Memorandum of Decision Re: Statute of Limitations

DO NOT PUBLISH This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
Decisions
IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re LITTLE LAKE INDUSTRIES, INC.,                                                 No. 1-90-01331 et al.,      Debtors. _____________________________/ RAYMOND CAREY, Trustee,      Plaintiff,     v.                                                                                                  A.P. No. 95-1104 RPL ASSOCIATES, INC.,      Defendant. ______________________________/
Memorandum of Decision
     This preference action was commenced by the Chapter 7 trustee within two years of his appointment. However, more than two years had passed while the case was in Chapter 11 without a trustee. Now before the court is the motion of defendant RPL Associates, Inc., to dismiss the case as untimely.      RPL filed an 18-page brief in support of its position which failed to mention the controlling case on this issue, California Canners & Growers, 175 B.R. 346 (9th Cir.BAP 1994). At oral argument, counsel for RPL attempted to distinguish California Canners on the ground that in this case there had been a confirmed plan whereas in that case a plan had never been confirmed. However, he did not say why this makes a difference, nor can the court think of a reason. The court in California Canners held:            [W]hen a trustee is appointed after a debtor in            possession is in place, the trustee receives the            full two year limitation period prescribed in sec-            tion 546(a) and is not limited to the remainder of            the two year period given to the debtor in posses-            sion. . . .      The rationale for allowing the trustee an entire two year period, absent any subtraction for time            used by the debtor in possession comports with the            reality that a debtor in possession may lack the            incentive to prosecute avoidance actions.      175 B.R. at 348. This rationale seems applicable regardless of whether the attempt to reorganize failed before or after confirmation of a plan.      For the foregoing reasons, the motion to dismiss will be denied. Counsel for the trustee shall submit an appropriate form of order.
Dated: August 14, 1995                                                                                                   _______________________                                                                                                                                                    Alan Jaroslovsky                                                                                                                                                    U.S. Bankruptcy