Eugenie M. Broussard

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 07-41711 T
Chapter 11
EUGENIE BROUSSARD,
Debtor-in-Possession.
_______________________________/
MEMORANDUM AND ORDER DENYING MOTION FOR RECONSIDERATION
Debtor 	Eugenie 	Broussard 	moves 	for 	reconsideration 	of 	the
Court’s order directing the appointment of a chapter 11 trustee. 	For
the reasons set forth below, the motion will be denied.
The above-captioned chapter 11 case was filed on June 6, 2007.
A status conference was conducted on August 6, 2007. 	At the status
conference, debtor’s counsel informed the Court that the debtor had
real 	property 	for 	sale 	in 	Wyoming 	and 	that, 	when 	the 	sale 	was
expected to generate sufficient cash to bring the debtor current on
her 	home 	mortgage. 	On 	that 	basis, 	she 	requested 	and 	obtained 	a
continuance 	of 	the 	status 	conference 	to 	October 	1, 	2007 	with 	no
deadline set for filing a plan and disclosure statement.
On 	September 	24, 	2007, 	the 	debtor 	filed 	a 	status 	conference
statement. 	The 	statement 	revealed 	that 	the 	debtor 	owed 	unsecured
Signed: March 10, 2008
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
March 10, 2008
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 07-41711 Doc# 71 Filed: 03/10/08 Entered: 03/10/08 14:47:25 Page 1 of 7

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
2
creditors approximately $57,000. 	It also represented that the debtor
had 	obtained 	a 	refinance 	on 	her 	home 	mortgage 	but 	that 	the 	lender
required 	the 	bankruptcy 	case 	to 	be 	dismissed. 	Consequently, 	the
debtor 	represented 	that 	she 	intended 	to 	move 	to 	dismiss 	the 	case.
The 	debtor 	represented 	that 	she 	had 	not 	yet 	received 	any 	offer 	to
purchase 	the 	Wyoming 	real 	property. 	The 	same 	information 	was
presented to the Court at the continued status conference. 	Based on
these 	representations, 	the 	debtor 	was 	given 	a 	hearing 	date 	of
November 5, 2007 for the motion to dismiss, and the status conference
was continued to this date as well.
No motion to dismiss was filed. 	On October 31, 2007, the debtor
filed a status conference statement, representing that the original
refinancing had fallen through but stating that the debtor now had a
new 	refinancing 	in 	progress. 	It 	represented 	that 	the 	debtor 	still
had no offer to purchase the Wyoming real property. 	The debtor asked
that 	the 	status 	conference 	be 	continued 	for 	45 	days 	and 	no 	plan
deadline be set. 	The debtor continued to represent that she intended
to dismiss her case as soon as the refinance on her home mortgage was
completed. 	The 	same 	information 	was 	communicated 	at 	the 	status
conference on November 5, 2007. 	Due to the length of time that had
passed during the chapter 11 and the information that the debtor had
substantial unsecured debt, the Court declined to grant the request
this 	time. 	A 	deadline 	of 	60 	days 	was 	set 	for 	filing 	a 	plan 	and
disclosure statement.
On 	January 	4, 	2008, 	the 	debtor 	filed 	a 	plan 	and 	disclosure
statement. 	As 	directed 	by 	the 	Court, 	the 	plan 	and 	disclosure
Case: 07-41711 Doc# 71 Filed: 03/10/08 Entered: 03/10/08 14:47:25 Page 2 of 7

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
3
statement were submitted to the Court for conditional approval. 	The
Court 	found 	the 	plan 	and 	disclosure 	statement 	grossly 	deficient.
Moreover, 	after 	reviewing 	the 	plan 	and 	disclosure 	statement, 	the
Court had serious concerns about the debtor’s intentions with respect
to 	her 	unsecured 	creditors. 	As 	a 	result, 	on 	January 	16, 	2008, 	it
issued an order directing the debtor to appear on February 20, 2008
to show cause why the case should not be converted to chapter 7 or a
chapter 11 trustee appointed.
The 	reasons 	for 	its 	concerns, 	as 	set 	forth 	in 	the 	order, 	in
brief, were as follows:
The debtor proposed to sell unencumbered nonexempt real property
in Wyoming and to use the sale proceeds to cure the arrearages on her
exempt 	real 	property 	and 	to 	pay 	unsecured 	creditors 	only 	from 	any
excess or from future income. 	She failed to disclose whether there
was likely to be any excess and, if so, whether the excess would be
sufficient to pay unsecured claims in full. 	She also disclosed that
she was currently unemployed. 	Nevertheless, the disclosure statement
represented 	that 	the 	plan 	presented 	virtually 	no 	risk 	to 	unsecured
creditors.
The Court also noted the numerous deficiencies in the plan and
disclosure statement. 	For example, the plan failed to classify all
of 	the 	debtor’s 	secured 	claims, 	failed 	to 	provide 	sufficient
information concerning the two secured claims that were classified,
and failed to set forth a proposed treatment for those claims. 	The
order to show cause also noted that the disclosure statement failed
to disclose the amount of the debtor’s unsecured claims and failed to
Case: 07-41711 Doc# 71 Filed: 03/10/08 Entered: 03/10/08 14:47:25 Page 3 of 7

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
4
disclose the existence of several of her scheduled assets of value:
i.e., 	a 	car, 	a 	boat, 	and 	a 	truck. 	Of 	the 	assets 	she 	did 	disclose,
for 	example, 	her 	real 	property, 	the 	disclosure 	statement 	failed 	to
disclose its value.
On 	February 	16, 	2008, 	the 	debtor 	filed 	an 	amended 	plan 	and
disclosure 	statement. 	The 	Court 	reviewed 	the 	amended 	plan 	and
disclosure statement prior to conducting the hearing on the order to
show 	cause 	on 	February 	20, 	2008. 	Having 	concluded 	that 	the
amendments were insufficient to satisfy its concerns, that the debtor
was unable to formulate a confirmable plan, and that appointment of
a 	chapter 	11 	trustee 	was 	in 	the 	bests 	interests 	of 	the 	estate, 	the
Court issued an order to that effect. 	At the request of the debtor
and 	the 	Office 	of 	the 	United 	States 	trustee, 	the 	Court 	issued 	a
memorandum setting forth the basis for its ruling, which it had given
orally at the hearing.
In the memorandum, the Court noted that the amended disclosure
statement revealed that the debtor now had a sale of the Wyoming real
property which was expected to net $87,000. 	It represented that the
debtor 	intended 	to 	use 	the 	proceeds 	to 	cure 	the 	arrearages 	on 	her
home 	mortgage 	and 	then 	to 	dismiss 	her 	case. 	It 	revealed 	that 	the
proceeds would be insufficient to pay both her substantial arrearages
on 	her 	rental 	real 	property 	and 	her 	unsecured 	claims. 	The 	Court
thought 	it 	likely 	that 	the 	debtor 	would 	use 	the 	balance 	of 	the 	net
sale 	proceeds 	after 	bringing 	her 	home 	mortgage 	current 	to 	cure 	the
arrearages on her rental properties. 	This would leave her unsecured
creditors 	unpaid 	or 	at 	best 	with 	only 	a 	partial 	payment. 	The
Case: 07-41711 Doc# 71 Filed: 03/10/08 Entered: 03/10/08 14:47:25 Page 4 of 7

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
5
disclosure 	statement 	continued 	to 	represent 	that 	the 	debtor 	was
currently 	unemployed. 	The 	Court 	stated 	that, 	given 	the 	length 	of
time 	that 	the 	debtor 	had 	been 	in 	a 	chapter 	11 	case, 	dismissing 	the
case under these circumstances appeared inappropriate.
Moreover, the Court noted that the plan and disclosure statement
were still grossly deficient. 	The plan still did not classify all of
the 	debtor’s 	secured 	claims, 	did 	not 	contain 	a 	summary 	of 	the
debtor’s 	assets, 	and 	did 	not 	contain 	a 	liquidation 	analysis.
Numerous 	other 	deficiencies 	were 	noted. 	Based 	on 	the 	debtor’s
failure to cure even those easily cured deficiencies previously noted
by 	the 	Court, 	the 	Court 	concluded 	that 	the 	debtor 	was 	incapable 	of
proposing 	a 	confirmable 	plan. 	Therefore, 	the 	Court 	directed 	the
appointment of a chapter 11 trustee.
On February 28, 2008, the debtor moved for reconsideration. 	In
her 	motion, 	the 	debtor 	repeated 	that 	a 	sale 	of 	the 	Wyoming 	real
property is pending and that, if consummated, will provide $87,700 to
the estate. 	She also indicated that a sale is pending of the Arizona
real property. 	She then made the somewhat confusing statement that
she 	owes 	the 	United 	States 	trustee 	$975 	as 	the 	result 	of 	a 	sale 	of
her property which took place only recently. 	It is unclear to what
sale she refers. 	The Court has not approved the sale of the debtor’s
property. 	She further stated that, since it appears that there is a
shortfall of $20,000 to pay all her creditors in full, she is seeking
personal 	loans 	or 	a 	short 	term 	loan 	against 	her 	home 	to 	raise 	this
sum. 	The Court has no confidence that she will seek court approval
for 	these 	transactions. 	Finally, 	the 	debtor 	expressed 	confidence
Case: 07-41711 Doc# 71 Filed: 03/10/08 Entered: 03/10/08 14:47:25 Page 5 of 7

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
6
that 	she 	can 	amend 	her 	plan 	so 	that 	it 	is 	confirmable. 	Again, 	the
Court continues to have no confidence, based on her performance thus
far, that she can do so.
The Court finds that the motion contains an insufficient basis
for 	reconsideration. 	Moreover, 	the 	appointment 	of 	a 	chapter 	11
trustee will not preclude the debtor from amending her plan a second
time.
Based on the foregoing, it is hereby
ORDERED 	that 	the 	debtor’s 	motion 	for 	reconsideration 	of 	the
Court’s order directing the appointment of a chapter 11 trustee be,
and it hereby is, denied.
END OF DOCUMENT
Case: 07-41711 Doc# 71 Filed: 03/10/08 Entered: 03/10/08 14:47:25 Page 6 of 7

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
7
COURT SERVICE LIST
Fayedine Coulter
Law Offices of Fayedine Coulter
1425 Leimert Bl. #306
Oakland, CA 94602
Case: 07-41711 Doc# 71 Filed: 03/10/08 Entered: 03/10/08 14:47:25 Page 7 of 7