Godare v. Reed (In re Reed)

Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
11 years 11 months ago

Citation:

Godare v. Reed (In re Reed), No. OR-11-1448-PaJuKu (9th Cir. B.A.P. Mar. 11, 2014).

Tag(s):

Ruling:

During the appeal from an order confirming a chapter 13 plan, the Ninth Circuit decided Flores II, overruling Kagenveama, on which the bankruptcy court had relied. The B.A.P. reversed and remanded for further proceedings in light of Flores II.

Procedural context:

The B.A.P. acted on the chapter 13 trustee’s appeal of the bankruptcy court’s order confirming the debtors’ chapter 13 plan.

Facts:

The chapter 13 debtors are above-median income debtors for purposes of 11 U.S.C. § 1325(b)(4), but they have negative disposable income under § 1325(b)(2)-(3) and line 59 of Form B22C. Based on Maney v. Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008), the bankruptcy court held that debtors were not required to propose a five-year plan, and the court instead confirmed a 43-month plan on August 9, 2011. While the trustee’s appeal to the B.A.P. was pending, the Ninth Circuit decided Danielson v. Flores (In re Flores), 735 F.3d 855 (9th Cir. 2013 (en banc) (Flores II). The Ninth Circuit determined that Kagenveama had been wrongly decided and held that the applicable commitment period is a “temporal” requirement, and, under § 1325(b)(1)(B), a bankruptcy court may confirm a plan “only if the plan’s duration is at least as long as the applicable commitment period provided by § 1325(b)(4).” 735 F.3d at 862. Under § 1325(b)(4)(A)(ii), the applicable commitment period for above-median income debtors is “not less than 5 years.” The B.A.P. reversed and remanded to the bankruptcy court for further proceedings in light of Flores II.

Judge(s):

Pappas, Jury, and Kurtz, Bankruptcy Judges

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!