In re IFC Credit Corp.

Citation:
First Chicago Bank & Trust v. Leibowitz (In re IFC Credit Corp.), Ch. 7 Case No. 09-27094, Adv. No. 09-01230, aff'd No. 11-cv-1976, No. 11-2172 (7th Cir. Dec. 5, 2011).
Tag(s):
Ruling:
Affirmed. The rule prohibiting pro se corporate filings is nonjurisdictional. Even though a pro se corporate filing is defective, it can be cured by an amended petition signed by an attorney pursuant to Rule 1009(a) of the Federal Rules of Bankrupcy Procedure. The amended petition may "relate back" to the original petition date pursuant to the equitable powers of the Court where the original defect was harmless. Subject-matter jurisdiction is intended to limit access to a federal tribunal in classes of cases that the Constitution or legislation declares off limits to the federal courts, it is not intended to punish litigants for errors or omissions made in the context of cases that are within jurisdictional limits (except for untimely notices of appeal). The "relation back" concept of Rule 15(c) of the Federal Rules of Civil Procedure, applicable to adversary proceeding complaints pursuant to Rule 7015 of the Bankruptcy Rules and applicable to involuntary petitions pursuant to Rule 1018 of the Bankruptcy Rules, may also be applied to voluntary petitions even though there is no express statute so requiring this result.
Procedural context:
The Bankruptcy Court held that the petition defect, cured by the day #2 refiling, was nonjurisdictional. The District Court affirmed. Northbrook appealed.
Facts:
IFC Credit Corporation voluntarily filed for Chapter 7 bankruptcy protection on July 27, 2009. Its bankruptcy petition was signed only by its president, a nonlawyer. The Debtor filed an amended petition the next day, signed by a lawyer. Prepetition, a creditor, First Chicago Bank & Trust n/k/a Northbrook Bank & Trust, had sued the Debtor for fraud, which fraud claim was re-filed in the bankruptcy case post-petition. The Chapter 7 Trustee counterclaimed to avoid and recover preference payments made to Northbrook within ninety (90) days prior to the original petition date. The parties settled the preference action subject to Northbrook's argument that the Court lacked subject matter jurisdiction as a result of the initially improper petition filing.
Judge(s):
JJ. BAUER, POSNER AND WOOD

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