New Opinion on Lam Motions in Chapter 20

In re Frazier, 2012 Westlaw 812387 (E.D. Cal. March 2012), the District Court has affirmed the bankruptcy court’s ruling allowing a residential lien strip notwithstanding no discharge in the chapter 13.  The court says, “Instead of discharge, the Court agrees with the underlying Bankruptcy Court and finds plan completion is the appropriate end to Appellees’ Chapter 20 case.  The lien strip will become permanent not upon a discharge, as would happen in a typical Chapter 13 case, but upon completion of all payments as required by the plan. See In re Blenheim, 2011 WL 6779709 (Bankr.W.D.Wash. Dec.27, 2011).”

Tax Rebates/Refunds Lead to Increased Filings

There were more bankruptcy filings in March than any other month in 2009, 2010, and 2011 and 2012 presumably will be the same.  Why you ask?  There is a great analysis here.    Tax refunds.  The article is actually about tax rebates but I assume it would apply to tax refunds as well.  The costs of filing we know have soared since BAPCPA in 2005.  The authors say “legal and administrative costs inhibit a significant number of households from filing for bankruptcy.”  The tax refunds gives the filer the funds to pay the attorney or other paid preparer.

The article concludes, “Mian and Sufi (2011) report that the household debt to income ratio more than doubled from 0.9 in 1980 to 2.0 in 2009.  Against the backdrop of this dramatic rise in household debt, raising the costs of filing is an ineffective strategy for curtailing consumer bankruptcy.  The recession has caught many households in a rising tide of unemployment and foreclosure, and high bankruptcy fees prevent them from obtaining much-needed relief.

There are many reasons to be troubled by today’s high bankruptcy rates—more than 1.3 percent of all U.S. households filed in 2011.  But we can only fix America’s bankruptcy problem by eliminating excessive consumer credit, not by adding insult to injury for households that are already broke.”

Bankruptcy Filings Down Again in the Central District

Central District of California
   2008    2009    2010 %    2011    2012
Jan 3,694 6,004 9,013 50% 10,868 21% 8,835 -19%
Feb 3,787 6,971 9,659 39% 10,631 10% 9,307 -12%
March 4,381 8,529 12,840 51% 13,543 5% 10,108 -25%
April 5,023 8,512 12,114 42% 12,087 0%
May 5,177 8,967 11,906 33% 11,669 -2%
June 5,351 9,595 12,190 27% 11,718 -4%
July 5,983 9,894 12,737 29% 10,418 -18%
Aug 6,195 9,748 12,720 30% 11,496 -10%
Sept 6,290 9,214 12,412 35% 10,006 -19%
Oct 6,364 10,322 11,753 14% 9,887 -16%
Nov 6,029 9,462 10,900 15% 9,099 -17%
Dec 6,615 9,864 10,925 11% 9,089 -17%
64,889 107,082 139,169 30% 130,511 -6%
% of total 0.059 0.075 0.089 0.095

Bankruptcy Filings Tumble in March, 2012

Bankruptcy filings in March were higher accross the country than April but 17% lower than March a-year-ago.   Prof. Bob Lawless has an interesting analysis of filing trends you can access here.

2007        2008      2009      2010 %      2011 % 2012
Jan 55,200 70,300 89,000 102,600 15% 102,200 0% 87,900 -14%
Feb 58,800 79,500 102,000 117,800 15% 109,600 -7% 104,400 -5%
March 73,100 90,400 131,000 159,200 22% 146,400 -8% 122,100 -17%
April 67,800 93,200 128,700 146,200 14% 129,800 -11%
May 69,900 89,700 120,400 133,500 11% 122,800 -8%
June 67,300 89,900 124,800 133,850 7% 120,700 -10%
July 69,100 96,400 130,500 134,600 3% 110,200 -18%
Aug 77,100 94,300 120,000 135,600 13% 120,900 -11%
Sept 67,500 96,200 125,500 134,000 7% 110,400 -18%
Oct 81,200 108,900 130,200 129,700 0% 111,500 -14%
Nov 74,200 91,400 115,500 118,100 2% 98,500 -17%
Dec 65,900 95,900 117,000 114,700 -2% 96,500 -16%
827,100 1,096,100 1,434,600 1,559,850 9% 1,379,500 -12%  

District Court Rules for WFB in Mwangi – Violation of Automatic Stay Case

The District Court has sided with WFB in the class action brought against Wells Fargo Bank in the Mwangi case.  Mwangi is the case where the 9th Circuit BAP ruled that WFB violated the automatic stay by freezing the funds automatically in every bankruptcy case.  The BAP sent it back to Judge Markell for a ruling on damages and Judge Markell ruled after an evidentiary hearing that there were none.  The debtor and their very energetic attorney filed a class action suit against WFB but now the district court has affirmed the bankruptcy court’s dismissal of the case.  A copy of the opinion is here – Mwangi.   My understanding is that WFB continues to freeze the account in every bankruptcy filing.  If that is not the case, I would love to know.  I still warn every client to get their money out of WFB before filing lest it be frozen.  I have to say however that the few times I have had to go to trustees to get the funds unfrozen, it has been handled pretty quickly.

Dodgers Purchase Agreement

You can access the agreement between McCourt and Guggenheim Baseball Managent, L.P, all 75 pages here.  This is the copy that was filed with the Bankruptcy Court a day or two ago.  Dodger Purchase Agreement

THE JEFFREY S. TURNER MEMORIAL COMMERCIAL LAW UPDATE

THE JEFFREY S. TURNER MEMORIAL COMMERCIAL LAW UPDATE

This meeting is jointly sponsored by The Financial Lawyers Conference and The Los Angeles County Bar Association Commercial Law and Bankruptcy Section, Commercial Law Committee

Thursday, May 10, 2012

Speakers:
Steven O. Weise, Proskauer Rose LLP
Robert Goldschein, Tennenbaum Capital Partners, LLC

Location:
Beverly Hilton Hotel
9876 Wilshire Boulevard
Beverly Hills, California

Read more…

Chapter 13 Day with Judge Ahart

I had a very pleasant chapter 13 confirmation hearing this morning with Judge Ahart.  I got to court an hour and a half before the hearing.  The trustee’s attorney told me everything was okay and the plan would be confirmed and I could leave.   I commented that I was surprised that it wasn’t more crowded, even an hour and a half early.  She said Judge Ahart’s calendar is very efficient and sometimes he is on second call by 11:00am.  If you are not there by then, you risk the case being dismissed.

Motion for Relief Day with Judge Robert Kwan

I spent an hour or so this morning in Judge Robert Kwan’s courtroom.  He had about 30 stay relief motions that he went through fairly quickly.  He continued 5 or 6 matters because there were no tabs on the pleadings he received.  What is surprising about that is that 6 out of 30 is 20% of all the motions.  The judges complain about this so often I would have been surprised if it was 6 in a month.  Also, he was continuing matters where he was not sure if the junior lienholders had been properly noticed.  He wants the address on the FDIC website if it’s a bank; he doesn’t want to depend on the address in the debtor’s schedules.  Finally, he was asking questions about the chain of title documents, i.e., the assignment of the note.  He questioned one attorney asking who the “declarant” was as the motion simply said something like “Asset Manager” and he quite properly asked, “Asset Manager for whom.”  On one motion he wanted a recorded copy of the trust deed.  The point is he is sua sponte reviewing the supporting documentation creditors are putting in these motions to make sure there is sufficient foundation even where there is no objection by the debtor.  Nice.

Orange County Bankruptcy Forum Program at Chapman Law School, April 21, 2012

The Orange County Bankruptcy Forum and Chapman University School of Law, Co-Sponsors, Present:

Bankruptcy Code Section 523:  A Comprehensive Seminar on All Aspects of  Nondischargeability and Nondischargeability Litigation Under 11 U.S.C. Section 523.  

Speakers:  Honorable Mark S. Wallace – U.S. Bankruptcy Court Judge
William M. Burd – Burd & Naylor
Dan E. Chambers – Troutman Sanders
Robert P. Goe – Goe & Forsythe
D. Edward Hays – Marshack Hays
Sean A. O’Keefe – O’Keefe & Associates

Program Committee:  Beth E. Gaschen, Adam M. Greely & Christopher A. Minier

Location:  Chapman University School of Law

THIS PRESENTATION WILL TAKE PLACE AT THE CHAPMAN LAW SCHOOL MOCK COURTROOM;  SPACE IS LIMITED TO FIRST 70 REGISTRANTS.

Date/Time:  April 21, 2012  8:30 a.m. – 12:00 p.m.   Continental Breakfast at 8:30 a.m.  Program to Commence at 9:00 a.m.

Cost:  Members: $100 ~ Non-Members $130 ~ Judge or Government Employee $50  After April 13, 2012  Members: $120 ~ Non-Members $150 ~ Judge or Government Employee $70