In re St. Louis (Aug. 21, 2013)
The chapter 11 Debtors filed a plan providing the Debtors with a 28-day period within which they could object to the secured status of a creditor’s claim, and the Debtors timely filed such an objection. However, the Debtors failed to provide notice to the one person the Debtors knew was representing the creditor’s interest, and the creditor failed to file a response. The Court then issued an order granting the objection to claim. The Court reconsidered the claim pursuant to 11 U.S.C. § 502(j) and held that the Debtors’ failure to provide proper notice to the creditor violated the creditor’s due process rights, which requires complying with the requirements of Bankruptcy Rule 7004(b)(3) when the relief sought was of a type – challenge to secured status - described in Bankruptcy Rule 7001. Since the Debtors did not comply with Bankruptcy Rule 7004(b)(3), the Court vacated its earlier order granting the objection to secured status.
WL Cite: In re St. Louis, No. 10-11933, 2013 WL 4498986, at *1 (Bankr. W.D. Tex. Aug. 21, 2013)