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.
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
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:
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