BankruptcyProf Blog

Circuit Court of Appeals Cases from Last Week

2nd Circuit Court of Appeals, March 26, 2009
Pleasant v. TLC Liquidation Trust, --- F.3d ---, 2009 WL ------ (2nd Cir. 2009)(Defendant's motion to reconsider too late)

5th Circuit Court of Appeals, March 26, 2009
Borrego Springs Bank, N.A. v. Skuna River Lumber, L.L.C., --- F.3d ---, 2009 WL ------ (5th Cir. 2009)(Bankruptcy Court must have jurisdiction over the assets to enter order surcharging assets and imposing a judicial lien)

6th Circuit Court of Appeals, March 23, 2009
Moran v. LTV Steel Co., --- F.3d ---, 2009 WL ------ (6th Cir. 2009)(mere fact that court authorized the committee to sue defendants did not render defendant aggrieved for purpose of standing to appeal order forming the committee)

6th Circuit Court of Appeals, March 27, 2009
Yoppolo v. MBNA Am. Bank, N.A., --- F.3d ---, 2009 WL ------ (6th Cir. 2009)(bank-to-bank transfer actually diminished the Debtor's assets and the "earmark" doctrine did not apply, and thus the transfer was of the Debtor's interest in the property)

8th Circuit Court of Appeals, March 24, 2009
Am. Prairie Constr. Co. v. Hoich, --- F.3d ---, 2009 WL ------ (8th Cir. 2009)(action involving a settlement agreement)

9th Circuit Court of Appeals, March 25, 2009
Educational Cred. Mgmt. Corp. v. Coleman, --- F.3d ---, 2009 WL ------ (9th Cir. 2009)(request for finding of "undue hardship" to permit the discharge of her student loans ripe even though substantially in advance of plan completion)

Leaving Las Vegas

I have been in Las Vegas for the past four days, hence no posts.  I spent the first two days anticipating the big victory by Gonzaga over UNC and the past two days licking my wounds.  Business in the city is really slow in my unexpert opinion. 

Obama Townhall Meeting Online Today - Send in Your Questions

http://www.whitehouse.gov/    

Prof. Katie Porter Posting on Credit Slips - This is Good

Laughing through the Pain
posted by Katie Porter
This economic meltdown isn't fun for anyone, not even bankruptcy law professors. But Americans are creative, resilient folks and in the midst of hardship, some people are finding ways to cheer themselves with humor. Here are three recent examples to lighten your day:

A former student of mine wanted to teach his elementary school-age son about the financial system and give him a taste of entreprenuership. They created Bankster Buddies toilet paper, which is printed with the faces of government officials who had a role in the meltdown. The bipartisan paper bears a memorable slogan: They dump on us; we wipe with them!

Next up is the Disposable Bullshit Bag. The bag comes printed with directions and carries a handy warning:  "Do not attempt to dispose of your BS through any government agency since they produce more bullshit than they can dispose of themselves." I've located a picture here but don't know where to purchase them. They are the perfect gift for that hard-to-shop for family member though.

Max Gardner of Shelby NC sent me a new twist on a classic song. Take a load off Fannie illustrates the current meltdown with visual images, including some great headlines from 2008 like "Bernake says housing crisis is contained."

I'm sure Credit Slips readers will have other examples. I think I've already pushed the outer limits of taste with my first two examples, so keep it in bounds, but feel free to share. We all need a laugh to lighten our load these days.

Thanks to Creditslips.com   

Dubai sues MGM Grand

A copy of the complaint can be accessed here.  I've been saying that I want to write a book on a big public chapter 11 that has some sex appeal.  A case that I can follow from day one and hopefully explain in plain english (which leaves out Lehman Bros.).  The MGM may be it.  The beginning basis for the Dubai suit is the comment by MGM's auditors in the latest report that there is substantial doubt that MGM can survive.  Stay tuned.   

Central District Consumer Bankruptcy Attorneys Program This Saturday

GENERAL MEMBERSHIP ASSSEMBLY

March 28, 2009 at 10:30 a.m.

Location:

Southwestern Law School
3050 Wilshire Blvd., Room 329
3rd Floor in the Westmoreland Building
Los Angeles, CA 90010

MCLE Program, Co-Sponsored by Southwestern Law School,

11:00 a.m. – 1:00 p.m.

Total MCLE Hours: 2 hours

“HOTTEST TOPICS IN CHAPTER 13”

Speakers:  Nancy Clark, Esq., Cassandra Richey, Esq. and a Surprise Guest Speaker

Upcoming Events:

April 18, 2009

MCLE: “Means Test” to be presented by James T. King, Esq. and Peter M. Lively, Esq.

1.6 Million Vehicles Repossessed in 2008

According to radio station - KCTV5:  

In 2008, 1.6 million vehicles were repossessed, an increase of 12 percent from the previous year. Economists said the home foreclosure crisis is partly to blame because as people try to save their homes, their car payments tend to fall behind.

The article can be accessed here.    1.6 million seems like a staggering amount to me.  How many vehicles even sold in 2008?  Thanks to Bob Hiller for this note. 

Oral History Interview with Vern Countryman - 1995

This is pretty fun to read if you like history at all.  I found it on the Penn Archives site.  The interview was conducted by Judge Randall Newsome.  The transcript is here.  

Circuit Court of Appeals Cases from Last Week

7th Circuit Court of Appeals, March 18, 2009
Leibowitz v. Great Am. Group, --- F.3d ----, 2009 WL ---------- (7th Cir. 2009)(contract to indemnify defendant was enforceable)

8th Circuit Court of Appeals, March 17, 2009
Fix v. First State Bank of Roscoe, --- F.3d ---, 2009 WL --------- (8th Cir. 2009)(No homestead exemption for property conveyed prepetition, other causes of action are property of the estate except claim for infliction of emotional distress - claims not prevented by prepetition relase)

9th Circuit Court of Appeals, March 16, 2009
Griffin v. Wardrobe, ---- F.3d ----, 2009 WL -------- (9th Cir. 2009)(state court improperly allowed Plaintiff to amend her complaint in violation of the automatic stay)

Thanks to Findlaw.com

Peter Pocklington Accused of Hiding Assets

I remember when Peter Pocklington traded Wayne Gretzky from his Edmonton team to the Kings.  I bought season seats right after that.  Anyway for some godforsaken reason he filed chapter 7.  The case is pending in Riverside before Judge Meredith Jury.  Several creditors have sued to deny his discharge on the grounds he is hiding all kinds of assets offshore.  You can access the complaint against him here.  Plaintiff's counsel, David Casselman, is a really aggressive attorney.  You really don't want him after you.  

By the way a little trivia - Barack Obama is six months younger than Wayne Gretzky.   

Speaking of a Trillion; and by the way, GO ZAGS

 

So its not bankruptcy.  I had a long day today.   

I laughed myself sick at lunch today reading the Daily News article by Thomas Hoffarth.  He points out that no 16th seed in the NCAA Tournament has ever beaten a first seed going 96-0 and only 11 times has the 16th even come within 10 points in the game with the first.  The 15th seed has only beaten the 2nd seed 4 times going 92-4, the last time being in 2001.  "Perhaps that's why oddsmaker Danny Sheridan has set the odds of 16th seed Alabama State winning the tournament at a trillion to one."  The odds on East Tenneasse winning is a septillion to one.  I'll lay a dollar on that.  I don't think there is a septillion dollars in the universe. 

My alma mater, Gonzaga, is going to do it this year. All the way to the final four.  I'm not sure if they post odds for that.   

Law Review Symposium: Bringing Down the Curtain on the Current Mortgage Crisis

This looks like a pretty good program at Pepperdine Law School.  You can access the brochure here.   Fourteen speakers including Prof. Bob Lawless.

When Friday, April 17, 2009, 8:30 a.m. – 5 p.m.
Where Pepperdine School of Law
24255 Pacific Coast Highway
Malibu, CA 90263

Contact Name Margaret Barfield
Contact Email margaret.barfield@pepperdine.edu
Contact Phone 310-506-4654
Type of Lecture/Seminar Symposia
Cost Attendance with MCLE credit: $150
Attendance with no MCLE credit: $75
Student (non-Pepp): $15
Pepperdine Law Student: no cost, but registration required

American College of Bankruptcy - Induction of Class 20 on March 26

The induction of the new fellows will take place ath the Supreme Court.  The information can be accessed here.  The 33 new inductees include our own Judge Geraldine Mund, Prof. Dan Bussell from UCLA, and Gary Klausner.  Ken Klee will lead one of the related programs on his new book, Bankruptcy and the Supreme Court.

Magna Entertainment - Santa Anita Racetrack - First Day Declaration

Can be accessed here. 

The Crisis of Credit Video

This instructional video is pretty good.  You can access it here. 

Symposium on Chapter 11 at DePaul in Chicago - April 16

 

Seventh Annual DePaul Business & Commercial Law Journal Symposium
Into the Sunset: Bankruptcy as Scriptwriter of the Dénouement of Financial Distress
Thursday, April 16, 2009
10:30 a.m. – 5:00 p.m.
Westin Michigan Avenue
909 North Michigan Avenue
Chicago, Illinois

For Better or Worse: Chapter 11 in the Post-BAPCPA Downturn
BAPCPA, the 2005 Bankruptcy Code overhaul, brought some significant changes to corporate reorganization, leading some to dub Chapter 11 as the "National Foreclosure Act." This panel will examine the myths and realities behind this description by focusing on the more sweeping BAPCPA amendments: time restrictions on assumption or rejection of commercial leases, the limited plan exclusivity period, 20-day administrative expense claims and the attempted reigning in of executive compensation.
Speakers: Jo Ann J. Brighton, K&L Gates, Charlotte, North Carolina; Judge Joy Flowers Conti, United States District Court, Western District of Pennsylvania, Pittsburgh, Pennsylvania; Richard E. Mikels, Mintz Levin, Boston, Massachusetts

Thanks to Prof. Nancy Rapoport

Circuit Court of Appeals cases from Last Week

2nd Circuit Court of Appeals, March 11, 2009
Overbaugh v. Household Bank N.A., --- F.3d ---, 2009 WL ------ (2nd Cir. 2009)(Chapter 13 trustee has standing to object to a motion to reclassify a claim; and motion to reclassify defendant's secured claim was properly denied as defendant had perfected a purchase money security interest in the secured claim pursuant to the terms of New York's UCC)

5th Circuit Court of Appeals, March 11, 2009
Cadle Co. v. Duncan, --- F.3d ---, 2009 WL ------ (5th Cir. 2009)(debts were dischargeable where Plaintiff failed to prove that the Debtor acted with fraudulent intent in omitting certain items from the schedules accompanying his bankruptcy petition)

Thanks to Findlaw.com

Harvey Miller Testimony Before the House re Chapter 11

Harvey Miller's testimony before the House on Wednesday is great.  You can access it here.   The House subcommittee was "concerned" that chapter 11 perhaps is not working anymore since Circuit City failed so quickly and went out of business leaving 34,000 employees stranded.  The Weil Gotschal mega bankruptcy attorney argues that chapter 11 in 1978, designed to rehabilitate distressed debtors, has been whittled away by special interest groups to the point that today the prime objective of chapter 11 is the maximization of creditor recovery.  He says:

"Thus, chapter 11, more often than not, is used as a means to validate and sterilize the sale of a debtor’s assets. This is accomplished by the use of section 363(b) of the Bankruptcy Code to effect a
expeditious sale of all or substantially all of the debtor’s assets, early in the case, to expedite
distributions, essentially, to secured creditors. The process provides early gratification of the
secured creditors and gives buyers the benefit of asset sales that are blessed by a court and, often,
are free and clear of liens, encumbrances and claims pursuant to section 363(f) of the Bankruptcy
Code."

"Virtually every group with an effective lobbyist came forward and was able to obtain special interest legislation that included protections for personal property equipment lessors, commercial property owners, shopping center owners and lessors, financial institutions, government agencies, unions, and
retirees, to name just a few. The biggest special interest victory is the ill-conceived BAPCPA."

He cites specifically the time restrictions for assuming leases and for filing plans.  Because the chapter 11 must assume or reject leases and file a plan early or liquidate, it will more often concede early that it cannot reorganize and therefore must liquidate. 

In fairness, he also points out that retailers did not, until a few years ago, generally give lenders a security interest in the inventory.  Today they do which makes inventory vendors more nervous for obvious reasons and creates a cash collateral problem which simply cannot be resolved at the beginning of the case without simply acceding to the demands of the cash collateral creditor. 

Fleetwood Homes First Day Declaration

You can access the first day declaration here.  The hearing on the first day motions is today at 2:00 p.m. in Riverside.  Meredith Jury is a great judge for this case.

Fleetwood Homes Files Chapter 11 in Riverside

U.S. Bankruptcy Court
Central District Of California (Riverside)
Bankruptcy Petition #: 6:09-bk-14254-MJ

Assigned to: Meredith Jury Chapter 11

Date filed:   03/10/2009

Debtor Fleetwood Enterprises Inc. 3125 Myers Street P.O. Box 7638 Riverside, CA 92513 951-351-3500 Tax ID / EIN: 91-2120567	represented by	Craig Millet 4 Park Plaza #1400 Irvine, CA 92614 949-451-3986 Fax : 949-475-4651 Email: cmillet@gibsondunn.com
U.S. Trustee United States Trustee (RS) 3685 Main Street, Suite 300 Riverside, CA 92501