All posts in Chapter 7

Cert. Asks Supreme Court to Resolve Where Funds from Ch. 13 Should Go After Case Is Converted (Harris v. Vieglahn, No. 14-400)

The appellant argues, “…of 320,000 Chapter 13 cases filed each year, 60,000 are later converted to Chapter 7″. But where should the funds held by the Chapter 13 Trustee go when Debtor converts the case: back to the debtor or to the creditors?  Harris v. Viegelahn, No. 14-400, petition for cert. filed (U.S. Oct. 6, 2014).

Because of a circuit split, the appellant has asked the Supreme Court to resolve this issue.  The appellant reminds us that our 9th Circuit B.A.P. requires the return post-Chapter 7, undistributed funds to the debtor.

Please find the full article below from Westlaw Journal Bankruptcy at Debtor Wants Supreme Court to Resolve Where Post-Petition Funds Go After Conversion, 11 Westlaw Journal Bankruptcy 2 (2014).

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Nov. 1st: New Median Family Income for Means Test

The U.S. Trustee Program has updated the Census Bureau’s Median Family Income Data and will apply the updated data to cases filed on or after Nov. 1st.

For the latest data required for completing Form 22A and Form 22C, please see here:  http://www.justice.gov/ust/eo/bapcpa/meanstesting.htm

Debtors + Class Action: Stir Carefully

You remember the class action quartet, right? Numerosity, Commonality, Typicality,  and Adequacy of Representation.

The Supreme Court in Wal-Mart Stores, Inc. v. Dukes (2011) took issue with plaintiff’s lack of commonality with other members’ claims.

But much recently, the Hon. James Otero of our local U.S. District Court of the Central District, took issue with the last requirement – adequacy of representation. In Alakozai v. Chase Investment Services Corp. (Oct. 2014), the court denied certification of the class on the following grounds: (a) plaintiffs’ claims were not “typical” of other members, and (b) the plaintiffs could not “adequately represent” the class.

Sitting at the edge of your seat, you ask — why!? Simple, the plaintiffs failed to disclose their personal bankruptcy filings, and failed to mention their class action claim in their bankruptcy schedules. Tsk-Tsk-Tsk.

To summarize, the court found that plaintiffs who had a personal bankruptcy pending would have other priorities that would obscure their full attention to the class action case, and that the plaintiff’s right to sue in the class action belonged to the trustee not the debtor (since the Ninth Circuit has said in Cloud v. Northrop Grumman,  all causes of action that accrued before the filing were property of the estate).  As such, argued the U.S. District Court, it was not the plaintiff’s claim to begin with – rather the Trustee’s. So you can’t “adequately represent” the class, if you are not the representative at all.

The case stands for the proposition that a District Court, at least in Judge Otero’s courtroom, will deny certification if the named plaintiff(s) do not disclose their bankruptcy filings or fail to list the class action in their schedules.

Rule of thumb: fully vet your plaintiff’s in the class action, and disclose if plaintiff’s have filed bankruptcy. Failure of which is, in legal parlance, a “big no-no”.

 

Full opinion at http://www.employmentclassactionreport.com/wp-content/uploads/sites/232/2014/10/Alakozai.pdf

Getting Paid: SCOTUS To The Rescue

Should you be paid for your services? ‘Absolutely!‘, you yell at the first person in front of you.

Should you get a bonus for the hard work you did on behalf of debtor’s estate, which allowed the estate to recoup a lot of assets? “Well of course…” you murmur under your breathe — “In Re Smith (2002) says so!”

Not so fast. The Supreme Court will answer the latter question by the end of the term. Submit those fee-apps quickly…just in case.

The Court will be tackling the issue of whether fees that resemble a form of bonus to the fee applicant, and costs incurred in defending that fee application should be compensable?

Ironically, on the fifth Tuesday in September – yes, fifth – the Court granted certiorari to the Fifth Circuit’s Baker Botts LLP v. Asarco LLC (“Asarco”), to answer this question.

The story unfolds like this — the law firm of Baker Botts represented Asarco during the company’s $1.7 billion bankruptcy settlement in 2009, which at the time was the largest environmental bankruptcy in U.S. history.

During the complicated case, Baker Botts did an exceptional job in recouping assets valued at nearly $7 billion via a successful fraudulent transfer litigation. Baker Botts submitted a $120 million fee application — plus a $4 million bonus to themselves for their hard work in recouping such assets for the estate.

I assume Baker Botts argued “‘but-for’ our hard work, the debtor’s estate would not have realized $7 billion of recouped assets”. While applauding the firm’s hard work, the bankruptcy judge agreed. The Debtor was livid at such a fee application, and vehemently objected. In defending its fee application, Baker Botts incurred an additional $5 million. Now, should Baker Botts be able to recoup this $5 million additional fee?  We will find out.

While the bankruptcy and district court approved the fees under §330 — the Fifth Circuit said not so fast.  The Fifth Circuit said those fees do not benefit the debtor’s estate nor are they necessary for the administration of the case — and as such, sorry Baker Botts, but you do not get those fees.

Baker Botts immediately filed a petition to the high court arguing that the Fifth Circuit’s decision conflicts with the Ninth Circuit’s (which allows the bankruptcy court discretion to award such fees under 330(a)).

Our Ninth Circuit, in In re Smith (2002), has said that fees stemming from those types of services that Baker Botts performed are “actual and necessary services”, and thus compensable. Phew.

Come June 2015, the circuit split shall be resolved, and we should finally find out how discretionary §330 can be.

 

 

For further information, please see the source: ABI World, In Asarco Case, by Valeria Morrison and John Farnum.

Link http://www.abiworld.org/e-news/AsarcoAnalysisArticle.pdf

 

David Hahn Memorial Service

Thanks to Sheila Pistone for this.  David Hahn was a good guy.

DAVID L. HAHN
Celebration of Life

Wednesday, October 15, 2014

You are welcome to gather and visit with friends and the family at 5:00 pm.
The Celebration of Life will begin at 5:30 pm.  Food and beverages will be served.

The service will take place beachside in northern San Clemente . Parking will be available in the area around the San Clemente DMV (2727 Via Cascadita, San Clemente , CA. Attendees will then walk one block across the PCH to the beach where the service will be held.

Please note: It is recommended that you dress casual and prepared for the beach and the weather. You may want to bring a lawn chair and blanket with you. After the Celebration we invite you to all enjoy a toast and the sunset together.

11/4/2014 – Settlement Agreements: What You Need to Know for State and Bankruptcy Courts

Settlement Agreements: What You Need to Know for State and Bankruptcy Courts

Panel:
Hon. Julia W. Brand, U.S. Bankruptcy Court
Stella Havkin, Esq., Havkin & Shrago
Raymond H. Aver, Esq., Law Offices of Raymond H. Aver APC

Moderator:
Christian Cooper, Esq., Public Counsel

Date: Tuesday, November 4, 2014
Time: 9am to 12 pm
Location: Roybal Federal Building
255 E. Temple Street, Assembly Room 1268
Los Angeles, CA 90012

YOU MUST COMPLETE A TWO-HOUR PRO BONO COMMITMENT BEFORE ATTENDING THE PROGRAM

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Dean Chemerinsky Speaking on the Future of Bankruptcy Courts

ORANGE COUNTY BAR ASSOCIATION
COMMERCIAL LAW & BANKRUPTCY SECTION

September Meeting
WEDNESDAY, September 24, 2014
11:45 a.m. to 1:30 p.m.
ONE TIME CHANGE IN DATE, TIME & LOCATION

Speaker:
Erwin Chemerinsky
Founding Dean, Distinguished Professor of Law
University of California Irvine, School of Law

Commentary and Questions:
Hon. Theodor C. Albert
U.S. Bankruptcy Court, Central District of California

Hon. Mark S. Wallace
U.S. Bankruptcy Court, Central District of California

Program Managers:
Richard Marshack, Esq.
Kelly Zinser, Esq.

Read more…

June 6, 2014 – FINANCIAL LAWYERS CONFERENCE – Basics of Bankruptcy

FINANCIAL LAWYERS CONFERENCE

BASICS OF BUSINESS BANKRUPTCY
On June 6, 2014, The Financial Lawyers Conference and The Lowell Milken Institute for Business Law and Policy at UCLA School of Law are jointly sponsoring a full-day program on the fundamental issues involved in business bankruptcies.

This program is designed for professionals who deal with business bankruptcies but who are not yet expert in this field, either because they are relatively new to it or because they do not deal with it routinely. Professionals who are lawyers, financial advisors, bankers, analysts and managers at hedge, private equity and other types of funds, and others who deal with distressed companies, will benefit from this program. In addition to providing a foundation of knowledge, the program will allow attendees to establish and cultivate contacts with others involved in this arena. We encourage senior members of the institutions who receive this invitation to send their more junior colleagues to the program.

As reflected in the following agenda, the faculty for this program on the fundamentals of business bankruptcies consists of an array of leading practitioners and academics.

Friday, June 6, 2014
Schedule, Agenda, and Faculty:
8:00 – 8:30 a.m. Registration and Continental Breakfast
8:30 – 8:45 a.m. Welcome and Introduction
Faculty: Ben Logan, O’Melveny & Myers LLP
8:45 – 9:15 a.m. Brief Overview of the Major Players and the Bankruptcy Court System
Faculty: Ben Logan, O’Melveny & Myers LLP
9:15 – 10:30 a.m. Commencement of a Chapter 11 Case, Automatic Stay and First Day Orders
Faculty: Whitman Holt, Klee, Tuchin, Bogdanoff & Stern LLP
Gabriel MacConaill, Sidley Austin LLP
10:30 – 10:45 a.m. Break
10:45 – 11:45 a.m. Chapter 11 Financing
Faculty: Scott Gautier, Peitzman Weg LLP
David Shemano, Peitzman Weg LLP
11:45 – 1:00 p.m. Lunch
1:00 – 1:45 p.m. Executory Contracts
Faculty: Ted Dillman, Latham and Watkins
Suzzanne Uhland, O’Melveny & Myers LLP
1:45 – 2:30 p.m. Avoiding Powers
Faculty: Bernard Bollinger, Buchalter Nemer
Michael Gottfried, Landau Gottfried & Berger LLP
2:30 – 3:30 p.m. Section 363 Sales
Faculty: Sam Newman, Gibson, Dunn & Crutcher LLP
Jeffrey C. Krause, Gibson Dunn & Crutcher LLP
3:30 – 3:45 p.m. Break
3:45 – 5:00 p.m. The Chapter 11 Plan
Faculty: Daniel Bussel, Klee, Tuchin, Bogdanoff & Stern
and Professor of Law at UCLA School of Law
Seth Goldman, Munger, Tolles & Olson LLP
5:00 – 5:15 p.m. Closing Remarks
Faculty: Ben Logan, O’Melveny & Myers LLP
Location: UCLA Law School
385 Charles E. Young Drive East
Los Angeles, California
Click for directions »
Cost: Registration charges include continental breakfast, luncheon, and refreshments at breaks

$125: FLC Members
Lawyers in Government Service
Class of 2012 and 2013 Law or Business School Graduates
Current Law School Students
$150: Nonmembers
Special Offer: Attorneys may join the Financial Lawyers Conference at the time of registration for this event for an additional charge of $50 (representing a $25 discount off the normal membership fees).

CLICK HERE TO REGISTER
Register Online

Click here for campus directions. »

Click here for parking directions. »

** Due to space limitations, registration is limited to 90 attendees. Registrations will be accepted on a first come first served basis. Seats fill up quickly so register ASAP!

MCLE Credit
This activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 7.25 hours. The Financial Lawyers Conference certifies that this activity conforms to the standards for approved educational activities prescribed by the rules and regulations of the State Bar of California governing minimum continuing legal education.

March 6, 2014 – Meet the New Bankruptcy Judges

The SBCBA Debtor/Creditor Section Presents:

“Meet the New Bankruptcy Judges”

When: Thursday, March 6, 2014, from 12:00 to 1:15 pm

Where:
Location to be announced (will be in Santa Barbara or Goleta)

1 hour MCLE credit (pending approval)

Speaker(s):
Honorable Peter Carroll and Honorable Deborah Saltzman

About the Event:
As many of you know, the Honorable Robin Riblet will be retiring this year after over twenty years on the bench, and Chief Judge Peter Carroll and Judge Deborah Saltzman will soon be taking the reins in the Northern Division. The judges have graciously agreed to discuss the transition and the coming procedural changes. Please join the Santa Barbara County Bar Association for a lunch time MCLE to hear what is in store for the future.

Questions:
Due to the interest in this event the judges will be collecting questions in advance and will address selected questions during the presentation. Please email your questions to Casey Nelson at: cnelson@lafsbc.org with the subject line “Question for the Judges.”

Price:
$25.00 for SBCBA Members, $30.00 for Non-Members

Contact Information/R.S.V.P.:
Carissa Horowitz, Esq. Carissa can be contacted at carissa@beallandburkhardt.com.
Checks should be made payable to the Santa Barbara County Bar Association.
Checks should be mailed to Beal & Burkhardt, Attn: Carissa Horowitz, 317 E. Carrillo Street, Santa Barbara, CA 93101.

Please RSVP BY Monday February 24, 2014.

Reaffirmation to refinance/modification after discharge

From:               Katherine Porter

Sent:                Saturday, October 26, 2013

Subject:           Reaffirmation to refinance/modification after discharge

If you have California clients facing requests to reaffirm after discharge to either refinance or modify the loan, please know about the California Monitor Program as a resource. I serve as Monitor at the request of California Attorney General Kamala Harris. The California Monitor provides assistance to homeowners and negotiation with the five mortgage companies that signed the National Mortgage Settlement: BoA, WF, Chase, Citi, and GMAC (now serviced by Ocwen) to ensure compliance with the Settlement, including its bankr uptcy-related servicing reforms. You can submit an issue to us by email to: camonitor@doj.ca.gov.

Of the 5 servicers listed above, we believe Wells Fargo is the main (only?) institution refusing refinances unless the mortgage debt was reaffirmed in the bankruptcy. (Doing it after the discharge basically doesn’t work for a host of legal reasons, and WF sees those issues but seems to continue to “ask for”/”require” a reaffirmation at times. Wells Fargo has confirmed to us, however, that loan modifications after discharge are available, regardless of whether the debt was reaffirmed.

California lawyers feel free to contact us if your clients are facing difficulty in the loan modification process [before, during, after, w/o regard to] the bankruptcy if the servicer is BoA, WF, Chase, Citi, or formerly GMAC (now Ocwen). Unfortunately, we cannot help with other servicers at this time.  We are also particularly interested in problems with Bank of America loans transferred to Nationstar (particularly honoring trial modifications in process or converting to permanent modifications), and whether motions for relief in chapter 13 cases are providing statements of whether the debtor is in the loss mitigation process (this is a settlement requirement).

We also created some bankruptcy-specific National Mortgage Settlement training documents, including one with the National Consumer Law Center called “What Every Consumer Bankruptcy Attorney Needs to Know About the National Mortgage Settlement.  http://californiamonitor.org/wp-content/uploads/2013/02/Consumer-Bankruptcy-Powerpoint.pdf

Our general page is: http://californiamonitor.org/

Professor Katherine Porter

California Monitor

A Program of the Attorney General