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In re Washington Mutual, Inc.

United States District Court, D. Delaware

August 6, 2018

IN RE WASHINGTON MUTUAL, INC., et al, Debtors.
v.
WMI LIQUIDATING TRUST, Appellee. HUSSAIN KAREEM, Appellant,

          MEMORANDUM

         I. INTRODUCTION

         Presently before the court is an appeal from the October 20, 2015 Order of the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") granting summary judgment in favor of WMI Liquidating Trust. For the reasons that follow, the court will affirm the Bankruptcy Court's October 2015 Order.

         II. BACKGROUND

         Pro se Appellant, Hussain Kareem ("Kareem") executed and delivered a security deed conveying the property located at 1921 Fisher Driver, Stockbridge, Georgia 30281 to Washington Mutual Bank ("WMB") to secure a note on the original principal amount of $168, 000 on August 17, 2007. (D.I. 23 at Ex. M, at ¶ 1042.) Within the first year of executing the mortgage, Kareem defaulted on his payments and, on September 2, 2008, WMB foreclosed on the property. (Id. at B1042-43.) On September 25, 2008, the FDIC executed a seizure of WMB and its subsidiaries.[1](D.I. 20 at 5.) On September 26, 2008, the petition date, Washington Mutual Inc. and WMI Investment ("Debtors") filed for Chapter 11 of the United States Bankruptcy Code. (Id.) Subsequently, the Bankruptcy Court entered an Order on January 30, 2009 ("Bar Date Order"), which established a March 31, 2009 deadline for creditors who sought to file Proofs of Claims that arose on or before the petition date, and approved the form and manner of the notice thereof. (D.I. 21 at Ex. B, at ¶ 4.) The Bar Date Order provided that "Proofs of Claims will be deemed timely filed only if actually received ... on or before the Bar Date." (Id. at B5) (emphasis in the original). Further, the Bar Date Order stated as follows:

any holder of a claim against the Debtors who receives notice of the Bar Date (whether such notice was actually or constructively received) and is required, but fails, to file a Proof of Claim in accordance with this Order on or before the Bar Date, shall not be permitted to ... participate in any distribution in Debtors' chapter 11 cases on account of such claim.

(Id. at B7.)

         The notice of the March 31, 2009 bar date and requirements for filing were served by Kurtzman Carson Consultants, the court appointed claims agent, by mail to the creditors known to the Debtor at the time. (D.I. 23 at Ex. P, at 30:4-8.) Additionally, the notice was published in four different publications, the Wall Street Journal, the Seattle Times, the Seattle Post-Intelligencer and the New York Times, in accordance with the Bar Date Order. (D.I. 21 at Ex. B, at BIO); (D.I. 21 at Exs. H-J.) Kareem did not file a Proof of Claim in advance of the March 31, 2009 bar date.

         On or around June 27, 2011, Kareem received a notice regarding the "Cassesse" class action which alleged that the Debtors inappropriately charged fees associated with certain mortgage payoffs. (D.I. 7 at Ex. B); (D.I. 20 at 14 n.4.) On August 26, 2011, Kareem opted-out of the "Cassesse" class stating that "[t]here are other damages which I want to pursue." (D.I. 7 at Ex. B.)

         On February 23, 2012, the Bankruptcy Court confirmed the Debtor's Seventh Amended Plan and, upon satisfaction or waiver of the conditions described therein, the transactions contemplated by the Amended Plan were consummated as reflected in the March 19, 2012 Notice. (D.I. 22 at Ex. K.) The Bankruptcy Court's February 2012 Order provided that:

Administrative Claim Bar Date. The last day to file proof of Administrative Expense Claims shall be ninety (90) days after the Effective Date, after which date, any proof of Administrative Expense Claim not filed with this Court shall be deemed forever barred and the Debtors, the Reorganized Debtors, and the Liquidating Trust shall have no obligation with respect thereto.

(Id. at Ex. K, at ¶ 182.)

         On March 19, 2012, Debtors filed a Notice of (A) Entry of Order Confirming the Seventh Amended Joint Plan of Affiliated Debtors pursuant to Chapter 11 of the United States Bankruptcy Code and (B) Occurrence of the Effective Date, directing that any person who had Administrative Expense Requests to submit such requests by June 17, 2012 ("March 2012 Notice"). (D.I. 23 at Ex. L.) The March 2012 Notice expressly stated that "Administrative Expense Requests will be deemed timely filed only if actually received by Kurtzman Carson Consultants LLC by 5:00 p.m. (prevailing Eastern Time) on June 17, 2012." (D.I. 23 at Ex. L, at ¶ 1007) (emphasis in the original). The March 2012 Notice further explained that:

if you are required to file an Administrative Expense Request pursuant to Section 3.1 of the Plan and paragraph 47 of the Confirmation Order and fail to do so by the Administrative Deadline, you will be forever barred, estopped, and enjoined from asserting such Administrative Expense Claim (and from filing an Administrative Expense Request with respect to such Administrative Expense Claim) against the Debtors, their estates, and their property and the Debtors, the Reorganized Debtors, and the Liquidating ...

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