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* Dugan v. Pension Ben. Guar. Corp. (In re Rhodes, Inc.), 382 B.R. 550 (Bankr. N.D. Ga. Jan. 2008) (Massey, J.)
The Bankruptcy Code provided no authority for the court to recalculate an ERISA claim.
The liquidating trustee objected to the PBGC's claim for unfunded benefit liabilities on a pension plan, which the trustee had terminated under ERISA's "distress termination" provision. The liquidating trustee argued that the PBGC's calculation of the liabilities was overstated. Relying on opinions of the Sixth and Tenth Circuits, the trustee asked the bankruptcy court to re-calculated the claimed amount.29 Finding those two circuit courts' readings of the Bankruptcy Code to be flawed, the bankruptcy judge in this case concluded that sections 502(b) and 1123(a)(4) of the Bankruptcy Code did not provide the requisite authority to recalculate a claim fixed by non-bankruptcy law. In this case, ERISA provided the PBGC with the means and the authority to calculate the amount of the "unfunded benefit liabilities." See 29 U.S.C. S 1301(a)(18). The court found that calculation to be neither arbitrary nor capricious. The trustee's objection was thus overruled.
* IRS v. Seivers (In re Seivers), 378 B.R. 473 (Bankr. W.D. Pa. Nov. 2007) (Bentz, J.)
The debtor fought the law . . . and won because the IRS failed to prove excusable neglect.
Seven months after the claims bar date, the IRS filed a proof of claim, and then (another three months later) requested an extension of time nunc pro tunc to file. The IRS purposefully had declined to file a proof of claim against the debtor because the IRS did not discover until several months after the petition date (though still before the bar date) that the debtor was liable for the tax obligations of his defunct company, which totaled over $200,000 in penalties. The IRS assessed these obligations on the debtor before the bar date but did not file a proof of claim until over seven months later. This delay was cause by the IRS's processing system. In the meantime, the debtor settled a lawsuit with the trustee of the debtor's defunct company's bankruptcy estate. Based on these circumstances, the court found that the IRS failed to establish that its late filing was a product of excusable neglect under the standards applicable to Bankruptcy Rule 9024 and Federal Rule 60(b)(1). Said the court, the debtor would be prejudiced by the late filing because a timely filing may have affected the debtor's decision to enter into a settlement agreement, and, for the same reason, the length of delay to be significant -- that is, the debtor's settlement took place after the claims bar date but before the late filing. And, even though there was no evidence of bad faith in the IRS's late filing, the court found the delay to be within the IRS's control. Accordingly, the IRS's motion for an extension nunc pro tunc was denied, and the debtor's claim objection sustained.
29
See In re CF & I Fabricators of Utah, Inc., 150 F.3d 1293 (10th Cir. 1998), cert. denied 526 U.S. 1145, 119 S.Ct. 2020, 143 L.Ed.2d 1032 (1999); see also In re CSC Industries, Inc., 232 F.3d 505 (6th Cir. 2000).
