BankruptcyProf Blog

Program on MERS

MERS - A Mortgage Industry Standard Built on Sand
 
Speaker:  Lewis Landau, Esq.  
        
Date:        Monday, May 18 
 
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

Lewis Landau will be speaking to the San Fernando Valley Bar Association’s Business, Real Property and Bankruptcy Section.  The argument Lew will make is that MERS is not a proper party to bring a motion for relief from stay and also that it is possible to invalidate the deed of trust where MERS is the beneficiary.  The program has attracted some attention and I believe some attorneys attending will be there to argue to the contrary.  Given the current real estate market, given the problems that the bankruptcy judges are having with the motions for relief from stay, the proof some judges are requiring before granting relief from stay and given the potential for litigation and helping debtor clients, the topic is very timely.  If anyone would like to attend, they should contact Linda Temkin at the San Fernando Valley Bar Association office at 818.227.0494, extension 105 or email her at events@sfvba.org.  One of the San Fernando Valley judges has committed to attend the program.

Circuit Court of Appeals Cases from Last Week

1st Circuit Court of Appeals, May 06, 2009
Colonial Surety Co. v. Weizman, --- F.3d ---, 2009 WL -------- (1st Cir. 2009)(discharge of liability from defendant's earlier bankruptcy discharge did not include plaintiff's claims against defendant, as defendant failed to list plaintiff's claim and 523(a)(3) makes listing the claim a condition of discharge)

7th Circuit Court of Appeals, May 05, 2009
United Air Lines, Inc. v. Regional Airports Improvement Corp., --- F.3d ---, 2009 WL -------- (7th Cir. 2009)(In a bankruptcy action involving the repayment and calculation of a secured loan for improvements to an airline terminal, district court judgment is reversed where: 1) the court did not properly calculate the annual rental rate for airport terminal space and the the appropriate discount rate; and 2) the calculation for the rental rate was too low and the discount rate too high)

9th Circuit Court of Appeals, May 04, 2009
California Self-Insurer's Sec. Fund v. Lorber Indus. of Cal., --- F.3d ---, 2009 WL -------- (9th Cir. 2009)(workers' compensation reimbursement claim not a priority since claim not an excise tax under 11 U.S.C. section 507(a)(8)(E)(ii))
 
9th Circuit Court of Appeals, May 06, 2009
Consolidated Freightways Corp. v. Aetna, Inc., --- F.3d ---, 2009 WL -------- (9th Cir. 2009)(recovery cap under 507(a)(5) is to be treated as an aggregate cap, but individuals who did not render services within a 180-day period preceding bankruptcy are not to be counted in determining the number of employees under Section 507(a)(5))

10th Circuit Court of Appeals, May 04, 2009
Hamilton v. Wash. Mut. Bank FA, --- F.3d ---, 2009 WL -------- (10th Cir. 2009)(Trustee cannot avoid Debtors' mortgage because a purchaser is deemed to know the contents of recorded documents in the Debtors' chain of title and, armed with this knowledge, a reasonably prudent purchaser would readily discover that the bank's mortgage encumbers the Debtors' house)

thanks to Findlaw.com

Student Loans in Bankruptcy

I volunteered once to take on a student loan case, i.e., file a complaint to have a loan discharged based on undue hardship.  Since then I get two or three emails or phone calls every week from someone who wants to file bankruptcy to get rid of their student loans.  I learned quickly that the person typically believes that you just go to the judge and tell them how miserable you are and the judge says something like "poor you, debt discharged."  So I wrote up a little blurb on how it works, i.e., full blown litigation, the Brunner tests, depositions, experts, trial and appeal.  Now I send the person my little blurb and I almost never hear from them again.  I assume the reaction is that I could not know what I'm doing and they will find a lawyer who does.  I assume many are shocked to find out that the litigation could easily cost $10,000 to $20,000 and likely fail anyway, at least in part.    

The biggest hangup for me is the Brunner requirement that the debtor must have made a reasonable effort to resolve the issue without bankruptcy.  The debtor is often being beat up on the phone by collectors who are telling them that they will take x amount per month and that x amount is some ridiculous number.  Is this a reasonable effort?  The collector won't sign anything or even give his name usually.  I've never even been close to reaching a settlement with a lender.  Part of that is very often because the debtor just doesn't want to pay.  The degree they got is not leading them to riches, the repayment is a long road, and they are looking for an easy way out. 

All of this is a lead-in to a nice article on student loans posted on the National Consumer Law website.  The article is entitled "Too Small to Help" and can be accessed here.  The article re enforces that private lenders in particular will not make deals.           

Jeffrey Skilling Petition for Writ of Certiorari

Jeffrey Skilling has asked the Supreme Court to hear his appeal.  You can access the Petition for Writ of Certiorari here.