Stratesec, Inc.

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
STRATESEC, INC.,
Debtor.
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Case No. 04-00696
(Chapter 11)
Not for Publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION RE OBJECTION TO CLAIM OF AMERICAN
EXPRESS BUSINESS FINANCE FILED SEPTEMBER 13, 2004 (CLAIM NO. 44)
If a proof of claim asserting secured status is to be
entitled under Fed. R. Bankr. P. 3001(f) to being treated as
prima facie evidence of the validity of its assertion of secured
status, the proof of claim must not present a guessing game as to
the nature of the collateral securing the creditor’s claim. 	If
the creditor fails to respond to a trustee’s objection that the
proof of claim failed to identify property of the estate securing
the claim, and the proof of claim failed to identify any such
collateral, the proof of claim’s assertion of secured status must
be disallowed without the necessity of any presentation of
evidence by the trustee.
The document below is hereby signed.
Signed: November 13, 2008.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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I
This decision addresses these points in the context of the
trustee’s objection to the proof of claim of American Express
Business Finance (“AMX”), filed September 13, 2004, which failed
to identify any collateral securing its claim. 	The trustee
objected to AMX’s proof of claim, only to the extent that it
claimed secured status. 	The creditor has failed timely to
respond to the objection to its claim. 	Nor has it filed an
amended proof of claim that identifies any collateral securing
its claim.
AMX’s proof of claim failed to identify the collateral
securing the claim. 	The trustee objects to AMX’s proof of claim
on the basis that there is no property of the estate securing the
claim, namely, “because the collateral claimed as security for
the Claim was not administered as part of the estate, and
therefore, the [Claim] is not a secured claim.”
The Official Form for a proof of claim in force on the date
that AMX filed its proof of claim provided “Check this box if
your claim is secured by collateral (including a right of
setoff),” and the box relating thereto was checked on the proof
of claim at issue. 	The Official Form then called for a “Brief
Description of Collateral” with optional boxes that could be
checked to describe the collateral, the boxes being for “Real
Estate,” “Motor Vehicle,” and “Other” with a space beside “Other”
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1 	That the Official Form requires the collateral to be
described has been made even clearer by the Official Form now in
force which provides that the creditor is to “provide the
requested information” and calls for the creditor to “[d]escribe”
the property or right of setoff. 	The Official Form that AMX
utilized must similarly be viewed as having required that a proof
of a secured claim briefly describe the collateral securing the
claim.
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for describing such other type of collateral. 	All of the boxes
were left unchecked on AMX’s proof of claim, and other parties in
interest are thus in the dark as to what property of the estate
it is that AMX claims serves as collateral for its allegedly
secured claim.
II
Under Fed. R. Bankr. P. 3001(a), a proof of claim must
“conform substantially to the appropriate Official Form.”
Although AMX utilized the Official Form in filing its proof of
claim, the proof of claim did not conform to the Official Form
when it failed as contemplated by the Official Form to briefly
describe the collateral securing AMX’s claim, and thus the proof
of claim was not executed in accordance with Rule 3001(a). 1 	The
mandate of Rule 3001(a)that “[a] proof of claim shall conform
substantially to the appropriate Official Form” required that AMX
briefly describe the collateral that secures its claim in the
space set forth in the Official Form for so describing the
collateral. 	Otherwise the proof of claim presents no starting
point for the trustee to investigate whether the asserted secured
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2 	The proof of claim may additionally have not been
executed in accordance with Rules 3001(c) and 3001(d):
• 	Rule 3001(c) provides that “[w]hen . . . an interest in
property of the debtor securing the claim . . . is
based on a writing, the original or a duplicate shall
be filed with the proof of claim” unless the proof of
claim includes a statement that the writing was lost or
destroyed. 	No such writing or statement was filed with
AMX’s proof of claim.
• 	Finally, if the basis for AMX’s asserting a secured
claim was a security interest, AMX’s proof of claim
further failed to attach evidence of perfection of the
security interest as required by Rule 3001(d).
Theoretically, AMX could have a secured claim (for example, a
right of setoff or a lien arising by statute) that was based on
neither a writing nor a security interest. 	But without the
collateral having been identified (for example, an identification
of a right of setoff against an obligation owed by the creditor
to the debtor), AMX’s proof of claim provided the trustee no
starting point for deciding whether he could demonstrate a
failure to comply with Rule 3001(c) or 3001(d) such as to utilize
failure to comply with those provisions as a basis for depriving
the claim of the evidentiary effect under Rule 3001(f) of a claim
executed in accordance with Rule 3001.
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status actually exists or whether the secured status was properly
perfected, and whether the proof of claim complies with the
requirements of Fed. R. Bankr. P. 3001(c) and 3001(d). 2
Moreover, if a proof of claim that fails even briefly to
describe the collateral securing the claim were treated as being
in conformance with the Official Form, the proof of claim would
be treated under Rule 3001(f) as prima facie evidence of the
validity of the proof of claim’s assertion of secured status.
That would put the trustee to the burden of proving a negative,
namely, that none of the myriad items that are property of the
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estate is subject to a lien or right of setoff in favor of the
creditor such as to give rise to an allowed secured claim under
11 U.S.C. § 506(a). 	The rulemakers did not likely intend such a
perverse result. 	Accordingly, I interpret the mandate of Rule
3001(a) that ““[a] proof of claim shall conform substantially to
the appropriate Official Form” as requiring that when a
description of collateral is elicited on the form, the proof of
claim does not conform with the Official Form if it neglects to
describe the collateral that gives rise to the assertion that the
claim is secured. 	The proof of claim here cannot be viewed as
filed in accordance with Rule 3001(a).
III
Having failed, insofar as its assertion of secured status
is concerned, to conform to the Official Form as required by Fed.
R. Bankr. P. 3001(a), the proof of claim is not entitled to be
treated as prima facie evidence of its validity under Fed. R.
Bankr. P. 3001(f) with respect to the assertion of secured
status. 	Thus, the objection to the creditor's proof of claim
will be sustained without the necessity of any evidentiary
showing by the trustee, and the claim will be allowed as a
general unsecured claim not entitled to any priority over other
unsecured claims.
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IV
Rule 3007 provides that when an objection to a claim is
joined with a demand for relief of the kind specified in Rule
7001, it becomes an adversary proceeding, and that Rule 7001
requires that the determination of the validity or extent of a
lien or other interest in property must be commenced as an
adversary proceeding. 	The trustee’s objection to the proof of
claim here, however, is not a request to determine the validity
or extent of a lien or other interest in property. 	Instead, it
is an objection to the proof of claim on the basis that no
collateral that is property of the estate has been identified,
and thus that the creditor is not entitled to any distribution
out of property of the estate (other than a distribution to it as
the holder of an unsecured claim). 	The trustee could hardly be
expected to file an adversary proceeding to determine the
validity or extent of a lien or other interest in property when
the creditor has failed to identify any such property of the
estate that is subject to a lien or other interest. 	No adversary
proceeding was required to disallow the asserted secured status
of the proof of claim in this case.
V
An order follows.
[Signed and dated above.]
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7	O:\TEEL\Judge Temp Docs\Stratesec Memorandum Decision re Objn to AMXBF Claim - No. 44v2.wpd
Copies to:
Katherine Sutcliffe Becker, Esq.
Office of U.S. Trustee
Amex BF
c/o R. Prebah Covetz
800 Traivs Street, Suite 1400
Houston, TX 77002
American Express Business Finance
c/o Kenneth I. Chenault
Chairman and Chief Executive Officer
200 Vesey Street
New York, NY 10285
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