Michael James Luther

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Baltimore
In Re: 	*
MICHAEL JAMES LUTHER 	* 	Case No. 	06-16303DK
* 	Chapter 	7
*
*
Debtor(s) 	*
MEMORANDUM OF DECISIONS
Related to this Court’s Order Converting Case from Chapter 11 to a Case Under Chapter 7,
entered on January 23, 2007 (paper no. 188) (hereinafter “Order Converting Case”), the Debtor has
filed the following pleadings. On March 12, 2007, the Debtor, Michael James Luther, pro-se, filed,
inter alia, a Motion for Leave to Appeal (paper no. 250), and a Motion Seeking Retroactive
Extension of Time to File Notice of Appeal (paper no. 249). Also on March 12, 2007, the Debtor
filed a Notice of Appeal containing a hand-written date in the body thereof of March 12, 2007 (paper
no. 251), a Notice of Appeal containing a hand-written date in the body thereof of January 29, 2007
(paper no. 252), an Appeal Information Report (paper no. 253), and an Application for Waiver of
Filing Fee for Notice to Appeal (paper no. 254). The text of the two Notices of Appeal (paper nos.
251 and 252), both filed on March 12, 2007, are identical except for the hand-written dates
contained therein. Previously, the Debtor filed a Motion to Stay Pending Appeal (titled “Amended
Motion for Stay Pending Appeal”) on February 26, 2007 (paper no. 228) and an Application for
Date signed March 22, 2007
Entered: March 22, 2007 Case 06-16303 Doc 266 Filed 03/22/07 Page 1 of 11

1 During various hearings during this case in response to questions from the court seeking
illumination on the matters submitted by Debtor, Debtor has been observed reading from
pleadings which he has filed, in a manner that would appear to indicate that he was not the drafter
of such documents.
2
Waiver of Filing Fee for Notice to Appeal (paper no. 229).
On March 15, 2007, the United States Trustee filed an omnibus Opposition to the Motion to
Stay Pending Appeal (paper no. 228), Motion for Leave to Appeal (paper no. 250), Motion Seeking
Retroactive Extension of Time to File Notice of Appeal (paper no. 249), as well as the two Notices
of Appeal (paper nos. 251 and 252). For the reasons set forth in this Memorandum of Decisions,
this court will enter orders denying the Motion Seeking Retroactive Extension of Time to File Notice
of Appeal (paper no. 249), the Motion for Stay Pending Appeal (paper no. 228) and the Applications
to Waive Filing Fees (paper nos. 229 and 254). In addition, this court will transmit to the United
States District Court for the District of Maryland the two Notices of Appeal (paper nos. 251 and
252) along with any record designated by the parties in accordance with Federal Rule of Bankruptcy
Procedure 8007(b), the Motion for Leave to Appeal (paper no. 250), the Omnibus Opposition of the
United States Trustee, and a Report and Recommendation recommending that the Motion for Leave
to Appeal and Notices of Appeal be dismissed.
As recited by the Omnibus Opposition of the United States Trustee, this case was
commenced by the filing of a voluntary petition under Chapter 11 by the Debtor on October 11,
2006. Also as recited by the Omnibus Opposition, the Debtor has filed numerous pleadings in the
case. Many of these pleadings have contained confusing legal jargon that may amalgamate parts of
different legal actions into one document. This court cannot tell whether this method of proceeding
results from Debtor’s inexperience, or whether Debtor is advised and provided documents for filing
by an undisclosed person giving ill founded advice and misinformation. 1 Because of the numerous
Case 06-16303 Doc 266 Filed 03/22/07 Page 2 of 11

2 It appears Mr. Joseph’s employment was sought in conjunction with an appeal by the
Debtor of a pre-petition securities fraud judgment entered against the Debtor in the Circuit Court
for Carroll County.
3
documents filed by Debtor and previous appeals on matters unrelated to the subject of the Notices of
Appeal filed on March 12, 2007, a chronological recitation as to certain filings and events is
necessary.
After filing this case on October 11, 2006, on October 26, 2006 the Debtor filed a document
entitled Reaffirmation Agreement (paper no. 20). In fact, the document filed did not seek to reaffirm
a pre-petition obligation of the Debtor in accordance with 11 U.S.C. § 524(c) but rather sought to
employ post-petition an attorney named Joel Joseph without compliance with 11 U.S.C. § 327. 2
A Status Conference was held on November 21, 2006 in the Chapter 11 case, as well as a
hearing upon the “Reaffirmation Agreement.” For the reasons set forth on the record, the court
denied the Reaffirmation Agreement and determined that a deadline should be set for the filing of any
plan or disclosure statement by the Debtor in the case. An Order Denying the Reaffirmation
Agreement was entered on November 22, 2006 and no further document attempting to gain court
approval of any counsel for Mr. Luther as a debtor-in-possession in the Chapter 11 case (as required
by 11 U.S.C. § 327), has been filed in this case thereafter. Also, on November 28, 2006 an order
was entered setting a deadline of February 8, 2007 for filing a Plan and Disclosure Statement (paper
no. 84). Neither order has been the subject of any appeal.
On November 29, 2006, the debtor filed a document entitled Chapter 11 Plan of
Reorganization (paper no. 92) but no Disclosure Statement. After review of the Plan, the court
determined that the Plan was both insufficient as a substitute for a Disclosure Statement and as a
Case 06-16303 Doc 266 Filed 03/22/07 Page 3 of 11

3 The Chapter 11 bankruptcy case of Mr. Luther is a small business case as defined by 11
U.S.C. § 101(51)(D) and as indicated by Mr. Luther on his petition instituting the bankruptcy
case. Accordingly, pursuant to 11 U.S.C. § 1125(f), as amended by the Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005, in a small business case the court may permit a
plan to also be the disclosure statement if the plan contains sufficient information as required by
11 U.S.C. § 1125. Further, the plan filed in a small business case must be confirmed within 90
days of the date of filing of the plan, unless extended upon compliance with the requirements of
11 U.S.C. § 1121(e)(3). 11 U.S.C. §1129(e).
4 A separate Order was entered denying the creditor’s Motion to Appoint a Chapter 11
Trustee and Examiner (paper no. 189).
4
matter of law could not be confirmed as a plan of reorganization in Chapter 11. 3 Accordingly, the
court sua sponte scheduled a hearing to determine whether or not the time within which a
confirmation is permitted to occur should be extended as provided for in 11 U.S.C. §§ 1129(e) and
1121(e)(3).
At the hearing held on January 11, 2007 to determine whether there should be an extension
for the time allowed to the debtor to confirm a Chapter 11 Plan, the debtor failed to appear and also
failed to file any documents in support of such an extension. As a consequence and as required by 11
U.S.C. § 1121(e)(3), no evidence meeting the preponderance standard having been submitted, the
court entered an Order denying extension of confirmation deadline (paper no. 159). The court also
entered an Order to Show Cause as to why the case should not be dismissed or converted to a case
under Chapter 7 (paper no. 168). Meanwhile on December 29, 2006, Creditor, Branch Banking and
Trust Company filed a Motion to Appoint a Chapter 11 Trustee or Examiner in the case. The
creditor’s motion and the order to show cause were set to be heard on January 22, 2007.
On January 22, 2007, the hearing was conducted upon the Order to Show Cause as to why
the case should not be dismissed or converted and the creditor’s Motion to appoint a Trustee. The
debtor did not respond to the Order to Show Cause and did not appear at the hearing thereupon.
For the reasons set forth on the record, the court entered the Order Converting Case. 4
Case 06-16303 Doc 266 Filed 03/22/07 Page 4 of 11

5 Those appeals are now pending before the United States District Court for the District
of Maryland and are the subject of reports and recommendations from this court recommending
dismissal thereof for lack of subject matter jurisdiction due to the fact that the Notices of Appeal
were filed after expiration of the required deadline for such appeals.
5
Prior to the entry of the Order Converting Case, the debtor noticed two appeals to the United
States District Court for the District of Maryland, (paper nos. 176 and 179). These Notices of
Appeal were as to orders denying motions to avoid liens held by Daimler Chrysler Financial Services
America LLC and Branch Banking and Trust Company, respectively. 5
Although the Debtor filed several pleadings subsequent to the entry of the Order Converting
Case, including motions to stay the orders denying motions to avoid lien, no document addressing
the Order Converting Case was filed of record until the filing by the Debtor on February 26, 2007 of
a Motion to Stay Pending Appeal (paper no. 228), and an Application for Waiver of the Filing Fee
for Notice to Appeal (paper no. 229). Paragraph 8 of the Motion for Stay Pending Appeal states:
“Appellant Appeals the ‘ Order Converting Case from Chapter 11 to a Case Under Chapter 7, SUA
SPONTE’ entered in the United States Bankruptcy Court for the District of Maryland in Baltimore
City on January 23, 2007.” However, the “WHEREFORE” clause requests the court to:
“a. enter an order of stay; and
b. grant further relief as the nature of this cause may require.”
Although the Motion for Stay Pending Appeal solely requested this court to enter an “order
of stay,” even if that document were treated as a Notice of Appeal, it was filed beyond the 10 days
within which such notice is required to be filed, and beyond 30 days from the entry of the Order
Converting Case, which is the maximum expansion of the appeal period which the court could have
granted if requested.
On March 5, 2007, a hearing was conducted to consider two Motions for Relief from Stay
Case 06-16303 Doc 266 Filed 03/22/07 Page 5 of 11

6 A foreclosure sale of the Wincopin Circle property had been conducted by mortgagee,
Wells Fargo Bank, NA, before the filing of the bankruptcy petition by the Debtor.
7 A foreclosure sale of the Jenna Drive Property was conducted before the filing of the
bankruptcy petition by creditor National City.
6
filed by Creditors Branch Banking and Trust Company and Daimler Chrysler Financial Services,
America, LLC, as well as a motion filed by the Debtor to sell property known as 10205 Wincopin
Circle, Unit No. 3036 and a Motion to Avoid Lien as to property known as 7293 Jenna Drive. 7
During that hearing, the Debtor argued that this case should not be in Chapter 7 and asserted that he
had appealed the Order Converting Case. Upon being informed by the court that no such Notice of
Appeal was filed in the docket, the Debtor exhibited to the court drafts of a Notice of Appeal,
Motion to Extend Time to Appeal Retroactively, and a draft order extending time to file Notice of
Appeal. These documents contained blanks which were not filled in and were not signed and
contained no indicia of filing. The Debtor stated that he had “copied them, filled them in” and filed
them. For the reasons stated on the record at the hearing of March 5, 2007, the court denied
Debtor’s motions to sell property known as 10205 Wincopin Circle and 7293 Jenna Drive, granted
the Motion for Relief from Stay filed by Branch Banking and Trust Company as to the Hummer H2
vehicle, and continued the hearing upon the Motion for Relief from Stay filed by Daimler Chrysler
Financial Services, America LLC as to the Mercedes Benz vehicle.
On March 12, 2007, a hearing was held upon a pending motion by Wells Fargo Bank,
seeking relief from stay to allow the state court to adjudicate a pending objection to ratification of
the foreclosure sale upon the property known as 10205 Wincopin Circle and a Motion to Stay
Pending Appeal as to an appeal by the debtor of the Order Denying Debtor’s Motion to Avoid Lien
of Branch Banking and Trust Company. The Debtor’s Motion to Stay Pending Appeal of the Order
Denying Motion to Avoid Lien was withdrawn by the Debtor on the record. The Motion for Relief
Case 06-16303 Doc 266 Filed 03/22/07 Page 6 of 11

7
from Stay by Wells Fargo as to the Wincopin Circle property was granted to allow the determination
by the state court of the disputed ratification.
On March 12, 2007, as recited at the beginning of this Memorandum of Decision, the Debtor
filed numerous pleadings concerning an appeal to the United States District Court of the Order
Converting Case. All of these pleadings are opposed by the Omnibus Opposition filed by the United
States Trustee (paper no. 256). As to the Motion for Leave to Appeal (paper no. 250), such motion
must be decided by the United States District Court. The Clerk of the United States Bankruptcy
Court will transmit that motion, the United States Trustee’s Omnibus Opposition, and this
Memorandum of Decision to the United States District Court for its determination. This court
observes, that the United States Trustee’s Opposition argues that leave to appeal an order converting
a case from Chapter 11 to a Chapter 7 is required as such order is assertedly an interlocutory order.
The United States Trustee further argues that leave should be denied as the motion is untimely.
However, it appears that the United States Court of Appeals for the Fourth Circuit has found that a
conversion order is immediately appealable without the requirement of gaining leave. See, In re
Fraidin, 110 F. 3d. 59 (4 th Cir. 1997) (unpublished decision).
As to the Motion Seeking Retroactive Extension of Time to File Notice of Appeal, (paper no.
249), the Debtor asserts that he mailed a copy of a Notice of Appeal to the United States District
Court within 10 days of the entry of the Order converting this case to Chapter 7. The Debtor then
states “Debtor appeals the exclusivity order dated February 7, 2007 - converting the case to Chapter
7 on January 22, 2007.” (The court notes that no Order was entered on February 7, 2007,
concerning exclusivity or any other matter in this case). The Debtor’s Motion Seeking Retroactive
Extension further states that he filed a Notice of Appeal and Certificate of Appeal on February 22,
2007, in person, but the notice was not entered by the court. The debtor finally alleges that he filed a
Case 06-16303 Doc 266 Filed 03/22/07 Page 7 of 11

8
Motion Seeking Retroactive Extension of Time to File Notice of Appeal on February 23, 2007 with
one amendment, including a proposed Order on February 26, 2007.
There is no record of any filing of a Notice of Appeal within 10 days of the entry of the Order
converting the case to a case under Chapter 7. Nor is there any record of any filing of a Notice of
Appeal and “certificate of appeal” on February 22, 2007. Furthermore, the Debtor does not assert
that he filed a notice of appeal within 10 days of the entry of the Order Converting Case. The
Debtor (by unsworn statement) simply avers that he “mailed” one “copy” of such a Notice of Appeal
within the 10 day period. As to the filings alleged to have occurred on February 22, 2007, there is
no record of any filing of any document on that date. Even if such documents had been filed on that
date, the Notice of Appeal would not have perfected an appeal of the Order Converting Case,
entered January 23, 2007, as it would have been filed substantially after the mandatory deadline to
confer jurisdiction on the appellate court. See Federal Rule of Bankruptcy Procedure 8002. Finally,
as to Debtor’s assertions that he filed a Motion Seeking Retroactive Extension of Time to File
Notice of Appeal on February 23, 2007, again there is no record of any filing on that date of any
pleading. Even if such a motion had been filed on February 23, 2007, this court could not grant such
a retroactive extension as such extension can only be granted by this court upon a motion filed within
30 days of the date of entry of the underlying order and such extension is only for a maximum of 30
days from the date of entry of the order to be appealed. The 30th day following the date of entry of
the Order Converting Case was February 22, 2007. As to the “one amendment” allegedly filed on
February 26, 2007 as referred to in Debtor’s Motion Seeking Retroactive Extension of Time to File
Notice of Appeal (paper no. 249), two documents were filed by the Debtor on February 26, 2007.
Neither is an amendment or other document referring to retroactive extension. Paper no. 229, filed
February 26, 2007 is an Application for Waiver of Filing Fee for Notice of Appeal and paper no. 228
Case 06-16303 Doc 266 Filed 03/22/07 Page 8 of 11

9
(filed the same date) is a Motion to Stay Pending Appeal.
Filed with this Memorandum of Decision is an Affidavit by Kenneth D. Ridgeway II, Acting
Division Manager of the United States Bankruptcy Court for the District of Maryland, Baltimore
Division. As stated in that Affidavit, the Court Clerk has instituted a diligent and exhaustive search
of the Clerk’s Office which has revealed there is no record or recollection of any appeal, motion for
leave to appeal, or motion seeking extension of time to file an appeal, being filed in any manner prior
to the filings of March 12, 2007. It therefore appears that there is no basis from which this court can
conclude that there was a timely perfection of an appeal of the Order Converting Case. However,
this court will defer to the United States District Court for the District of Maryland as dismissal of
the appeal and will report and recommend to the United States District Court that the appeal noticed
by the notices filed on March 12, 2007 (and allegedly noticed by prior filings) be dismissed as
untimely.
This court denies the Motion Seeking Retroactive Extension of Time to File Notice of
Appeal, which Motion was filed on March 12, 2007 (paper no. 249) as being filed out-of-time and
stating insufficient basis. This court has no authority to grant a retroactive extension of the time to
file a Notice of Appeal beyond the 30th day after the entry of Order from which the appeal would be
taken. This court finds no credible evidence that any prior motion seeking extension or a prior filing
of a Notice of Appeal was filed by the Debtor, for the reasons stated hereinabove.
As to the Applications for Waiver of Filing Fees for Notice to Appeal filed on February 25,
2007 (paper no. 229) and re-filed on March 12, 2007 (paper no. 254), this court finds no basis to
grant such applications where it appears no appeal was perfected. These applications will therefore
be denied.
As to the Motion to Stay Pending Appeal filed on February 26, 2007, this court considers
Case 06-16303 Doc 266 Filed 03/22/07 Page 9 of 11

10
such Motion under the standards enumerated in Blackwelder Furniture Co. v. Seilig Mfg. Co., Inc.,
550 F2d 189 (4 th Cir. 1977) and Long v. Robinson, 432 F. 2d 977, 979 (4 th Cir. 1970). Pursuant to
these authorities, this court is to consider whether granting a stay of the Order Converting the Case
would cause irreparable harm to the respondent/appellee, or to the contrary whether denying such
motion would cause irreparable harm to the movant, appellant. Because the Debtor has failed to
confirm a Chapter 11 plan in his small business case within the time permitted by statute, staying the
conversion of this case to Chapter 7 would simply leave the case in a useless hiatus while creditors
remained prejudiced by the automatic stay protecting the Debtor. This would expose creditors to the
risk that the Debtor, remaining in possession under a Chapter 11 case, would dissipate assets,
particularly as the Debtor in his application to waive filing fee for appeal, continues to assert that he
has no income from which to pay the filing fee. Therefore, it is a reasonable conclusion that the
Debtor could only pay living expenses during the hiatus by liquidating assets. Accordingly, the court
finds that irreparable harm may be visited upon the bankruptcy estate by a stay of the Order
Converting Case to a case. In addition, the court is to consider the merits of the appeal as a part of
the test for a stay pending appeal. Here, where it appears that the appeal was not timely taken, there
appears to be no merit. Even if the appeal had been timely perfected, given that the Debtor filed no
opposition to the Order to Show Cause as to why the case should not be converted and failed to
appear at the hearing thereupon and provide any basis for why the case should continue in a Chapter
11 after the expiration of the time within which the Debtor was required to confirm a plan, this court
concludes that the Debtor’s appeal is without substantive merit of any kind. Upon this finding the
court will enter an Order denying the Motion for Stay Pending Appeal.
Finally as to the Notices of Appeal, the Notices of Appeal filed on February 12, 2007, will be
processed in accordance with the Federal Rules of Bankruptcy Procedure and transmitted to the
Case 06-16303 Doc 266 Filed 03/22/07 Page 10 of 11

11
United States District Court for the District of Maryland at the conclusion of the time within which
the parties may designate record. By a Report and Recommendation, this court will require that as a
part of such record, a copy of this Memorandum of Decision and a Report and Recommendation
recommending dismissal of the appeal be part of the record transmitted to the United States District
Court.
cc: 	Debtor(s)
Debtor(s)’ Counsel
Trustee
U.S. Trustee
All Other Parties-In-Interest
End of Order
Case 06-16303 Doc 266 Filed 03/22/07 Page 11 of 11