Filed: Apr. 22, 2019
Latest Update: Apr. 22, 2019
Summary: ORDER DISAPPROVING THE APRIL 10, 2019 STIPULATION FOR CONVERSION (DOCKET # 40), AND SCHEDULING A FURTHER HEARING ON THE DEBTOR'S MOTION TO CONVERT THIS CASE TO CHAPTER 13 Thomas J. Tucker , United States Bankruptcy Judge . The Debtor filed a motion to convert this Chapter 7 case to Chapter 13 (Docket # 25, the "Motion"). The Chapter 7 Trustee objected. The Court held a hearing on April 3, 2019, at which time counsel for the Debtor and counsel for the Trustee stated that they had agreed to s
Summary: ORDER DISAPPROVING THE APRIL 10, 2019 STIPULATION FOR CONVERSION (DOCKET # 40), AND SCHEDULING A FURTHER HEARING ON THE DEBTOR'S MOTION TO CONVERT THIS CASE TO CHAPTER 13 Thomas J. Tucker , United States Bankruptcy Judge . The Debtor filed a motion to convert this Chapter 7 case to Chapter 13 (Docket # 25, the "Motion"). The Chapter 7 Trustee objected. The Court held a hearing on April 3, 2019, at which time counsel for the Debtor and counsel for the Trustee stated that they had agreed to se..
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ORDER DISAPPROVING THE APRIL 10, 2019 STIPULATION FOR CONVERSION (DOCKET # 40), AND SCHEDULING A FURTHER HEARING ON THE DEBTOR'S MOTION TO CONVERT THIS CASE TO CHAPTER 13
Thomas J. Tucker, United States Bankruptcy Judge.
The Debtor filed a motion to convert this Chapter 7 case to Chapter 13 (Docket # 25, the "Motion"). The Chapter 7 Trustee objected. The Court held a hearing on April 3, 2019, at which time counsel for the Debtor and counsel for the Trustee stated that they had agreed to settle their dispute, on terms that would include conversion of this case to Chapter 13.
On April 10, 2019, the Debtor's attorney filed a stipulation joined by the Trustee, entitled "Stipulation To Resolve Objection and Convert Chapter 7 Case to Chapter 13" (Docket # 40, the "Stipulation"). The parties stipulated to the entry of an order for conversion. Their proposed order states, in relevant part:
IT IS FURTHER ORDERED The Chapter 13 plan shall:
a. Allow and pay an administrative expense in the amount of $1,200 to Clayson, Schneider & Miller, PC for chapter 7 trustee legal fees incurred to date, pursuant to their duly filed proof of claim.
b. Allow and pay an administrative expense in the amount of $5,900 to Timothy J. Miller the Chapter 7 Trustee pursuant to In re Horton, 2004 Lexis 1408 (SD Ohio 2014), In re Bartlett, 590 B.R. 175 (D. Mass. 2018), Also See generally In re Yanna Case No. 13-60811-tjt (ED Mich.).
(Ex. A to Stipulation (emphasis added)).
The Court will not enter this proposed Order, because the Court will not approve the Chapter 7 Trustee obtaining any fee or administrative expense if this case is converted to Chapter 13, without the Chapter 7 Trustee having made any disbursements or having turned over any money to any non-debtor parties in interest. The Court agrees with the line of cases that hold that under the plain language of 11 U.S.C. § 326(a), a Chapter 7 trustee is not entitled to any compensation, when a Chapter 7 case is converted to Chapter 13 with the Chapter 7 trustee having made no disbursements.1 See, e.g., In re Pivinski, 366 B.R. 285, 289 (Bankr. D. Del. 2007); In re Fischer, 210 B.R. 467, 469 (Bankr. D. Minn.1997); In re Silvus, 329 B.R. 193, 214-15 (Bankr. E.D. Va. 2005).2
For these reasons,
IT IS ORDERED that:
1. The Court disapproves the stipulation of the Debtor and the Chapter 7 Trustee, filed April 10, 2019 (Docket # 40).
2. The Court will hold a further hearing on the Motion (Docket # 25) on May 1, 2019 at 9:00 a.m.
3. If the Debtor and the Chapter 7 Trustee agree on a revised stipulated order resolving the Trustee's objection to the Motion, which is consistent with this Order, they may file a new stipulation and submit a new proposed order.
