In re Osborn

Memorandum re Plan Confirmation

Debtor Brain Osborn has proposed a Chapter 13 plan whereby he will pay $1,350.00 per month for 36 months to the Chapter 13 trustee. After payment of mortgage arrears, there will be a pot of about $43,000.00 for unsecured creditors to share. Unsecured creditor Tor Perkins objects.

Osborn is a licensed architect and general contractor. Perkins has filed a claim for $282,393.00 based on “construction liability.” Perkins alleges that Osborn overcharged him for design and construction work on Perkins’ home in Mill Valley. A state court lawsuit was pending when Osborn filed his Chapter 13 petition.

Perkins has raised three objections to confirmation. First, he alleges that Osborn was not eligible because his total debt exceeded the limit of § 109(e) of the Bankruptcy Code. Second, he alleges that due to a fraudulent transfer of property to his wife which would be avoided in Chapter 7 Osborn’s plan fails to meet the requirements of § 1325(a)(4). Third, he alleges that the plan has been proposed in bad faith.

Osborn is ineligible for Chapter 13 only if Perkins’ claim is considered liquidated. Osborn claims that his debt is liquidated because he can…