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January 28, 2010

Earle Hagen Golf Tournament - Mark Your Calendars

Earle Hagen Memorial Golf Tournament 

June 11, 2010
 
Benefiting the Debtor Assitance Project

Contact Jim King
 
king@kingobk.com
Or call (818) 242-1100

January 28, 2010 in Programs | Permalink | Comments (0) | TrackBack

January 27, 2010

Top Ten Parts of BAPCPA Congress Needs to Fix

Musing on the subway. 

1.  Computation of the chapter 13 plan payment for the above-median debtor.  The mechanical test or "forward-looking test"?  See 1325(b).  Congress obviously intended a mechanical test but the language leads to an absurd result. 

2.  Post-petition earnings in an individual chapter 11.  BAPCPA says they are property of the estate. Section 1115.  This is especially a disaster when a chapter 11 trustee is appointed.  The trustee, in theory, gets the debtor's paycheck each month.  Who would work then?

3.  Eligibility for chapter 13.  What is a secured debt - unsecured debt for eligibility purposes?  The courts are all over the board.  Now we have to tell prospective debtors, "I don't know if you qualify or not - depends on the judge."

4.  Small Business chapter 11s.  The additions have not helped.  We badly need a streamlined small business chapter 11.   

5.  Credit counseling.  Get rid of credit counseling! - the requirement is a joke.  No one even pretends to be counseled, "just pay the 50 bucks and get your certificate!"

6.  Debt Relief Agencies.  Lawyers should not be debt relief agencies.  It is demeaning in my opinion and misleading to the public.  The restrictions on what we call tell our clients should be removed (and will probably be removed by the Supremes in Milavetz). 

7.  The Means Test.  Get rid of it.  We had totality of the circumstances before and that weeded out the abusive filers, i.e., those who have the ability to repay their debts.  I could not fillout the means test form myself without a computer program - how do we expect pro pers to ever do it?  And it is easy to manipulate, i.e., arrange the filing so that the current monthly income is below the median.  Allmost everyone qualifies i.e., "passes" the means test, or is below the median, so it is a complicated hurdle which accomplishes nothing. 

8.  Mandatory reaffirmations on vehicles.  One judge in the Central District says she never refuses to approve a requested reaff.  One judge I know denys most on the basis that the debtor can tell the lender that he tried but the judge would not agree.  Presumably then the lender will just let the debtor keep the car and keep making the payments. 

9.    The automatic stay.  In the second case when the automatic stay is automatically lifted after 30 days, is it lifted as to the debtor only (as the code says) or as to the property as well? 

10.  Hmm - still thinking.

A few of the screw ups above will be fixed, hopefully, by the Supreme Court.  What galls me is that Congress won't just fix the screwups that the courts are struggling with.  A Supreme Court case costs us about $1 million - and that's the Supreme Court cost - not the lower courts.  The Supreme Court budget is about $75 million and it will resolve about 75 cases this year. 

For whatever all that is worth. 

January 27, 2010 in Current Affairs | Permalink | Comments (3) | TrackBack

January 26, 2010

Supreme Court in Recess for 3 Weeks

from Scotusblog.com

Today at the Court
Beginning of a recess until mid-February
Erin Miller | Tuesday, January 26th, 2010 10:15 am
 
Today the Court is in recess and no non-capital orders are expected.  The next session of the Court is February 19, when the Justices will meet for a private conference.  As such, we expect this to be the final Today at the Court post until then.

Nice job!  Didn't they just get back from Christmas vacation?

January 26, 2010 in Supreme Court | Permalink | Comments (0) | TrackBack

January 24, 2010

Circuit Court of Appeals Cases from Last Week

2nd Circuit Court of Appeals, January 22, 2010
In re: Jackson, --- F.3d ---, 2010 WL --------- (2nd Cir. 2010)(settlement payment not exempt, "future earnings" under tort law was unpersuasive given the different purposes of tort law and bankruptcy law) 

4th Circuit Court of Appeals, January 22, 2010
United Rentals, Inc. v. Angell, --- F.3d ---, 2010 WL --------- (4th Cir. 2010)(payments here are an avoidable preference regardless of whether the transfers set in motion a chain of events that resulted in the debtor's recoupment of the amounts paid, no showing that such new value was given to the debtor as part of a contemporaneous exchange)

January 24, 2010 in Other Circuit Briefs | Permalink | Comments (0) | TrackBack

Statute to Sue Trustee Ran Says 7th Circuit

By Lara Boyko, UWLA Law Student

CIT Communications Finance Corporation v. Maxwell (In re marchFirst, Inc), 589 F.3d 901 (7th Cir., 2009)

Issue: Was suit against the trustee here properly dismissed where the complaint was filed after the statute of limitations had run?

Holding: Yes

In 2000, CIT leased telephone equipment to marchFIRST.  On April 12, 2001, marchFIRST filed a bankruptcy petition.  Maxwell was appointed trustee.  CIT then requested the return of its equipment. “Maxwell and his agents advised CIT to contact different individuals, each of which ‘stonewalled’ CIT.”  In addition, Maxwell missed the August 12, 2001 deadline for filing an inventory of CIT’s property as required by Section 704.  Three and a half months later, Maxwell filed a Statement of Financial Affairs denying that the debtor held or controlled any of CIT’s property.  Maxwell began liquidating the debtor’s property (which presumably included CIT’s property).  CIT filed an administrative expense claim in 2002 and sued Maxwell in 2007 for breach of fiduciary duties.  The statute of limitations is five years in Illinois.  Maxwell sought dismissal based on the statute but CIT argued that it did not discover Maxwell’s breaches until some time in 2002 and therefore the statute had not run.  The bankruptcy court dismissed and the district court affirmed. 

The 7th Circuit affirmed.  The statute of limitations begins “at the time of the breach or when the plaintiff reasonably should be aware of its injury and its wrongful cause.”   Based on the timeline of events and sophistication level of CIT, it should have known that its injury was wrongfully caused during the summer and fall of 2001 during Maxwell’s refusal to cooperate and not between May 7, 2002, and December 12, 2002, as claimed.  Therefore the statute of limitations period started accruing in 2001, which is more than five years before CIT filed a complaint against the defendant.

January 24, 2010 in Other Circuit Briefs | Permalink | Comments (0) | TrackBack