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GENERAL ELECTRIC CAPITAL CORPORATION v. NSC CREDITOR TRUST

December 14, 2005.

GENERAL ELECTRIC CAPITAL CORPORATION, Appellant,
v.
NSC CREDITOR TRUST, Appellee.



The opinion of the court was delivered by: SAMUEL DER-YEGHIAYAN, District Judge

MEMORANDUM OPINION

This matter is before the court on General Electric Capital Corporation's ("GE") appeal of a bankruptcy court's ruling. For the reasons stated below, we affirm the bankruptcy court.

BACKGROUND

  National Steel Corporation ("National") entered into bankruptcy. In the bankruptcy proceedings, various deadlines were set in National's first amended joint plan of liquidation ("Plan"). The Plan provided that administrative claims needed to be filed by January 19, 2004. GE claims that it entered into an agreement with National under which GE would be given an extension for the filing of administrative claims until January 26, 2004. According to GE, the extension provided time for GE and National to investigate the circumstances giving rise to GE's claim and to attempt to settle any disputed issues. GE also claims that during the extension period, National agreed that no distributions were to be made to any creditors. On January 26, 2004, GE filed an application for allowance and payment of an administrative expense claim ("Application") and thereafter National filed an objection to the Application with the bankruptcy court. GE contends that National's initial objection and National's subsequent supplemental objections did not include an objection based upon the timeliness of the Application.

  GE claims that the parties then entered into discovery to prepare for trial, and during discovery GE realized that the amount it sought in the Application was not sufficient. GE filed a motion for leave to amend the Application to include two additional legal theories. On April 26, 2005, National objected to the motion to amend and filed a motion to strike the Application based upon the untimeliness of the Application. According to GE, the motion to strike was filed over a year after the deadline set for the filing of objections to the Application. On May 11, 2005, the bankruptcy court denied GE's motion to amend and granted National's motion to strike the Application without giving GE an opportunity to file a response. GE then filed a motion for reconsideration, which was denied by the bankruptcy court. The bankruptcy court awarded National costs as the prevailing party with respect to the Application. GE has appealed this matter to this court seeking a review of the bankruptcy court's rulings on May 11, 2005, which denied GE's motion to amend and granted National's motion to strike. GE also seeks a review of the bankruptcy court's rulings on June 24, 2005, that awarded costs to National and denied GE's motion for reconsideration.

  LEGAL STANDARD

  A federal district court has jurisdiction, pursuant to 28 U.S.C. § 158, to hear appeals from the rulings of a bankruptcy court. On appeal, the district court reviews the factual findings of the bankruptcy court under the clearly erroneous standard and reviews the bankruptcy court's legal findings under the de novo standard. In re A-1 Paving and Contracting, Inc., 116 F.3d 242, 243 (7th Cir. 1997).

  DISCUSSION

  I. Motion to Strike and Motion to Amend

  Instead of selecting its best arguments regarding the motion to strike and the motion to amend, GE has presented the court with a vast array of arguments regarding the motion to strike and motion to amend, apparently hoping that in the wide spray of arguments presented to the court, one argument will succeed. However, GE cannot prevail on appeal simply because it has come up with the largest number of alternative arguments. To begin, GE argues that the bankruptcy court erred in granting National's motion to strike because GE did not have an opportunity to respond to the motion to strike. GE also complains about the enforcement of the Plan deadlines, argues that National should have been estopped from objecting to the Application, argues that National waived its right to object to the Application, and argues that GE's untimely filing of the Application was due to excusable neglect. GE also asks the court to consider the equities in this case in general, argues that it should have prevailed under the informal proof of claim doctrine, contends that GE had a right to amend pursuant to Federal Rule of Civil Procedure 15, and finally argues that, in general, GE was denied due process.

  A. Opportunity to Respond to Motion to Strike

  GE contends that it was entitled to an opportunity to respond to National's motion to strike before the bankruptcy court ruled on it and that GE was not accorded an adequate opportunity to do so.

  1. Response by GE

  GE begins its opening appellate brief by stating that the bankruptcy court granted the motion to strike without giving GE "an opportunity for the presentation of evidence or argument. . . ." (Applt. Op. Br. 2). GE thus implies that the bankruptcy court granted the motion to strike without giving GE any opportunity to respond. However, further on in GE's opening brief, GE acknowledges facts that make it clear that GE's initial statement was erroneous. GE acknowledges that the bankruptcy court conducted a hearing regarding the motion to strike, thus offering GE an opportunity to orally respond to the motion to strike. (Applt. Op. Br. 15). GE also admits that it had sufficient notice of the motion to strike to address the motion to strike in its reply brief for its motion to amend. However, instead of addressing the merits of the motion to strike in the reply brief, GE admits that it simply indicated that it would "respond to the Motion to Strike pursuant to an appropriate briefing schedule." (Applt. Op. Br. 15). The ...


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