UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------X
In the Matter of Chapter 7
Case No. 803-82036-288
JEFFREY A. KECKLEY and
DENISE C. KECKLEY,
Debtors.
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ORDER SCHEDULING A HEARING ON AN EXPEDITED BASIS
Upon the annexed application of Kenneth Kirschenbaum,
Trustee, by his counsel, Kirschenbaum & Kirschenbaum, P.C.,
dated October 20, 2003, for an order scheduling a hearing on an
expedited basis to consider the trustee's application for an
order:
(a) compelling and directing the debtors to vacate the
premises commonly known as 38 Huron Street, Port Jefferson
Station, New York (the "Premises") on or before November 30,
2003;
(b) authorizing and directing the United States Marshal to
take all necessary steps to remove the debtors and all of their
exempt property from the Premises if the debtors have not
voluntarily vacated the Premises on or before November 30, 2003;
(c) authorizing and directing the United States Marshal to
incur any necessary expense to remove the debtors and all of
their exempt property from the Premises, and to secure said
Premises, in the event the debtors do not voluntarily vacate the
premises on or before November 30, 2003, and to charge said
expenses as a claim against the Estate;
(d) compelling and directing the debtors and their counsel
to cooperate with the trustee and the real estate broker
retained by the trustee in connection with the marketing and
sale of the Premises;
(e) prohibiting the debtors and the debtors' counsel from
interfering with, or preventing, the marketing and sale of the
Premises by the trustee and the broker retained by the trustee;
and
(f) for such other and further relief as this Court deems
just and proper, and after due deliberation and sufficient cause
appearing for an expedited hearing,
NOW, upon the application of the Trustee, by his counsel,
Kirschenbaum & Kirschenbaum, P.C., it is
ORDERED, that a hearing on the trustee's application will
be held on the ____ day of October, 2003, at 9:30 a.m., or as
soon thereafter as counsel can be heard, before Judge Stan
Bernstein, at the United States Bankruptcy Courthouse, 290
Federal Plaza, Room 860, Central Islip, New York; and it is
further
ORDERED, that notice of the hearing shall be deemed good
and sufficient if a copy of this order and the papers upon which
it was granted are served by regular mail on or before the ____
day of October, 2003 upon Jeffrey A. Keckley and Denise C.
Keckley, at 38 Huron Street, Port Jefferson Station, New York
11766, William M. Gearty, Esq., at Jonathan M. Young, LLP,
Attorneys for the Debtors, 479 Middle Country Road, Coram, New
York 11727 and the United States Trustee, Long Island Federal
Courthouse, 560 Federal Plaza, Central Islip, New York 11722;
and it is further
ORDERED, that an affidavit evidencing service of this Order
and the papers upon which it was granted shall be filed with the
Clerk of the Court on or before October ____, 2003; and it is
further
ORDERED, that objections, if any, to the relief requested
by the trustee shall be in writing and shall set forth the basis
for the objection in the form prescribed by the Bankruptcy Rules
and the Local Rules of this Court. The objections shall be
electronically filed in accordance with the procedures
prescribed by the United States Bankruptcy Court for the Eastern
District of New York and a hard copy, distinctly marked for
Chambers, shall be filed with the Clerk of the Court. An
affidavit of service evidencing service upon Kirschenbaum &
Kirschenbaum, P.C. and the United States Trustee shall accompany
the filed objections. Copies of the filed objections shall be
served upon Kirschenbaum & Kirschenbaum, P.C., 200 Garden City
Plaza, Garden City, New York, 11530 and upon the United States
Trustee, Long Island Federal Courthouse, 560 Federal Plaza,
Central Islip, New York 11722 so as to actually be received on
or before October , 2003 at 1:00 p.m.
Dated: Central Islip, New York
October ___, 2003 STAN BERNSTEIN
UNITED STATES BANKRUPTCY
JUDGE
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------X
In the Matter of Chapter 7
Case No. 803-82036-288
JEFFREY A. KECKLEY and
DENISE C. KECKLEY, APPLICATION
Debtors.
--------------------------------X
TO: STAN BERNSTEIN
UNITED STATES BANKRUPTCY JUDGE
The application of Kenneth Kirschenbaum, Trustee, by his
counsel, Kirschenbaum & Kirschenbaum, P.C., respectfully states:
1. This application is being submitted in support of the
trustee's request for an order:
(a) compelling and directing the debtors to vacate the
premises commonly known as 38 Huron Street, Port Jefferson
Station, New York (the "Premises") on or before November 30,
2003;
(b) authorizing and directing the United States Marshal to
take all necessary steps to remove the debtors and all of their
exempt property from the Premises if the debtors have not
voluntarily vacated the Premises on or before November 30, 2003;
(c) authorizing and directing the United States Marshal to
incur any necessary expense to remove the debtors and all of
their exempt property from the Premises, and to secure said
Premises, in the event the debtors do not voluntarily vacate the
premises on or before November 30, 2003, and to charge said
expenses as a claim against the Estate;
(d) compelling and directing the debtors and their counsel
to cooperate with the trustee and the real estate broker
retained by the trustee in connection with the marketing and
sale of the Premises;
(e) prohibiting the debtors and the debtors' counsel from
interfering with, or preventing, the marketing and sale of the
Premises by the trustee and the broker retained by the trustee;
and
(f) for such other and further relief as this Court deems
just and proper.
2. On March 25, 2003 the debtors filed a voluntary
petition for relief pursuant to Chapter 7 of Title 11 of the
United States Code. At that time, Kenneth Kirschenbaum was
appointed Chapter 7 trustee, in which capacity he continues to
serve.
3. In Schedule A annexed to the petition, the debtors
listed their joint interest in real property commonly known as
38 Huron Street, Port Jefferson Station, New York (the
"Property") and estimated the market value of their interest in
the Property at the time of filing to be $200,000.00.
4. The Premises was encumbered by a first mortgage with a
remaining balance due of approximately $173,000.00, and the
debtors claimed an aggregate $20,000.00 homestead exemption.
Notwithstanding the debtors' estimate of the fair market value
of the property, the trustee decided to conduct an independent
investigation concerning the value of the Property. Based upon
communications with a real estate broker familiar with the
values of residential real estate in the neighborhood where the
property is located, the trustee estimated that the Property
could be sold for a sum somewhere between $249,000.00 and
$269,000.00. Given the equity in the property based upon the
trustee's estimate of fair market value, he decided to
administer the real property for the benefit of the creditors of
the estate.
5. The trustee obtained a court order authorizing him to
retain a real estate broker to market the property. Upon the
entry of the order authorizing the broker's retention, the
trustee instructed the broker to contact the debtors and make
arrangements for access to the premises, to list the property
for sale and to start marketing the property. In addition,
correspondence was sent to debtors' counsel via facsimile
transmission informing debtors' counsel that the trustee had
retained a broker pursuant to court order and requesting that he
inform the debtors of their obligation to cooperate with the
broker. A copy of the correspondence to debtors' counsel, dated
May 20, 2003, is annexed hereto as Exhibit A.
6. Soon after the broker commenced marketing the property
he started encountering interferences from both the debtors and
the debtors' attorney. Specifically, the broker informed the
trustee that he was instructed by William Gearty, the debtors'
attorney, not to communicate with the debtors, that Mr. Gearty
was the only person the broker should communicate with if he or
any other broker wanted to show the premises and that any
appointments for a showing would have to be made through him.
Later that same day, the broker attempted to schedule two
showings through Mr. Gearty, one for that evening and one for
the next evening by another MLS broker. He was told that Mr.
Gearty was not available and that he could leave a message. The
broker was subsequently called back by Mr. Gearty's secretary
who informed him that the showing that evening was not okay, but
that the showing the following evening was okay. The following
evening the MLS broker went to the premises with potential
purchasers, at which time the debtors refused to allow the
broker or the potential purchasers into the home. In short, two
potential purchasers were prevented from seeing the property.
7. Mr. Gearty was contacted the following day to discuss
the situation. In addition, he was sent correspondence via
facsimile that same day in which the incident was confirmed and
he was informed that preventing the real estate agent from
marketing the property is an interference with the trustee's
administration of the estate. A copy of the correspondence
dated June 12, 2003 is annexed hereto as Exhibit B.
Additionally, the real estate broker forwarded a fax to Mr.
Gearty confirming the incident and requesting a week-end contact
person and telephone number so that he could arrange
appointments to show the property over the week-ends. A copy of
the fax, dated June 13, 2003, from the broker to Mr. Gearty is
annexed hereto as Exhibit C.
8. The Keckleys have made the marketing of this property a
very difficult process for the broker. They have repeatedly
failed to return his phone calls and have generally been
uncooperative. Additionally, the Keckleys are frequently
unavailable in order to provide the trustee's broker and the MLS
brokers with an opportunity to show the Property to potential
buyers.
9. While there have been potential purchasers who were
prepared to make offers to purchase the premises, they
immediately withdrew their offers when they learned that the
debtors were still residing at the premises and that there was a
liklihood that the sale could be delayed indefinitely. One
potential purchaser, who had already paid for an engineer's
report and incurred legal fees informed the realtor that she was
given the distinct impression by the debtors that they would do
whatever had to be done to prevent the sale from taking place.
Notwithstanding that she had already incurred these expenses and
was very interested in purchasing the property, she withdrew her
offer. See copy of e-mail from Jack Muratore of Coach Realtors,
dated August 17, 2003, annexed hereto as Exhibit D.
10. In addition to chilling potential purchasers, the
debtors are also chilling MLS brokers' efforts to market the
property. Several brokers have had potential purchasers to whom
they wanted to show the property. However, based upon the
debtors' refusal to schedule appointments on so many occasions,
or to allow MLS agents inside to show the premises when
appointments have been scheduled, the number of MLS agents
seeking to make appointments to show the property has decreased
dramatically.
11. The broker has now informed the trustee that for the
last week he has been unable to make contact with the debtors.
While the broker has left messages on the debtors' answering
machine to call to schedule times and dates that the house can
be shown, there have been no return calls.
12. Besides the debtors' lack of cooperation, other
factors have been contributing to the difficulty in marketing
the property. Potential purchasers have expressed concern over
the fact that the debtors are still in the property and have
been giving the impression that they do not want to move out.
The message being perceived by potential purchasers is either
that the sale of the property will be delayed indefinitely or
that the new purchasers will inherit an eviction proceeding if
the property is purchased subject to the debtors' tenancy.
13. The trustee is currently negotiating a contract with
yet another potential purchaser and, once again, the debtors'
continued occupancy of the premises and their intention not to
vacate has become an issue. If there is no order requiring the
debtors to vacate the premises and the assistance of the United
States Marshal is not put in place, it is likely that yet
another potential purchaser may withdrew his offer. Therefore,
it has become necessary for the trustee to seek drastic relief
so that the creditors of this estate will not be prejudiced.
14. Given the circumstances and the potential for losing
the current offer if the proposed purchasers are not persuaded
that the premises can be delivered vacant, the Court is being
asked to schedule a hearing on this application on an expedited
basis. In the event that the trustee cannot convince the
potential purchasers that the property can and will be delivered
vacant, there is a significant risk of losing the deal.
Furthermore, the same circumstance will in all liklihood recur
over and over again.
15. Currently, no mortgage payments are being made.
Interest continues to accrue. Any equity in the property is
eroding. The bar date for filing proofs of claim expired on
August 5, 2003. A review of the filed claims reveals that the
aggregate sum of the general unsecured claims filed is
$49,155.04. Given the claims that have been filed, there is a
high liklihood that a meaningful distribution can be made to
unsecured creditors if the property is administered without any
further delay. However, if the current situation is allowed to
continue for a period of months, there will be no remaining
equity for the creditors. In order to salvage the remaining
equity and produce a benefit for the creditors of this estate,
the house has to be marketed on an expeditious basis, and the
cooperation of the debtors and their counsel is essential.
16. Particularly noteworthy is the fact that Mr. Gearty
has specifically advised me that no matter what offer is
received by the trustee, that the debtors are going to oppose
the sale of their home. I asked him on what basis the debtors
intended to oppose the sale. He told me that he was not going
to tell me, and that when the trustee seeks court authorization
to sell the property he will make his objection. The debtors
have received the protections of the Bankruptcy laws for many
months now and they have already received their discharge.
Cooperation with the trustee at this point in the administration
of the property should not only be expected, it should be
required. Given the delays already caused by the debtors, the
trustee is asking the Court to fix November 30, 2003 as an
outside date by which the debtors shall vacate the premises.
17. Because the trustee has no confidence that the debtors
will comply with an order compelling them to vacate the
premises, the trustee is seeking additional relief in the form
of an order authorizing and directing the United States Marshal
to take all necessary steps to remove the debtors and all of
their exempt property from the Premises and to incur any
necessary expense to remove the debtors and all of their exempt
property from the Premises, and to secure said Premises, in the
event the debtors do not voluntarily vacate the premises on or
before November 30, 2003, and to charge said expenses as a claim
against the Estate. Finally, even if the debtors vacate the
premises prior to November 30, 2003, the trustee is asking the
Court to direct the debtors to fully cooperate with him and the
real estate broker in the marketing and sale of the property and
to prohibit the debtors from interfering with, or preventing,
the marketing and sale of the property.
18. No prior application for the relief sought herein has
been made to this Court or to any other court.
WHEREFORE, for the reasons set forth above, it is
respectfully requested that the Court grant the trustee's
application in its entirety.
Dated: Garden City, New York
October 20, 2003
KIRSCHENBAUM & KIRSCHENBAUM,
P.C.
Attorneys for the Trustee
By:_____
Steven B. Sheinwald (ss-6336)
200 Garden City Plaza
Garden City, New York 11530
(516) 747-6700
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