OKSALLY ALVAREZ VELEZ and JORGE BAUER HUERTAS

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO
In re: :
:
OKSALLY ALVAREZ VELEZ, : Case No. 04-06968 (GAC)
JORGE BAUER HUERTAS, : Case No. 05-08723 (GAC)
:
Debtors : Chapter 13
___________________________________:
DECISION AND ORDER
Case No. 04-06968 was dismissed on December 22, 2004 (dkt.
#35), based on the debtors’ failure to respond to a motion to
dismiss filed by creditors Armando Acevedo Melendez and Clara L.
Armaiz Serrano (“Acevedo/Armaiz”). The debtors filed a motion for
reconsideration on January 3, 2005 (dkt. #37) which Acevedo/Armaiz
opposed (dkt. #41). Debtors indicated that their delay in
responding to the motion to dismiss was due to medical issues in
the family of their attorney. Debtors argued that they propose to
pay 100% of all allowable claims, plus 6% interest. Debtors also
dispute the claim of Acevedo/Armaiz.
The matter was scheduled for August 30, 2005 and subsequently
rescheduled for September 16, 2005. On September 13, 2005, the
debtors filed a motion to withdraw their motion for reconsideration
(dkt. #47), electing instead to file a new bankruptcy case, Case
No. 05-08723. Acevedo/Armaiz opposed the motion, complaining that
the case had been in procedural limbo for eight months pending a
ruling on the motion for reconsideration (dkt. #48).
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Acevedo/Armaiz also complain that the filing of the second case
while the first was still pending was unconscionable and that the
debtors only basis for the filing is to stave off judgments in
civil cases filed by Acevedo/Armaiz. Acevedo/Armaiz indicate that
the debtors have assets well in excess of $1.3 million and little
more than half of that amount in liabilities.
At a hearing held on September 27, 2005, the Court vacated the
order of dismissal in Case No. 04-06968 in order to consolidate the
case with Case No. 05-08723, which had been assigned to a different
judge. In reviewing both cases, it now appears that Case No. 04-
06968 should remain dismissed and Case No. 05-08723 should continue
as the debtors can not be debtors in two simultaneous Chapter 13
cases.
Furthermore, the Court has reviewed the debtors’ initial
motion requesting withdrawal of the motion for reconsideration of
dismissal and concludes that the debtors were entitled to withdraw
it. Rather than being in procedural limbo, because the case had
been dismissed, no automatic stay applied notwithstanding that a
motion for reconsideration of dismissal was pending. See 11 U.S.C.
§ 362(c)(2) and Lomagno v. Salomon Brothers Realty Corp. ( In re
Lomagno), 2005 WL 3036319 (1st Cir. 2005). The debtors sought to
withdraw the reconsideration, alleging that they had received
attachment letters from the Internal Revenue Service. During the
period in which Case No. 04-06968 was dismissed, the debtors
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indicate that they paid municipal patents in the amount of $14,000
to avoid the closure of their business, that their mortgage is
current and that they have incurred no new debts. Almost nine
months passed from the time of the initial dismissal and the
debtors’ decision to abandon the request for reconsideration and
file a new case. Nothing prohibited the debtors from doing this.
The Court concludes that Acevedo/Armaiz are not prejudiced by the
second filing. As they themselves indicate, the debtors have
sufficient assets to pay the disputed debt to Acevedo/Armaiz should
they prevail on their claim. The Court notes that the debtors have
filed an adversary proceeding against Acevedo/Armaiz in Case No.
04-06968, challenging their claim, Adv. No. 05-00239, and that the
matter has been scheduled for a pre-trial hearing.
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ORDER
WHEREFORE IT IS ORDERED that the order vacating the dismissal
of Case No. 04-06968 is VACATED. The debtors’ motion to withdraw
their request for reconsideration of the dismissal is GRANTED. The
Case is DISMISSED. Case No. 05-08723 will remain pending. The
Clerk to transfer Adv. No. 05-00239 to the docket of Case No. 05-
08723, as well as claims numbered one through seven. The Chapter
13 trustee is directed to transfer any funds deposited in Case No.
04-06968 to Case No. 05-08723 and file an informative motion within
twenty (20) days indicating the status of the case and the amount
transferred.
SO ORDERED.
San Juan, Puerto Rico, this 5th day of December, 2005.
/s/ Gerardo A. Carlo
__________________________
GERARDO A. CARLO
Chief, U.S. Bankruptcy Judge
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