S. MARTIN TEEL, JR., Bankruptcy Judge.
The hearing on confirmation of the proposed plan filed by the debtor, Gerald Henneghan, and on the chapter 13 trustee's motion to dismiss this case was set for January 13, 2017. Henneghan failed to appear at that hearing, and the court granted the trustee's motion to dismiss the case with prejudice for two years. Henneghan has now moved to vacate that dismissal order.
Henneghan was obligated to appear at the hearing on January 13, 2017, to address confirmation of his proposed plan. That failure to appear in proper prosecution of the case itself would be a potential ground for dismissing this case.
Henneghan's motion to vacate fails to address any of the grounds that the chapter 13 trustee's motion set forth as warranting the dismissal of this case. In any event, an examination of the court's own records reveals that this is a case that ought not be allowed to remain pending.
Henneghan failed to file his schedules and a Chapter 13 Calculation of Your Disposable Income (Official Form 122C-2) in a timely fashion. On November 9, 2016, without having obtained an extension of time for doing so, Henneghan filed schedules and a Chapter 13 Calculation of Your Disposable Income. Those documents demonstrate that the case must remain a dismissed case.
First, the schedules listed no creditors. In a prior bankruptcy case in this court, Case No. 11-00673, Henneghan similarly failed to include any creditors on his schedules, misconduct that the court noted in denying Henneghan's motion seeking to convert that chapter 7 case to chapter 13. See Order Denying Motion to Convert Case to Chapter 13 and Denying Motion To Impose Automatic Stay (June 3, 2012) (Dkt. No. 51 in Case No. 11-00673). So, when Henneghan filed this case, he was well aware that he was obligated to file accurate schedules listing his creditors, yet he failed to do so.
Second, similarly defective is Henneghan's Schedule A/B, which listed only one asset, his real property at his address of record, and listed no items of personal property he owns.
Third, and most critically, Henneghan's Schedule I and his Chapter 13 Calculation of Your Disposable Income (Official Form 122C-2) listed no income for Henneghan. Without income, a debtor is not eligible to file a chapter 13 case, for 11 U.S.C. § 109(e) provides that "[o]nly an individual with regular income" is eligible for Chapter 13.
Fourth, Henneghan's Schedule J and his Chapter 13 Calculation of Your Disposable Income list no expenses. Without any income and expenses being scheduled, Henneghan has acted in bad faith and abused the bankruptcy system in failing to provide the trustee and creditors with information regarding his ability to carry out a chapter 13 plan in this case and regarding the amount of his net disposable income (an amount that, under 11 U.S.C. § 1325(b)(1), the trustee and creditors could object must be paid under a plan).
Fifth, Henneghan's schedules of creditors, his Schedule I, his Schedule J, and his Chapter 13 Calculation of Your Disposable Income are so bereft of information that they amount to a failure to file "(i) a schedule of assets and liabilities; (ii) a schedule of current income and current expenditures; . . . [and] (v) a statement of the amount of monthly net income, itemized to show how the amount is calculated" as required by 11 U.S.C. § 521(a)(1)(B). With exceptions of no relevance here, 11 U.S.C. § 521(i)(1) provides that when a debtor "fails to file
Henneghan alleges that the trustee "failed to serve any of her filed motions [sic] and purported motions [sic] against Gerald Henneghan" and alleges that the trustee "intentionally mislead [sic] the Court and intentionally did not serve Gerald Henneghan with her motions [sic] on account of the Trustee's conspiracy to file a fraudulent claim against Gerald Henneghan for more than $96,000.00 with the Bank of New York Mellon."
If Henneghan is contending that the trustee made no such mailing, it makes no sense that a conspiracy with Bank of New York Mellon to file a fraudulent claim would have prompted the trustee to not serve the motion to dismiss on Henneghan. First, Bank of New York was free to file a claim in the case without the necessity of reaching some agreement with the trustee, so a conspiracy makes no sense. Second, if a fraudulent claim were to be filed, it would have no impact in the case upon the case being dismissed: it is only in an open case that the filing of a fraudulent claim could potentially benefit Bank of New York Mellon. Accordingly, the trustee's filing of the motion to dismiss was inconsistent with the existence of a conspiracy regarding the filing of a fraudulent claim. Third, the trustee's motion to dismiss did not rely on any claim of Bank of New York Mellon as affecting the issue of whether the case should be dismissed. Finally, Henneghan offers no reason for his belief that the trustee conspired with Bank of New York Mellon to file a fraudulent claim: he suggests no motive for the trustee's engaging in such a conspiracy.
Regardless of this service issue, Henneghan, as noted previously, was required to appear at the confirmation hearing on January 13, 2017. He has only himself to blame for not appearing at that confirmation hearing, at which the motion to dismiss was heard.
In any event, for the reasons set forth above, this case cannot survive under 11 U.S.C. §§ 109(e) and 521(i)(1). In that light, the case ought to remain dismissed, and the dismissal will not be vacated.
This is a case in which Henneghan's conduct of record, as discussed above, demonstrates that he has proceeded in bad faith and abused the bankruptcy system. Moreover, since 1998, Henneghan has filed 16 prior bankruptcy cases. Thirteen of those ended up being dismissed, including cases dismissed for failure to file required information. Eight of those dismissals were dismissals with prejudice (one of which was a dismissal with prejudice for 12 months after the court found that Henneghan had abused the bankruptcy process).
As already noted, in yet another case, Case No. 11-00673, which was not dismissed, Henneghan failed, as in this case, to include any creditors on his schedules (and that led to the court denying Henneghan's motion to convert that chapter 7 case to chapter 13).
In addition, Henneghan has not contested that, as alleged by the trustee, he failed to appear at the meeting of creditors; failed to make any plan payments; and failed to comply with 11 U.S.C. § 1308(a) by failing to file within the deadlines set by that provision all required tax returns for all taxable periods ending during the 4-year period ending on the date of the filing of the petition commencing the case. Such misconduct would additionally support a finding of bad faith and an abuse of the bankruptcy system.
Henneghan has failed to articulate in his motion any reason why, in light of the foregoing, any dismissal of the case ought not remain a dismissal of the case with prejudice for two years. However, because Henneghan contends that the motion to dismiss was not served on him, I will give him 21 days to file a writing showing why the dismissal of the case ought not remain a dismissal with prejudice for two years. If Henneghan fails to articulate adequate grounds why the dismissal ought not remain a dismissal with prejudice for two years, I will enter an order letting the dismissal remain one with prejudice for two years. If Henneghan files a writing articulating adequate grounds why the dismissal ought not remain a dismissal with prejudice for two years, I will hold a hearing on whether the dismissal of the case should remain a dismissal with prejudice for two years. If the court holds a hearing, that hearing may include addressing whether the trustee served the motion to dismiss on Henneghan, such as to warrant denying Henneghan's motion to vacate in toto based on his failure timely to oppose the motion to dismiss.
An order follows.
[Signed and dated above.]
Copies to: Debtor; recipients of e-notification of orders.
