April 12, 2008
Frontier Airlines Bankruptcy
Well this has been the fortnight, as they say, for airlines' bankruptcy filings.
Frontier Airlines filed chapter 11 on April 10, 2008 in the Southern District of New York, case No. 08-11298-rdd, Assigned to Judge Robert D. Drain. The immediate cause of the filing was the "notice" by the carrier's credit card processor that it wanted an additional $75 million (or roughly 40% of its cash on hand) to be held in a reserve account to cover anticipated future losses. It was going to begin holding 50% of the credit card receipts until the fund increased to $130 million.
Frontier is considerably bigger than ATA and Aloha with some 6,100 employees including 666 pilots. It lost $32 million in the last quarter of 2007. The cost of gas has risen from $2.12 per gallon on 12/31/06 to $2.58 on 12/31/07 to $3.39 on 4/9/08. It has 62 planes, 38 leased and 24 owned.
There are no figures in the First Day Declaration on the value of the assets versus the total amount of debt.
April 11, 2008
NACBA Convention in Los Angeles - May 15 to 18, 2008
The National Association of Consumer Bankruptcy Attorneys ("NACBA") convention this spring is being held in Hollywood at the Renaissance Hotel from May 15 through May 18. The brochure is here. Its not too late to sign up. There will be some real heavyweight speakers including Ken Klee, Katie Porter, Henry Sommer (co-author of Collier on Bankruptcy). It's a pretty impressive and very lengthy set of programs and I highly recommend it. Say hi if you see me. JH
April 10, 2008
10th Circuit BAP Rules on Requirement that Debtor File Paycheck Stubs for Past 60 Days
Miller v. Cameron (In re Miller) ---- B.R. ----, 2008 WL 754809 (10th Cir. Mar. 2008)
Issue: Is a debtor's pay stub containing year-to-date income totals “other evidence of payment” sufficient to meet the filing requirements of payment advices for the previous 60 days?
Section 521(a)(1)(B)(iv) requires an individual debtor to file “copies of all payment advices or other evidence of payment received within 60 days before the date of the filing of the petition, by the debtor from any employer of the debtor.” The debtor failed to file one stub (of four pay periods in the previous 60 days). Instead he “filed a chart which calculated the data on the missing third pay stub, extrapolated from the year-to-date payment information contained on Debtor's fourth pay stub.” The bankruptcy court raised the issue sua sponte. The chapter 13 trustee sided with the debtor. The bankruptcy court “concluded that Debtor's bankruptcy case had been automatically dismissed pursuant to § 521(i)(1), effective on the forty-sixth day following Debtor's petition date.” “The court found the year-to-date information summarized by Debtor's counsel did not amount to ‘other evidence’ under the statute because Debtor's employer had not provided that evidence.” The court said the key word in the statute is “received” and that the chart was not something “received” from the employer.
The BAP reversed. “We believe this interpretation unnecessarily reads additional requirements into the statute. Under the bankruptcy court's interpretation, a debtor would not only need to provide a separate piece of documentary evidence for each pay period during the sixty days prepetition, he would also have to ensure that each piece of evidence was created by his employer.” “[T]he bankruptcy court's interpretation makes the ‘other evidence of payment’ option effectively non-existent. This stretches the statutory language too far.” “[Y]ear-to-date payment information may be credible ‘other evidence of payment received,’ even though the evidence is not technically in the form of separate payment advices for each relevant pay period.” “In reaching this conclusion, it is important to emphasize that we are not holding that year-to-date income information per se satisfies the filing requirements of § 521(a)(1)(B)(iv). Whether year-to-date figures or some ‘other evidence of payment’ presented by a debtor satisfies the statute will depend on the particular facts and circumstances of any given case.”
April 9, 2008
US Trustee Email Program
Thanks to Robert G. Drummond for this post:
The U.S. Trustee Program's Web site now includes a free email subscription service through GovDelivery. This service allows visitors to receive notifications by email when new information is available.
Click on the "Email Updates" icon at the top of the home page of the UST website to subscribe and start receiving notification of changes to the Web pages you specify. You may unsubscribe at any time.