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IN RE PLAGAKIS

January 27, 2004.

IN RE: PETER PLAGAKIS, Debtor-Appellant; PETER PLAGAKIS, Debtor-Appellant, -against- STUART P. GELBERG, et. al., Appellees


The opinion of the court was delivered by: STERLING JOHNSON, District Judge

MEMORANDUM AND ORDER

On May 6, 2003, Peter Plagakis ("Debtor" or "Appellant") brought this appeal from an order of the United States Bankruptcy Court for the Eastern District of New York ("Bankruptcy Court"), Jerome Feller, B.J., ("Judge Feller") dated December 30, 2002. Judge Feller's order ("Order") dismissed, nunc pro tunc, Appellant's petition filed pursuant to Chapter 13 of the United States Bankruptcy Code, 11 U.S.C. § 1301-1330, and denied Appellant's motion to convert the Chapter 13 case to Chapter 11 pursuant to 11 U.S.C. § 1307(d). Appellant brings this appeal pursuant to 28 U.S.C. § 158, which grants this Court jurisdiction to hear appeals from the bankruptcy courts of the Eastern District of New York. For the reasons stated herein, the Court affirms the Order.

  FACTUAL AND PROCEDURAL BACKGROUND

  Until June 28, 2002, Debtor was the record owner of real property located at 38-73 Douglastown Parkway, Douglastown, New York, 11363 ("Douglastown Property"). (Order at 2; Appellee Citibank, N.A.'s Record on Appeal in Support of Dismissal ["AE Rec."], Ex. E, Schedule ["Sch."] A.) The Douglastown Property was encumbered by a mortgage held by Citibank upon which Debtor had been in default since 1995. (Order at 2; AE Rec., Ex. G at 2.) Citibank obtained a judgment of foreclosure against Debtor on May 13, 2002 and scheduled a foreclosure sale for June 28, 2002 at 9:00 a.m. (Order at 2; AE Rec., Ex. D, ¶ 7; AE Rec., Ex. E, Statement of Financial Affairs, ¶ 4; AE Rec., Ex. G at 2.)

  While Citibank was engaged in foreclosure proceedings before the state court, Debtor executed and delivered on or about December 1, 2000 a quitclaim deed to John Bouzas in exchange for ten dollars. (AE Rec., Ex. D, ¶ 11; U.S. Trustee's Memorandum of Law ["U.S.T. Memo."] at 4.) On January 16, 2001, the deed was recorded in the City Register of Queens County. (AE Rec., Ex. D, ¶ 11.)

  In 2002, after Citibank obtained the judgment of foreclosure, Mr. Bouzas filed an order to show cause as to why the judgment was not defective due to the fact that, as the transferee of the Douglastown Property, he was a necessary party who had never been served. (U.S. T. Memo. at 4-5.) Justice John A. Milano of New York Supreme Court, Queens County, denied the order to show cause, (Id.)

  Debtor filed a motion before the state court for a stay of the foreclosure sale. (Order at 2.) This motion was denied, and the Douglastown Property was sold on June 28, 2002 at approximately 9:00 a.m. to Core Holdings, Inc. for $1.1 million. (Id. at 3.)

  On June 28, 2002 at 8:47 a.m., thirteen minutes before the foreclosure sale, Debtor filed a Chapter 13 Bankruptcy Petition ("Petition") that did not include a plan, Schedules A through J, summary of schedules, declaration concerning Debtor's schedules, or statement of financial affairs. (Id.) That same day, the Cleric of the Court informed Debtor by written notice that the Petition was deficient because these documents had not been filed. The notice directed Debtor to file these missing documents by July 15, 2002. Debtor subsequently received two extensions of time, and was ultimately ordered to file a Chapter 13 plan and other documents by August 15, 2002.

  On July 17, 2002, Citibank N.A. ("Citibank") filed a motion for an order pursuant to 11 U.S.C. § 362 annulling the automatic stay nunc pro tunc ("Lift Stay Motion"). On July 22, 2002, the Chapter 13 Trustee, Stuart P. Gelberg, Esq. ("Chapter 13 Trustee"), filed a motion pursuant to 11 U.S.C. § 1307(c) to dismiss Debtor's case. On August 9, 2002, Debtor riled his opposition to Citibank's Lift Stay Motion and his amended Petition.

  In Schedule A of the amended Petition, Debtor stated that he owned the Douglastown Property. (AE Rec., Ex. E, Sch. A.) In Schedule D, he listed Citibank as holding a secured claim of $772,375. (Id. Sch. D.) In Schedule B, Debtor claimed ownership interest in a joint venture with an estimated value of $350,000. (Id., Sch. B.) In Schedule F, Debtor listed two unsecured nonpriority creditors: a credit card company with a claim of $2,901, and John Bouzas, whose claim was not enumerated. (Id., Sch. F.) In the Statement of Financial Affairs, Debtor listed his income for the tax years 2000 and 2001 at $0. (Id.) In Schedules I and J, Debtor reported that he had been employed for six months and that his net income was $3,000 per month, with monthly expenses of $2,500. (AE Rec., Ex. E, Sch. I, J.)

  On August 16, 2002, J. Papapanayotou filed a notice of appearance on behalf of Debtor and a motion pursuant to 11 U.S.C. § 1307(d) to convert Debtor's case to a Chapter 11 case ("Conversion Motion"). On August 23, 2002, Citibank opposed Debtor's Conversion Motion, and on August 28, 2002, Citibank filed an objection to the confirmation of the Chapter 13 reorganization plan. On October 18, 2002, Core Holdings, Inc. filed an affidavit in support of the Lift Stay Motion.

  The hearing was adjourned twice to permit the united states Trustee's Office, at the Bankruptcy Court's request, to review and respond to the motions and correspondence.*fn1 On November 26, 2002, The United States Trustee for the Eastern District of New York filed a memorandum of law in support of the Chapter 13 Trustee's motion and requested that the dismissal be nunc pro tunc to the date and time of the filing of the petition. Debtor did not file written opposition to the Chapter 13 Trustee's motion.

  A hearing was held on December 3, 2002 at which the Bankruptcy Court denied Debtor's Conversion Motion and dismissed, nunc pro tunc, Debtor's Chapter 13 case. The Bankruptcy Court noted in its Order that Debtor "made no plan payments and . . . no post-petition mortgage payments," and that Debtor's proposed Chapter 13 plan "provide[d] for no plan payments. . . ." (Order at 3.) The Bankruptcy Court found that Debtor's proposed Chapter 13 plan failed to comply with 11 U.S.C. § 1322(a)(1) and 11 U.S.C. § 1325(a)(6) and that Debtor was ineligible for Chapter 13 relief pursuant to 11 U.S.C. § 109(e). (Id. at 4.) The Bankruptcy Court also found that Debtor's Chapter 13 Petition and Conversion Motion were filed in bad Faith. (Id. at 3-4.)

  On January 8, 2003 and May 8, 2003, Debtor, pro se, filed the instant appeal and a supporting memorandum of law with this Court.*fn2 Debtor seeks reversal of the Bankruptcy Court's denial of his motion to convert his case from Chapter 13 to Chapter 11. (Brief of Appellant Peter Plagakis ["AP Rec."] at 19.) Alternatively, Debtor requests that this Court grant the Chapter 13 Trustee's motion to dismiss, but not nunc pro tunc, as the Bankruptcy Court held. (Id. at 2.) Ordinary dismissal, Debtor argues, would allow him to refile the action as Chapter 11 case. (Id. at 19.) Finally, Debtor contends that the Bankruptcy ...


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