In this article for Pratt’s Journal of Bankruptcy Law, Michael L. Cook examines recent decisions by the Fifth and Sixth Circuit Courts of Appeals that have made it clear that courts now have ample precedent to bar late claims and appeals.
“Sixty-seven creditors [who] failed to file timely [claims] [a]fter an approximately two-year-and-nine-month delay . . . [thus] failed to meet their burden of providing excusable neglect” on their motion to file late claims, the U.S. Court of Appeals for the Fifth Circuit recently held in In re CJ Holding Co. After reversing the district court, the Fifth Circuit “reinstated the judgment of the bankruptcy court,” stressing that it had not “abused its discretion by denying the Claimants’ motion for relief from the bar date.”
The U.S. Court of Appeals for the Sixth Circuit, in In re Smith, also affirmed the lower courts’ denial of the debtor’s motion in another case for an extension of time to appeal, agreeing that counsel’s “miscalculation of the deadline was insufficient to establish excusable neglect.”
“The sole issue in CJ Holding,” said the Fifth Circuit, was “whether the bankruptcy court abused its discretion by denying the Claimants’ motion for leave to file late” claims. Resolution turned on “whether the Claimants’ failure to file timely proofs of claim was the result of excusable neglect.”