Ronald Newell Day and Laura Barton Day

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEIGH DIVISION
IN RE:
RONALD NEWELL DAY and
LAURA BARTON DAY,
DEBTORS.
CASE NO.
09-01418-8-JRL
Chapter 12
ORDER
This case is before the court on the debtors’ motion for modification of their confirmed
chapter 12 plan, the United States Attorney’s motion to declare the automatic stay terminated,
and the trustee’s motion to dismiss the case. On February 11, 2010, the court conducted a
hearing on these matters in Raleigh, North Carolina.
The debtors filed a voluntary petition for relief under chapter 12 of the Bankruptcy Code
on February 23, 2009. An order confirming the debtors’ chapter 12 plan was entered on August
28, 2009. Among the creditors dealt with by the plan is the United States of America,
Department of Agriculture, Farm Service Agency (“FSA”), with a claim of $968,314.53 secured
by liens on the debtors’ real property and on the debtors’ farm machinery and equipment. Under
the confirmed plan, the debtors must tender annual payments of $62,479.00 and $11,277.00 for
the benefit of FSA by December 15 of each year, subject to a 30-day grace period. If the debtors
fail to meet these obligations, the plan provides that the automatic stay will terminate as to FSA
SO ORDERED.
SIGNED this 03 day of March, 2010.
________________________________________
J. Rich Leonard
United States Bankruptcy Judge
____________________________________________________________
Case 09-01418-8-JRL Doc 80 Filed 03/03/10 Entered 03/03/10 16:13:34 Page 1 of 3

1 Under the terms of the plan, the debtors are obligated to make annual payments to the
IRS in the amounts of $4,112.57 and $6,977.40. The IRS objects to the debtors’ proposed
deferment of payment.
2
without further court action.
It is undisputed that the debtors have not met their obligations to FSA under the terms of
the confirmed plan. Although the debtors have made their best efforts to produce the funds and
were able to remit $20,630.05 to the chapter 12 trustee on December 29, 2009, they are woefully
behind in their payment obligations. Acknowledging the delinquency, the debtors ask the court
to modify their chapter 12 plan by deferring payments due to FSA and to the Internal Revenue
Service (“IRS”) for one year.1 In support of their motion, the debtors assert that a severe drought
decreased the yield of their 2009 soy bean harvest by approximately 85 percent. FSA objects to
the debtors’ proposed modifications on the grounds that no disaster declaration for drought or
any other disaster has been made for the county in which the debtors’ farm is located and asks
the court to declare the automatic stay terminated. The chapter 12 trustee supports the FSA’s
position indicating that the terms of the debtors’ plan were fully negotiated, suggesting that the
types of extraordinary circumstances that warrant overturning a final order are not present in this
case, and asking that the debtors’ case be dismissed for failure to make plan payments.
Based on the proffer before the court, the motion of United States Attorney to declare
that the automatic stay is lifted as to FSA is ALLOWED. A settlement was negotiated only
months before the default occurred, the terms of which were incorporated into a final order
approved by this court. The debtors acknowledge the default, which is substantial and cannot be
cured in a short time. Negotiated settlements must be given effect by the court, and if a party is
unable to meet the terms they negotiated for in the settlement, then the consequences that are
Case 09-01418-8-JRL Doc 80 Filed 03/03/10 Entered 03/03/10 16:13:34 Page 2 of 3

3
called for in the order must prevail. The debtors’ motion to modify the chapter 12 plan is hereby
DISMISSED, and the trustee’s motion to dismiss is CONTINUED for 30 days so that the
debtors can decide whether to convert their case to chapter 7 or to proceed with dismissal.
“END OF DOCUMENT”
Case 09-01418-8-JRL Doc 80 Filed 03/03/10 Entered 03/03/10 16:13:34 Page 3 of 3