More Opinions Addressing Pro Se Claimants in New Century TRS Holdings, Inc

Konar v. New Century TRS Holdings, Inc (In re New Century TRS Holdings, Inc), Adv. No. 12-50187 (KJC), 2014 WL 2198247 (Bankr. D. Del. May 23, 2014); In re New Century TRS Holdings, Inc, No. 07-10416, 2014 WL 2511339 (Bankr. D. Del. May 30, 2014) (“Cromwell”); In re New Century TRS Holdings, Inc, No. 07-10416, 2014 WL 2446823 (Bankr. D. Del. May 30, 2014) (“Russell”)

In In re New Century TRS Holdings, Inc, the Honorable Kevin J. Carey has spent significant time adjudicating pro se claimants’ late-filed proofs of claims that assert various alleged injuries relating to their respective mortgages.  In fact, in just a few months, the Court has written seven Opinions, four of which have already been reviewed by The Delaware Bankruptcy Insider here, here, and here.  In the Opinions, Judge Carey denied the pro se claimants’ late-filed claims, held that the claimants were “unknown” and therefore not entitled to actual notice of the bar date, and found no excusable neglect entitling the claimants to file late proofs of claim.  The three additional Memoranda discussed herein do not deviate from the Court’s past holdings.

In Konar, the Court denied a pro se claimant’s motion requesting the Court to reconsider its prior holding that, among other things, disallowed the claimant’s proof of claim as untimely.  Konar filed a proof of claim for $1.25 million for “willful and malicious injury,” presumably related to a mortgage although not detailed in the Court’s Opinion.  Similar to the Court’s analysis in the Cromwell decision, Judge Carey found no excusable neglect for filing this claim four and a half years after the bar date.  Following the seminal case of Pioneer Inv. Serv. Co. v. Brunswick Assoc. Ltd. P’ship, 507 U.S. 380 (1993), the Court found that prejudice existed if the claim was allowed and that allowance might open the floodgates to similar claims, a well-taken point considering the amount of pro se claimants pressing similar claims in the New Century proceedings.  Moreover, Konar was deemed by the Court to be an “unknown” creditor entitled only to notice of the bar date by publication because, as the Court has previously held, “the availability of a borrower’s name and address in the Debtors’ loan files may reflect that the borrower was acustomer of the Debtors but, without more, does not mean that the borrower was a creditor of the Debtors, known or otherwise.”  (emphasis in original).

In the follow-up Cromwell and Russell decisions issued on May 30, 2014, Judge Carey denied the claimants’ motions for reconsideration of the Court’s earlier Opinions that disallowed the movants’ claims as late-filed.  As a basis for the original denials, Judge Carey found that the claimants were unknown and received proper notice of the bar date through publication notice.  By the motions for reconsideration, both claimants asked Judge Carey to consider new pieces of evidence that allegedly established their positions as known creditors.  Judge Carey reviewed the evidence and did not find it persuasive for either creditor.  Accordingly, their motions were denied.