Free Memorandum and Order - District Court of Delaware - Delaware

Case 1:04-cv—O1265-SLR Document 18 Filed O3/13/2007 Page 1 of 2
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 7
US WOOD PRODUCTS, INC., g Bky. N0. 00-3198-MFW
) Adv. N0. 03-53656
Debtor. )
PANOLAIVI INDUSTRIES, INC., )
et al., )
)
Appellants, )
v. g Civ. N0. 04-1265-SLR
MONTAGUE S. CLAYBROOK, g
Chapter 7 Trustee, )
Appellee. g
MEMORANDUM ORDER
At Wilmington this 13th day 0f March, 2007, having reviewed appellants motion
for reconsideration and the papers filed in connection therewith;
IT IS ORDERED that said motion (D.l. 16) is granted. The United States Court
0f Appeals for the Third Circuit has recently issued an opinion that resolves the
question of law presented in this case. In In re American Pad & Paper Co., _ F.3d
__, 2007 WL 624346 (3d Cir. March 2, 2007), the Court concluded that 11 U.S.C. §
546(b) "puts all parties in interest on notice that the time for filing of avoidance actions
will expire in two years, with the possibility of an additional one year if a trustee is
appointed or elected under sections 702, 1104, 1163, 1202 or 1302 before the two

Case 1:04-cv—O1265-SLR Document 18 Filed 03/13/2007 Page 2 of 2
years expire." g at *7. Finding that the language of § 546(b) is unambiguous, the
Court held that the appointment of an interim trustee pursuant to 11 U.S.C. § 701 does
not trigger the additional one-year period under § 546(b), as § 701 is not an
enumerated section. g at *3. As that holding is applied to the undisputed facts of this
case, appellee did not become the permanent trustee by operation of law, pursuant to
11 U.S.C. § 702(d), until after the two-year period of limitations had expired}
Therefore, the one-year extension was not triggered and the adversary proceeding at
bar was not timely filed. For these reasons,
IT IS FURTHER ORDERED that the August 20, 2004 opinion and order ofthe
bankruptcy court is reversed, and the case is remanded for proceedings consistent with
this order.
United States Disgict Judge
°The debtor at bar filed its voluntary petition for relief on July 31, 2000. The two-
year statute of limitations under § 546(b) expired on July 31, 2002. Appellee was
appointed as interim trustee under § 701 on July 30, 2002. l·le was not made the
permanent trustee, pursuant to § 702(d), until April 7, 2004, the time of the § 341
creditors meeting. The adversary proceeding at bar was commenced in June 2003,
within one year of the § 701 appointment, but well after the July 31, 2002 expiration
date. E Claybrook v. Ponderosa Industrial de Mexico, 2004 WL 1877730 (Bkrtcy. D.
Del. August 20, 2004) *1.
2