EMPLOYEE WHO HAD A CLAIM AGAINST THE DEBTOR FOR AN INJURY SUSTAINED WHILE ON BOARD THE DEBTOR'S VESSEL WAS ALLOWED TO FILE A LATE CLAIM PURSUANT TO FED. R. BANKR. P. 9006 BECAUSE THE EMPLOYEE PRESENTED LEGITIMATE REASONS FOR DELAYING THE FILING OF THE CLA
In re: SUNCRUZ CASINOS, LLC, JAB AMERICA, INC., Debtors.
UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF FLORIDA, FORT LAUDERDALE DIVISION
2007 Bankr. LEXIS 3629
October 26, 2007, Decided
PROCEDURAL POSTURE: The debtor filed for relief under Chapter 11 of the United States Bankruptcy Code. A former employee filed a motion for rehearing on the court's earlier order denying the judgment creditor's motion to allow a late-filed claim and to allow relief from stay. The debtor and the primary secured creditor objected to the motion.
OVERVIEW: In July 2005, the former employee had initiated a maritime personal injury action against the debtor alleging he sustained an injury aboard ship in July 2002. The employee filed a motion in the bankruptcy court proceeding in March 2006, which sought permission to assert a late-filed claim against the debtor. The court had established September 15, 2004 as the deadline for filing claims. The employee suffered a subsequent injury in 2005, while working for a different owner. The court noted that on the date of the 2002 elevator incident the employee had a cause of action, and thus a bankruptcy claim, against the debtor. The court found that there were valid reasons for the employee's delay in filing a claim, particularly when he had become pain free for a period of time and had been told that he had reached maximum medical improvement. Any prejudice to the debtor and the primary creditor was outweighed by the employee's right to pursue a claim. The employee's delay in filing a claim was not unreasonable. The court found that relief from the stay was appropriate so that the employee could liquidate his claim in a district court.
OUTCOME: The court granted the employee's motion to allow a late filed claim. The court granted the employee's motion for relief from stay and the employee was authorized to liquidate his claim in a district court. Upon completion of the liquidation, the parties were directed to return to the court for allowance or disallowance of the claim.
