In Re Pereira and Melo Dairy

MEMORANDUM DECISION

The debtor filed a petition under chapter 11 of the Bankruptcy Code on February 24, 2004. On June 15, 2004, the debtor converted this case to one under chapter 7. Michael D. McGranahan (“Trustee”) was appointed as interim chapter 7 trustee. Creditors did not vote at the meeting of creditors to elect a third party as trustee and thus Trustee became the trustee for the case. 11 U.S.C. § 702 (d).

On October 29, 2004, the trustee objected to the claim filed in this case by the Conservatorship of Florence Alves (“Claimant”). The initial objection was simply that the claim had no supporting documentation to justify the $486,000 sought. By stipulation of the parties, the initial hearing was continued to December 28, 2004. On December 14, 2004, Claimant filed a written response with supporting documentation to prove up its claim.

In its response, Claimant alleges that the debtor partnership and its two partners wrongfully converted monies from Claimant in the approximate amount of $243,000. The transfers allegedly occurred between January 25, 2002 and June 25, 2002. On October 28, 2002, the Stanis-laus County Superior Court made findings sufficient to appoint the…