May 29, 2009
Lynn LoPucki Research Data Base
All the data my little heart can handle on big bankruptcy cases. Here you can compute the amount of expected fees in a big case or look up the data on 830 previous cases. The website can be accessed here. In Los Angeles from 1980 to 2009 there have been 21 "big cases." Twenty of those cases (each of which is listed by name) had confirmed plans, one case - IndyMac Bank is pending. Three cases in the San Fernando Valley during the same time, two converted and one is pending - Meruelo Maddux Properties. What a great site.
May 28, 2009
NY Times Article on the Process of Choosing Sonia Sotomayor
This is pretty interesting. I wish I could look at at one of the 75 page memos.
May 26, 2009
Review of Recent Developments by the Financial Lawyers Conference
This is the continuation of the George Triester program of years gone by.
Financial Lawyers Conference
214 Main Street, #336, El Segundo, CA 90245 · (310) 322-1350 · Fax (310) 615-4581
FOR MORE INFORMATION: www.financiallawyers.org
This meeting is jointly sponsored by The Financial Lawyers Conference and The Los Angeles County Bar Association Commercial Law and Bankruptcy Section, Bankruptcy Committee.
FLC's annual review of recent developments in bankruptcy law including discussion of significant judicial opinions from around the country.
Thursday, June 4, 2009
Speakers: Jeffrey H. Davidson, Stutman, Treister & Glatt, P.C.
K. John Shaffer, Stutman, Treister & Glatt, P.C.
Location: The Omni Hotel
251 S. Olive Street
Los Angeles, California
click here for map
Time: 6:00pm - 6:45 pm - Registration and Cocktails
6:45pm - 7:30 pm - Dinner
7:30pm - 8:30 pm - Program
Cost: $70.00 FLC & LACBA Members
$40.00 Lawyers in Gov’t Svc.
General Motors Bankruptcy Lawyers
From the ABA Journal today:
Lawyers Joke that GM Bankruptcy Will Deplete Experienced Bar
By Debra Cassens Weiss
A General Motors bankruptcy would require so many restructuring specialists that lawyers joke there wouldn’t be enough to go around.
GM had nearly $150 billion in revenue last year; its restructuring would be more complicated and possibly larger than that of any American corporation, including Enron, the New York Times reports. “Legal fees totaling hundreds of millions of dollars are likely during the course of the case given the high-powered and high-fee lawyers involved,” the Times says.
Hundreds of bankruptcy lawyers from nearly every major firm with restructuring teams have spent months preparing documents that would be required in a GM filing, expected before June 1.
Among the experts tapped to work on the bankruptcy are Harvey Miller of Weil, Gotshal & Manges and Martin Bienenstock of Dewey & LeBoeuf. Miller and other Weil lawyers are principal legal counsel for the bankruptcy filing, while Bienenstock could end up representing the reorganized company, the Times says.
The American Lawyer identifies other lawyers advising GM: corporate group chairman Joseph Gromacki and partner Michael Wolf of Jenner & Block in Chicago, and bankruptcy and reorganization chair Robert Weiss of Honigman Miller Schwartz and Cohn in Detroit.
Meanwhile, GM’s board is represented by Cravath, Swaine & Moore, the Times says.
May 25, 2009
Judge Bruce Markell Sanctions Attorney for Filing Second Chapter 13 When First Case was Still Pending
Brief by University of West Los Angeles student Roksana Moradi:
In re Sanford, --- B.R. ---, 2009 WL 901760 (Bkrtcy.D.Nev., Judge Markell)
Issue: Is the attorney’s conduct here, filing a second case when the first is still pending, sanctionable conduct?
BRUCE A. MARKELL, Bankruptcy Judge.
Attorney Goldberg filed Mr. Sanford's Chapter 7 case in 2004. The schedules indicated that the debtor had $100,023 in unsecured debts and $159,000 secured by his home worth $200,000. The $41,000 of equity was claimed exempt. Goldberg charged the debtor $791. At the meeting of creditors, the trustee questioned the valuation of the home. The debtor decided to convert the case to chapter 13. He later filed a Motion to Convert even though the discharge had already been entered. At the hearing, the court granted the motion but instructed Goldberg to provide in the order that the discharge was revoked. Goldberg failed to submit an order. Instead he filed a second case, also a chapter 13, for the debtor charging him $2,700. The trustee on the first case eventually submitted an order converting the First Case 20 months later.
In the Second Case, the home was listed at $460,000 but still exempt because Nevada law had changed the exemption amount in the interim from $200,000 to $350,000. In the Second Case, no creditor filed a proof of claim probably because they had already received the notice of discharge in the First Case. When no POCs were filed, Goldberg amended the plan to pay himself only by selling the home. The home was then sold $415,000 and the plan completed.
One year later Goldberg brought a motion seeking an order requiring the discharge to be entered in the Second Case. The court orally granted the motion on October 4, 2007. Mr. Goldberg, however, failed to submit an order regarding this motion. About two months later, the trustee figured out what had happened. The court then set an OSC re sanctions.
The court focused on Goldberg's failure to submit an order after the conversion motion, given its consequences to the court and to his client; and Goldberg's filing of the Second case. Goldberg argued that Rule 58 absolved him from the requirement of submitting an order as the ruling became effective 150 days after it was orally entered. He obviously confused the national rule which promotes finality for purposes of appeal and the local rule which prevents a prejudicial lag between a court's oral ruling and the docketing of the order giving that ruling effect.
As to filing the Second Case, Goldberg argued that there was no rule against filing multiple chapter 13 cases for one debtor. The court disagreed and said that not only was Goldberg's conduct objectively unreasonable but was also in bad faith. Given the oral conversion in the First Case, there was no need to file the Second Case. “Moreover, Mr. Goldberg took unfair advantage of creditor confusion in filing the Second Case, effectively eliminating creditor claims while increasing his overall attorney's fee.”
For four reasons, the court found that Goldberg's actions were made in bad faith. First, Goldberg filed the Second Case, in part, to take advantage of the Nevada legislative change that increased the homestead exemption. Second, his knowledge of the prior case is further evidence of bad faith. This is not a situation in which an attorney was negligent in not investigating and discovering that another lawyer filed an earlier case. Third, he charged legal fees for both cases. Fourth, the court considered Goldberg's experience in making its determination regarding bad faith. Goldberg testified that he has filed between 15,000 to 20,000 bankruptcy cases over the last 12 years of practice. He boldly asserted in advertisements that he could solve almost any consumer's financial problems.
The court ruled as follows for sanctions:
1. Mr. Goldberg received a public reprimand for his conduct in these cases in the form of the publication of the opinion of these cases in the West Reporter system, and in any other reporter system generally publishing bankruptcy court opinions.
2. Mr. Goldberg had to return all fees charged Mr. Sanford.
3. Mr. Goldberg was directed to submit a copy of the opinion of this case with every fee application he submits in this district for work done during the two-year period following the date of entry of this opinion. During such period, he was also directed to deliver a copy of this opinion to each client that he files a bankruptcy petition for, once his aggregate billings for that client, for any one case or related matters, exceed $5,000.
4. For the two-year period following the date of entry of the opinion of this case, should Mr. Goldberg be served with a motion or an order to show cause that seeks, as relief, sanctions for his conduct in a case or proceeding in this court, or in any other state or federal court in Nevada, he shall deliver a copy of this opinion to the person or entity serving him with such motion or order, and shall include a copy of such opinion in any response to such motion or order that is filed with the court.
5. To the extent that Mr. Sanford still desired his discharge, Mr. Goldberg should pay all costs and expenses, including attorneys' fees, as may be necessary for Mr. Sanford to obtain his discharge.
May 24, 2009
More Real Life on Negotiating a Loan Modification
More from the Bankruptcy Roundtable list serve:
I share your pain. Client endured a series of phone calls by herself after the phone calls that I referred to in my original posts and then she and I spent yet another marathon in which we were informed that filing a bankruptcy would terminate her application for a modification under the Making Home Affordable program. We went ahead and filed because unless she gets rid of her unsecured debt, a Making Home Affordable modification isn't going to do her any good. What really irritates me is that unless there is an "active" bankruptcy, Chase won't connect you to any department that actually handles bankruptcy cases. The people who we have reached appear to have no idea what actually happens in bankruptcy. And actually, we were put on hold twice in this last round of phone calls because the person on the other end acknowledged they didn't know how Making Home Affordable would be affected by a bankruptcy. And when they came back on line it was pretty clear they hadn't spoken with anyone in a bankruptcy-related department.
Carol G. Stebbins
Attorney at Law
That's funny. I am trying to just start the loan mod/ loss mitigation process with a client who has chase. You have to send them an authorization form to a centralized fax number. Four weeks later. Ten calls later. Chase can only tell me they haven't got my fax. Can't email it. Can't mail it. For a while I was faxing it twice day. Their loss mitigation personnel are a joke. Worst customer service ever. And yet, while on hold numerous times, their hold voice mesage kept saying how committed they were to helping their customers
No wonder the lenders and their lobbyists did not want cramdown - - they might have become accountable and something might have actually been done to modify debt. Back in the 80's, when I had clients with FmHA, HUD or other government agency debt, I always told them, just go into chapter 11-12-13 or whatever because outside of BKC you will never get an answer due to this problem. At least in BKC court, they are participation is mandatory & they coerced to the table, there are deadlines for action and some agency lawyer or outside counsel will have to speak with authority on behalf of the entity.
JAMES H. (JIM) COSSITT, ATTORNEY & COUNSELLOR AT LAW
Board Certified, Business & Consumer Bankruptcy Law, American Board of Certification
It is quite amazing about this bureaucracy. My favorite story is at least five years old. After making a series of phone calls, and finally getting through to someone who seemed to know who I had to speak to, she (who understood my frustration), was going to transfer me to the right party. I asked if she could "conference call" this as I had been disconnected a couple of time and didn't want to start the process again. She complied, and when we got the third person, I could only hear this third poorly - - - so I suggest that this third person call me back. She responded that her facility had no telephones that could dial out. I quickly responded that I felt really sorry for her because, if there was a fire, she couldn't call the fire department and would "fry". The person who had set up this call just laughed and laughed.
Louis S. Robin, Esq.
Would anyone be upset if I were to publish this thread on my website or give it to clients that ask about these programs.
We all know what the real answer is for the clients, the whole program is a misdirection. There is no serious intent to help the average homeowner, but politicians and the industry felt that they needed cover for the billions they are handing themselves to correct their own excesses and make their constituents / customers feel included. It is a sham; otherwise, it would be working. There are only two institutions that I have found to be serious about loan modifications (1) HSBC (British), and (2) American General Finance.
The rest of the mortgage companies / servicers have no interest in rehabilitation. They seem to be more interested in the properties becoming bank owned.
I can think of only two reasons for this. The first is that the banks are betting that the toxic asset purchase program will net them at tax payer expense more money than they will get at a foreclosure auction if they let others take the properties at present market values. The second is that there is a very long game going on here and the same banks that are being floated by the government anticipate hyper inflation and these same properties are a hedge against this inflation which will produce a dizzying amount of profit later for those institutions.
Done ranting. Sorry. I think I am just jealous that I'm not one of these guys.
IndyMac Bank has been telling my client for six months: "We can't give you a loan modification unless your BK attorney reopens your case and files a reaffirmation of your previous loan." It's maddening. Each of us has dozens of loan mod horror stories, all ending the same way - abject failure of the entire loan mod process.
During 2008 my office kept good statistics on the number of clients who had managed to get all the way through their lender's loan mod process. We tracked 106 clients, of whom only 2 were offered any kind of modification. Both consisted of a 6-month rate reduction and tacking missed loan payments on the back end of the loan. Some modification.
As Congress was preparing to vote on cramdown legislation, I put this info in a detailed letter to my Congresswoman, Mary Bono Mack. My letter caught her eye and she personally called me the day after I faxed my letter to her office. We spoke on the phone for almost 30 minutes and she told me she was
worried about her "credit union constituents" who would suffer enormous losses under cramdown legislation. She voted against the bill.