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Recent Notable Opinions of the Supreme Court of The United States:
Kontrick v. Ryan, No. 02-819 (2004), Argued November 3, 2003, Decided January 14, 2004, CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT. A creditor in Chapter 7 liquidation proceedings has "60 days after the first date set for the meeting of
creditors" to file a complaint objecting to the debtor's discharge. Fed. Rule Bankruptcy Proc. 4004(a). The bankruptcy
court may extend that period "for cause" on motion "filed before the time has expired." Fed. Rule
Bankruptcy Proc. 4004(b). Reinforcing Rule 4004(b)'s restriction on extension of the Rule 4004(a) deadline, Rule 9006(b)(3) allows
enlargement of "the time for taking action" under Rule 4004(a) "only to the extent and under the conditions stated
in that rule," i.e., only as permitted by Rule 4004(b). Held: a debtor forfeits the right to rely on Rule 4004 if the debtor does not raise the Rule's time
limitation before the court considers a creditor's objection to discharge. Only Congress
may determine a lower federal court's subject matter jurisdiction. U.S. Const., Art. III, Sec. 1. The Code
establishes objections to discharges as core proceedings within the courts' jurisdiction. 28 U.S.C. Sec. 157(b)(2)(J). Congress did not
include time constraints within the Code. As Bankruptcy Rule 9030 states, the
Bankruptcy Rules shall not be construed to extend or limit the jurisdiction of the courts. The filing deadlines
prescribed in Rules 4004 and 9006(b)(3) are claim-processing rules that do not determine subject matter
jurisdiction.
Recent Notable Opinions from Illinois Bankruptcy Courts
In re Sims, Case No. 02-90737, Adversary No. 02-9040, April 6, 2004 before the Illinois Bankruptcy Court for
the Central District. After the Sims initiated Illinois bankruptcy in a Chapter 7 proceeding, a creditor
objected to discharge alleging fraud based upon the receipt of a large insurance settlement that the Sims spent
prior to the date of filing. The Court nevertheless allowed discharge. Pursuant to 11 U.S.C. 727(a)(2)(A)
debtors filing Illinois bankruptcy must be denied a discharge where it is found that the debtor, within one year
before the date of filing, with the intent to hinder, delay, or defraud a creditor or an officer of the estate
has transferred, removed, destroyed, mutilated, or concealed property of the debtor. An Illinois bankruptcy
court must find that the debtor acted with actual intent requiring a showing of extrinsic evidence suggesting
that fraud exists. In re Smiley, 864 F.2d 562 (7th Cir, 1989). Because direct evidence of a debtor's intent
usually is unavailable, intent may be inferred from the circumstances surrounding the debtor's conduct. In re
Smiley, supra at 566. The question of intent generally will depend upon assessment of the credibility of
witnesses and the court's assessment of that credibility. In re Bonnett, 895 F.2d 1155 (7th Cir. 1989). The
burden of proof is placed upon the party filing the complaint in an adversary proceeding to establish all elements of 11 U.S.C. 727 by a preponderance of the
evidence. Grogan v. Garner, 111 S.Ct. 654 (1991).
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