The Force Awakens: Objections to Exemptions After Law v. Siegel
Thursday, February 18, 2016 Program 12:00 – 1:00 P.M.
Location Los Angeles County Bar Association 1055 W. 7th Street, Suite 2700 Los Angeles, CA 90017 Read more…
All posts in Chapter 11
Judicial Estoppel: Can’t Have Your Cake & Eat It Too
Did the Debtor forget to list a lawsuit on his Schedule B or Statement of Financial Affairs?
Judicial estoppel is used to prevent a party from asserting inconsistent positions in different judicial proceedings (i.e. you say one thing in bankruptcy court but then another in state court). This rule was set in Supreme Court case of New Hampshire v. Main (2000).
Eligibility of Trusts to File Bankruptcy
Judge Tighe did a great analysis on eligibility of trusts to file bankruptcy. Her tentative is below In re: The Shahla Dowlati 2005 Living Trust.
UST moves to dismiss this chapter 11 case because the Shahla Doowlati 2005 Living Trust (the “Trust“) was created for estate planning purposes, and thus is ineligible to be a debtor. Section 109(a) establishes that “only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under this title.” Section 101(41) defines “person” to include any “individual, partnership, and corporation.” It does not include governmental units or trusts. See 11 U.S.C. § 101(41).
One Action Rule
Be careful Banks – in California you get one bite at the apple in collecting a deficiency judgment against a homeowner (or possible debtor in bankruptcy).
For creditor attorneys – make sure you’ve complied with the ‘one action rule,’ or you waive your client’s right in a deficiency judgment against the former homeowner.
For debtor attorneys – if the creditor has violated the ‘one action rule,’ and are seeking to recoup against your debtor-client now, make sure to object to their proof of claim under §502(b)(1), such that the claim is unenforceable against the debtor under state law. Read more…
Does the Chapter 13 or Chapter 11 Plan Pay Some Percentage to Creditors or Some Specified Amount over the Term of the Plan?
In chapter 13s, the plan – the preprinted plan form – says the debtor will pay x amount per month “which is estimated to pay unsecured creditors x% over the plan period” (paraphrasing the quote). There is a recent crazy BAP case, In re Schlegel, that says the debtor is promising, per the form, to pay the percentage to unsecured creditors, not just the amount specified. So if a proof of claim is filed after the plan is confirmed, the debtor must object or amend his plan to change the percentage in the plan. Assuming there is no basis to object, it is a complete waste of time if you ask me to amend the plan just to change the percentage. Anyway, I was explaining this to one of the associates here and it occurred to me that the chapter 11 plan for an individual should include language that the debtor is not promising to pay some specific percentage to unsecured unsecured creditors, only some specific amount to the class as a whole.
Random Thoughts for the Week
My partner Matt Resnik is meeting with a possible new client. He was doing a loan mod with another atty who told him to file a pro per chapter 7 case to stop the foreclosure sale set for the next day. When he did, Wells Fargo Bank immediately froze the $50,000 in this debtor’s bank account. Presumably it has already been sent to the trustee.
I was just looking at a Judge Vicki Kaufman tentative ruling on a 12(b)(6) motion. Plaintiff is saying – in the complaint – “my state court judgment is enough to show 523(a)(4) and (a)(6).” Reminds me of a comment Judge Jury made to me at a mediation a week or two ago. She said, “Good luck using the state court judgment or even findings to establish (a)(4) or (6).” Judge Kaufman said the same. Plead the express trust and the “culpable state of mind requirement.” As to (a)(6), plead “that the debtor had a subjective motive to inflict the injury or that the debtor believed that injury was substantially certain to occur as a result of his conduct.” Read more…
And the Central District Gets a Big Case – Freedom Communications
Central District of California (Santa Ana)
Bankruptcy Petition #: 8:15-bk-15311-MW
| Assigned to: Mark S Wallace Chapter 11 |
|
| Debtor Freedom Communications, Inc., a Delaware Corporation 625 N Grand Ave Santa Ana, CA 92701 ORANGE-CA Tax ID / EIN: 95-1140750 aka The Orange County Register fka Freedom Newspapers, Inc. |
Report About Oral Argument In re Zachary
Michael St. James sent out the below very nice and thoughtful email. I sure hope he’s wrong. I sent it to Judge Jury with the comment that I hope he is wrong. Her comment was we disagree about that. By the way, you can watch the oral argument here. (Thanks to Judge Kwan for reminding me of that).
From: “Michael St. James” [mailto:bankr-l@lists.illinois.edu]
Sent: Wednesday, October 21, 2015 4:08 PM
To: M. Jonathan Hayes; BANKR-L@listserv.illinois.edu
Subject: [Bankr-L] Ninth Circuit Oral Argument: Absolute Priority Rule in Individual Chapter 11 Cases
Based on Mr. Hayes’ email, below, on October 21, 2015 I attended oral argument before the Ninth Circuit in Zachary, a direct appeal from the Bankruptcy Court (E.D. Cal., Holman, J.) addressing whether the absolute priority rule applied in individual Chapter 11 cases. Read more…
Slavery + Chapter 11
I loved reading this case. Felt like a Grimms’ fairy tale.
Picture this — you earn a paycheck, right? Now put yourself in a position that when you receive your paycheck, an invisible hand (no not Uncle Sam) comes and takes a big chunk of that paycheck to pay your creditors, and you cannot do anything about it! Kind of like an involuntary wage garnishment. This is what a bankruptcy court was faced with in a Chapter 11 case in New Jersey.
9th Circuit Panel Chosen for In re Zachary
The 9th Circuit has finally chosen the three justices who will hear In re Zachary. They are Richard Paez, Mary Murguia, and Andrew Hurwitz. Judge Paez wrote the Bellingham decision and I think is a friend of bankruptcy debtors. Mary Murguia was appointed by Obama in 2011. She is one of seven children of parents who emigrated from Mexico in 1950. Andrew Hurwitz is also an Obama appointee from 2011. He successfully represented several death row inmates before the Supreme Court in Ring v. Arizona getting a ruling that juries rather than judges make the factual determinations of whether there is aggravating circumstances to merit the death penalty.
I like this panel. I am rooting of course for affirmation of In re Friedman. Oral argument is 10/21 at Stanford.
M. Jonathan Hayes Books
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