William R. Sawyer, United States Bankruptcy Judge.
This case came before the Court on the Debtor's Motion to Excuse Debtor from Section 341 Hearing ("Motion to Excuse") on October 31, 2017. (Doc. 8). Debtor Angelo Alleca was present by and through counsel Michael Fritz Sr. and the Bankruptcy Administrator was present through Britt Griggs. Carly Wilkins appeared on behalf of Chapter 7 Trustee Susan DePaola, raising an objection to the present motion. The issue before the Court is whether the Debtor has shown a dire necessity exists to justify excusing his attendance at an 11 U.S.C. § 341 meeting of creditors. For the reasons set forth below, the Debtor failed to meet his burden under Local Bankruptcy Rule 2003-1; thus, the Debtor's Motion to Excuse Debtor from Section 341 Hearing is DENIED.
Debtor Angelo Alleca filed a petition in bankruptcy pursuant to Chapter 7 of the
At the October 31 hearing, Carly Wilkins, appearing on behalf of Susan DePaola, objected to the meeting of creditors taking place by interrogatories. Britt Griggs, on behalf of the Bankruptcy Administrator, stated that she plans to file a motion to dismiss based on the lack of necessity of the filing, citing Debtor's arguably nondischargeable debts and recent New York residency.
This Court has jurisdiction to hear this matter pursuant to 28 U.S.C. § 1334(b). This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2)(A). This is a final order.
Under 11 U.S.C. § 343, a "debtor shall appear and submit to examination under oath at the meeting of creditors under section 341(a) of this title." The plain language of § 343 suggests that the Court has little discretion to excuse a debtor from physically attending the meeting of creditors. In re Martin, 12 B.R. 319, 320 (Bankr. S.D. Ala. 1981). Historically, however, a majority of courts waive the physical attendance requirement and allow appearance by alternative means if the debtor can establish good cause supporting a waiver of the plain language requirement in § 343. Typically, conducting a § 341 examination by interrogatories is proper only in relatively simple cases in which the trustee will not find it necessary to ask followup questions. See In re Loudon, 2008 WL 215700, at *2 (Bankr. D. Vt. Jan. 16, 2008). Excusing a Debtor's physical attendance at the § 341 meeting of creditors in this District is controlled by Local Bankruptcy Rule 2003-1
At the October 31 hearing, Debtor's counsel referenced Local Rule 2003-1 in support of the Motion to Excuse Debtor's attendance from the meeting of creditors; however, Debtor failed to show that his incarceration resulted in a dire necessity justifying Debtor being excused from attending the meeting of creditors in-person.
Furthermore, Debtor's bankruptcy case is not a simple Chapter 7 case as the Debtor's financial affairs are directly correlated to his present incarceration and ponzi scheme conviction. His financial affairs, specifically the $24,800,000 in restitution resulting from the ponzi scheme and, possibly, the $2,000,000 in other unsecured debt, may determine whether the Debtor is entitled to a discharge pursuant to 11 U.S.C. § 727. If the Trustee were to conduct the § 341 examination by interrogatories, it is likely that multiple back and forth rounds of questions will be necessary to complete the examination. Even with multiple rounds of questions, the Trustee is likely to face insurmountable difficulty in fulfilling her duties. Given the facts of this case, "[i]nterrogatories do not amount to attending the meeting, as they are more like the functional equivalent of the debtor's schedules and statement of financial affairs, and do not substitute for an oral examination based, in part, on schedules and statement of financial affairs." In re Moore, 309 B.R. 725, 728 (Bankr. N.D. Tex. 2002). Given the likely complexity of the facts relating to Debtor's financial affairs, which are related to a financial fraud perpetrated on a number of victims, the Trustee in this case may have serious difficulty fulfilling her fiduciary duties in an effective, comprehensive, and economic manner without the Debtor's in-person participation at the meeting of creditors. The fact that the Trustee has objected to the Debtor's Motion to Excuse further supports this conclusion.
Considering the totality of the circumstances, the Court concludes that the Debtor has failed to meet his burden and has not shown an alternative method exists that is functionally equivalent to the Debtor attending the § 341 examination in person. Thus, there is good cause to deny