The United States Bankruptcy Court for the Eastern District of Pennsylvania (Fox, J.) held that a creditor is prohibited from filing an amended claim post-confirmation, as the filing of such a claim would be futile.
The Debtor listed Sovereign Bank on Schedule D as a secured creditor holding a disputed claim. Sovereign Bank filed a proof of claim for an amount classified as unsecured. The Debtor filed an amended Chapter 11 plan of reorganization, pursuant to which Sovereign Bank’s secured claim was reclassified as unsecured, and pursuant to which Sovereign Bank was to terminate its existing UCC-1 Financing Statement and release all existing liens on the Debtor’s assets. The plan further provided that the Debtor would continue in possession of all of its property and assets, and that all treatments provided under the plan would be in full and complete satisfaction of each claim. The amended plan was thereafter confirmed.
Following confirmation, Sovereign Bank filed a motion to amend its proof of claim, asserting that its unsecured proof of claim was “an obvious oversight.”
The court found that is has discretion to allow amendments to proofs of claim. However, pursuant to Federal Rule of Civil Procedure 15, amendments are not allowed where they would be futile. The Court concluded that, because the confirmed plan was binding in nature, any amendment to the proof of claim would be futile. Sovereign’s failure to file a proof of claim did not extinguish its secured claim; however, the confirmation did extinguish its unsecured claim – rendered any further amendment to the proof of claim meaningless.
See In re Omega Optical, Inc., 11-13036 (Bkrtcy.E.D.Pa., 2012).