Bankruptcy e-Bulletin – Update from the State Bar Business Law Section’s INSOLVENCY LAW COMMITTEE

By | June 19, 2013 | Community, Current Events | 2 Comments

June 19, 2013

Dear constituency list members of the Insolvency Law Committee (“ILC”), the following is a legislative summary of interest to insolvency practitioners and professionals:

California Assembly Bill AB 929 became effective on January 1, 2013, increasing personal property exemptions under California Code of Civil Procedure (“CCP”) sections 703 and 704 and impacting the homestead exemption as set forth below:

Under AB 182 (2003), a bill developed through coordination between the California Law Revision Commission and the Insolvency Law Committee, the process of increasing exemptions as to personal property under CCP §703.140, the so-called “wild card” set of exemptions, was removed from the political process through application of a first-of-its kind automatic triennial cost-of-living adjustment set by the annual California Consumer Price Index to keep pace with inflation. See CCP §703.150. Increases in the homestead exemption in real property were not part of this automatic adjustment process.

AB 929, a bill sponsored by Assemblyman Bob Wieckowski, a long-time member of the National Association of Consumer Bankruptcy Attorneys, finally ties the homestead exemption to inflation and the increasing cost of home ownership. On April 1, 2013 (and every three years thereafter) the Judicial Council is required to submit adjusted homestead exemptions based on the change in the annual California Consumer Price Index to the Legislature.

AB 929 modifies CCP §704.730 so that the maximum income threshold is increased (from $15,000 to $25,000 if single and from $20,000 to $35,000 if married) for persons 55+ years of age to be eligible for the $175,000 homestead exemption.

AB 929 also revises and recasts the “wild card” set of exemptions so that their language generally mirrors the corresponding CCP section 704 “homestead” set of exemptions for various assets and increases the dollar amount of the exemption for a debtor’s interest in motor vehicles, household furnishings, jewelry, and tools/professional equipment. The amounts under CCP 703.140(b) were further adjusted effective April 1, 2013 based on the change in the annual Consumer Price Index for All Urban Consumers for the most recent three-year period. The following lists certain dollar amounts of exemptions under CCP 703.140(b):

Property
Old Amount
New Amount (for Petitions filed from 1/1/13 – 3/31/13)
New Amount (for Petitions filed on or after 4/1/13

Homestead (CCP §703.140(b)(1))
$22,075
$24,060
$25,575

Motor Vehicles (CCP §703.140(b)(2))
$3,525
$4,800
$5,100

Household Items, animals, crops, musical instruments (CCP §703.140(b)(3))
$550
$600
$650

Jewelry (CCP §703.140(b)(4))
$1,425
$1,425 (no change)
$1,525

Wildcard (CCP §703.140(b)(5))
$1,175
$1,280
$1,350

Tools of Trade ((CCP §703.140(b)(6))
$2,200
$7,175
$7,625

Life Insurance (CCP §703.140(b)(8))
$11,800
$12,860
$13,675

Personal Injury ((CCP §703.140(b)(11)(D))
$22,075
$24,060
$25,575

Finally, certain other changes were made to CCP § 703.140. First, under CCP §703.140(b)(11)(D), the exclusion for pain, suffering and actual pecuniary loss for the personal injury exemption is eliminated. Second, under CCP §703.140(b)(2), the motor vehicle exemption is expanded to include one or more vehicles (i.e. previously only one vehicle could be exempted).

These materials were prepared by Dore Law, in San Francisco, California. Editorial contributions were provided by ILC member Monique Jewett-Brewster, of Bryan Cave, LLP, in San Francisco, California and ILC Advisor Robert G. Harris of Binder & Malter, LLP in Santa Clara, California.

Thank you for your continued support of the Committee.

Best regards,

Insolvency Law Committee

The Insolvency Law Committee of the Business Law Section of the California State Bar provides a forum for interested bankruptcy practitioners to act for the benefit of all lawyers in the areas of legislation, education and promoting efficiency of practice. For more information about the Business Law Standing Committees, please see the standing committees web page.

These periodic e-mails are being sent to you because you expressed interest in receiving updates from the Insolvency Law Committee of the State Bar of California’s Business Law Section. As a Section member, if you would also like to sign up to receive e-bulletins from other standing committees, simply click HERE and follow the instructions for updating your e-bulletin subscriptions in My State Bar Profile. If you have any difficulty or need assistance, please feel free to contact John Buelter. If you are not a member, or know of friends or colleagues who might wish to join the Section to receive e-bulletins such as this, please click HERE to join online.

To keep up-to-date on the latest news, case and legislative updates, as well as events from the Business Law Section and other Sections of the State Bar of California as well as the California Young Lawyers Association (CYLA), you can follow them on Facebook or add their Twitter feed.

Ninth Circuit joins majority, holds unstayed judgments not ‘bona fide dispute’ — In re Georges Marciano, No. 11-60070 (9th Cir., Feb. 27, 2013)

By | June 19, 2013 | Appeals | No comments

Reed Smith LLP — Marsha A. Houston and Christopher O. Rivas

From: http://www.lexology.com/library/detail.aspx?g=af6d1cf5-d067-4e43-8e6a-3029be339228

In re Georges Marciano, No. 11-60070 (9th Cir., Feb. 27, 2013)

CASE SNAPSHOT

Judgment creditors of Georges Marciano filed an involuntary chapter 11 petition against Marciano, who appealed the state judgments before the petition was filed. The Ninth Circuit ruled, in a case of first impression, that unstayed state court judgments on appeal were not “the subject of a bona fide dispute,” and thus the Bankruptcy Court did not err when it entered an order for relief under chapter 11 against Marciano, notwithstanding the pending appeals.

FACTUAL BACKGROUND

Guess Jeans founder, Georges Marciano, sued multiple former employees in California Superior Court, alleging theft, and some of these employees cross-complained against Marciano for defamation and intentional infliction of emotional distress. The California court entered separate judgments against Marciano in favor of the employees in amounts as high as $55 million. Three of the former employees and judgment holders filed an involuntary chapter 11 petition against Marciano, while the judgments were being appealed by Marciano to the California Court of Appeal. Marciano did not post a bond to stay the judgments.

Read more…

Borsos v. United Healthcare Workers-West (In re Borsos)

By | June 19, 2013 | Appeals | No comments

From: http://volo.abi.org/borsos-v-united-healthcare-workers-west-in-re-borsos

Citation: BAP No. EC-12-1163-MkDJu (B.A.P. 9th Cir. June 10, 2013) (NOT FOR PUBLICATION)

Ruling:
The Bankruptcy Appellate Panel of the Ninth Circuit VACATED the bankruptcy court’s nondischargeability judgment and REMANDED the matter for further findings regarding whether the debtor committed defalcation within the meaning of 11 U.S.C. § 523(a)(4). During the pendency of the appeal, the Supreme Court decided Bullock v. BankChampaign, N.A., 133 S. Ct. 1754 (2013). Interpreting the meaning of “defalcation,” as used in § 523(a)(4), the Supreme Court held that defalcation requires a culpable state of mind, effectively abrogating Ninth Circuit law that formerly did not require a particular state of mind to except a debt from discharge. Applying Ninth Circuit law as it stood at the time, the bankruptcy court did not make any findings regarding the debtor’s state of mind. In light of the Supreme Court’s holding in Bullock, the panel held that it was necessary for the bankruptcy court to revisit the matter and determine whether the debtor acted either with knowledge that his conduct would constitute a breach of his fiduciary duty, or with conscious disregard or willful blindness to a “substantial and unjustifiable risk” that his conduct would constitute a breach of his fiduciary duty. The record before the panel did not allow it to ascertain with any certainty the debtor’s mental state. Because of its holding on the defalcation issue, the panel chose not to address the debtor’s argument that 29 U.S.C. § 501 did not impose upon him the type of fiduciary capacity envisioned by 11 U.S.C. § 523(a)(4).

Procedural context:
The debtor appealed from the bankruptcy court’s nondischargeability judgment under 11 U.S.C. § 523(a)(4).

Read more…

California Assembly Bill AB 929 effective on 1/1/2013: increasing personal property exemptions under CCP 703 and 704 impacting the homestead exemption

By | June 19, 2013 | Legislation | 1 Comment

Dear constituency list members of the Insolvency Law Committee (“ILC”), the following is a legislative summary of interest to insolvency practitioners and professionals:

California Assembly Bill AB 929 became effective on January 1, 2013, increasing personal property exemptions under California Code of Civil Procedure (“CCP”) sections 703 and 704 and impacting the homestead exemption as set forth below:

Under AB 182 (2003), a bill developed through coordination between the California Law Revision Commission and the Insolvency Law Committee, the process of increasing exemptions as to personal property under CCP §703.140, the so-called “wild card” set of exemptions, was removed from the political process through application of a first-of-its kind automatic triennial cost-of-living adjustment set by the annual California Consumer Price Index to keep pace with inflation. See CCP §703.150. Increases in the homestead exemption in real property were not part of this automatic adjustment process.

AB 929, a bill sponsored by Assemblyman Bob Wieckowski, a long-time member of the National Association of Consumer Bankruptcy Attorneys, finally ties the homestead exemption to inflation and the increasing cost of home ownership. On April 1, 2013 (and every three years thereafter) the Judicial Council is required to submit adjusted homestead exemptions based on the change in the annual California Consumer Price Index to the Legislature.

AB 929 modifies CCP §704.730 so that the maximum income threshold is increased (from $15,000 to $25,000 if single and from $20,000 to $35,000 if married) for persons 55+ years of age to be eligible for the $175,000 homestead exemption.

Read more…

BLOOMBERG NEWS Bank awarded bonuses for foreclosures, lawsuit says By Hugh Son and David McLaughlin

By | June 17, 2013 | Current Events | 1 Comment

BLOOMBERG NEWS JUNE 15, 2013 NEW YORK — Bank of America Corp. rewarded staff with cash bonuses and gift cards for meeting quotas tied to sending distressed homeowners into foreclosure, former employees say in court documents.

Mortgage workers falsified records and were told to delay loan-assistance applications by requesting paperwork that the second-biggest US lender had already received, according to statements from former employees filed last week in federal court in Boston.

The lender improperly disqualified applicants to the Home Affordable Modification Program, according to a May 23 statement from Simone Gordon, a loss-mitigation specialist who left the company in 2012.

‘‘We were regularly drilled that it was our job to maximize fees for the bank by fostering and extending delay of the HAMP modification process by any means we could,’’ Gordon said. Managers instructed staff to ‘‘delay modifications by telling homeowners who called in that their documents were ‘under review,’ when in fact, there had been no review,’’ she said.

The bank has denied the plaintiffs’ allegations.

Read more…

cdcbaa — The Strategic Plan for the United States Bankruptcy Court of the Central District of California

By | June 17, 2013 | Court Clerk Information, Judges Corner, Programs | 1 Comment

cdcbaa — Central District Consumer Bankruptcy Attorney Association: The Strategic Plan for the United States Bankruptcy Court of the Central District of California

June 22, 2013

Speakers:
Judges Peter Carroll, Maureen Tighe, Scott Clarkson, Deborah Saltzman, Sandra Klein
Clerk of the Court Kathy Campbell and Staff

The judges will present the proposed new Strategic Plan for the Central District of California, and discuss, among other things, (a) the prior strategic plans of the court; (b) the process undertaken to develop the proposed plan; (c) the comments received during the comment period that expired on May 15, 2013; (d) current work on the proposed plan, including the layout of the plan and the incorporation of comments received; (e) the projected adoption date and implementation date; and (f) the reports that will be made by the chief judge annually during the 7 year term of the plan after implementation regarding the goals reached under each of the strategic issues contained in the plan. Ms. Campbell and her staff may have a Power Point presentation on one or more aspects of the plan. The presentation will be 1 hour and 15 minutes to 1 hour and 30 minutes, with the balance of the time for questions, etc. Each judge making a presentation is responsible for a specific aspect of the planning process and will speak about that section.

Where:
Southwestern Law School
3050 Wilshire Boulevard
Westmoreland Building – 3rd Floor
Los Angeles, CA 90010
Parking is $8.00

Times:
Registration: 10:00am – 11:00am
cdcbaa Membership Meeting: 10:30 am – 11:00 am
Program: 11:00 am – 1:00 pm

2 Hours of MCLE Credit Provided – Limited Space

NOTE: ONLY MEMBERS CURRENT ON THEIR 2013 MEMBERSHIP DUES WILL BE ADMITTED.

Cost: Free to current cdcbaa Members
Non-Members: $250 (which includes cdcbaa membership through 2013, at least two more free MCLE Programs this year, admission to the list serve, and admission to the annual
Calvin Ashland Awards Dinner). Note: persons who have not previously been members of the cdcbaa may join at the meeting for $175.00 which will cover the remainder of this year and the Awards Dinner.

Sign up the day of the seminar with a check payable to cdcbaa or visit our website at www.bklawyers.org to remit payment online.

July 20th CLE Program:
New Issues with the Homestead Exemption

Ninth Circuit (“BAP”) has affirmed a judgment excepting debts from discharge under 11 U.S.C. § 523(a)(6) based upon the preclusive effect of a Nevada state court judgment for abuse of process, nuisance, and oppression

By | June 14, 2013 | Appeals | No comments

June 13, 2013

Dear constituency list members of the Insolvency Law Committee, the following is a recent case update:

Summary

The U.S. Bankruptcy Appellate Panel of the Ninth Circuit (“BAP”) has affirmed a judgment excepting debts from discharge under 11 U.S.C. § 523(a)(6) based upon the preclusive effect of a Nevada state court judgment for abuse of process, nuisance, and oppression. Black v. Bonnie Springs Family Ltd. P’ship (In re Black), Case Nos. 12-1122-DJuKi and 12-1124-DJuKi (related appeals)(9th Cir. BAP Feb. 11, 2013). To read the full decision, click (Black) http://cdn.ca9.uscourts.gov/datastore/bap/2013/02/12/Black12-1122.pdf

Read more…

SUMMER PROGRAM IN LOS ANGELES ON TUESDAY JUNE 25 — RSVP Today!

By | June 14, 2013 | Community, Programs | 1 Comment

The California Supreme Court’s next program will be presented in downtown Los Angeles on the evening of Tuesday, June 25, 2013. Jointly sponsored with the Northern District of California Historical Society, the Ninth Judicial Circuit Historical Society, and the California Historical Society, it will feature an “all-star” cast of state and federal judges and promises to be both entertaining and educational. California Supreme Court Justices Marvin Baxter and Kathryn Werdegar, California District Court of Appeal Laurie Zelon, and U. S. District Court Judges Andrew Guilford, Terry Hatter, and Ronald Lew will dramatize federal-state relations in 19th Century California, as illustrated by events in the tumultuous life and violent death of California Chief Justice and lawyer David Terry.

David Terry was one of the most colorful and controversial justices of the California Supreme Court. During his tenure on the Court he stabbed a member of San Francisco’s 1856 Committee of Vigilance and was imprisoned and tried by the Vigilantes. In 1859, Terry fought a duel with, and killed, United States Senator David Broderick. During the Civil War, Terry fought for the Confederacy as an officer in the Texas Cavalry. After the war, Terry returned to California, resumed the practice of law and, in the 1880s represented Sarah Althea Hill in two notorious trials in San Francisco (one in state court and one in federal court) over her alleged marriage to wealthy U.S. Senator William Sharon. In 1889, Terry physically assaulted U.S. Supreme Court Justice Stephen Field, after Field–while riding circuit–had ruled against Terry in a Sharon lawsuit and then jailed both Terry and Sarah for contempt. During the assault, Justice Field’s bodyguard (a federal Marshal) shot and killed Terry, leading to a landmark U.S. Supreme Court decision, In re Neagle, about the immunity of federal officers from state criminal laws.

The June 25 program will feature the Justices and Judges reading from documents written by Terry, Sarah, Field and others. It will also include historical images (photos, drawings, maps) of the events recounted. The program will be narrated by Richard Rahm, a member of the Northern District Society’s board of directors and a shareholder in the Littler Mendelson law firm, and Dan Grunfeld, the CSCHS president and a partner in the Kaye Scholer law firm.

The program will be held at the auditorium of the Ronald Reagan State Building, at 300 South Spring Street, Los Angeles 90013, starting at 5:30 p.m. and ending at 7 p.m. A reception will follow. The program and reception are free. MCLE credit will be available, for a charge of $30.

 

 

APPOINTMENT TO PANEL OF CHAPTER 7 TRUSTEES

By | June 12, 2013 | Chapter 7 | 1 Comment

PUBLIC NOTICE: APPOINTMENT TO PANEL OF CHAPTER 7 TRUSTEES

The United States Trustee seeks resumes from persons wishing to be considered for appointment to the panel of trustees who administer cases filed under chapter 7 of the bankruptcy code. The appointment is for cases filed in the United States Bankruptcy Court for the Northern District of California, primarily in the San Jose Division. Chapter 7 trustees receive compensation and reimbursement for expenses, in each case in which they serve, pursuant to court order under 11 U.S.C. §326 and§330.  The minimum qualifications for appointment are set forth in 28 C.F.R. § 58.3. To be eligible for appointment, an applicant must possess strong administrative, financial and interpersonal skills. Fiduciary and bankruptcy experience is desirable but not mandatory.

A successful applicant will be required to undergo a background check, and must qualify to be bonded, it is recommend to have the expert opinion of a tax problems lawyer. Although chapter 7 trustees are not federal employees, appointments are made consistent with federal Equal Opportunity policies, which prohibit discrimination in employment.

Forward resumes to the Assistant United States Trustee,Edwina E. Dowell, U.S. Trustee Program, 280 South First St., Room 268, San Jose, CA 95113. All resumes should be received on or before Friday, July 5, 2013.

U.S. Department of Justice

United States Trustee
Northern and Eastern
Districts of California and Nevada

San Jose
408-535-5525
FAX 408-535-5532
280 South First St., Suite 268
San Jose, California 95113
Website address: www.usdoj.gov/ust/r17

Employment Opportunities with the United States District Court, Central District of California

By | June 11, 2013 | Courts | 1 Comment

Employment Opportunities with the United States District Court, Central District of California.

Opportunity:  Seeking a term law clerk position to a new U.S. Magistrate Judge in Los Angeles, California
http://www.cacd.uscourts.gov/employment/term-law-clerk-us-magistrate-judge-designee

Opportunity:  Seeking a term law clerk position to a new U.S. Magistrate Judge in Santa Ana, California
http://www.cacd.uscourts.gov/employment/term-law-clerk-us-magistrate-judge-designee-0

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