ENTERLIFE AMBULANCE CORPORATION

IN THE UNITED STATES BANKRUPTCY COURT FOR
THE DISTRICT OF PUERTO RICO
IN RE:
ENTERLIFE AMBULANCE
CORPORATION
CASE NO. 09-02828 BKT
Chapter 11
FILED & ENTERED ON 04/12/2010
Debtor(s)
OPINION AND ORDER
The matter before the Court is Creditor Efrain Torres’ Motion for Summary Judgment allowing the Proof of
Claim (the “Claimant”), and Debtor’s Motion for Summary Judgment regarding the contested matter of the
allowance of Efrain Torres’ Proof of Claim No. 8 and the Debtor’s Objection to the claim (the “Debtor”). The
Claimant contends that the circumstances giving rise to this case and a document filed by the Debtor prior to
the expiration of the claims bar date constituted a timely informal proof of claim, or in the alternative that the
doctrine of excusable neglect would permit the court to accept the late filing of the claim. Debtor argues in
return that the specific criteria necessary for an informal proof of claim has not been met by Claimant, nor have
the factors established by case law to allow the late filing under the doctrine of excusable neglect been met.
For the reasons set forth below, the Court will enter an order granting summary judgment in favor of the
Debtor.
On April 8, 2009, EnterLife Ambulance Corporation filed a petition under Chapter 11 of the Bankruptcy Code,
and as of that date have been managing it’s affairs and operating its business as a debtor-in-possession.
Claimant was duly notified of the bankruptcy proceedings and received proper notice of the 11 U.S.C. § 341
Meeting of Creditors. This notice contained the information for the claims bar date which was set at August
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17, 2009. There is no dispute that Claimant received this information in a timely manner. In addition, the
record shows that Claimant was present, and also represented by an attorney at the § 341 Meeting which took
place on May 18, 2009. The Schedules filed at the time of the petition did not list nor recognize Efrain Torres
as a creditor. Debtor filed a notice to the Court on April 27, 2009, submitting two balance sheets and statement
of operations in compliance with 11 U.S.C. § 1116 [Dkt. No. 16]. These balance sheets dated December 31,
2008 and March 31, 2009 contained two line items designated as “Account Payable” in the name of “Efrain
[sic]”for the amounts of $53,875.88 and $8,000.00 	The balance sheet was clearly marked as “Copy of
Unaudited Balance Sheet & Income Statement as of & for the year ended December 31, 2008.” In addition,
the balance sheet had the notation “for management purposes only.” On November 2, 2009 a proof of claim
was filed by the Claimant Efrain Torres in the amount of $61,875.88. This claim was objected by Debtor on
November 3, 2009 [Dkt. No.62]. 	The Court approved the disclosure statement and confirmed the plan
following a hearing on December 3, 2009 [Dkt. No. 75]. Shortly after the confirmation, the Court scheduled a
pre-trial hearing on the objection to claim dispute for January 29, 2010. At the hearing the Court decided that
the parties would file simultaneous motions for summary judgment to determine the controversy as to whether
an informal proof of claim exists and/or whether the applicability of the doctrine of excusable neglect is
appropriate to this dispute.
SUMMARY JUDGMENT STANDARD
Both the Debtor and Efrain Torres claim an entitlement to summary judgment. Summary judgment will be
granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law." See Fed. R. Civ. P. 56(c); Fed. R. Bankr. P. 7056. See also Celotex
Corp. v. Catrett, 477 U.S. 317, 322, (1986). In viewing the facts, the Court must draw all reasonable inferences
from them, in the manner most favorable to the nonmovant. Desmond v. Varrasso (In re Varrasso), 37 F.3d
760, 763 (1st Cir. 1994); Piccicuto v. Dwyer, 39 F.3d 37, 40 (1st Cir. 1994). In the present case, the parties
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agree that there are no issues of material fact.
INFORMAL PROOF OF CLAIM
The time for filing a proof of claim under Fed R. Bankr. P. 3003 (c)(3) may not be enlarged except to the
extent and under the conditions stated in the that rule. See Fed. R. Bankr.P. 9006(b). Additionally, the Court
cannot consider the unaudited balance sheets dated December 31, 2008 and March 31, 2009 filed in the
pending case as an informal proof of claim. Debtor's Counsel filed the balance sheet, and the Notice in
compliance with 11 U.S.C. § 1116 does not contain a demand upon the Debtor's estate or an intent to hold the
Debtor liable for the debt. See, In re Wigoda, 234 B.R. 413, 415 (Bankr.N.D.Ill.1999), aff'd 11 Fed.Appx. 624
(7th Cir.2001) (“The informal proof of claim is an equitable doctrine developed by the courts to ameliorate the
strict enforcement of the claims bar date. To be an informal proof of claim a document must (1) have been
timely filed with the bankruptcy court and become part of the record, (2) state the existence and nature of the
debt, (3) state the amount of the claim, and (4) evidence the creditor's intent to hold the debtor liable.”
(citations omitted)); In re Bowers, 104 B.R. 362, 364 (Bankr. D. Colo. 1989.
The factor for determining whether an informal proof of claim exists requires that the proof of claim must be in
writing; that the writing must contain a demand by the creditor on the debtor's estate; that the writing must
express an intent to hold the debtor liable for the debt; that the proof of claim must be filed with the
Bankruptcy Court; and that, based on the facts of the case, it would be equitable to allow the amendment. Cf.
Liakas v. Creditors' Comm. of Deja Vu, Inc., 780 F.2d 176, 178 (1st Cir. 1986) (“a proof of claim must contain
a demand by the creditor against the debtor's estate, and an intent to hold the debtor's estate liable”). Under this
doctrine, an informal proof of claim may be subsequently amended by a formal proof of claim. In this case, the
only document filed prior to the deadline for filing proofs of claim in the pending case was filed by Debtor’s
counsel and not by the Claimant, Efrain Torres. The suggestion that there exists a balance owed as evidenced
by the unaudited balance sheets filed in the pending case is insufficient to constitute a writing by the Claimant.
Moreover, it does not contain a demand for payment or otherwise satisfy the requirements for informal proofs
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of claim set forth in the Bowers and Wigoda cases.
Accordingly, this Court concludes that the two unaudited balance sheets filed by the Debtor in this
case do not constitute an informal proof of claim by Claimant, Efrain Torres.
THE DOCTRINE OF EXCUSABLE NEGLECT
The leading case regarding the doctrine of excusable neglect is Pioneer Investment Services Co. v. Brunswick
Associates Limited Partnership, 507 U.S. 380 (1993). In that case, unsecured creditors faced a claims bar date
of August 3, 1989. They failed to file timely claims, in part because of ambiguities in the court's notice setting
the filing deadline. On August 23, 1989, the claimants filed proof of claims with a motion to permit the late
filings under the excusable neglect standard found in Fed. R. Bankr. P. 9006(b). The bankruptcy court and the
district court ruled against the claimants. The Sixth Circuit reversed and the Supreme Court affirmed in a 5-4
decision.
The Supreme Court acknowledged that ordinarily, inadvertence, ignorance of the applicable rules, or mistake
in construing the rules does not constitute excusable neglect. It noted, however, that excusable neglect was an
"elastic concept," Id. at 392, and concluded that the determination of excusable neglect should be established
by an equitable test, "taking account of all relevant circumstances surrounding the party's omission." Id. at 395.
To determine whether a party's neglect was "excusable," a court should consider: 1) the danger of prejudice to
the debtor, 2) the length of the delay and the potential impact on judicial proceedings, 3) the reason for the
delay, including whether it was within the reasonable control of the movant, and 4) whether the movant acted
in good faith. Because of a "dramatic ambiguity" in the notice of the claims bar date, the Court concluded that
the creditors' failure to timely file claims was excusable and affirmed the circuit court's holding. Id. at 398-99.
Applying the Pioneer factors to this case leads to a clear result. There is the potential danger of prejudice to the
debtors by allowing a late claim as the plan has already been confirmed. The length of the delay is two and
one-half months. The impact of allowing a large sum as a late filed claim will not have a negligible impact on
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the remaining proceedings. The third factor, however, is determinative. There is no reason in the record as to
why the Claimant delayed approximately 75 days in filing his proof of claim. The Claimant was duly notified
of the bankruptcy filing and it’s proceedings, and moreover had legal representation at the § 341 Meeting of
Creditors. In the case before us there is no ambiguity in the notice provided to the Claimant of the claims bar
date. That fact alone sets this case apart from Pioneer. In a Chapter 11 case, it is not necessary to file a claim if
the creditor agrees with the amount the debtor has listed as due in its Schedules and the debtor has not listed
the debt as disputed, contingent or unliquidated. However, if the creditor believes it is owed more money than
indicated by the debtor, or its claim is unlisted, listed as disputed, contingent or unliquidated, the creditor
needs to timely file a claim for the full amount owed. Fed. R. Bankr. P. 3003(b)(1) & (c)(2). The responsibility
to do this falls squarely on the creditor.
CONCLUSION
Based upon the foregoing, the court GRANTS the Summary Judgment Motion in favor of Debtor. Claimant,
Efrain Torres has no basis in law to have his late filed claim allowed under either the theory of informal proof
of claim or excusable neglect. The objection to claim no. 8 filed on November 3, 2009 [Dkt. No.62] is hereby
GRANTED. The claim number 8 filed by Efrain Torres on November 2, 2009 in the amount of $61,875.88 is
disallowed in its entirety.
IT IS SO ORDERED.
San Juan, this 12 day of April, 2010.
Brian K. Tester
U.S. Bankruptcy Judge
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