Circuit Court of Appeals Cases from Last Week

By | February 11, 2012 | Cases | No comments

United States Fourth Circuit, 02/09/2012
McDaniel v. Blust,
In a suit re conduct by members of trustee’s law firm and accountant during bankruptcy proceedings, plaintiffs must obtain leave of the bankruptcy court before filing suit as required by the Barton doctrine.

United States Fourth Circuit, 02/10/2012
In re McCormick,
Bank’s lien on one parcel avoided, where: 1) deed was unrecorded as to that parcel; 2) the bankruptcy trustee was only imputed with the notice of the deed that would be imputed to a bona fide purchaser under state law; and 2) North Carolina law allowed a purchaser to rely exclusively on the official recordation index of the county to discover liens, regardless of what other independent knowledge that purchaser might have.

United States Ninth Circuit, 02/09/2012
Matter of SK Foods, L.P.,
Appeal of denial of motion to remove the trustee and disqualify his counsel is dismissed for lack of jurisdiction where each of the orders was not a final, appealable order.

Thanks to Findlaw.com.

New Downtown UST Compliance Rules — Comments and Questions

By | February 9, 2012 | Chapter 11, U.S. Trustee | No comments

Comments and questions re new compliance requirements for Downtown U.S. Trustee’s Office (Woodland Hills has more detailed instructions for their new rules!):

-The instructions to the Debtor’s Declaration re Compliance state that the tax returns are to be provided to the UST at the Initial Debtor Interview, but does not give another option in the event the returns are not provided at the IDI. Are you supposed to email or snail-mail? The UST analysts in Woodland Hills are adamant that no documents are mailed, except for large MORs.

-The Debtor’s Declaration re Compliance states that the Debtor must attach a Real Property Questionnaire for each real property it has an interest in.  But the UST’s Guidelines and Requirements for Chapter 11 Debtors in Possession (LA Division Cases Only) – Appendix A states that the Real Property Questionnaire must be provided to the UST in a separate email, with the following in the subject line “CH 11 COMPLIANCE 2:11-bk-12345-QQ; ABCD, INC.; USTLA5.” Therefore, the Real Property Questionnaire CANNOT be attached to the Debtor’s Declaration re Compliance.

Read more…

Proposed New Bankruptcy Schedules

By | February 9, 2012 | Court Clerk Information | No comments

The powers to be are working on new “consumer friendly” bankruptcy forms.   The Advisory Committee on Bankruptcy Rules has promulgated new forms.  You can access them here.   Click on the bankruptcy committee line, then on the September 2011 line.  Then scroll down to page 189 for the new forms.  They look pretty nice to me.  There are more pages but definitely easier to complete.  If you have an opinion on the forms, you can send it to scott_myers@ao.uscourts.gov.  Judge Elizabeth Perris is very involved in the new forms as well.

Bankruptcy Filings Down in January, 2012 – Total US

By | February 9, 2012 | Bankruptcy Data | No comments
TOTAL US 2008 2009 2010 2011 % 2012
Jan 70,300 89,000 102,600 102,200 0% 87,900 -14%
Feb 79,500 102,000 117,800 109,600 -7%
March 90,400 131,000 159,200 146,400 -8%
April 93,200 128,700 146,200 129,800 -11%
May 89,700 120,400 133,500 122,800 -8%
June 89,900 124,800 133,850 120,700 -10%
July 96,400 130,500 134,600 110,200 -18%
Aug 94,300 120,000 135,600 120,900 -11%
Sept 96,200 125,500 134,000 110,400 -18%
Oct 108,900 130,200 129,700 111,500 -14%
Nov 91,400 115,500 118,100 98,500 -17%
Dec 95,900 117,000 114,700 96,500 -16%
1,096,100 1,434,600 1,559,850 1,379,500 -12%

Bankruptcy Filings Down in January, 2012

By | February 9, 2012 | Bankruptcy Data | No comments
Central District of California
2008 2009 2010 2011 2012
Jan 3,694 6,004 9,013 10,868 21% 8,835 -19%
Feb 3,787 6,971 9,659 10,631 10%
March 4,381 8,529 12,840 13,543 5%
April 5,023 8,512 12,114 12,087 0%
May 5,177 8,967 11,906 11,669 -2%
June 5,351 9,595 12,190 11,718 -4%
July 5,983 9,894 12,737 10,418 -18%
Aug 6,195 9,748 12,720 11,496 -10%
Sept 6,290 9,214 12,412 10,006 -19%
Oct 6,364 10,322 11,753 9,887 -16%
Nov 6,029 9,462 10,900 9,099 -17%
Dec 6,615 9,864 10,925 9,089 -17%
64,889 107,082 139,169 130,511 -6%
% of total 0.059 0.075 0.089 0.095

The Silent Tax Lien and the Bankruptcy Trustee

By | February 8, 2012 | Taxes | No comments

A colleague writes:
PC has $150k of equity in her home. Taxes owed are dischargeable. I know if the IRS filed a Notice of Lien, the lien remains but what if no Notice of Lien was filed – is the unrecorded lien still attached to the equity?

Gentle lawyer:
The IRS does indeed have a silent lien against the equity in the house, but it disappears in bankruptcy. Because the bankruptcy trustee takes over the property with the powers of a judgment creditor, and because there was no Notice of Federal Tax Lien on file, the trustee’s interest trumps the IRS’s interest. The debtor gets to keep the equity in the house. After the discharge is entered, the taxes are discharged, and the IRS can no longer attach the house.

Actor William “Gary” Busey files Chapter 7

By | February 8, 2012 | Cases, Current Events | No comments

Actor Gary Busey filed Chapter 7 on February 8, 2012. The case was assigned to Judge Ahart at the Woodland Hills Bankruptcy Court.  The Chapter 7 Trustee is David Gottleib.

William Busey 1:12-bk-11182-AA Case type: bk Chapter: 7 Asset: No Vol: v Judge: Alan M. Ahart Date filed: 02/07/2012 Date of last filing: 02/07/2012

It was an “emergency” or “face-sheet” filing so the information is limited: the “primarily consumer debts” box is checked;  1-49 creditors; – Value of assets is estimated to be under $50,000; – Liabilities are estimated to be from $500,000 to $1M.

New Chapter 11 Disclosure Statement and Plan Forms for Individuals

By | February 7, 2012 | Chapter 11 | No comments

I finally used the new Chapter 11 Disclosure Statement and Plan forms for individual cases.  They are required by Judge Kaufman and Judge Zurzolo.  They are on the bankruptcy court website, Forms F 2081-1.DISCLSR.STMT and F 2081-1.PLAN.  They are incredibly simple and easy to use.  In fact, I’m not sure the disclosure statement form has enough in it.  The only historical info required is the means test numbers and the net income from the MORs.  The only projections required are amended Schedules I and J, amended to reflect the current status and the plan payments.  The only information on liquidation required is amended Schedules A and B, amended to the date of the disclosure statement.  I added exhibits with projections and I would certainly add exhibits with historical info if available.

The bad news is you cannot save the forms once filled out.  So you have to do the perfect job on the first try or retype it on the second try.  Also, of course, the empty boxes for the treatment of secured creditors leave a lot to be desired.  I got around that (I hope) by saying “see attached for the treatment.”

Try it, you’ll like it!  Remember the forms apply only to individual cases.  Also remember to thank Dennis McGoldrick who did the yeoman’s work on these and got the judges to approve them.

Inland Empire Bankruptcy Forum – Evening with the Judges

By | February 6, 2012 | Judges Corner, Programs | No comments

IEBF Presents:  An Evening With Our Judges  Tuesday, February 7, 2012

The Honorable Meredith A. Jury – U.S. Bankruptcy Judge
The Honorable Catherine E. Bauer – U.S. Bankruptcy Judge
The Honorable Deborah J. Saltzman – U.S. Bankruptcy Judge
The Honorable Scott C. Clarkson – U.S. Bankruptcy Judge
The Honorable Mark S. Wallace – U.S. Bankruptcy Judge
The Honorable Wayne Johnson – U.S. Bankruptcy Judge
Mark D. Houle, Esq.**

**The U.S. Court of Appeals for the Ninth Circuit has appointed Mr. Houle as U.S. Bankruptcy Judge for the Riverside Division.

Attendees are encouraged to submit questions for discussion by e-mail to Todd Frealy at taf@lnbyb.com. Questions are requested no later than January 28, 2012.

When:  Tuesday, February 7, 2012  No-Host Cocktails 6 p.m.  Dinner 6:30 p.m.  Program 7 p.m.

Where:  Mission Inn  3649 Mission Inn Avenue, Riverside

Read more…

Circuit Court of Appeals Cases from Last Week

By | February 4, 2012 | Case Briefs | No comments

United States Fourth Circuit, 02/02/2012
Gentry v. Siegel
Former employee cannot pursue class action for unpaid ovetime where: 1) no abuse of discretion ruling that the bankruptcy process was superior to the class action process for resolving the claims of former employees; 2) notice of the bankruptcy process to the named claimants was not constitutionally deficient; and 3) with respect to unnamed claimants, the named claimants lacked standing to challenge the notice.

United States Ninth Circuit, 01/30/2012
Matter of Thorpe Insulation Co.
Bankruptcy Court’s orders denying creditor’s motion to compel arbitration and disallowing its claim is affirmed, where: 1) the resolution of the creditor’s claim was a core matter in the bankruptcy; 2) no abuse of discretion in denying the creditor’s motion to compel arbitration; 3) no abuse of discretion by declining to give the creditor further opportunity for discovery; 4) the creditor’s claim was properly disallowed because the debtor’s covenants in a settlement agreement were purported prepetition waivers of the protections of the Bankruptcy Code, which need not be permitted.

Thanks to Findlaw.com

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