Gregory Allen Moore

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
WILSON DIVISION
IN RE:
GREGORY ALLEN MOORE,
DEBTOR.
CASE NO. 05-09201-8-RDD
Chapter 13
ORDER
This matter came before the court on Steven Ira Cohen’s (“Cohen”) motion requesting
payment of administrative expenses. A hearing took place in Raleigh, North Carolina, on
January 28, 2010. Pursuant to the oral ruling at the hearing, the parties had 10 days to file
memoranda regarding this issue; however, none were filed.
BACKGROUND
In October 2001, the debtor and Cohen entered into an agreement whereby the debtor
purchased a chiropractic business from Cohen. The purchase price for the business assets was
$450,000.00, which was evidenced by a promissory note and security agreement. On April 1,
2002, the same parties entered into a lease agreement for the rental of office space at a rate of
$3,100.00 a month. Ultimately, the debtor defaulted under both the promissory note and the
lease agreement. On May 20, 2005, Cohen initiated an action in Superior Court of Pitt County
SO ORDERED.
SIGNED this 03 day of March, 2010.
________________________________________
J. Rich Leonard
United States Bankruptcy Judge
____________________________________________________________
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for recovery of damages. When the complaint was filed, Cohen was represented by counsel,
Larry Economos. However, on October 7, 2005, Economos withdrew as counsel. At that time,
Cohen began representing his interest pro se. On October 13, 2005, the debtor filed for relief
under chapter 13 of the Bankruptcy Code. The debtor was not served with the order allowing
Economos to withdraw until October 14, 2005.
Beginning in March 2005 and continuing until approximately May 2007, Cohen was
incarcerated under charges of mail fraud at the Federal Correctional Institution in Petersburg,
Virginia. Prior to incarceration, Cohen executed a power of attorney naming Linda Leggett his
legal representative. Pursuant to the power of attorney, Leggett was authorized to deal with
Cohen’s ongoing financial affairs and property management, including the office space rented by
the debtor. On February 7, 2006, the debtor’s chapter 13 plan was confirmed and the plan
assumed the unexpired lease of the office space. In summer of 2005 and again in October 2005,
the debtor personally notified Leggett of the bankruptcy. This court previously held that Leggett
received reasonable notice from the debtor regarding the bankruptcy. As Cohen’s attorney-in-
fact, Leggett’s knowledge is imputed to Cohen.
On September 20, 2009, Cohen filed a motion requesting relief from the automatic stay
asserting, inter alia, that the debtor owes $15,000 in past due rent at the time of filing the
petition. Pursuant to the order filed on January 12, 2010, the motion was denied. However,
consistent with the oral ruling at the hearing, this court granted Cohen 20 days from the date of
the hearing to file an administrative claim for any amount of the assumed lease which has not
been paid into the confirmed plan.
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DISCUSSION
Pursuant to the Bankruptcy Code, an estate may assume an unexpired lease entered into
by the debtor. 11 U.S.C. § 365(a). However, an assumption requires the cure of any pre-petition
defaults and adequate assurance of future performance. 11 U.S.C. § 365(b)(1). The obligations
incurred by the assumption of a lease are administrative expenses. NLRB v. Bildisco &
Bildisco, 465 U.S. 513, 531-32 (1984). “An entity may timely file a request for payment of an
administrative expense, or may tardily file such request if permitted by the court for cause.” 11
U.S.C. § 503(a). Neither the Bankruptcy Code nor the Bankruptcy Rules set forth a deadline for
filing administrative expense claims. In re Guillebeaux, 361 B.R. 87, 91 (Bankr. M.D.N.C.
2007). As a result, bankruptcy courts may exercise their discretion in setting administrative
claim bar dates according to the circumstances of the case. Id.; See also In re Southern Soya
Corp., 251 B.R. 302, 311 (Bankr. D.S.C. 2000).
At hearing, the debtor testified that the lease was current prior to filing the petition
because he sent a check of approximately $12,000 for past due rent to Economos. Leggett
testified that the debtor owed $14,700 in past due rent prior to filing the petition according to her
payment history record. However, the critical fact is the substantial delay in filing a claim for
pre-petition past due rent.
Leggett had notice of the debtor’s bankruptcy petition, which listed Cohen as a creditor.
The debtor’s confirmed plan assumed the unexpired lease, but made no provision for cure of any
pre-petition arrearage. The debtor continued to occupy the office space, and Leggett had the full
authority to file a claim on Cohen’s behalf. Yet, neither Cohen nor Leggett asserted any pre-
petition default under the lease until September 25, 2009, nearly four years after the debtor filed
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the petition. The administrative claim is untimely and Cohen failed to demonstrate cause for the
delay. As a result, the administrative claim for pre-petition past due rent is barred.
To the extent that there is any post-petition arrearage, this obligation clearly arose under
the confirmed plan. The debtor must promptly pay into the plan an amount sufficient to satisfy
this obligation. Counsel are directed to attempt to agree on this amount within ten days of this
order, failing which the court will resolve the matter.
CONCLUSION
Based on the foregoing, the motion for payment of pre-petition arrearages under the lease
is DENIED. The motion for payment of post-petition lease obligations is ALLOWED.
“END OF DOCUMENT”
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