Fed.R.Bankr.P. 9006(b)(1); Bar Date for Administrative Claim
In re Centennial Healthcare Corp., 2005 Bankr. LEXIS 2684, Case No. 02-74974 (Bankr. N.D. Ga. December 5, 2005) (Massey).
Debtor Centennial Healthcare Corporation and 34 related companies, which leased and managed numerous nursing homes in several states, filed Chapter 11 petitions on December 20 2002, and their cases were jointly administered. On June 22, 2004, the court entered a Confirmation Order confirming the Third Amended Joint Plan of Reorganization and set a bar date for non-professional administrative expense claims for September 26, 2004.
The creditor, representative of the estate of her late mother, had asserted a claim against the nursing home in which her mother lived, alleging negligent care and treatment of her mother, who died in June 2003.
The creditor hired counsel in early 2003 and counsel began communicating with the nursing home and its counsel. In February 2004, nursing home counsel notified the creditor’s counsel that Centennial was in bankruptcy, but did not otherwise notify the creditor that any other entity was in bankruptcy. The creditor filed a lawsuit in December 2004. Defendants in that action moved to dismiss the case based upon the pending bankruptcy cases, but they also responded to discovery. This motion prompted creditor’s counsel to investigate the bankruptcy cases and he first learned of the Notice and Bar Date in January 2005. The creditor filed her claim in April 2005 and requested an extension of time in which to file.
The court concluded that evidence presented, including affidavits of the claims agent, did not establish that notices were properly addressed, mailed and delivered to the creditor, even though they had been evaluating her claim for more than a year. Moreover, throughout the initial dispute and through the hearing in Bankruptcy Court, the parties referred to “Centennial,” as if it were the only company in bankruptcy. The notices provided to the creditor prior to 2005, including the motion filed in the state court case, were insufficient to show that the entities in bankruptcy were involved in the operation and management of the nursing home at issue. Overall, the facts showed that the debtor, and not the creditor, was more at fault for the delay. Moreover, there was no evidence that the creditor acted in bad faith, or that the debtor would be prejudiced by allowing the late claim, and the creditor filed the claim within a reasonable time after she received actual notice of the bar date. Therefore, the time was extended and the claim allowed.