Local Rule 7041-1: Dismissal of Discharge Actions

Rule 7041-1 Dismissal of Discharge Actions

(a) Required Information. Unless it is contained in the stipulation or settlement agreement, a stipulation or request by the plaintiff to dismiss a complaint brought to bar discharge of a debtor must be accompanied by a separate statement, signed by counsel (or by the party if not represented by counsel) for all parties to the stipulation or settlement agreement, setting forth: (1) any consideration, monetary or otherwise, to be received by the plaintiff; (2) the basis and source of that consideration; or (3) that the plaintiff is not to receive any consideration.

(b) Notice.

(1) Notice of the stipulation or settlement must contain a clear and concise statement of the consideration, if any, to be received by the plaintiff.

(2) In addition to the persons specified in Rule 7041, Federal Rules of Bankruptcy Procedure, notice of the stipulated dismissal must be given to: [A] any party in interest having filed a special request for notice; and [B] (i) any creditor having filed a proof of claim, or (ii) in a case in which no claims are to be filed, the five (5) largest unsecured creditors other than those creditors whose claims are nondischargeable under § 523 of the Code.

(c) Opposition.

(1) A party in interest opposing dismissal of the § 727 complaint may file a written opposition thereto within twenty-one (21) days of the date the notice is served and: [A] serve a copy on— (i) the parties to the adversary action, and (ii) the case trustee; and [B] transmit a copy to the United States trustee.

(2) Any opposition to the dismissal must set forth: [A] specifically the basis for the objection; [B] any terms or conditions the objecting party requests be imposed on the dismissal; and [C] a statement of whether or not the objecting party is agreeable to substituting as party plaintiff in the action.

(d) Hearing.

(1) In any case in which the plaintiff is to receive consideration in any form in exchange for dismissal, unless the court, for cause, otherwise orders, a hearing must be held before a discharge action is dismissed by stipulation or agreement of the parties, even if no objection is filed in response to the notice. (2) [A] In any case where the plaintiff is not to receive consideration in any form in exchange for the dismissal, the court may deny, grant, or impose terms and conditions on dismissal of the action without a hearing. [B] If an objection or opposition to dismissal is timely filed, ordinarily the court will not grant dismissal without a hearing.

(e) Dismissal for Lack of Prosecution. Any proceeding that has been pending in this court for more than one (1) year without any activity of record may, after notice, be dismissed for want of prosecution on motion by any party, or by the court. In addition, in appropriate circumstances, the court may issue an order to show cause why a proceeding should not be dismissed regardless of how long it has been pending.