. Currently, a trustee at times objects to confirmation on grounds that the debtor has not provided the trustee with information requested at the meeting of creditors or otherwise believed relevant to plan confirmation. Under these circumstances the trustee’s objection includes a request for information or documents that the debtor has not previously provided as requested. If the debtor agrees to provide the requested information or documents, the trustee typically settles the objection and files a stipulation and proposed order that sets a deadline for production. The court enters the order and cancels the hearing.
After discussion and consultation with the trustees and subcommittee members, the court has created a new procedure to be used under these circumstances. Under the new procedure, when the trustee believes more information is needed to decide whether to oppose or recommend plan confirmation the trustee will move for production of information under Rule 2004 and request an extension of the time to object to confirmation. No hearing will be scheduled. If the court concludes that the requested information is within the scope of Rule 2004, the court may immediately order the debtor to produce the information (subject to reconsideration if the debtor timely objects) and extend the time by which the trustee must oppose confirmation.
The procedure will operate as follows:
1. The trustee will file a motion to (i) require the debtor to produce additional information under Rule 2004 and (ii) extend the deadline by which the trustee may object to confirmation until (typically) 28 days after the proposed deadline by which the debtor must produce the requested information. A form of the notice and motion that has been approved by the court can be found at https://www.wieb.uscourts.gov/local-sample-forms. A direct link to the form is available HERE.
2. The trustee will serve the motion on debtor’s counsel (or on the debtor if the debtor is not represented) and those parties who receive ECF notice. The trustee must file a proposed order when filing the motion, and the trustee is required to serve a notice that any opposition to the motion must be filed within 14 days of the motion’s filing or be forfeited. The court may, and typically will, grant the motion soon after it is filed and will not wait until the expiration of the 14-day period.
3. If the debtor files a timely objection after the court grants the motion, the court will treat the objection as a request to reconsider de novo. Depending on the circumstances, including the nature of the relief requested in the motion and the basis for the debtor’s objection, the court might ask for a response from the trustee or set a hearing.
4. Generally, the trustee’s motion for additional information will include a request that the court order the debtor to produce the information within 28 days from the entry of the order; however, the trustee and the debtor could agree on a different deadline or the trustee could unilaterally request a different deadline to accommodate circumstances explained in the motion.
5. The debtor may request more time to comply with the order requiring the debtor to produce information by filing a motion or stipulation to enlarge the time similar to those found in the uniform doomsday procedure documents, such as the stipulation & order at local form 9008 and 9008-O. https://www.wieb.uscourts.gov/uniform-doomsday-procedures.
6. If the debtor does not comply with an order to produce information, the trustee is expected to move to dismiss, unless the circumstances warrant a different course, and, in the alternative, request a further extension of the time to object to confirmation should the court not dismiss the case. As with other motions to dismiss, the trustee and the debtor may resolve the motion without a hearing by agreeing that the court deny the motion subject to a doomsday provision and a further extension of the deadline by which the trustee must object to confirmation.
7. If after reviewing the additional information produced by the debtor the trustee concludes that the plan does not meet the confirmation requirements, the trustee will object to confirmation within the extended objection period set by the court’s order and will also then self-schedule a hearing under the normal procedures for trustee’s objections to confirmation. If the trustee concludes that the plan meets the confirmation requirements, the trustee will promptly recommend that the court confirm the plan.
The court’s expectation is that this new procedure will allow the chapter 13 trustees to obtain orders to produce information necessary to plan confirmation in a way that reduces confirmation objections and unnecessary hearings. This new procedure is effective immediately.