In re- CALDEL HOLDINGS, LLC

Case Type:
Business
Case Status:
Affirmed
Citation:
BAP No. NC-21-1083-BFS (9th Circuit, Oct 27,2021) Not Published
Tag(s):
Ruling:
When considering a motion to reopen a case, a bankruptcy court should ordinarily not address the merit of any disputes underlying the motion, but may decline to reopen where the undisputed facts show that reopening would be a pointless exercise. Also, after a chapter 7 case is closed, the debtor has standing to file an amendment to a tax return filed by the chapter 7 trustee.
Procedural context:
Appeal of order denying motion of debtor's principal to reopen chapter 7 case to compel the trustee to file an amended tax return and challenge the award of professional fees previously awarded.
Facts:
When the case was open, the trustee obtained an order authorizing her to file tax returns identifying Peter Chernik as the debtor's sole member. The Court overruled Chernik's objections to the tax return. Chernik did not appeal. Chernik then objected to to the final fee requests of the trustee and her counsel, which objections were overruled. Chernik did not appeal. After the case was closed, Chernik filed a motion to reopen to compel the trustee to file an amended tax return and to again challenge the fee awards. The Bankruptcy Court denied the motion, holding that reopening would be a pointless exercise. On appeal, the BAP agreed, holding that while ordinarily the underlying disputes should not be considered in ruling on a motion to reopen, the Bankruptcy Court can deny the motion if the underlying facts are undisputed and reopening would be a pointless exercise. The BAP also rejected Chernik's argument that he did not have authority to file amended tax returns, noting that authority to file was revested in the debtor and Chernik when the case was closed.
Judge(s):
BRAND, FARIS, and SPRAKER

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