I guess the writing was on the wall for a while. Pachulski, counsel for debtor, has engaged in a pre-packaged deal with the major secured creditors (hedge fund Standard General). Case was filed in Delaware, not surprisingly.
The creditors matrix alone is 475 pages (the printing machines are firing off for the marketing packages prepared by prospective committee counsels).
Godspeed American Apparel.
This is the case that held that the debtor’s home loan may not be modified over the objection of the bank even though the debtor operated a substantial business from their home. The security was “real property that is the debtor’s principle residence.”
| 09/24/2015 | 33 | Filed order (Deputy Clerk: RGA) Pursuant to the stipulation of the parties, this appeal is voluntarily dismissed. Fed. R. App. P. 42(b). The parties shall bear their own costs and attorneys’ fees on appeal. A copy of this order shall serve as and for the mandate of this court. [9695367] (SML) [Entered: 09/24/2015 02:56 PM] |
The U.S. Trustee is hosting a unique Brownbag program on Thursday, October 29, 2015 from noon to 1:30 p.m. We will be discussing issues and concerns related to all matters 341(a)—particularly the rules and rationale behind the smooth and effective conduct of this essential piece of the bankruptcy process.
Proposed topics include: Read more…
ORANGE COUNTY BAR ASSOCIATION
COMMERCIAL LAW & BANKRUPTCY SECTION
September Meeting
Exemptions Case Law and Statutory Update
Learn about 2014-2015 developments regarding exemptions including recent case law imposing the burden of proof on the Debtor and allowed surcharges after Law v. Siegel;
Discover best practices for maximizing exemptions without risking denial of discharge; and
The panelists will also discuss proposed Senate Bill 308 increasing the homestead exemption to $300,000 across the board and eliminating the requirement to reinvest exemption proceeds.
D. Edward Hays, Esq., Partner, Marshack Hays LLP
Jeffrey I. Golden, Esq., Partner, Lobel Weiland Golden Friedman LLP Read more…
In a case of first impression, Judge Montali had to decide whether a landlord’s claim for payment of rent during the gap period of a personal bankruptcy is entitled to priority.
Before delving into the facts of the case, a quick primer is appropriate. The treatment of a commercial landlord’s claims in bankruptcy is too complicated and will be discussed in more depth in a future article so this “quick primer” is very limited.
When a company files for bankruptcy, the landlord in a nonresidential context is usually the most powerful player in the scene. The landlord is entitled to be paid contract rate lease payments until the Debtor decides to either reject or assume the lease. This is provided for under § 365(d)(3) which states that “The trustee shall timely perform all the obligations of the debtor … arising from and after the order for relief under any unexpired lease of nonresidential real property … until such lease is assumed or rejected, notwithstanding section 503 (b)(1) of this title….” Read more…
In re Zachary has finally been set for oral argument. Zachary is the case that deals with whether or not the absolute priority rule applies in individual chapter 11 cases.
The Notice of Appeal was filed 7/11/2013! Briefing was completed on 12/10/2013.
| 08/13/2015 | 24 | Notice of Oral Argument on Wednesday, October 21, 2015 – 09:30 A.M. – CA Stanford Sch Moot Courtroom – Stanford U CA.View the Oral Argument Calendar for your case here.[9645858] (GEV) [Entered: 08/13/2015 11:27 AM] |
I have taken out the names of the parties but this is a well known and well regarded bankruptcy boutique law firm. This is the Judge’s Tentative Ruling.
Tentative Ruling:
This is the first and final application for allowance of fees and costs of [the Firm], debtor’s former counsel. The application is opposed in part by the Chapter 11 trustee, and is opposed in whole by both the UST and the debtor.
This is a disturbing case on several levels. First, the case under the DIP was a disaster. A trustee was ultimately appointed for several reasons but most prominently, the MORS were incorrect and seriously misleading, and not only slightly but by a factor of hundreds of thousands. This led to a grave concern whether anything the DIP said or reported could be relied upon. Further, the case appeared to languish for an extended period without tangible progress being made toward reorganization. A disclosure statement was finally provisionally approved, but never amounted to anything because no exhibits were filed as required and ultimately the estate under the trustee’s direction abandoned the entire approach described in the plan. It also developed after the fact that some basic rules were either misunderstood or ignored, including that substantial amounts of cash collateral were spent without consent or authority in violation of §363(c). Cash collateral may have been used in substantial part to pay [the Firm] $57,010 toward its interim fees under a Knudsen order. The lame excuse is offered that counsel thought Bank of America was adequately protected by equity cushion in any event, so apparently decided not to bother with this most basic of Chapter 11 requirements. In addition, apparently substantial amounts of estate property were deposited in Mrs. [debtor’s] account and expended without disclosure at all or any authority under §363. Again, such behavior casts the DIP in the most unfavorable light and makes a consensual plan unlikely.
I have spoken with quite a few practitioners and surprisingly, all of them have said the same thing: an individual Debtor in Chapter 11 Bankruptcy can only receive a discharge once every 8 years.
Then a good friend of mine and told me about his magic bullet: he would vacate the prior discharge to make his clients eligible for the Chapter 11 discharge. It is quite brilliant actually but it turns out not to be necessary.
First, let’s discuss the code section which seems to have caused all the confusion:
Debtor (a gun shop owner) had used social media to promote his gun store, but after he lost ownership of his store in bankruptcy, a judge declared the business’s Facebook and Twitter accounts property that belonged to the new owner and ordered the Debtor to turn over the passwords. Debtor argued the accounts were personal, and refused. He was held in contempt, and spent seven weeks in federal custody until he complied with the order.
The judge’s ruling charts new legal territory in awarding property in bankruptcy proceedings and points to the growing importance of social media accounts as business assets. Legal experts say it also provides a lesson for all business owners active in social media about keeping separate accounts.
The “bar date” to file a proof of claim in the Corinthian chapter 11 bankruptcy case is July 20, 2015. If you think Corinthian owes you money for any reason, you should file a proof of claim in the case. The proof of claim form is here. On line one you put in the amount you think it owes you. You should have some rational basis for the amount but it does not have to be precise at this time unless of course you can make it precise. It should be the amount you think you would win if you sued the school outside of bankruptcy court. You should attach documents if you have them. If you screw something up on the form, the courts are pretty casual about letting you fix it later, i.e., file an amended proof of claim. The big thing is don’t blow that date.
Very helpful instructions can be found on the Public Counsel website here.
Once it is done, mail it to
Corinthian Colleges, Inc., et al. Claims Processing, c/o Rust Omni, 5955 DeSoto Ave., Suite 100, Woodland Hills, CA 91367.
The big think is don’t be intimidated by the process. You won’t be shot if you do it wrong. If you file it late however, you are assured of getting nothing.
