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November 25, 2009

Rules Changes Beginning December 1, 2009

Amendments to the Bankruptcy Rules Take Effect December 1
The following is a summary of the amendments to the Bankruptcy Rules which will take effect December 1, 2009.  The complete text of the new rules, along with official reports, summaries and explanations, are available at:

 http://www.uscourts.gov/rules/newrules6.htm .

A.  Rule 9006:  Changes to the Time Computation Rules
The most pronounced amendment to the bankruptcy rules is in Rule 9006 regarding time computation, i.e. the number of days or hours from a triggering event.  All calendar days are now counted, not just “business days” — excluding the date of the event that triggers the period, but including weekends and holidays.  If, at the end of the time period the deadline day is on a weekend or holiday, then the period is extended to the next day that is not a weekend or holiday, with a proviso for state holidays as discussed below.  These same rules apply for calculation of hourly time periods, except if the hourly time period ends on a weekend or holiday, then the deadline for the hourly time period is automatically extended to the same time on the next day that is not a weekend or holiday.

The amended rules introduce a quirk involving state holidays that must be taken into account.  First, if the deadline set by the rules is on a state holiday that is not a federal holiday, there is an automatic extension of the time period to the next day that is not a weekend or a holiday, but only if the time period being counted is one that goes forward from the event that triggers the deadline.  For example, a rule requiring a filing 14 days after an order of relief would be extended to 15 days if the deadline day is a state, but not federal, holiday.  This change is designed to prevent parties from missing deadlines because they incorrectly believed the courthouse was closed on the state holiday.  However, if the rule requires the parties to count backwards from the triggering event, then the deadline is not extended if the final day is a state, but not federal, holiday.  For example, a rule requiring objections to a proposed sale 7 days before the date of the sale would not be extended to 8 days if the deadline date is a state, but not federal, holiday.  Thus the parties do not lose an extra day because the deadline date is a state holiday.  Practitioners should take extra care counting backwards from deadlines because, if the deadline is extended by a weekend or federal holiday, then the time period to act is effectively shortened by the amended rules.

    The amended rules continue the practice of extending deadlines in cases when the clerk’s office is inaccessible.  The amended rules specifically provide that in cases of electronic filing, if the clerk’s office is inaccessible on the deadline day, then the filing date is midnight of the next day the office is open, presuming that day is not a weekend or holiday.  For non-electronic filing, it is the normal period of closure on the next day.  The committee notes clarify that interruptions in the electronic filing system are specifically considered as causing “inaccessibility” of the clerk’s office within the meaning of the rules.

   The committee notes clarify that there are two exceptions to the new calculation rules.  First, if a court ordered calendar date is specifically set by the order, i.e. “November 1st” rather than “7 days from the date of this order,” then November 1st is the hard date, regardless of the rules.  Second, some statutes still require business days be used in calculation: these rules do not affect deadlines set by statute.  See, e.g., 11 U.S.C. § 527(a)(2) (debt relief agencies must provide a written notice to an assisted person “not later than 3 business days” after providing bankruptcy assistance services) (emphasis added).

   Finally, the amended rules modify all the set periods in the rules in order to account for the fact that weekends are now included in time computation.  The various deadlines are amended in the following manner:
• 5-day periods become 7-day periods
• 10-day periods become 14-day periods
• 15-day periods become 14-day periods
• 20-day periods become 21-day periods
• 25-day periods become 28-day periods

B. Additional Rule Changes
In addition to the time calculation measures, a variety of minor changes will be added to the rules.  These are summarized briefly below.

Rule 4008:  A requirement that a cover sheet be filed along with all reaffirmation agreements.  The cover sheet will be included in the Official Forms.

Rule 7052, 7058, 9021:  In order to clarify judgment requirements, Rule 58 of the Federal Rules of Civil Procedure is explicitly made applicable to adversary proceedings.  This clarifies that the separate document requirements for recording judgments apply to adversary proceedings.  All other recording requirements for judgments and orders are determined by Rule 5003(a), which does not have a separate document requirement.

Rule 7052, 9015, 9023:  These rules are amended to change the deadline for filing certain post-judgment motions to 14 days, rather than the 28 day deadline in the 2009 Amendment to the Federal Rules of Civil Procedure (which are generally incorporated by reference into the Bankruptcy Rules).  This is necessary because the deadline for filing a notice of appeal under Bankruptcy Rule 8002 is 14 days rather than the 30 days allowed under Rule 4(a)(1)(A) of the Federal Rules of Appellate Procedure.

Rule 2016:  The rule is updated to reflect the requirement of 2005 Amendments to the Bankruptcy Code that the declaration of compensation paid to the bankruptcy petition preparer as required by 11 U.S.C. § 110(b)(2) must be filed with the petition, rather than 10 days after the petition.

Rule 9006:  Corrects a cross-referencing error in relation to the time requirements for service of process.

Official Form 9F, 10, and 23:  Minor technical changes in these forms are made to comply better with the official language of the bankruptcy code.

The foregoing materials were prepared by Donald H. Cram, III  and Bernard Kornberg of Severson & Werson, San Francisco, California, Robert G. Harris of Binder & Malter, Santa Clara, California, and Neil W. Bason of Howard Rice Nemerovski Canady Falk & Rabkin, P.C., San Francisco, California.

November 25, 2009 in Current Affairs | Permalink

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Comments

Nice summary of the new rules. Very informative. Thank you.

Posted by: Sued.com | Dec 2, 2009 7:02:24 PM

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