BankruptcyProf Blog

Circuit Court of Appeals Cases from Last Week

2nd Circuit Court of Appeals, December 24, 2009
Kirschner v. KPMG LLP, --- F.3d ---, 2009 WL ---------- (2nd Cir. 2009)(the Court of Appeals certifies questions to the Court of Appeals of New York re consequences of insider conduct and the "adverse interest" exception)

3rd Circuit Court of Appeals, December 22, 2009
In re Plassein Int'l Corp., --- F.3d ---, 2009 WL ---------- (3rd Cir. 2009)(in leveraged buy-outs, payments to shareholders of the acquired corporations not avoidable as fraudulent transfers because they were exempt settlement payments under section 546(e))

3rd Circuit Court of Appeals, December 22, 2009
In re 15375 Memorial Corp., --- F.3d ---, 2009 WL ---------- (3rd Cir. 2009)(Chapter 11 dismissed for lack of good faith where petitions served no valid bankruptcy purpose and were used primarily as a litigation tactic to protect debtors and their parent companies from liability in pending litigation)

7th Circuit Court of Appeals, December 21, 2009
In re marchFIRST, Inc., --- F.3d ---, 2009 WL ---------- (7th Cir. 2009)(plaintiff's claims dismissed because they accrued more than five years before it filed its complaint and its claims are barred by the five-year statute of limitations)

9th Circuit Court of Appeals, December 21, 2009
In the matter of: Harris, --- F.3d ---, 2009 WL ---------- (9th Cir. 2009)(action by a Chapter 7 debtor against the bankruptcy trustee is dismissed where: 1) the bankruptcy court had subject matter jurisdiction over plaintiff's state law breach of contract claim; and 2) the bankruptcy court's approval of the acts plaintiff alleged breached the contract entitled the defendants to derived quasi-judicial immunity)

Thanks to Findlaw.com

Scotus Wiki on Hamilton v. Lanning

http://www.scotuswiki.com/index.php?title=Hamilton%2C_Chapter_13_Trustee_v._Lanning

Circuit Court of Appeals Cases from Last Week

1st Circuit Court of Appeals, December 14, 2009
Haag v. US, --- F.3d ---, 2009 WL ---------- (1st Cir. 2009)(defenses to IRS request for judgment for unpaid taxes rejected where defenses are foreclosed by res judicata and are without merit)

1st Circuit Court of Appeals, December 14, 2009
Rederford v. US Airways, Inc., --- F.3d ---, 2009 WL ---------- (1st Cir. 2009)(action against airline by a former employee alleging violation under the ADA dismissed where: 1) plaintiff failed to pursue her employment discrimination claims through the bankruptcy proceeding; and 2) the district court did not err in rejecting plaintiff's contention that she nonetheless should be able to litigate her claims based on the doctrines of judicial estoppel and unclean hands)

5th Circuit Court of Appeals, December 15, 2009
In re Superior Offshore Int'l., Inc., --- F.3d ---, 2009 WL ---------- (5th Cir. 2009)(confirmation of debtor's Chapter 11 liquidation plan is affirmed where: 1) section 1123(a)(4) only required equal treatment of members within the same class; 2) the plan made all the disclosures regarding the Equity Subcommittee required by section 1129(a)(5)(A)(i); and 3) because a class of creditors voted in favor of the plan, the absolute priority rule unambiguously did not apply to those claims)

Thanks to Findlaw.com

Reflections on Twenty Years of Law Teaching: A Great Article by UCLA Prof. Stephen Bainbridge

I have learned a few things over the past couple of years following Prof. Bainbridge's blog.  His article on the UCLA Law Review website can be accessed here.  I would not say we agree on a lot, especially politically, but he gets me thinking. 

I certainly employ the "soft Socratic" method of teaching.  Call on a volunteer to review an assigned case or answer a question and then help when they get stuck in the response - give them a straight answer at the end of the discussion, write it on the board. 

But I part ways with Steve on whether law schools are supposed to teach students "to think like lawyers."  That is my goal in teaching and I think that is by far the accomplishment of a law student by the end of the law curriculum.  I did not realize that until I taught first year contracts after about ten years of teaching the Uniform Commercial Code to third year students.  I kept writing on exam answers from first year students, "This is not political science class."  "This is not sociology."  State the issue, state the rule, and apply the rule to the facts.  Students do not have difficulty learning the rules (the few rules which are actually important to learn).  They have a terrible time applying the rules to Mr. Jones sitting in your office with a problem that needs resolution.  Often the student will set forth the correct issue and rule, and then abandon the rule entirely because "in this case it's unfair to make Mr. Jones pay for the goods."  They have a terrible time telling Mr. Jones he blew it.  He better pay. 

But the article has motivated me to give power point a shot.  I have used it a little but never handed out a power point presentation to students.  It has motivated me to think about how to use all those electronic gadgets students are staring at during class - in a positive way - rather than just continuing to whine about it.    

Great Thread on Removal of Judicial Liens

Question:
Correct me if I am wrong…. When someone files a Chapter 7 bankruptcy and there is a judicial lien on his/her home due to an unpaid credit card debt… the lien still stands after the discharge of the bankruptcy?
 
Laurie Turley-Michel
Sandusky, OH 44870

Correct, unless they file a Motion to Avoid Lien.
Most debtors do not understand this.  I have had many cases where the judgment lien survives the bk and the debtor demands that it be released.  Frankly I think there are attorneys in this district that do not explain this well to their clients and do a disservice to them by not filing a motion to avoid, which most creditors do not bother to respond to.
 
Brooks J. Grainger, Esq.
South Bend, IN 46660

Some attorneys only file a motion to avoid the lien if there is real property in the case, but I have always filed motions to avoid judgment liens in every 7 for one simple reason: if you don't, your client will be calling you a year or 2 later to complain when some loan officer turns him down because there is still an outstanding lien on his credit report.

I don't think a creditor can attach the old lien to new property after the discharge, but try explaining that to some mortgage hack who doesn't get it; it's better to have the Order Avoiding the Lien handy to fax or email to them.

(don't forget to file motions to avoid non-PMSI liens too.  they don't just go away.)
 
Jim Gray
Atlanta, GA

I don't think one can or should move to avoid liens in every 7. How do you avoid a lien that does not exist? To be avoidable, the lien has to impair an exemption. If a debtor owns no real property, there is no lien and there is no impairment of exemption.

Alan Wenokur
Seattle, WA

Looks like what you are really doing is getting a comfort order when there is no real property. The request to the court should make that clear; otherwise, a motion seeking 522(f) relief as against something that doesn't exist might get bounced.

catmcewen@AOL.COM

I disagree, since (at least in Georgia) a judgment becomes a lien against "all real and personal property," and in every state, I'm sure the debtor's clothes and furniture are exempted, and therefore the lien impairs the exemption on personal property.  Unless your client lives in a cave and is a nudist, he has exempt property.  (But I say this, not knowing if some states let judicial liens attach only to real but not personal property.)

But, as I said, the practical reason was so that future issuers of credit will not get all hung up over old, unavoided liens that remain on the debtor's credit report for 7 more years.  I've argued with all manner of untrained non-lawyer loan officers, one of whom tried to tell me that the debts were not discharged if the account numbers were not listed.  He would not buy the strange notion that Notice is of the essence, not exact balances or account numbers (which are often redacted anyway).  He turned down my client's credit application for this absurd reason.

I simply do this to prevent later, pointless quibbling with laymen who want to argue the law with me and with clients who think you let them down.

As for the other comment, perhaps it is indeed just a comfort order, but no judge in my district has ever failed to grant the motion where no creditor responded.

I like to leave no loose ends hanging in a 7 so that I don't have to continue to deal with the case for years afterward.

So no, you don't HAVE to avoid all judicial liens in a 7, but your life might be quieter if you just do it as a routine.  My software just cranks them out and we file them.
 
Jim Gray
Atlanta, GA

What about non purchase money security interests in household goods and a car. If the creditor does not seek to lift the stay to repossess what happens after the discharge in a 7? What about in a 13 where the debt is not fully paid in the 13?

Ronald F. Suber

At least in my state, you can't avoid a title lien on a car, but you can (and should) avoid a non-PMSI lien on household goods, otherwise they're still collateral after the discharge. And if the creditor responds, we usually work out some sort of compromise if the debt is fairly fresh.

Jim Gray

"You can (and should) avoid a non-PMSI lien on household goods . . . "
That raised a question for me.
How prevalent are nonpossessory, non-PMSI's in household goods? The FTC bans nonpossessory, non-PMSI's in most things that would be considered "household goods." The FTC's definition of household goods excludes some things. My supposition, however, would be that there is NOT a huge part of the consumer credit market taking valid nonpossessory, non-PMSI's. Is there a sense that there is rampant noncompliance with the FTC rule?

Bob Lawless

In Alabama, there are several lenders/finance companies that will take a blanket security interest not only in household goods but on cars as well, even when the car title is in the possession of the purchase money auto lender.

Ronald F. Suber

I see less of it than I used to, but American General Finance and a few others take non-possessory liens in household goods as collateral.  One time I stopped by their attorney's office and saw a table covered with collectible Barbie Dolls that they'd picked up from the defaulting debtor.
 
One small finance company came up with the idea of purchasing the debtor's furniture and electronics and then "selling" it back to the debtor so that there's no lien to avoid, and they'd just pick up the furniture if they weren't paid.
 
JG

The market has indeed changed since UCC and Bankruptcy Code battles were fought over this in the 1960's and 1970's. Non-purchase money security interests in HHG are a negligible problem these days. Credit cards have largely preempted the old consumer loan companies. I have not seen a case justifying bothering with an avoidance motion in at least 10 years, maybe 20. Even as to HHG PMSI's in bankruptcy, many consumer bankruptcy lawyers including this one have concluded that creditors very rarely consider them worth enforcing when the stay and discharge prohibit asking for money. The default strategy is give the creditor its choice of attempting to enforce the lien or walking away, with high confidence it will be the latter. They often still ask for reaffirmation agreements, and presumably some debtor lawyers recommend that, or they wouldn't keep asking.

Kenneth J. Doran
Madison, Wis. / W.D.Wis.

I agree with Ken.  Even when the loan is purchase-money, the creditor cannot afford the cost of picking up, storing, and trying to re-sell used merchandise.  It depends on the price and age of the goods, but in most cases the best course is to give the creditor the choice.  Just tell your client to tell Sears they can come out and pick up the washing machine.

Patrick Casey

In our business we frequently encounter loans or sales all set to close, when at the last minute the formerly-bankrupt mortgagor/seller learns to his dismay that neither his bankruptcy attorney nor his closing attorney understands (as at one point in my career I didn’t understand – we all have to learn it somehow) this easy-to-remember and very important principle: Liens pass through bankruptcy unaffected. So if the debtor wants to affect the lien, the debtor has to get himself an order. I can’t tell you how many times I’ve had attorneys say to me, when I’ve recited this principle, “But the owner listed this secured creditor in his petition, and then he got his discharge.”

If even one bankruptcy lawyer on this list, as a result of reading this thread, saves his client the trouble, and himself the embarrassment and expense, of going back to court to get the avoidance order that should’ve been obtained during the bankruptcy proceeding, that is a good thing.
 
John D. Thomas
East Hartford, CT 06108

One can, of course, move to reopen the case to avoid the lien, but that can be expensive and time consuming, usually when time is of the essence.
 
David A. Tilem
Glendale, CA 91206

Indeed, and I recall being very surprised to learn that (in CT, anyway) you can go back in many years later. I figured there would be some time limitation on one’s ability to do so. In one case the court allowed the avoidance nine years after the BK case was closed.

John D. Thomas
East Hartford, CT 06108

But if the Order only avoids the lien to the extent it impairs exemptions, then how does help post bankruptcy? It would seem the lien still exists for all property acquired after the bankruptcy or even during the bankruptcy if it is not property of the estate.

Ronald F. Suber
Fairhope, Al 36533

Re pre-petition claims:  The automatic stay would prohibit creation or attachment of a lien during the bankruptcy or on after-acquired property.  And then the discharge would create an injunction against creation or attachment of a lien post-discharge.

In Florida, a judgment lien is not automatic; one must register the judgment centrally (Tallahassee registry) to acquire a lien on personalty, and one must record a certified copy of the judgment in the land records where land is situated to create a lien on land (the copy routinely recorded by the Clerk of Court isn't enough).  There are also some attributes of the judgment itself that are prerequisites to the creation of a judgment lien.  So, in Florida, the mere existence of a judgment doesn't necessarily mean that exemptions are impaired by a judgment lien.

CatMcEwen@AOL.COM

It is a Catch-22.  The judgment creditor records pre-petition.  The debtor has nor real property and obtains a discharge. The debtor does not avoid the lien, because there is no lien that impairs exempt real property.  The debtor later acquires real property.  The lien is of record. Does the lien attach? Liens do pass through BK.  But the discharge voided the judgment, and with no underlying judgment, the judgment lien  no longer exists. See In re Thomas 102 BR 199 (Bk ED Cal 1989).
 
Larry Szabo
Oakland, CA

As I understand it, an existing judgment lien on existing property remains attached even after discharge, unless it is avoided during the chapter 7.  The existing property remains encumbered by the lien unless avoided.  Bankruptcy does not automatically remove security interests, that requires an order of the court.

On the other hand, new after-acquired property should not become encumbered by the old pre-bankruptcy lien, whether avoided or not, as it would violate the automatic stay to continue to attach a pre-bankruptcy lien to post-bankruptcy property as it is acquired.

My whole point all along has been that if you go to the trouble to avoid the lien, then it can no longer interfere with the debtor's attempts to get credit after the discharge.  It's a lot cleaner and less confusing just to go ahead and avoid it while you can.  I don't worry about whether it's necessary or even appropriate, I just know that I've done all that the debtor could expect me to do.  His old judgments are now gone, and I have a court order to prove it.

My argument for avoiding the liens is not based on the legal issues, it's simply done to cut down on hassles and recriminations later.
 
Jim Gray

And the reason you do it is the best reason. Helps the client and covers your butt.
Although there are plenty of title companies tha just don't understand the fact that after acquired property can not be subject to a lien created pre petition.

Brooks J.Grainger

I think a fascinating article would be one where both a scholar and an “in the trenches” practitioner combine their efforts and publish “practical advice for the bankruptcy practitioner.” The scholar’s purpose would be to prevent due process and other public policy errors.

Ronald F. Suber
Fairhope, Al 36533

The discharge may not have "avoided the judgment," but rather created an absolute legal defense to the judgment's implied powers to effect collection.
 
Richard J. Cohen, Esq.
Centerville, MA 02632

The discharge voids "judgments at any time obtained," 524(a)(1).

Lawrence L. Szabo
Oakland, CA 94610

New Bankruptcy Judges in San Diego and San Jose

The 9th Circuit has appointed Margaret Mann in San Diego and Charles Novack in Oakland as Bankruptcy Judges.  Ms. Mann will replace retiring Judge James Meyers and Mr. Novack will replace retiring Judge Marilyn Morgan.  Each will take the bench early next yeaar. 

Review of 9th Circuit Cases for 2009

Central District Consumer Bankruptcy Attorneys Association

Fourth Annual Review of 9th Circuit Published Decisions and Selected Other Cases on Bankruptcy for 2009

January 30, 2010

Speakers:
Hon. Erithe Smith
Bankruptcy Judge, Central District of California, Santa Ana Division
M. Jonathan Hayes

Where:
Southwestern Law School
3050 Wilshire Boulevard
Los Angeles, CA 90010

Times:
Registration: 10:00 am - 11:00 am
CDCBAA Membership Meeting: 10:00 am - 11:00 am
Program: 11:00 pm - 1:00 pm

2 Hours of MCLE Credit Provided – Limited Space
Cost:  Free to CDCBAA Members
Non-Members:  $210 (which includes one year membership in CDCBAA, admission to the annual Calvin Ashland Awards Dinner, and at least seven more free MCLE Programs this year)

Program on Foreclosures in California

Update on Foreclosure Law Changes Including Modifications and Attorney Representation

Speaker:   Mark Blackman, Esq.  
 
Date:     Wednesday, December 16
 
Time:    12:00 Noon  Lunch and Program

Place:    SFVBA Conference Room
    21250 Califa Street, Woodland Hills
  Ste 113 
 
Cost:     $30 Members prepaid; $40 at the door
$40 Non-Members prepaid
  $50 Non-Members at the door  
 
The SFVBA is a State Bar of California approved MCLE provider.  By attending this seminar, attorneys earn 1 hour MCLE.

San Fernando Valley Bar Association
21250 Califa Sreet, Suite 113 ■ Woodland Hills, California 91367
Tel. 818.227.0490 ■ Fax. 818.227.0499 ■ www.sfvba.org
 
 

Central District Filings for November

From Prof. Lawless' data base, the Bankruptcy Data Project:

Filings by chapter in the Central District of California in November, 2009:  Note:  November had 19 business days, October had 21. 

CACB

ch 7; 7,167

ch 11; 84

ch 13; 2,201

total; 9,452

Filings by chapter in the Central District of California in October, 2009:

CACB

ch 7; 7,839

ch 11; 107

ch 13; 2,366

total; 10,314

 

This compares to 9,089 total in September, 9,740 in August, and 9,886 filings in July, 9,578 in June, 8,965 in May, 8,398 in April, 8,518 in March, 6,967 in February and 5,999 in January. 

Chapter 13s were 2,025, in September, 2,180 in August, 2,053 in July, 2,291 in June, 1,988 in May.  Chapter 13 trustees received 440 new petitions each in November.

Total Central District filings in November by the way were more than double the entire state of New York,  9,452 to 4,368 and roughly double the entire state of Texas, 9,452 to 4,804.  So about the same as the Texas and New York combined.   

House Rejects Loan Modification Bill

You can access the Reuters article here.

A Summary of Bankruptcy Law

Dear Mr. Hayes,
 
This is Eileen Keusseyan.  I appeared before you for a mediation in an adversarial proceeding.  I found out about your publication during my appearance.
 
Well, I have read "A Summary of Bankruptcy Law" and I now use it almost on a daily basis as a summary guide.  Thank you for putting so much information together in such a concise and resourceful publication.
 
Thank you.
 
Sincerely,  Eileen Keusseyan

The book is available at Amazon.com.   
 

Circuit Court of Appeals Cases from Last Week

11th Circuit Court of Appeals, December 03, 2009
In re Coady, --- F.3d ---, 2009 WL -------- (11th Cir. 2009)(discharge denied where: 1) debtor concealed an equitable interest in his wife's businesses; and 2) the doctrine of continuing concealment applies when a debtor kept his assets out of a creditor's reach during the look-back period through a sham ownership arrangement established more than one year before the bankruptcy petition was filed)

Thanks to Findlaw.com

New SCOTUS Wiki Editor

I have been invited by Tom Goldstein's team at SCOTUSBlog.com to be the SCOTUS Wiki Editor for the case of Hamilton, Chapter 13 Trustee v. Lanning.  My mission is set forth by Manager Erin Miller:

You will be responsible for all the entries for the Lanning page that I initially listed: the three articles of roughly 800 words each (the argument preview, oral argument recap, and opinion analysis) and links to news/blog coverage.  It would also be great if you could link to any new amicus briefs that are posted in the case (we will post all the merits briets by the parties as they come in).
 
You and your blog will be listed as the caretakers of the Lanning page.  In addition, we will post the articles that you produce on the blog as well as the Wiki, if you would like.  If that interests you--we generally aim for previews to go up on the blog two days before an argument, and recaps and analysis to go up within two days of the event (the sooner the better).  Our editor Amy Howe reviews everything that goes up on the blog, so we would ask you to submit a draft a few days before (this is mostly a formality).

I consider this a serious honor and am up to the task. 

November Filings Down

Total bankruptcy filings for November, 2009 were 115,500, down 11.4% from October, 2009, 130,200, which was up 3.7% from September, 2009, 125,500.  Compare 120,000 in August; 130,500 in July; 124,800 in June; 120,400 in May; 128,700 in April, 131,000 in March, 102,000 in February and 89,000 in January.

Total filings Jan through November, 2009; 1,330,020
Total filings Jan through November, 2008; 1,000,200
Total filings Jan through November, 2007;    761,200

The "year ago" figures are finally starting to catch up.  For instance, filings in November 2008 were 91,400, not that far behind November, 2009 (although still 26% more than 2008).   

Thanks to the Bankruptcy Data Project. 

Prof. Mark Scarberry Article on Loan Mods

An email from Mark:

In case list members might be interested, let me say that I've just posted the following forthcoming article on SSRN:
 
A Critique of Congressional Proposals To Permit Modification of Home Mortgages in Chapter 13.
 
You can read the abstract and download the full text at http://ssrn.com/abstract=1520794. There may yet be a few edits, but it is in essentially final form.
 
The article follows up on my December 2007 congressional testimony, on the debate or conversation on mortgage modification at a January 2009 AALS program, and on the presentation I gave as part of the Pepperdine Law Review symposium on the mortgage crisis in April 2009, with some of you in attendance. The article will be published soon as part of the Pepperdine Law Review symposium edition.
 
As anyone who attended the AALS presentation or the Pepperdine symposium would expect, the article is sharply critical of the conclusions Georgetown Law Prof. Adam Levitin draws from his empirical studies. 
 
Best wishes,
Mark Scarberry
Pepperdine

NY Times Article on Why Loan Mods Fail

The article is here.  Thanks to Prof. Jean Braucher for pointing it out. 

House Taking Another Shot at Loan Modifications in Bankruptcy

From The Hill.

Circuit Court of Appeals Cases from Last Week

1st Circuit Court of Appeals, November 24, 2009
Boston & Maine Corp. v. Massachusetts Bay Transp. Auth., --- F.3d ---, 2009 WL ---------- (1st Cir. 2009)(cleanup claims barred by 1983)

2nd Circuit Court of Appeals, November 23, 2009
O'Rourke v. US, --- F.3d ---, 2009 WL ---------- (2nd Cir. 2009)(IRS claim allowed where 1) the bankruptcy court's finding that a notice of deficiency was mailed to debtors was not clearly erroneous; 2) debtors identified no affirmative misconduct on the part of the IRS warranting an estoppel; and 3) their argument that the certified mail log was inadmissible was waived)

Thanks to Findlaw.com

Back on the Job

Well, my son and I got back from Washington on Wednesday night.  I had two hearings on Thursday which took the whole day and phone call after phone call on Friday.  Today and tomorrow I can get some work done.  I have 14 chapter 11s going on right now and will probably file another on Monday.  They are virtually all individuals trying to save real property.  About half are trying to save their homes, half have additional pieces of real property they purchased in the last few years when loans were easy to get.  The properties are always underwater. The debtors have tried extensively to get a "loan mod" prior to coming to me.  The retainers I get are usually small and the paperwork huge.  My most common statement to my exasperated clients is "GM filed the same chapter 11 that you filed."  It is my sense that the judges are getting a little exasperated also with the number of cases filed by people who simply cannot afford the property they have and will not accept that - they are hoping that a delay will somehow help.  In the chapter 11 bankruptcy arena, I rarely see aggressive efforts by the banks - and I am no fan of banks.  Most banks in chapter 11 wait a few to several months before taking action to get relief from stay and finish the foreclosure, even if they are not getting monthly payments.  It may be because they are so busy, or the few firms that do the work in bulk are so busy, or because they too are hoping that a delay will somehow help to get the loan caught up or paid.  The tragedy is that the chapter 13 limits are not increased.  If the secured debt limit was increased to $2 million, my 14 cases would become two or three.  I'll post the Circuit Court of Appeals Cases for the past two weeks today and tomorrow.   Thanks for continue to follow my blog.  JH  

Oral Argument at the Supreme Court, Milavetz and Espinosa

This morning was oral argument on Milavetz and Espinosa.  It sure is a fun experience.  Without a doubt, the guy having the most fun up there is Breyer.  He asked bunches of questions with a big smile on his face - proud of himself - and then he would visit with Sonia Sotomayor next to him and Clarence Thomas on the other side.  John Roberts had a lot of questions and when he speaks, everyone listens.  You can really see the deference the other judges give him.  Stevens was pretty quiet; Thomas said not a word.  Alito always seems annoyed.

On the merits of Milavetz, I was prepared to concede that attys (me) are debt relief agencies especially when the judges were grilling the atty arguing that the statute is unconstitutional.  Breyer pointed out that the statute says anyone who is going to appear in court or anyone who undertakes legal representation of an assisted person is a debt relief agency.  That makes it clear Congress intended to include attorneys.  But when the government got up, Alito said "people don't want a debt relief agency to do their bankruptcy, they want a lawyer."  Breyer said, "What if a big firm represents someone's brother-in-law in a chapter 7, is the big firm forever after a debt relief agency?"  The answer was yes which is ridiculous.  A few of them said that the speech issue was nothing - all it means is don't tell the client something bad.  But Roberts pointed out - forcefully - that Congress is trying to accomplish something - keep people from ripping off credit card companies - by telling attorneys what not to tell their clients.  No matter how attorneys answer some of the client's questions including not answering them, could be a signal to the client which could put the atty in jeopardy.

On Espinosa,  it seems pretty clear they are going to affirm the Kozinski ruling.  They kept saying the bankruptcy judge made a mistake but that doesn't make the judgment void.  I felt bad for the lady arguing the side to reverse Kozinski.  They were kind of mocking her.  The debtor's counsel who spoke later wasn't much good either.  He suggested that no matter what the plan said, if there was no objection, it could not be attacked later except through Rule 60(b). 

The Milavetz transcript is here.  The Espinosa transcript is here.  Let me know what you think.