Martin Lloyd Norman, Sr. and Merrilee Hope Norman

OCR transcription for search; preserved printed pages are authoritative

The court incorporates by reference in this paragraph and adopts as the findings and orders
of this court the document set forth below.

Russ Kendig
United States Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

CHAPTER 13

IN RE:

MARTIN LLOYD NORMAN, SR. CASE NO. 10-60118

AND MERRILEE HOPE NORMAN,
JUDGE RUSS KENDIG

Debtors.

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) MEMORANDUM OF OPINION

) (NOT INTENDED FOR

) PUBLICATION)

This case is before the court on the chapter 13 trustee’s (“Trustee”) objection to
confirmation of Debtors’ second amended plan. Trustee claims that Debtors miscalculated
the chapter 7 value and must contribute more to the plan to satisfy the liquidation value to
meet the requirements of 11 U.S.C. §1325(a)(4). Debtors focus their argument on their
ability to deduct hypothetical chapter 7 trustee fees to arrive at the liquidation value. The
court held a hearing on January 5, 2001. Following the hearing, the parties submitted
memoranda of law.

The court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 1334 and the
general order of reference entered in this district on July 16, 1984. Venue in this district and

division is proper pursuant to 28 U.S.C. § 1409.

This opinion is not intended for publication or citation. The availability of this
opinion, in electronic or printed form, is not the result of a direct submission by the court.

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ANALYSIS

Debtors’ pose the central issue as a matter of law: whether they can deduct
hypothetical chapter 7 trustee fees in arriving at a liquidation value for the purposes of 11
U'S.C. § 1325(a)(4). Trustee concedes this point. Trustee’s issue is with Debtors’ figures.

According to Trustee, the chapter 7 liquidation value of this case is $6,549, not the
$5,400 proposed in the amended plan. The liquidation analysis attached to Trustee’s brief
details her calculations. She starts with a total property value of $27,700.’ This amount is
reduced by the value of the liens,” exempt amounts from Schedule C,* and liquidation costs
of ten percent, for a total of $8,110. Once chapter 7 trustee fees of $1,561, calculated under
11 U.S.C. § 326, are deducted, Trustee arrives at a liquidation value of $6,549.

Debtors arrive at the $5,400 liquidation value by deducting chapter 7 fees from
$6,940.’ No basis for Debtors’ $6,940 figure is provided and the court failed in several
attempts to divine how Debtors arrived at it. This figure is the heart of the disagreement
between the parties. Trustee’s comparable figure is $8,110. The material question is why

the Debtors’ figure differs from Trustee’s.

As the objecting party, Trustee bears the initial burden to show that the plan does not
meet arequirement for confirmation. See Inre Lofty, 437 B.R. 578 (Bankr. S.D. Ohio 2010);
In re Marchionna, 393 B.R. 512 (Bankr. N.D. Ohio 2008). Trustee successfully established
that Debtors’ plan fails to provide a return to unsecured creditors equal to that which “would
be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title.”
11 U.S.C. § 1325(a)(4). Once Trustee meets the initial burden of proof, Debtors must carry
the burden of persuasion. See Lofty, 437 B.R. 578, 584; Marchionna, 393 B.R. 5 12,517.
Essentially, Debtors must rebut the presumption created by Trustee’s proof.

Debtors failed to carry their burden. Trustee provided a detailed analysis of the
valuations and deductions underpinning her $8,110 figure. Debtors provided no foundation
for their $6,940 and have not persuaded the court that the Trustee’s liquidation value of
$6,549 is wrong or that their figure of $5,400 is correct. Trustee’s objection to confirmation

! This is a combination of appraised values, a value presented by Debtors, and a value
assigned to one item by Trustee.

2 Both secured vehicles are undersecured, so Trustee establishes a liquidation value of
zero on these items.

3 Trustee used the original Schedule C filed by Debtors. Debtors filed an amended
Schedule C after briefing of this issue concluded. The court is not factoring the

amended exemptions into this decision.

* Debtors have engaged in felicitous rounding. Even by their own calculations, the actual
amount is $5,496.

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will be sustained.

An order to this effect will be entered contemporaneously with this opinion.

Service List:

Toby L. Rosen

Charter One Bank Building, 4" Floor
400 W. Tuscarawas St.

Canton, OH 44702

Nicole L. Rohr
Thrush & Rohr LLC
4410 22nd Street NW
Canton, OH 44708

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