K. Lounge LLC

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
K. LOUNGE LLC,
Debtor.
)
)
)
)
)
Case No. 05-01041
(Chapter 7)
DECISION RE DISMISSING OMNIBUS OBJECTION TO CLAIMS
After this case was converted from chapter 11 to chapter 7,
the debtor filed an omnibus objection to claims. The court will
dismiss the omnibus objection for the following reasons.
The notice accompanying the objection did not give the
affected creditors notice of a 30-day opportunity to respond, and
instead gave them notice of only an 11-day opportunity to
respond.
Further, the trustee is the proper party to pursue
objections to claims in a chapter 7 case unless a refusal by the
trustee to object and other circumstances justify granting leave
to another party to object. See In re Trusted Net Media
Holdings, LLC, 334 B.R. 470, 475-76 (Bankr. N.D. Ga. 2005).
Here, the debtor has not filed the necessary motion. Moreover,
The decision below is hereby signed. Dated: March
27, 2006.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
Case 05-01041 Doc 182 Filed 03/28/06 Entered 03/28/06 15:45:13 Desc Main
Document Page 1 of 3

1 It is evident from the debtor’s own schedules that
undisputed claims in the case far exceed the value of assets in
the case. It is thus unlikely that the debtor has standing to
object to claims: it would have standing only if the disallowance
of the claims would have a direct impact on it. That the debtor
has filed a notice of appeal from the court’s order converting
this case to chapter 7 does not confer standing: unless and until
the debtor secures a reversal of that order, it is not a debtor-
in-possession with standing to object to claims.
2
the debtor has not demonstrated that it has standing to object to
claims even were the trustee to refuse to object to the claims.1
See Trusted Net Media Holdings, LLC, 334 B.R. at 476 (citing
numerous decisions re lack of debtor standing to object to claims
in a chapter 7 case).
Finally, one of the objections to claims (the objection to
the claim of the Internal Revenue Service (“IRS”)) involves a
claim that the debtor objected to only on the basis that it had
been paid, but the debtor now concedes that the claim has not
been paid. Although the debtor contends that the trustee should
issue funds to the IRS that the debtor attempted to disburse to
the IRS, that is not the proper subject of an objection to claim.
If the debtor has standing and grounds to request the court to
compel the trustee to make such a payment to the IRS, the debtor
ought to pursue such relief via a motion to compel, not by way of
continued litigation of the objection to claim.
An order follows.
[Signed and dated above.]
Case 05-01041 Doc 182 Filed 03/28/06 Entered 03/28/06 15:45:13 Desc Main
Document Page 2 of 3

3	O:\JUDGTEMP\K Lounge Decsn re Dismissing Objection to Claims.wpd
Copies to: Debtor’s attorney; Daniel M. Litt, Esq.; Nancy L.
Alper, Assistant Attorney General; Darrell W. Clark, Esq.; Jack
E. Strausman, Esq.; Barry A. Haberman, Esq.; Office of U.S.
Trustee.
Case 05-01041 Doc 182 Filed 03/28/06 Entered 03/28/06 15:45:13 Desc Main
Document Page 3 of 3