IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
|DO NOT PUBLISH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.
LITTLE LAKE INDUSTRIES, INC., No. 1-90-01331
RAYMOND CAREY, Trustee,
v. A.P. No. 95-1104
RPL ASSOCIATES, INC.,
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
[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 _______________________