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June 6, 2009

Order Approving Sale of Chrysler Assets and the Appellate Briefs

You can access Judge Gonzalez' Order approving the sale here.  (Thanks to SCOTUSblog)

You can access Chrysler's appellate brief here, the government's appellate brief here, and the objecting Indiana Pension Fund's appellate brief here.      

June 6, 2009 in Current Affairs | Permalink | Comments (0) | TrackBack

Bankruptcy Petition Filings Fall in May - Can That be True?

Total filings in May, 2009 were 120,400, down 6.5% from the 128,720 petitions filed in April, 2009.  This compares to 131,000 in March, 102,000 in February and 89,000 in January.  The May rate equates to 1,445,000 for a year compared to 1,597,000 in 2004, 1,660,000 in 2003 and 1,578,000 in 2002. 

These results surprised me.  Although I file only a few consumer petitions each month, the phone calls I get every day are just getting ridiculous.  I've been getting more calls than ever in my life from small businesses who want to file chapter 11 and basically faint when I tell them how much it costs.  Some small businesses can be squeezed into chapter 13 but small corporations/LLCs/partnerships cannot.  There should be a small business chapter 11 that actually works.  The small business rules in the code now do nothing to help the small business, especially from the immense cost.  But I digress. . .    

June 6, 2009 in Bankruptcy Statistics | Permalink | Comments (1) | TrackBack

June 4, 2009

Slate Magazine Quotes Yours Truly

A 20 minute interview reduced to a single sentence.  But they spelled my name right - mostly.  Chris Beam's article can be accessed here.  I really don't know how GM prospective purchasers will view the bankruptcy but have you heard anything lately about the Chrysler case? Or the Tribune Co (which is trying to sell the Chicago Cubs)?     

June 4, 2009 in Current Affairs | Permalink | Comments (0) | TrackBack

GM Bankruptcy Info Websites

From my Law Professor Blogs compadre, Joe Hodnicki, Law Librarian Prof

GM Bankruptcy Information Updated

Case No.: 09-50026-reg

Venue: Bankr. S.D.N.Y., http://www.nysb.uscourts.gov/

Petition: http://www.scribd.com/doc/15995649/General-Motors-Bankruptcy-Petition

Calendar: In future, but not yet, calendar will be available at http://www.nysb.uscourts.gov/calendars/reg.pdf .

PACER: https://ecf.nysb-mega.uscourts.gov/ (Docket & Documents)

Update: Most documents and docket information are available free of charge from the claims agent's website.

GM Press Releases. A GM press release giving an overview of the case is available at http://bit.ly/158rCZ . GM press releases respecting the bankruptcy case are available at http://media.gm.com/ .

June 4, 2009 in Current Affairs | Permalink | Comments (1) | TrackBack

cdcbaa Program on June 13, 2009 on the Means Test

CENTRAL DISTRICT CONSUMER BANKRUPTCY ATTORNEYS ASSOCIATION

GENERAL MEMBERSHIP ASSSEMBLY

June 13, 2009 at 10:00 a.m.

Location:

Southwestern Law School
3050 Wilshire Blvd., Room 611
6th 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

“MEANS TEST”

 Speakers:
James T. King, Esq.
Peter M. Lively, Esq.

 Special Guest Speaker:
Kenneth Lau, Esq.
Staff Attorney, Office of the U.S. Trustee

Upcoming Event:

June 22, 2009 at the California County Club, Whittier

The Earle Hagen Memorial Golf Tournament for the benefit of Public Counsel’s Debtor Assistance Program

June 4, 2009 in Programs | Permalink | Comments (0) | TrackBack

June 2, 2009

Judge Robert Gerber Testy in GM Hearings

"All business" Judge Robert Gerber threatened to hang up on a lawyer who cracked a joke about GM executives flying private jets.  So says Debra Weiss at the ABA Journal here.  The article has some nice background on Judge Gerber.   

June 2, 2009 in Current Affairs | Permalink | Comments (0) | TrackBack

General Motors Bankruptcy

U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Bankruptcy Petition #: 09-50026-reg

Assigned to: Judge Robert E. Gerber

Date filed:   06/01/2009 
 
Debtor
General Motors Corporation
300 Renaissance Center
Detroit, MI 48265-3000
Tax ID / EIN: 38-0572515

represented by  Joseph R. Sgroi
Honigman Miller Schwartz and Cohn LLP
2290 First National Building
660 Woodward Avenue
Detroit, MI 48226
(313) 465-7570
Fax : (313) 465-7571
Email: jsgroi@honigman.com

Stephen Karotkin
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
(212) 310-8350
Fax : (212) 310-8007
Email: stephen.karotkin@weil.com

 
U.S. Trustee
United States Trustee
33 Whitehall Street
21st Floor
New York, NY 10004
(212) 510-0500 

June 2, 2009 in Current Affairs | Permalink | Comments (1) | TrackBack

June 1, 2009

Circuit Court of Appeals Cases from Last Week

6th Circuit Court of Appeals, May 28, 2009
Stark v. Moran, --- F.3d ---, 2009 WL ------- (6th Cir. 2009)(person objecting to abandonment of property by the trustee has no standing to appeal because he alleged only that he would have profited from purchasing the stock, and his mere status as a bidder for the stock was insufficient)

7th Circuit Court of Appeals, May 27, 2009
Thompson v. General Motors Acceptance Corp. , --- F.3d ---, 2009 WL ------- (7th Cir. 2009)(in a chapter 13, GMAC violated automatic stay when it refused to return seized vehicle to the estate; GMAC must return vehicle immediately where a debtor has an equity interest and then it can seek adequate protection in bankruptcy court)

9th Circuit Court of Appeals, May 29, 2009
Egebjerg v. Anderson , --- F.3d ---, 2009 WL 1492138 (9th Cir. 2009)(repayment of loan against 401(k) not deductible on means test) 

Thanks to Findlaw.com

June 1, 2009 in Other Circuit Briefs | Permalink | Comments (0) | TrackBack

9th Circuit Rules that Repyament of 401(k) Loans not Deductible on the Means Test Because the Loan is not a Debt

Egebjerg v. Peter Anderson (In re Egebjerg), ---- F. 3d ----, 2009 WL 1492138 (9th Cir. May, 2009)

Issue:   Is the repayment of a secured loan against the debtor’s 401(k) deductible on the means test?  
  
Holding:   No.   

Direct appeal from the bankruptcy court

Judge Hawkins
The debtor is single making $6,100 per month.  His unsecured debt was $31,000.  Two years before filing he took a loan from his 401(k) which he was repaying at $733 per month.  On the means test, he deducted this payment as a payment on a secured debt leaving him with net disposable income of $15 per month.  The UST moved to dismiss under both 707(b)(2) and (b)(3).  The bankruptcy court agreed that the deduction was proper under (b)(2) but dismissed under (b)(3) on the totality of the circumstances since the loan would be repaid in full in just over one year.   The court ruled that even if the deduction was not proper under (b)(2), it would qualify as “special circumstance” which could rebut the presumption of abuse under (b)(2).    

The 9th Circuit affirmed but ruled that the bankruptcy court should have dismissed under (b)(2).  “We join the vast majority of courts in holding that the debtor’s obligation to repay a loan from his or her retirement account is not a ‘debt’ under the Bankruptcy Code.”  One reason is that the plan will never sue the member; it is simply an offset against future benefits.  “Congress expressly gave Chapter 13 debtors the ability to deduct 401(k) payments from their disposable income calculation, § 1322(f), but did not include any similar exemption for Chapter 7 debtors.  Congress also added a section which provides that the automatic stay does not apply to automatic deductions to repay a retirement plan loan, but expressly stated that the provision shall not be construed to provide that such a loan constitutes a ‘claim’ or ‘debt.’ § 362(b)(19). ‘In light of the amendments sprinkled throughout the Code [addressing 401(k) loans] — especially section 1322(f) — the lack of a 401(k) provision in section 707 is a glaring indication that Congress did not intend 401(k) loan repayments to be deducted in Chapter 7.’”

The debtor argued that the deduction was an “other necessary expense.”  The court rejected that argument, saying “The IRS’s guidelines foreclose Egebjerg’s contention.  The guidelines, which Congress expressly incorporated into § 707(b)(2)(A)(ii), state specifically that ‘[c]ontributions to voluntary retirement plans are not a necessary expense.’”  “[I]t is hard to argue that the replenishment of past voluntary contributions to the 401k account by repaying loans is a necessary expense.”

As to the “special circumstance,” the 9th circuit said that it was possible that it could be a special circumstance but not here.  The debtor’s “only” reason for borrowing the money in the first place was to pay debts to avoid bankruptcy.  This is “commendable” but insufficient.  “Indeed, if the original unsecured consumer obligation could not be considered a special circumstance, it would seem problematic to find ‘special circumstances’ for the 401(k) loan that merely replaced those debts.”

June 1, 2009 in 9th Circuit Briefs | Permalink | Comments (0) | TrackBack

May 31, 2009

Cert Petitions Filed in Debt Relief Agency Case of Milavetz

Cert Petitions in the 8th Circuit case of Milavetz, Gallop & Millavetz v. USA were filed by both the Plaintiff law firm and the USA.  Plaintiff's brief can be accessed hereThe government's brief can be accessed here.  The response briefs can be found on the Scotusblog.com.  Tom Goldstein has picked this as a case which the Supremes might grant cert.  It would sure be fun if they did.  

The 8th Circuit ruled that attorneys are debt relief agencies, that the DRA rules which seem to restrict speech are unconstitutional, and that the requirements re statements DRAs have to make in advertising are constitutional.

The Supreme Court is considering this coming week whether to grant cert on this case.      

May 31, 2009 in Other Circuit Briefs, Supreme Court | Permalink | Comments (1) | TrackBack