Restructuring

Contributed by Charlie Chen
For many parents with school-age kids, the month of August marks the end of summer vacation and the start of the new school year, and in this spirit, a post on practice fundamentals seems appropriate.  Specifically, attorneys are responsible for (i) maintaining an accurate address of record to ensure proper service and (ii) monitoring their case docket to avoid missing a deadline.  While this may seem elementary, the recent decision from Judge Teel of the United States Bankruptcy Court for the District of Columbia nonetheless reinforces a point that is particularly applicable to a bankruptcy practitioners’ day-to-day practice. 
Background
In In re Lezell, the bankruptcy court emphasized the attorney’s responsibility to maintain an accurate address of record and monitor the case docket to avoid missing a deadline.  In this case, after concluding that an involuntary petition was improperly filed, the court subsequently issued the following orders: (i) Order of Dismissal; (ii) Judgment Awarding Attorney’s Fees and Expenses to Debtor; and (iii) Order setting a deadline of May 8, 2015 to oppose the reasonableness of the fees and expenses sought by the debtor (collectively, the “Orders”).  Two months after the deadline passed, petitioners’ counsel, who filed the involuntary petition (and was also jointly and severally liable pursuant to the Orders for the award of attorney’s fees and expenses to the debtor), filed an Urgent Motion to Reopen or Re-Calendar on the basis that he did not receive notice of the Orders (the “Petitioners’ Motion”).
The Bankruptcy Court Denied the Petitioners’ Motion
The bankruptcy court reviewed the Petitioners’ Motion and denied the relief requested.  First, the court considered the assertion by petitioners’ counsel that he did not receive e-mail notification of the Orders.  The court noted that petitioners’ counsel still filed pleadings in paper form and was not registered for electronic filing with the court.  Thus, the court rejected petitioners’ counsel’s argument and determined that he was not entitled to e-mail notification of the Orders.
Next, petitioners’ counsel alleged that his office did not receive the mailed copies of the Orders.  In support, petitioners’ counsel submitted an affidavit of non-receipt.  Relying upon the plain language of Rule 9022(a) of the Federal Rules of Bankruptcy Procedure, the court rejected this argument, finding that, among other things, a certificate of mailing showed that the Orders were mailed to the address of record for petitioners’ counsel two days after the Orders were entered.  Moreover, the court found that an affidavit of non-receipt “does not demonstrate that the documents were not mailed.”
In addition, the court noted that the affidavit submitted by petitioners’ counsel stated that his address was “3626A Union Street” which was often confused with “3626 Union Street” and had resulted in mis-delivered mail in the past.  The court believed that in these circumstances, petitioners’ counsel “should have been acutely aware that he needed to monitor the docket” via his PACER account.  Furthermore, the court also noted that the address of record provided by petitioners’ counsel was “36-26A Union Street, # 3F” which was inconsistent with the address “3626A Union Street” listed in his affidavit.
Conclusion
Although the decision in Lezell is not particularly shocking in its outcome, it serves as a useful reminder that attorneys are responsible for (i) maintaining an accurate address of record to ensure proper service and (ii) monitoring their case docket to avoid missing a deadline.  With electronic filing rapidly becoming the norm in many federal courts, petitioners’ counsel could have avoided the whole dispute by registering to become an electronic filer, and, thus, he would have received e-mail notification of the Orders (and likely not have missed the deadline to file an objection).
As we have discussed the issue of excusable neglect previously in In re An and In re Majestic Holdco, LLC and In re Canopy Financial, Inc., deadlines are enforced by bankruptcy courts and this case is no exception.  The court’s decision in Lezell serves as yet another reminder that unlike some classes in school, make-up exams are not always offered under the Bankruptcy Rules.