Langston v. Dallas Commodity Co

Summarized by Bradley Pearce , Pearce Law PLLC
3 months 1 week ago

Case Type:

Consumer

Case Status:

Affirmed

Citation:

24-10883 (5th Circuit, Nov 17,2025) Published

Tag(s):

Ruling:

A section 341 first meeting of creditors does not automatically conclude if the trustee fails to comply with the requirements of Fed. R. Bankr. P. 2003(e), so that the 30-day window under Fed. R. Bankr. P. 4003(b)(1) for objecting to a debtor's claimed exemptions does not relate back to the last convened meeting. The determination of whether an objection to a debtor's claimed exemption is timely must be made on a case-by-case basis, with due consideration of the creditor's equitable defenses to whether the objection was untimely.

Procedural context:

Following years of continued section 341 meetings, the Chapter 7 trustee failed to set a date and time for an adjourned meeting. Nearly a year later, a creditor filed an objection to the debtor's claimed exemptions. The debtor objected to the timeliness of the creditor's objections and argued that Fed. R. Bankr. P. 2003(e) created a bright line for the application of the 30-day limitations period of Fed. R. Bankr. P. 4003(b)(1). The bankruptcy court overruled the debtor's objections. The debtor appealed to the district court, which affirmed the bankruptcy court's ruling but held that the timeliness of the claim objection should be determined under Matter of Peres, 530 F.3d 375 (5th Cir. 2008), notwithstanding the 2011 amendments to the Federal Rules of Bankruptcy Procedure.

Facts:

In state court litigation by Dallas Commodity Co. against Joseph F. Langston, Jr., and the Langston Family Limited Partnership, Dallas Commodity obtained a $1.5 million judgment against the defendants. Langston then filed a Chapter 7 petition and then placed the Langston Family Limited Partnership in a separate Chapter 7. In his personal Chapter 7 case, Langston claimed that two IRA accounts, valued at more than $500,000, were exempt. Langston's Chapter 7 trustee continued Langston's first meeting of creditors multiple times in order to get more documents from Langston. At the conclusion of the continued section 341 meeting on May 26, 2021, Langston's counsel, the trustee, and Dallas Commodity's counsel agreed that (1) Langston would amend his schedules, (2) Dallas Commodity would prepare a transcipt of the May 26 meeting and provide Langston's counsel with a list of additional requested documents and questions for Langston; and (3) the trustee would "get back to" Langston's and Dallas Commodity's lawyers about a date for the continued section 341 meeting. The trustee, however, failed to file a statement with the date and time for the continued section 341 meeting, contrary to the requirements of Fed. R. Bankr. P. 2003(e). Instead, the trustee filed an interim report on July 31, 2021, summarizing the status of the case. This report stated that a "continued, and hopefully final, 341 meeting in this estate will be scheduled shortly to complete the examination and allowing the [Langston and Langston Family Limited Partnership] estates to propose a compromise that will resolve the contested claims in both estates" (cleaned up). Less than two weeks later, the Langston Family Limited Partnership chapter 7 trustee filed an adversary proceeding against Langston. The complaint asserted claims relating to the IRAs that Langston claimed as exempt in his bankruptcy case. Langston then amended his schedules in November 2021. Three months later, the trustees for the two estates agreed to abate (stay) the adversary proceeding to allow the bankruptcy court to rule on objections to Langston's claimed exemptions. About a week before the trustees filed the agreed order to abate the adversary proceeding, counsel for the trustee for the Langston Family Limited Trust estate asked Langston's chapter 7 trustee to "not conclude" Langston's section 341 meeting. The trustee subsequently made a docket entry on March 9, 2022, that stated that the meeting of creditors was held and "concluded 5/26/2021." The same day, counsel for the Langston Family Limited Trust trustee asked Langston's trustee asked if the trustee intended to close the 341 meeting on March 9, 2022, and "to start the 30-day deadline to object to exemptions?" Langston's trustee answered affirmatively. Thirty days later, on April 8, 2022, Dallas Commodity filed objections to Langston's claimed exemptions for the IRAs. At the hearing on the objection, Langston argued that Dallas Commodity's objection was untimely because it was filed more than 30 days after the May 26, 2021, section 341 meeting. Langston based this argument on Fed. R. Bankr. P. 2003(e), which deems the meeting concluded unless the trustee announces the date and time of the continued meeting and promptly files a statement announcing the date and time. The bankruptcy court overruled Langston's timeliness arguments, and Langston appealed to the district court. The district court, applying Fifth Circuit precedent, held that the 341 meeting was concluded on March 9, 2022, and affirmed the bankruptcy court.

Judge(s):

Southwick, Higginson, and Wilson, Circuit Judges

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