A first and final accounting hearing on the application of the trustee was scheduled for May 7, 1992. Shortly before the hearing, the debtor, Larry Dzienkowski, filed an objection to the distribution to unsecured creditors so that the court might consider including omitted creditors, Jack and Delores Gakey.

      After reviewing the file, I approved the first and final account without the inclusion of the omitted creditors, and issued an Order Denying Motion to Defer Distribution of Dividends on May 7, 1992 (Docket No. 87). On May 21, 1992, the debtor filed a motion to reconsider this court's Order Denying Motion to Defer Distribution     2 ABR 403  of Dividends. Presumably this also applies to the order approving the first and final accounting (Docket No. 88 filed May 6, 1992).

      Debtor's motion to reconsider does not state what Bankruptcy Rule it is brought under nor cite any authority. If it is a motion under FRBP 9023 (which incorporates FRCivP 59(e)) for a new trial or amendment of a judgment, it is untimely. See, In re Rugley, 75 BR 94 (BankrCD Cal 1987). This kind of motion has to be brought within ten days of entry of the order.

      On the other hand, if it is a Rule 60 motion brought under FRBP 9024, it would be timely. See, In re Zumbrun, 88 BR 250, 252 (9th Cir BAP 1988) and In re Pacific Far East Lines, Inc., 889 F2d 242, 248-50 (9th Cir 1989) (allowing reconsideration under Rule 60(b) 18 months after the ruling).

      The court will nonetheless deny the motion to reconsider. First, it does not comply with FRBP 9013 by spelling out the legal and factual grounds clearly. Compare In re Prestige Point, 113 BR 643, 651 (BankrCD Cal 1990) (dealing with a motion to assume a lease). Also, the debtor apparently has not even served the Gakeys or their attorney.

      Second, the court has weighed the potential detriment to the debtor versus the detriment to the trustee and other creditors of this estate who are on the verge of being paid. It appears that no distribution to unsecured creditors could be made for a substantial period of time while debtor litigates with Jack and Delores Gakey pursuant to § 523(a)(3). See, In re Brosman, 1 ABR 165 (BankrD AK 1991), In re Ford, 87 BR 641 (BankrD Nev 1988), and In re Hendricks, 87 BR 114 (BankrCD Cal 1988). Not only would the     2 ABR 404  creditors who timely filed proof of claims possibly receive only 50¢ on the dollar as opposed to substantially full payment, but they would lose the time value of their money while debtor litigates the case to establish dischargeability.

      In his initial memorandum, filed April 30, 1992 (Docket No. 82) in support of his objection to the distribution to creditors on the eve of the first and final accounting hearing, debtor alleged that he was a joint venturer with the Gakeys and had not listed them on his schedules for this reason. He said that after his discharge, the Gakeys had obtained a default judgment against him for $7,600 in mid-1991. He claimed to have relied on advice of an attorney that a debt would be discharged.

      In debtor's May 15, 1992 affidavit (Docket No. 90) filed with the court on May 21, 1992 with the motion to reconsider, his story changes somewhat. He now alleges that he ordered four gambling machines for the Gakeys and some other people in the business venture. He claims to have just been a middle man. He claims to have spent $2,000.00 of his own money for having:

the machines worked on in Anchorage. After that, they sat around my house.The Gakeys and others knew the machines were ready and waiting but never picked them up.

      The Gakeys wanted him to return the machines and get their money back, but the debtor said that could not be done. He claims to have sold the machines when he was offered $1,600.00 for them.

      In 1991, after his discharge, he spoke to an attorney for a legal benefit plan to which he belonged, but not his bankruptcy attorney. He said that the attorney "looked at the complaint and     2 ABR 405  said that if I had filed bankruptcy these people couldn't collect from me." He was later ordered to appear at a judgment debtor exam, and so he contacted his present attorney, Bruce Rausch. He claims that the Gakeys did know about the bankruptcy even though they are not listed on the schedules, but debtor's affidavit does not state when this knowledge occurred. He further alleges difficulty in getting the schedules in this case, although the bankruptcy file remains open in Anchorage to this day.

      It appears that the attorney for the legal plan may have misadvised the debtor in this case that the Gakey debt was discharged rather than advising him to defend the complaint on the basis of 11 USC § 523(a)(3) either in the State of Alaska District Court or by a separate adversary proceeding in this court.

      It may be that the debtor has a complete defense to the debt, but he must file an adversary proceeding under 11 USC § 523(a)(3) or raise the issue in an appropriate state court action to show that the Gakeys had knowledge of the bankruptcy in time to file a proof of claim which would have been recognized by the court. As a condition for allowing a dischargeability, the court might require debtor to pay the Gakeys' costs of litigation (see, In re Brosman, 1 ABR at 172; In re Beshensky, 68 BR 452, 455 (BankrED Wisc 1976); and, In re Musgrave, 129 BR 119, 121 fn 6) although, if the Gakeys knew about the bankruptcy in time to file a claim or raise the issue without incurring litigation costs, maybe these costs would not be justified. See In re Soult, 88 BR 801, 804 (BankrSD Ohio 1988) and In re Anderson, 72 BR 783, 786 (BankrD Minn 1987). If the court does not find it too late to challenge the discharge of     2 ABR 406  the Gakeys' debt, it is possible that debtor would be required to pay at least the amount of recovery that the Gakeys would have gotten if they had filed a proof of claim in time for a distribution under the first and final accounting that was approved on May 5, 1992.

      It is also possible, that § 523(a)(3) will not avail the debtor if the Gakeys' claim is the kind that would be nondischargeable under § 523(a)(2),(4),(6), which deals with a debtor who incurs a debt through some kind of fraudulent behavior or willful or malicious conduct.

      On balance, the debtor (or his counsel) was too lax and too late to disrupt the distribution to creditors on the eve of disbursement. Whatever relief debtor may be entitled to will probably have to be invoked by a § 523(a)(3) adversary complaint.