New century liquidating trust agreement

Although persons with legitimate claims may be precluded from sharing in estate assets, strict enforcement of the bankruptcy bar date is no more unfair than application of a statute of limitations to foreclose a tort claim.

Permitting this late filing would create a dangerous precedent for other creditors who have sat on their rights without any other reasonable justification.

While this result to a consumer borrower may seem harsh, I must be mindful of the importance of a bar date in a chapter 11 case, as stated by the Best Products Court: In order to efficiently administer a Chapter 11 reorganization case, a bar date within which creditors must file their claims is essential. These entities are referred to herein as the "Debtors," collectively, or any individual entity may be referred to herein as the "Debtor." [2] This Court has jurisdiction over this matter pursuant to 28 U. The Deed of Trust provides that the Mortgage Electronic Registration System, Inc.

Upon consideration of the facts of this case in light of the Pioneer factors, particularly the substantial prejudice to the Trust and the significant delay in filing the Galope Claim, I conclude that the Galope Claim is not entitled to relief from the Bar Date. III Corp., a California corporation; New Century Mortgage Ventures, LLC (d/b/a Summit Resort Lending, Total Mortgage Resource, Select Mortgage Group, Monticello Mortgage Services, Ad Astra Mortgage, Midwest Home Mortgage, TRATS Financial Services, Elite Financial Services, Buyers Advantage Mortgage), a Delaware limited liability company; NC Deltex, LLC, a Delaware limited liability company; and NCoral, L. On August 3, 2007, New Century Warehouse Corporation, a California corporation, which is also known as "Access Lending," filed a voluntary chapter 11 bankruptcy petition. [5] Exhibit E-20 did not attach a copy of the Deed of Trust, although the Deed of Trust is attached to the proof of claim as filed.

9006(b)(1) provides in relevant part: Except as provided ... On November 20, 2009, the Court entered an Order confirming the Modified Second Amended Joint Chapter 11 Plan of Liquidation (the "Modified Plan") (D. Jacobs as Liquidating Trustee of New Century Liquidating Trust and Plan Administrator of New Century Warehouse Corporation (the "Trustee"). The Modified Plan adopted, ratified and confirmed the New Century Liquidating Trust Agreement, dated as of August 1, 2008, which created the New Century Liquidating Trust (the "Trust") and appointed Alan M. To allow creditors to assert claims against a debtor without regard to the establishment of a bar date would vitiate the very purpose of it. MERS is the beneficiary under this Security Instrument." [6] See D. The first Pioneer factor, prejudice, does not refer to an imagined or hypothetical harm; a finding of prejudice should be a conclusion based on the facts in evidence. When addressing the issue of prejudice under the Pioneer test, the O'Brien Court discussed several relevant considerations, including: (i) whether the debtor was surprised or caught unaware by the assertion of a claim that it had not anticipated, (ii) whether the payment of the claim would force the return of amounts already paid out under the confirmed plan or affect the distribution to creditors; (iii) whether payment of the claim would jeopardize the success of the debtor's reorganization; (iv) whether allowance of the claim would adversely impact the debtor actually or legally; and (v) whether allowance of the claim would open the floodgates to other future claims. Prior to the proposal of any meaningful plan of reorganization, the debtor needs to be apprised of the total amount and types of claims with which the plan must deal. ("MERS") "is a separate corporation that is acting solely as a nominee for Lender [NCMC] and Lender's successors and assigns. Therefore, the claim in Grossman's arose pre-bankruptcy, when the claimant was exposed to the product containing asbestos. In the present case, the Galope Claim states that it is based upon the "Mortgage Note," and includes copies of the Truth-in-Lending Statement and Deed of Trust that were part of the December 2006 loan transaction. The Grossman's Court recognized that the test to determine whether a claim is subject to a claims' bar date must also be reviewed in light of due process considerations. Determining whether the discharge of claims satisfies due process includes an inquiry into the adequacy of notice of the claims bar date. The legal analysis related to the Bar Date as set forth in the White decision is equally applicable here and I repeat a portion of the Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedures authorizes courts to set bar dates by which proofs of claim or interest may be filed. In the White decision, I determined that the "availability of the Whites' names and address in the Debtors' loan files may have reflected that the Whites were known customers, but without more, it did not make them `known creditors.'" White, 450 B. Whoever our creditors were, of any type of business engagement or however their claims arose, that was the intent, providing the nationwide notice. The Third Circuit considered the issue of when a claim arises for purposes of the Bankruptcy Code in the decision Jeld-Wen, Inc. The Court agreed that "a prerequisite for recognizing a `claim' is that the claimant's exposure to a product giving rise to the `claim' occurred prepetition, even though the injury manifested after the reorganization." Grossman's, 607 F.3d at 125. Moreover, to the extent the Galope Claim is based upon allegations of fraud in connection with the Debtors' sale of the loan, the sale took place prior to the bankruptcy filing. Galope that occurred prior to the bankruptcy filing and, therefore, is a pre-petition claim. The issue of adequacy of the Debtors' Bar Date Notice arose previously during oral argument on a motion to dismiss (see White v. (In re New Century TRS Holdings, Inc.), , 511-514 (Bankr. Del.2011)), but I deferred ruling on the adequacy of the Bar Date Notice until completion of an evidentiary hearing on the matter. So our analysis was it was better to provide notice in The Wall Street Journal where maybe parties might expect to be finding a bar date notice or might look for a bar date notice because it has become more standard to advertise in The Wall Street Journal.... Debtors' counsel also testified that supplementary notice of the Bar Date was published in the Orange County Register because New Century's main office was located in Irvine, Orange County, California. (Id.) Since the Orange County Register was following the bankruptcy case in its reporting, the Debtors believed providing supplementary notice of the Bar Date in the Orange County Register would be likely to reach those individuals who were reading the Orange County Register to keep track of what was going on in the case. The testimony at the December 13, 2011 hearing established that the Debtors' business was nationwide. July 21, 1997) (Holding that homeowner-mortgagors were not known creditors, even though their identities were "reasonably ascertainable" from the debtors' loan service records, when those records did not indicate that mortgagors were potential class members who could file suit in the future, thereby becoming claimants). Galope was an unknown creditor at the time the Bar Date Notice was being served, and was entitled only to constructive notice by publication. The Bar Date Order in the present case provided that "[t]he Debtors shall cause the Publication Notice to be published once in the national edition of The Wall Street Journal and any such other local publications as the Debtors deem appropriate no less than 30 days prior to the General Bar Date." (Trustee, Ex. The Debtors published notice of the Bar Date in The Wall Street Journal (National Edition) and the Orange County Register on July 23, 2007. Galope, who resided in California at the time of publication of the Bar Date Notice, argues that publication of the Bar Date Notice in two newspapers does not meet due process requirements because the Debtors should have published notice in more local newspapers. At the evidentiary hearing on December 13, 2011, the Trustee presented testimony of former lead counsel for the Debtors regarding the decision-making process behind the publication notice. ("[I]n the case of persons missing or unknown, employment of an indirect and even a probably futile means of notification [by publication] is all that the situation permits and creates no constitutional bar to a final decrees foreclosing their rights." The Mullane Court determined that notice by publication was sufficient for unknown beneficiaries of a common trust fund, but insufficient for known beneficiaries with a known place of residence). The Debtors chose to publish in the national edition of The Wall Street Journal to reach creditors nationwide. Chemetron, 72 F.3d at 348-49, Best Products, 140 B. Because the Debtors were operating their business nationwide (in fact, in 20 states), it was entirely reasonable and appropriate for the Debtors to publish the Bar Date Notice in the national edition of The Wall Street Journal, supplemented by the paper that covered the area of the Debtors' main offices, to reach the broad expanse of unknown creditors. Moreover, publication in newspapers in "dozens of locations" in which a Debtor is conducting business can be "onerous, cumbersome and unduly expensive." Best Products, 140 B. The Court must balance the needs of notification of potential claimants with the interests of existing creditors and claimants. Further, There had been quite a bit of attention paid to the incredible administrative expenses with respect to noticing the case and with respect to the preparation of the schedules. trying to address the administrative cost of the case. Based upon consideration of relevant case law and the record made at the hearing on December 13, 2011, I conclude that the Debtors' publication of Bar Date Notice in the national edition of The Wall Street Journal, supplemented with notice in the Orange County Register, was reasonable and constitutionally adequate notice for unknown creditors. Galope to file a claim nearly four years after the Bar Date and after substantial distributions of the Trust's assets would be significantly prejudicial to the Trust and all unsecured creditors that complied with the Bar Date Order. Seaman Furniture Co., Inc., Notice by publication is a poor and sometimes a hopeless substitute for actual service of notice. But when the names, interests and addresses of persons are unknown, plain necessity may cause a resort to publication. Courts have decided that it is impracticable to expect a debtor to publish notice in every newspaper a possible unknown creditor may read. The Chemetron Court further wrote that "[p]ublication in national newspapers is regularly deemed sufficient notice to unknown creditors, especially where supplemented, as here, with notice in papers of general circulation in locations where the debtor is conducting business." Chemetron, 72 F.3d at 348-49. at 661 (Publication of the bar date notice in two newspapers—The Wall Street Journal and The Richmond Times Dispatch—for a debtor with a nationwide business was deemed "constitutionally adequate."), Brown, 171 B. at 27 ("Since the national edition [of The New York Times] is sold throughout the country and can be purchased from any corner newspaper vendor here in Philadelphia, the Court finds that it is a reasonable means of alerting potential creditors of the need to file a proof of claim."). The Fourth Circuit has written: In bankruptcy, the court has an obligation not only to potential claimants, but also to existing claimants and the petitioner's stockholders. Here, the record reflects that additional publication in local or regional newspapers would have consumed a disproportionate share of the Debtors' resources. Courts considering a request for an enlargement of time based on excusable neglect consider four factors, as set forth by the United States Supreme Court in Pioneer Inv. Russell on July 20, 2011 in the amount of 0,000 (secured) (the "Russell Claim"). Galope and other claimants filed responses in opposition to the Trustee's Claim Objection. The Claim Objection also objects to the proof of claim 4132 filed by Tiphanie Goines on July 20, 2011, in the amount of 2,000 (secured) (the "Goines Claim") and proof of claim number 4133 filed by Karan J.

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