Wolfberg

MEMORANDUM **

Section 1141 of the Bankruptcy Code provides that “the provisions of a confirmed [reorganization] plan bind the debtor.” 11 U.S.C. § 1141 (a). This requirement “tells creditors that they should expect payment of their claims according to the terms of the confirmed plan. If the plan does not provide for any postconfirmation challenges to claims, the debtor is bound to pay on those creditors’ claims as *892 provided for by the plan.” Kelley v. S. Bay Bank (In re Kelley), 199 B.R. 698, 703-04 (9th Cir.BAP1996) (internal quotation marks omitted). Although Fed. R. Bankr.P. 1009 permits the debtor to amend bankruptcy schedules “as a matter of course at any time before the case is closed,” such amendment must comply with section 1141. See United States v. Towers (In re Pac. Atl. Trading Co.), 33 F.3d 1064, 1066 (9th Cir.1994) (“[A]ny conflict between the Bankruptcy Code and the Bankruptcy Rules must be settled in favor of the Code.”).

The Wolfbergs’ reorganization plan stated repeatedly that it will be funded through the sale of their residence. Neither the plan nor the accompanying disclosure statement, which must contain information enabling creditors to make an…

dissenting.

GOULD, Judge.

The Wolfberg residence was valued at $16 million, and debts totaled about $13 million. I cannot believe that reasonable creditors would find it important that the Wolfbergs planned to exempt $125,000 from the sale of a residence expected to yield a $3 million surplus for the Wolf-bergs. I therefore cannot accept the position that, “to make an informed judgment about the plan,” a reasonable creditor would need to know the Wolfbergs would declare a homestead exemption. 11 U.S.C. § 1125 (a)(1). So I do not believe that the bankruptcy laws required the Wolfbergs to include the homestead exemption in their disclosure statement. Nor do I agree with the majority view that, after liquidation, reducing the Wolfbergs’ $10 + million pool of assets by $125,000 “changes the payout scheme of their confirmed reorganization plan” in any material respect. Rather, the Wolfbergs would pay listed creditors for identified debts from a pool of money only slightly diminished. I see no conflict at all between Bankruptcy Rule 1009 and Section 1141 of the Bankruptcy Code, because nothing in the plan bound debtors to an exemptionless homestead. The initial bankruptcy judge found…