Although no objections to debtor’s claimed exemptions were filed within 30 days of the creditors’ meeting under debtors original chapter 11 petition, after debtor converted the case to a chapter 7 proceeding, a new 30-day period ran from the date of the meeting of the chapter 7 creditors, and the objections by the chapter 7
trustee and a creditor to debtors claimed exemption in stock in a closely held corporation of which he was 85 percent shareholder, and which he valued at $1, are timely.
The issue before the court is whether a new time period for objecting to exemptions arises upon the conversion of a case from one under chapter 11 to one under chapter 7.
Upon conversion of a case from chapter 11 to chapter 7, a new meeting of creditors is required upon conversion from chapter 11 to
chapter 7. This new meeting of creditors is not a continuation or extension of the meeting of creditors in the previous chapter 11 proceeding, but is a separate and distinct meeting in which a new trustee must be selected.
Section 348(a) also provides that sections of the bankruptcy code that are keyed to entry of the order for relief are unaffected by conversion.
However, the time period fixed for filing objections to exemptions is keyed not to the date of the entry of the order for relief but to the date set for the meeting of creditors.
Unfortunately, Bankruptcy Rule 4003(b) does not address whether in a converted case the meeting of creditors referred to is only the
initial meeting of creditors, or whether the second meeting of creditors triggers a new 30-day period for objections to exemptions.
When faced with two possible interpretations of the bankruptcy code and rules I am inclined to choose the interpretation that makes practical sense. It would be impractical and illogical to follow the debtor’s interpretation as it ignores the realities of the bankruptcy process. If the chapter 7 trustee is to have a meaningful opportunity to object to a debtors exemptions in a converted case, a new time period for objecting to exemptions must arise upon conversion from chapter 11 to chapter 7.
This interpretation is consistent with the role intended for chapter 7 trustees in the bankruptcy system. Accordingly, I find that the meeting of creditors referred to in Bankruptcy Rule 4003(b) includes the meeting of creditors held when a case is converted from one under chapter 11 to one under chapter 7.
Pursuant to Rule 4003(b) the trustee and any creditor may file objections to the list of exemptions within 30 days after the conclusion of the creditors meeting.
Since the creditor and the chapter 7 trustee filed their objections within 30 days of the chapter 7 meeting of creditors, their objections are timely.
LaRossa v. Leydet (Tice) No. 91-25434-T, Jan. 15, 1993; USBC at Norfolk, Va.; James H. Walsh for creditor; Donna J. Hall, trustee; Jacqueline A. Hoskins for debtor * VLW 093-4-016, 7 pp.