Rufus Stancil

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
RUFUS STANCIL, JR.,
Debtor.
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Case No. 01-02220
(Chapter 7)
OPINION RE DEBTOR'S MOTION
TO AMEND ORDER OR, IN THE ALTERNATIVE,
MOTION TO COMPEL FURTHER ABANDONMENT OF FUNDS TO THE DEBTOR
The debtor has filed a motion which essentially asks the
court to enter a single order addressing the rulings entered
in the litigation of objections to the proofs of claim of the
Sherman Avenue tenants and their Tenants Association, and to
direct payment of those awards from the estate. No one has
objected, and the court does not disagree with the general
goals of the motion (to make clear that it is the estate that
is to pay the claims, including costs of the litigation, to
consolidate the allowances in a single order, to make the
order a final order concluding the litigation, and to direct
the trustee to make payment since the trustee has sufficient
funds to do so).
However, the court will enter an order with changes to
Stancil’s proposed orders for the reasons discussed below.
The opinion below is hereby signed. Dated: June 3,
2006.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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1 Ordinarily, a ruling on an objection to claim would
include only a ruling on the amount owed at the petition date,
and the calculation of postpetition interest under § 726(a)(5)
and payment would await the completion and approval of a final
report, but the trustee has not opposed payment of claims now,
and all have recognized that this is a case in which there
will be a surplus to deliver to the debtor. If the claims are
to be paid now, it makes sense to pay them with postpetition
2
1. Confusingly, Stancil has presented two proposed
orders saying essentially the same thing but in different
formats. A single order ought to suffice. And there is no
reason to vacate the order (Docket Entry No. 679) which merely
directed that more detail be supplied regarding costs claimed
by the tenants.
2. Further, the proposed orders recite wrong amounts
(albeit in what are tiny errors) for what were allowed amounts
for some of the claims under prior orders, and classifies the
cost award to the Tenants Association as an award of
prepetition costs when it was an award of postpetition costs.
3. The allowed claims of the tenants fix the amounts of
the tenants' claims as of the petition date, but the tenants
are additionally entitled to a distribution of interest
accrued on their claims since the petition date. 11 U.S.C. §
726(a)(5). As in the case of the Tenants Association's
recovery of prepetition attorney's fees, the rate should be
2.31% per annum from the date of the petition, and the federal
judgment interest statute from which that rate is derived
directs that interest be compounded annually.1 The date of
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interest now. Moreover, the proposed orders Stancil submitted
could be read as barring later assertion by the tenants of
postpetition interest if the proposed orders were signed. The
court will thus award postpetition interest.
3
the petition was October 30, 2001, and interest is compounded
annually. To June 20, 2006 (the court’s estimate of the date
on which the trustee will make payment), each tenant’s claim
will have grown by 11.18075%. This is shown by the following
multiples by which interest increased each claim:
10/30/2001 to 10/30/2002: 1.0231
10/30/2001 to 10/30/2003: 1.0467336 = 1.0231 x 1.0231
10/30/2001 to 10/30/2004: 1.0709131 = 1.0231 x 1.0467336
10/30/2001 to 10/30/2005: 1.0956511 = 1.0231 x 1.0709131
10/30/2001 to 06/20/2006: 1.1118075 =
1.0956511 x [1 + (.0231 x 233
days/365 days per year)]
Interest after June 20, 2006, will accrue on the amount owed
(exclusive of postpetition costs) on June 20, 2006, at
.00623679% per day, a factor of .0000623679 per day = [1/365 x
{(1.0956511/1.1118075 = .9854683) x .0231 = .0227643}].
Because the Tenants Association’s interest computation in the
order fixing the amount of its claim was to a much earlier
date, the court’s order will additionally use 11.18075% as the
interest to be awarded from the petition date to June 20,
2006, in the case of the Tenants Association’s award as well.
However, the Tenants Association limited its request for
postpetition interest to the $24,066.00 of attorney’s fees
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incurred prepetition, and the 11.18075% figure (and any per
diem award) will be computed with $24,066.00 as the amount
upon which interest is to be accrued.
4. With respect to the postpetition bills of costs
awarded against Stancil (and that he wants the trustee to use
estate funds to pay), no interest would ordinarily be awarded.
Although the costs are being paid from the estate, the payment
from the estate is being done on the basis that Stancil
benefitted the estate by contesting the objections to claims
and so the expense is an administrative expense that the
estate ought to shoulder, or, alternatively, on the basis that
there will be a surplus and Stancil prefers for the trustee to
make the payment of the costs directly. Under either of those
two bases for ordering the trustee to make payment, interest
ought not be paid to the recipients of the payments of costs.
An order follows consistent with the foregoing.
[Signed and dated above.]
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Copies to:
Edward M. Kimmel
[Counsel for Debtor]
Joshua R. Taylor
[Co-Counsel for the Tenants]
Charles A. Malloy
[Co-Counsel for the Association]
Daniel A. Katz
[Co-Counsel for the Association]
Adrienne DerVartanian
Julie L. Becker
Jennifer L. Berger
[Co-Counsel for the Tenants]
Wendell W. Webster
[Chapter 7 Trustee]
Office of the United States Trustee
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