BankruptcyProf Blog

Bank Customers Win One (Soon)

"Barring a last-minute assault from the banks, a federal rule to protect vulnerable Americans from overly grabby creditors will take effect on May 1.

The issue involves individuals’ bank accounts that contain Social Security payments for retirement and disability or certain other federal benefits for veterans, the poor, the aged and the disabled. By law, those sums cannot be seized by creditors to cover unpaid debts, a vital protection intended to shield close-to-the-edge recipients from financial calamity and to block creditors from acquiring taxpayer-provided benefits."

Read more here.

JPMorgan Shouldn’t ‘Escape’ $6.4 Billion Madoff Suit, Trustee Picard Says

"JPMorgan Chase & Co. (JPM) shouldn’t 'escape' a $6.4 billion lawsuit in bankruptcy court by switching the case to district court, the trustee liquidating Bernard Madoff’s collapsed firm said. 'The issue of JPMC’s misconduct belongs before the bankruptcy court as the court most versed in the nuances of the Ponzi scheme and the roles of other, related wrongdoers in that scheme,” Irving Picard, the trustee, said in a filing yesterday in U.S. District Court in Manhattan. “JPMC seeks refuge in this court to escape the scrutiny of the bankruptcy court.' "

Read more here.

Judge Denies Motion To Remove Trustee Overseeing Madoff Money Recovery

"A federal bankruptcy court judge this morning denied a motion by a victim of Bernard Madoff's Ponzi scheme to remove the trustee overseeing the liquidation of Madoff’s brokerage business.

 Madoff victim Helen Chaitman, who is also an attorney, argued that federally appointed trustee Irving Picard struck what she called a "sweetheart deal" with the family of late Madoff investor Norman Levy."

Read more here.

After Dale Saip and Kerry-Lynne Findlay stories, will bankruptcy shaming become commonplace?

"This week, media outlets have been focusing on past financial troubles of Conservative candidates.  Former Delta-Richmond East nominee Dale Saip was forced to step aside after it was revealed that he declared bankruptcy in 1993. This left creditors on the hook for $340,000.

The replacement candidate, lawyer Kerry-Lynne Findlay, also declared bankruptcy. According to a CBC report, she listed $175,000 in assets and debts of nearly $558,000 in 2001. She attributed it to a long legal fight over real estate with the Musqueam band.  In 2008, the Vancouver Sun also highlighted the past bankruptcies of three federal candidates—Conservative Lorne Mayencourt, Liberal Don Olson, and Green Doug Perry.

Those who've never filed for bankruptcy might be quick to judge these politicians. Some will see it as a moral failing, notwithstanding any reasons behind these candidates' financial troubles.  But before we rush to any conclusions, consider this: the man who is often judged the greatest American president in history was also a former bankrupt.

Abraham Lincoln filed for bankruptcy in 1833 after his business partner died. He spent the following 17 years repaying his debts."

Read more here.

Harry & David Files for Bankruptcy With Agreement to Cut Debt

"Harry & David Holdings Inc., the Oregon-based gift-box retailer that began selling fruit by mail in the 1930s, filed for bankruptcy protection after reaching an agreement with lenders to trim debt that includes almost $200 million in bonds.

The company, owned by investment funds controlled by Wasserstein & Co., listed assets and debt of as much as $500 million each in a Chapter 11 petition filed today in U.S. Bankruptcy Court in Wilmington, Delaware."

Read more here.

Borders Seeks To Hand Out $8.3 Million In Bonuses

"Book retailer Borders Group Inc., which is shuttering hundreds of stores in a bid to stay alive, is seeking bankruptcy court approval to hand out as much as $8.3 million in executive bonuses, including nearly $1.7 million to President Mike Edwards.

Papers filed with the U.S. Bankruptcy Court in Manhattan outline a proposed bonus program that is keyed to the company either reorganizing under Chapter 11 or selling itself as a going concern."

Read more here. 

Dr. Murray Propofol Pharmacy Shut Down

"The Las Vegas pharmacy that supplied Dr. Conrad Murray with massive amounts of Propofol for Michael Jackson has been shut down ... TMZ has learned.

According to court documents obtained by TMZ ... "Applied Pharmacy has been shut down by the State of Nevada and will file Bankruptcy in 90 days."

The pharmacy shipped multiple packages of Propofol to Murray at his girlfriend's Santa Monica address in the months before MJ died."

Read more here.

Ex-lawyer gets jail in bankruptcy fraud

"A former Wakefield, Mass., lawyer was sentenced Tuesday to three years in prison for failing to disclose winning lottery tickets he had purchased to a bankruptcy trustee and for filing a false tax return."

Read more here.

Employees, members of Club Fitness wake up to locked doors, bankruptcy note

"Club Fitness employees were enrolling people in new memberships on Tuesday. But when they showed up for work on Wednesday morning, they found their keys didn’t work, and a bankruptcy notice had been posted."

Read more here.

Fund Wants Bling From Steelers’ Charlie Batch

"A Pennsylvania real-estate fund is going after the glory–and some of the bling–that comes with Pittsburgh Steelers player Charlie Batch’s athletic fame.

A federal bankruptcy judge is allowing Primerock Real Estate Fund, owed $820,000 by the Steelers backup quarterback, to continue its legal pursuit of the things that the 36-year-old Batch used as collateral to obtain a loan in November 2009, according to the Pittsburgh Tribune-Review."

Read more here.

Auditor says Victorville near insolvency

"VICTORVILLE - Ongoing losses, net asset deficiencies in major funds and a lack of liquidity has put this city on the brink of insolvency, an auditor has determined.

Auditing firm Mayer Hoffman McCann said in its comprehensive audit released last week that "substantial doubt exists about the city's ability to continue as a going concern." A going concern refers to a business that operates without the threat of liquidation for at least 12 months.

For months, the Securities and Exchange Commission has been investigating the city's bond sales. The probe remains ongoing. And for the last two years, the Grand Jury has been investigating the city's finances."

Read more here.

Another Oregon resort goes bankrupt

"Before the Great Recession, there was a killing to be made developing golf-themed resorts in Central Oregon.

Thornburgh Resort Co. LLC, which aimed to transform a 2,000-plus acre ranch near Bend into the swankiest golf-themed resort of all, is the latest casualty of the rush.

On March 11, Kameron DeLashmutt, whose family ranched the land for generations, filed for protection from creditors under Chapter 11 in U.S. Bankruptcy Court for Oregon after his vision of building the region’s most luxurious residences around golf courses designed by celebrity players failed to materialize.

An investor said the bank had foreclosed on the development site. The bankruptcy petition is silent on bank loans."

Read more here.

Feb. US bankruptcy claim trades dip, value rises

"WILMINGTON, Del., March 22 (Reuters) - The value of U.S. bankruptcy claims that traded in February hit an eight-month high due to a handful of big transfers involving cases such as Mesa Air Group Inc, according to data released on Tuesday.

But overall activity continued to dry up as large bankruptcy filings evaporate and traders are left shifting through smaller cases, according to SecondMarket, which runs a bankruptcy claims trading marketplace."

Read more here.

Madoff, WaMu, Borders, Lehman, Viceroy Resort: Bankruptcy

"March 22 (Bloomberg) -- Fred Wilpon, Sterling Equities Inc., the owners of the New York Mets baseball club, and Wilpon’s friends, family and associates filed a motion on March 20 to dismiss the newly revised, 373-page complaint where the trustee liquidating Bernard L. Madoff Investment Securities Inc. seeks to recover $300 million in fictitious profits and $700 million in principal repayments.

The Wilpon group, in their 94-page brief supporting dismissal, say they were “victims” who were “defrauded by Madoff” and “never should have been targeted by the trustee.” They say there are no facts to support the trustee’s complaint.

The motion to dismiss won’t be decided until late June, at the earliest."

Read more here.

Rowan gets 14 months ... and a tongue-lashing

"Christi Rowan might have served no more than six months in prison for helping
bankrupt auto mogul Denny Hecker hide assets, but her 'brazenness' — stealing money
in the FBI's possession — warranted nothing less than the maximum sentence, a federal judge ruled Tuesday.

U.S. District Judge Joan Ericksen sentenced Hecker's new wife to 14 months in prison.

'It's mindboggling that somebody would take money that was in the custody of the
court and the FBI," Ericksen said. "It does kind of take your breath away.'

Rowan, 37, declined to make a statement to the court. Wearing a white dress shirt
and black skirt, she stood stoically before the judge as the sentence was
handed down. Her 14-year-old daughter, who was in the courtroom with other
family members, sobbed audibly."

Read more here.

RECEPTION HONORING THE FEDERAL JUDICIARY

May 12, 2011
Time: 5:30 p.m. - 7:30 p.m.
Registration: 5:30 p.m.
Location: City Hall - Tom Bradley Room, 200 N. Spring St. 26th Fl., Los Angeles, CA
Cost: $70 (FBA Members), $50 (government employees//Students)
$85 (non members)
Group Registration Fees: FBA members 10 Tickets (10) $600;
Federal judiciary and 1 Guest Complimentary, Additional judicial guests $35.

Federal Bar Association - Los Angeles Chapter
210 N. Glenoaks Blvd. Ste C
Burbank, CA 91502
(818) 843-1020   fax: (818) 843-7423
www.fbala.org   email: fbala@emaoffice.com

Federal Bar Association - LIVE CM/ECF E-FILING TRAINING PROGRAM

The Federal Bar Association's LIVE e-filing training program enables attorneys and
support staff to comfortably utilize the District Court's CM/ECF filing system. 

* Get questions answered
* Eliminate "Notice of Filing Deficiency"  
* Attorneys get certified for login/password
* All participants get certificates and MCLE credits  

Upcoming Classes in Los Angeles:
Friday, March 25, 2011
Saturday, March 26, 2011

For more information or to sign up please contact:
Watkins Consulting, LLC
Mike or Maricris (ACE) Tel: 213.623.3979
Patrick  Watkins, Tel:  213.400.0175
email:  www.traincm-ecf.com

Westlaw “Headnote of the Day” -- Chapter 7 "vehicle" ?

163 Exemptions
163I Nature and Extent
163I(C) Property and Rights Exempt
163k44 k. Vehicles and Teams.
    Parts which Chapter 7 debtor had collected from various sources, and which, while
they had never been assembled, would, if assembled, comprise a working automobile,
did not constitute a "vehicle," for purposes of Oregon exemption statute; while
exemption statute was to be liberally construed, liberal construction could not
transform pile of parts into automobile.
In re McMillin, 441 B.R. 348 (Bankr. D. Or. 2010)

Los Angeles Bankruptcy Forum Presents

"The Beneficent Government: Federal and State Regulators in Bankrupcy Cases"

Regulators often have different goals than the usual bankruptcy constituencies --
maximizing returns to creditors is not what they're about. Our panel looks at
various regulators, what their goals are and what they do when they show up in
a bankruptcy case. Regulators discussed will include the FDIC, FTC, SEC, and state
health and insurance regulators.
 
Moderator:
Rodger M. Landau
Landau, Gottfried & Berger, LLP

Panelists:
Matthew Pakkala 
FTI Consulting,  Inc          
Michael B. Lubic 
K&L Gates, LLP
Samuel R. Maizel
Pachulski, Stang, Ziehl & Jones, LLP

Price                                                           
$80.00 for LABF members
$100 for non-members
$35.00 for government 
$10.00 additional at door

April 11, 2011
Hotel Intercontinental    
2151 Avenue of the Stars
Los Angeles, CA  90067

Doors Open 6:00          
Dinner at 6:45
Program at 7:30 p.m.
                          
If you have a question please
call Pat Garcia at (818) 972-5343

Perry Ellis Closes on Purchase of Anchor Blue Assets

"The Miami-based clothing retailer (NASDAQ: PERY) said it had the winning $500,000 bid during a March 3 auction for Anchor Blue and Miller’s Outpost trademarks, along with all other intellectual property holdings associated with Anchor Blue.

A bankruptcy court judge approved the deal."

Read more here.