Reddy Porus

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1The Court scheduled the order to show cause hearing for
reasons other than the facts recited below. The order to show
cause was issued because the debtor had provided a social
security number in his first case. In his second case, he
declared that he had no social security number. In response to
the Court’s order to show cause, the debtor stated that, in the
first case, he had provided the court with a tax identification,
not a social security number. The Court was not satisfied with
this response. The number provided in the first case did not
appear to be a tax identification number. By its format, it
appeared to be a social security number. However, the Court’s
decision to dismiss the case with a 180 day refiling bar is
unrelated to this issue.
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re No. 06-40036 TD
Chapter 7
REDDY PORUS,
Debtor.
_____________________________/
MEMORANDUM OF DECISION
Two related contested matters in the above-captioned case were
presented to the Court at a hearing on February 9, 2006. The
first was the Court’s order to show cause why the case should not
be dismissed with prejudice.1 The second was the debtor’s motion
Signed: February 12, 2006
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
February 14, 2006
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 06-40036 Doc# 30 Filed: 02/12/06 Entered: 02/14/06 10:17:59 Page 1 of 7

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2Section 109(g) of the Bankruptcy Code, which is not a new
provision, makes the debtor ineligible to file this case and
represents sufficient grounds to dismiss this case, apart from
the grounds stated below. The brief time between the dismissal
of the debtor’s prior case and the filing of this case make it
unlikely that there were any changed circumstances justifying
the second filing. The debtor has not alleged any changed
circumstances qualifying as such.
3Legal title to the Lot is actually held by the debtor as
trustee for the Double M Trust. It is unclear whether any such
trust actually exists. The debtor filed the first bankruptcy
case as an individual doing business as Double M Trust.
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to extend the automatic stay for 30 days pursuant to 11 U.S.C. §
362(c)(3)(B). For the reasons stated below, the Court will deny
the motion to extend the automatic stay and dismiss the case with
a refiling bar of 180 days.
DISCUSSION
The debtor lives in India. He has filed two chapter 7
bankruptcy cases in this Court within the last six months. His
first case was filed on October 16, 2005. It was dismissed on
January 10, 2006 when he failed to attend two consecutive meetings
of creditors. His second case was filed on January 13, 2006,
three days after his preceding case was dismissed.2 In his
bankruptcy schedules, the debtor claimed to hold fee title to a
parcel of undeveloped real property in Danville, California (the
“Lot”).3 He listed no unsecured creditors.
The Lot is encumbered by a lien securing a claim held by CMR
Mortgage Fund II, LLC (“Creditor”). The Creditor’s claim is also
secured by a junior lien on a commercial building (the “Building”)
owned by P. Bidda Holdings (“Bidda”), whose chapter 11 case is now
Case: 06-40036 Doc# 30 Filed: 02/12/06 Entered: 02/14/06 10:17:59 Page 2 of 7

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4The Creditor disputes that the value of the Building is
sufficient to pay its claim in full. To the contrary, it fears
that the combined value of the Building and the Lot may render
it undersecured.
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pending in this court. In support of the motion to extend the
automatic stay, the debtor represented that Bidda was in the
process of selling the Building for a sufficient amount to pay the
Creditor’s claim in full.4 He admitted that he filed the two
chapter 7 cases solely to obtain the automatic stay so as to
prevent the Creditor from foreclosing on the Lot in the meantime.
The Office of the United States Trustee (the “UST”) and the
chapter 7 trustee (the “Trustee”) both appeared at the hearing
through counsel. The Trustee opposed dismissal of the case at
this time. She asked for additional time to determine whether
there were any creditors and whether the Lot had any value that
could be realized for their benefit.
Section 362(c)(3)(A) of the Bankruptcy Code provides that, if
an individual files a chapter 7 case within 1 year of when a prior
chapter 7 was pending, the individual only receives an automatic
stay for 30 days. To obtain a longer stay, the debtor must file
a motion to extend the stay and must persuade the Court that the
second case was filed in good faith. 11 U.S.C. § 362(c)(3)(B).
There is a presumption under these circumstances that the second
case was filed in bad faith. To rebut this presumption, the
debtor must present clear and convincing evidence. 11 U.S.C. §
362(c)(3)(C). Here, the debtor failed to meet that burden, and
the motion to extend the stay will be denied. A debtor’s desire
Case: 06-40036 Doc# 30 Filed: 02/12/06 Entered: 02/14/06 10:17:59 Page 3 of 7

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to obtain the benefit of the automatic stay and nothing else is
not a legitimate purpose for filing a chapter 7 case.
The more interesting issue is whether the case should be
dismissed despite the Trustee’s objection. The Trustee has
clearly not had adequate time to investigate whether the Lot has
any value for these potential creditors. On the other hand, if
the Creditor’s view of the value of the Building and the Lot is
correct, any delay would be prejudicial to its interests.
The question arose at the hearing as to whether, under these
circumstances, the automatic stay protecting property of the
estate would expire within 30 days unless extended as well as the
automatic stay protecting the debtor. The Trustee had not filed
a motion to extend the stay. Any such extension is required to be
granted within the first 30 days of the case. See 11 U.S.C. §
362(c)(3)(B). According to the Creditor, the Lot was scheduled to
be sold at a foreclosure sale on February 15, 2006. If the stay
as to the estate expired on February 12, 2006, the Trustee’s
ground for opposing dismissal would be moot. The Court’s reading
of the statute in court suggested that the stay protecting the
estate would expire on February 12, 2006.
However, on closer reading of the statute, the Court concludes
that, even where a second chapter 7 case is filed within one year
of a prior case, the automatic stay protecting the estate does not
expire within 30 days unless extended by the court. Like many of
the provisions enacted in the Bankruptcy Abuse and Consumer
Protections Act (“BAPCA”), the language is ambiguous. The
Case: 06-40036 Doc# 30 Filed: 02/12/06 Entered: 02/14/06 10:17:59 Page 4 of 7

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relevant provision states that “the stay...with respect to any
action taken with respect to a debt or property securing such
debt...shall terminate with respect to the debtor on the 30th day
after the filing of the later case....” See 11 U.S.C. §
362(c)(3)(A). The phrase “with respect to a debt or property
securing such debt” suggests that the stay protecting the estate
as well as the stay protecting the debtor expires in 30 days.
However, the phrase “shall terminate with respect to the debtor”
suggests that only the stay protecting the debtor expires in 30
days.
The latter reading makes more sense. The primary motivation
for the enactment of the consumer provisions of BAPCA was to
discourage individual debtors from abusing the bankruptcy system
and to provide greater protections for creditors. Depriving the
estate of the protection of the automatic stay, where maintaining
it might benefit creditors, would be inconsistent with that goal.
Moreover, it would be difficult for a chapter 7 trustee to make
the showing required to overcome the presumption of bad faith.
Therefore, unless the case is dismissed, the foreclosure sale
scheduled for February 15, 2006 cannot go forward.
However, the Court concludes that the case should be
dismissed. As noted above, the debtor has scheduled no unsecured
creditors. Although the claims bar date has not passed, the Court
finds it likely that no unsecured claims will be filed. Since the
debtor scheduled no unsecured claims, no unsecured creditors will
receive notice of the filing. Moreover, because the debtor lives
Case: 06-40036 Doc# 30 Filed: 02/12/06 Entered: 02/14/06 10:17:59 Page 5 of 7

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in India, it is plausible that he has no unsecured creditors, at
least in the United States. If the Creditor’s view of the value
of the two properties is correct, any delay in the foreclosure
sale of the Lot would be prejudicial its interests. Under these
circumstances, the Court concludes that it would be inequitable to
maintain this case on the chance that unsecured creditors might
file claims.
CONCLUSION
The debtor’s motion to extend the automatic stay is denied.
The case is dismissed with a 180 day refiling bar. Counsel for
Creditor is directed to submit a proposed form of order in
accordance with this decision.
END OF DOCUMENT
Case: 06-40036 Doc# 30 Filed: 02/12/06 Entered: 02/14/06 10:17:59 Page 6 of 7

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COURT SERVICE LIST
Reddy Porus
2415 San Ramon Valley Blvd., #4-160
San Ramon, CA 94583
Lois I. Brady
350 Frank H. Ogawa Plaza, Ste. 702
Oakland, CA 94612
Marcus O. Colabianchi
Stein & Lubin LLP
600 Montgomery St., 14th Floor
San Francisco, CA 94111
Case: 06-40036 Doc# 30 Filed: 02/12/06 Entered: 02/14/06 10:17:59 Page 7 of 7