BankruptcyProf Blog

Program on Consumer Credit in Philly Sept 25, 2009

This looks pretty good.  Recent Developments in Consumer Credit and Payments.  The agenda can be accessed here.  It is hosted by the Federal Reserve Bank of Philadelphia.   

Project on Student Debt

A couple of new sites which could help with repayment of student loans.  The Project on Student Debt and the Income Based Repayment program.  If these actually help anyone, I would appreciate knowing that.  A person cannot qualify for undue hardship under Section 532(a)(8) unless they have made a good faith effort to settle before filing the case. 

California Bar Exam Starts Today

Good luck to my students.  When I was studying for the bar in 1979, I considered writing a letter to the bar promising not to practice law if they just let me pass so I didn't have to take it again. 

Sotomayor Committee Vote Today

The Judiciary Committee expects a vote today at its business meeting on Judge Sonia Sotomayor’s nomination to the Supreme Court.  After the committee’s vote, the full Senate will likely hold a vote before the August recess, by Aug. 7.

Circuit Court of Appeals Cases from Last Week

7th Circuit Court of Appeals, July 20, 2009
In re Gallo, --- F.3d ---, 2009 WL ---------------- (7th Cir. 2009)(no slander of title for filing lis pendens and turnover proper where debtor's former wife failed to establish that the bankruptcy court had any obligation to ensure her ability to pay the judgment before granting the turnover motion)

7th Circuit Court of Appeals, July 20, 2009
In re Turner, --- F.3d ---, 2009 WL ---------------- (7th Cir. 2009)(chapter 13 debtor's phantom mortgage not deductible from debtor's disposable income)

U.S. 9th Circuit Court of Appeals, July 20, 2009
Hoffman v. Lloyd, --- F.3d ---, 2009 WL ---------------- (9th Cir. 2009)(rescission of sale of debtor's foreclosed home proper where the buyer failed to notify the debtor of his rights under California's Home Equity Sales Contract Act, and the parties' settlement agreement did not affect this obligation)

Thanks to Findlaw.com. 

David Souter to Speak at ABA Annual Meeting in Chicago Aug 1

Justice Souter will be the keynote speaker at the ABA Annual meeting in Chicago on Aug 1.  You can access the brochure here. 

ABA Program on Business Bankruptcy, Las Vegas, October, 2009

Register Today! ABA Section of Business Law
Business Bankruptcy Committee
Fall Meeting
October 18-21, 2009
Paris Las Vegas
Las Vegas, NV

ABA Registration Deadline - Friday, October 2, 2009
Don’t miss this great opportunity to exchange views, explore issues, identify emerging practices and interact with other committee members. Register today to attend the 2009 ABA Section of Business Law Committee on Business Bankruptcy Fall Meeting, October 18-21, 2009 at the Paris Las Vegas. As usual, our meeting is being planned and coordinated with the National Conference of Bankruptcy Judges. A number of great CLE programs have been planned covering current hot topics; click here for a complete onsite meeting guide.

You can register any of the following ways:

1. On the NCBJ’s registration form;

2. On the ABA Section of Business Law online registration page or the printable registration form.

As always, the registration fee includes extensive materials from all of our programs - including subcommittee programs. These are made available on a CD-ROM.

3. The NCBJ has reserved a limited number of hotel rooms, and we encourage you to make your reservations as soon as possible. The group room rate is $190.00 per night at the Paris Las Vegas. Please make your reservations by calling the hotel directly at (702) 946-7000 OR (888) 266-5687 and reference the discounted NCBJ (National Conference of Bankruptcy Judges) rate. 

Cramdown Hearings Thursday July 23, 2009

NOTICE OF SUBCOMMITTEE HEARING
The Senate Committee on the Judiciary, Subcommittee on Administrative Oversight and the Courts will hold a hearing entitled " The Worsening Foreclosure Crisis:  Is It Time to Reconsider Bankruptcy Reform?" on Thursday, July 23, 2009 at 10:00 a.m. in Room 226 of the Senate Dirksen Office Building.

Chairman Whitehouse will preside.
By order of the Chairman

Circuit Court of Appeals Cases from Last Week

5th Circuit Court of Appeals, July 14, 2009
Tech. Lending Ptnrs. LLC v. San Patricio Cty. Cmty. Action Agency, --- F.3d ---, 2009 WL ---------- (5th Cir. 2009)(equitable mootness does not apply where the relief requested would not affect the success of the plan or the rights of parties not before the court)

6th Circuit Court of Appeals, July 15, 2009
Quilling v. Trade Ptnrs., Inc., --- F.3d ---, 2009 WL ---------- (6th Cir. 2009)(order distributing the proceeds of life insurance policies owned by a receivership estate on a pro rata basis is affirmed over objection of plaintiff seeking priority)

6th Circuit Court of Appeals, July 17, 2009
Mitan v. Duval, --- F.3d ---, 2009 WL ---------- (6th Cir. 2009)(order converting case from Chapter 11 to Chapter 7 nunc pro tunc under Section 105 affirmed)

7th Circuit Court of Appeals, July 17, 2009
In re MarchFIRST, Inc. , --- F.3d ---, 2009 WL ---------- (7th Cir. 2009)(claim filed untimely where: 1) claim faxed but the bankruptcy notice was sufficiently clear that submission by mail or by hand were the only permissible methods of transmittal; and 2) creditor did not offer convincing justification or explanation for its untimely filing)

10th Circuit Court of Appeals, July 14, 2009
Caplan v. B-Line, LLC, --- F.3d ---, 2009 WL ---------- (10th Cir. 2009)(creditor failed to provide documentation in support of its proof of claim in chapter 13, and thus it was properly disallowed)

Craig Rankin

Craig M. Rankin
All of us at Levene, Neale, Bender, Rankin & Brill L.L.P. are all extremely saddened to report that our good friend and colleague, Craig M. Rankin, died today from injuries suffered in a tragic accident.  We are sure that those of you who had the privilege of knowing Craig remember his quick mind, his out-going personality and his desire to live life to the fullest.  Our thoughts and prayers are with his family.
 
Regards,
David

DAVID L. NEALE
LEVENE, NEALE, BENDER, RANKIN & BRILL L.L.P.
10250 Constellation Boulevard, Suite 1700
Los Angeles, California 90067
Telephone No. (310) 229-1234
Telecopier No. (310) 229-1244
Email:  dln@lnbrb.com
www.lnbrb.com

Mark Cuban Insider Trading Case Dismissed (Sort of)

I'm not a basketball fan until the Lakers get to the semi-finals but I enjoy watching someone go toe-to-toe with the SEC and come out ahead.  The court has dismissed the insider trading case against Mark Cuban but gave the SEC the right to amend.  The decision can be accessed here. 

Review of My Supreme Court Book on Bankruptcy Litigation Blog

Boy, to be included in the same anything with Ken Klee is probably the highlight of my career.  Steve Jakubowski of the Coleman Law Firm in Chicago has written a review of my book, Bankruptcy Jurisprudence from the Supreme Court.  You can access the review here.  The review is posted today on his exceptional blog - Bankruptcy Litigation Blog.  Steve reviews Ken Klee's new book on the Supreme Court as well as mine and opines that they would be good reading for Sonia Sotomayor.

My book is available on Amazon.  Let me know what you think.  JH   

Circuit Court of Appeals Cases from Last Week

6th Circuit Court of Appeals, July 06, 2009
QSI Holdings, Inc. v. Alford, --- F.3d ---, 2009 WL ---------------- (6th Cir 2009)(section 546(e) defense to fraudulent conveyance extends to the leveraged buyout at issue, involving privately held securities)

8th Circuit Court of Appeals, July 08, 2009
Educational Credit Mgmt. Corp. v. Jesperson, --- F.3d ---, 2009 WL ---------------- (8th Cir 2009)(debtor not entitled to an undue hardship student loan discharge as debtor is a recent law school graduate who is reasonably likely to be able to make significant debt repayments in the foreseeable future and qualified for the Department of Education's twenty-five year Income Contingent Repayment Plan)

9th Circuit Court of Appeals, July 10, 2009
Biltmore Assocs., LLC v. Twin City Fire Ins. Co., --- F.3d ---, 2009 WL ---------------- (9th Cir 2009)(In an action by former officers of the Debtor for indemnification in an underlying action for breach of fiduciary duty, the "insured versus insured" exclusion in the relevant policies barred coverage, because a post-bankruptcy debtor in possession acts in the same capacity as the pre-bankruptcy debtor for the purpose of directors and officers liability insurance)

11th Circuit Court of Appeals, July 10, 2009
Lawrence v. Goldberg, --- F.3d ---, 2009 WL ---------------- (6th Cir 2009)(where Plaintiff sued his creditors claiming they conspired to wrongfully enforce a turn over order issued by a Bankruptcy Court, complaint is dismissed where Plaintiff failed to obtain leave of the Bankruptcy Court before filing his complaint)

Thanks to Findlaw.com. 

Central District Filings up 7% in June

In June, 2009, the Central District saw 9,578 total filings compared to 8,965 in May, 8,398 in April, 8,518 in March, 6,967 in February and 5,999 in January.  That is 48.550 for the first six months compared 33,396 for the same six months last year or a 45% increase.   

Chapter 13s were 2,287 compared to 1,988 in May - 22% of total filings - same percentage as the last three months.  That is 457 new petitions per trustee for the month.     

There were 110 new chapter 11 petitions compared to 66 in May.  Individuals filed 42 of the chapter 11 petitions in June.    

This info can be found at the Bankruptcy Data Project.   

Witness List for Sotomayor Confirmation Hearings Starting Monday

 You can access the list with biographies here.  An exhaustive study of her rulings by the Brennan Center can be accessed here.  The study concludes she is a "mainstream judge."   

GM Sale Approved

You can access Judge Gerber's Opinion here. 

cdcbaa Ethics Program - July 18, 2009

CENTRAL DISTRICT CONSUMER BANKRUPTCY ATTORNEYS ASSOCIATION

 GENERAL MEMBERSHIP ASSSEMBLY

July 18, 2009 at 10:30 a.m.

 Location:

Southwestern Law School
3050 Wilshire Blvd., Room W329
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 Hours: 2 hours

“Ethics: Attorneys Beware!: The Unauthorized Practice of Bankruptcy Law”

 Moderator:

Jennifer L. Braun, Esq.
Assistant to the United States Trustee

 Speakers:

The Honorable Judge Maureen A. Tighe
United States Bankruptcy Judge – San Fernando Valley Division

 Holly J. Fujie, Esq.
President, State Bar of California

 Jerry C. Baik, Esq.
Supervising Assistant City Attorney,
City of Los Angeles Criminal-Identity Theft and Fraud Unit

Circuit Court of Appeals Cases from Last Week

5th Circuit Court of Appeals, June 30, 2009
Tate v. Bolen, --- F.3d ---, 2009 WL -------------- (5th Cir. 2009)(Debtors allowed to deduct a transportation ownership deduction under the plain language of section 707(b), even though they had no loan or lease payment on their vehicle)

8th Circuit BAP Rules that Credit Union Violated the Automatic Stay in Collecting Auto Loan

In re Krivohlavek, --- B.R. ---, 2009 WL ----------- (8th Cir. BAP, May 2009)

Issue:   Does a credit union violate the automatic stay when it removes funds from the debtor’s savings account for payment of an auto loan where the debtor has announced she intends to return the vehicle but has not?           

Holding:      Yes. 

The chapter 7 debtor filed her statement of intention with her schedules indicating that she intended to return a vehicle which had been financed by her credit union.  The payments on the loan were paid by an automatic deduction from her paycheck which funds were placed into her credit union savings account and then, from there, apparently immediately, transferred out by the credit union in payment of the loan.  The payroll deduction was a little more than the loan payment as some of the deduction was for a “Christmas account.”  The debtor informed the credit union shortly after she filed that she was going to return the vehicle and that she wanted the automatic payments stopped.  The credit union told her “that it did not have the ability to stop the automatic payment of her loan and that the only way to do so was for the Debtor to obtain a form from her employer, sign it, and then submit it to the Credit Union.”  The debtor eventually filled out and submitted the right form but by then $1,300 had been taken from her savings account and applied to the loan. 

The debtor filed a motion for turnover and for sanctions which the bankruptcy court denied.  The credit union argued that it did not “violate the automatic stay because it did not take any affirmative act to collect a debt from the Debtor; it merely received what it believed were voluntary payments on a loan.”  The court accepted the credit union’s position that only the debtor could stop the paycheck deductions, it was essentially a one-step process, that is the transfer by the employer to the credit union resulted in the payment, and that since she had not returned the vehicle, she apparently intended to keep it and therefore the credit union could keep the payments.

The 8th Circuit BAP reversed.  It disagreed with the factual finding that the credit union was not able to stop the withdrawal from the savings account.  “[H]ere the Credit Union took an affirmative step beyond the mere receipt of an automatic payment – it applied a portion of the funds automatically deposited into the Debtor’s account toward payment of a debt.  And that affirmative step constitutes an act to collect a debt prohibited by § 362(a)(6).”

Bankruptcy Filings Rise Slightly in June

Total bankruptcy filings for June, 2009 increased 3.6% to 124,800 from 120,400 in May which was down from 128,720 petitions filed in April.  That's 374,000 for the second quarter up 16% from 322,000 for the first quarter.  The June rate equates to 1,497,600 for the year compared to 1,597,000 in 2004, 1,660,000 in 2003 and 1,578,000 in 2002.