BankruptcyProf Blog

Pets and Chapter 13

Below are two comments posted on a Bankruptcy Law Listserve:

-Pets? Anyone got some brilliant way to use pet and veterinary expenses to lower
disposable monthly income in a chapter 13 bankruptcy?

-See if you can get a doctor's prescription as it lowers blood pressure to have
companion animal? Or have a mental health professional state that they will commit
suicide if they don't have companion animals? Then it would be a medical / health
care expense. Of course if there's nothing like that and it's just a pet, if the
person is unmarried and alone there is some case law that for a retired person
living alone with a pet, it's not an excessive expense. Maybe you can get one of
the humane associations to write an amicus brief!

I was surprised by the comments -- we have gotten Chapter 13 plans confirmed with a pet/vet expense without a problem.

We have two cases pending that list a pet/vet expense that is on the higher side, elderly and sick pets. If the Debtors must live off the budget on Schedule J for the next 5 years how could an attorney NOT budget a client's true expenses, including those that are pet related? Are Debtors supposed to give away or euthanize their pets when filing Chapter 13?

We will keep you updated about the two cases.

-Roksana D. Moradi, Esq.

Hurricane Irene Results in Early Closure of Delaware Secretary of State

The Secretary of State Department of Corporations is closing at 12:00 EST as Delaware
has declared a state of emergency due to hurricane Irene.

Our office in Delaware will remain open until 2:00 PM EST (11:00 a.m. PST).
Due to the approach of the hurricane, extraordinary rules apply.
If you have time-sensitive needs please contact your CLAS service representative at
800.952.5696. Although we anticipate reopening on Monday, as this is a rapidly
changing situation the Department of Corporations could be unavailable for several
days. Please remember to allow additional time for documents and filings.

 

FINANCIAL LAWYERS CONFERENCE

Stern v Marshall: Anna Nicole, Stripped of Legacy, Forces Bankruptcy System to
Rerun Marathon

Thursday, October 6, 2011
 
The panelists will explore the interpretations and implications of the Supreme Court's
opinion in Stern v. Marshall, undoubtedly the most important bankruptcy decision in 29 years.
Learn how this "narrow" holding is disrupting bankruptcy litigation around the country.
Professors Bussel and Klee were on the brief for E. Pierce Marshall in the Supreme Court
and will share insights into the importance of his victory in this case, and as always,
Ms. Neely will provide her own incisive analysis.

The program will cover, among other issues: the future of bankruptcy courts'
jurisdiction over state law claims; the limits on the power of bankruptcy courts to
enter final judgments; and the practical implications of Stern v. Marshall for
attorneys and judges.
 
Speakers:
Kenneth N. Klee, Klee, Tuchin, Bogdanoff & Stern LLP
Daniel J. Bussel, Klee, Tuchin, Bogdanoff & Stern LLP
Sally S. Neely, Sidley Austin LLP
 
Beverly Hilton Hotel
9876 Wilshire Boulevard
Los Angeles, California
 
Time:
6:00 pm - 7:00 pm - Registration and Reception
7:00 pm - 8:00 pm - Program
 
Cost:
$70 FLC Member
$85.00 Nonmembers
$40.00 Lawyers in Gov’t Svc.

Financial Lawyers Conference
214 Main Street, #336, El Segundo, CA 90245
(310) 322-1350
Federal Tax ID# 23-7448511

For information on FLC’s events and membership, go to
www.financiallawyers.org
 
This activity has been approved for Minimum Continuing Legal Education credit by the
State Bar of California in the amount of 1 hour. The Financial Lawyers Conference
certifies that this activity conforms to the standards for approved educational
activities prescribed by the rules and regulations of the State Bar of California
governing minimum continuing legal education

Law Firms as Debtors-in-Possession: Lessons and Cautionary Tales

Los Angeles Bankruptcy Forum Presents its September 19, 2011 Program
 
The Program will address issues that arise upon a law firm's insolvency.
Panel members have served as Trustee, Creditors Committee counsel, Debtor's counsel,
and special litigation counsel in law firm dissolutions and wind downs and in several
high- profile law firm voluntary and involuntary bankruptcy cases, including the
Heller Ehrman, Howrey, Thelan, and Brobeck cases.  They also have
represented numerous law firms in acquiring lawyers in distressed situations.

Panelists:
Peter Gilhuly - Latham & Watkins
Ron Greenspan - FTI Consulting
Edwin B. Reeser, P.C.
Christopher D. Sullivan - Trepel Greenfield Sullivan & Draa LLP
Thomas A.Willoughby - Felderstein Fitzgerald Willoughby & Pascuzzi LLP
 
Cost:
Members: $80.00
Non-Members: $100.00
Government: $35.00
At door:  Additional $10.00
 
September 19, 2011
Doors open 6:00 p.m.
Dinner at 6:45 p.m.
Program at 7:30 p.m.
Lights out 8:45 p.m.
 
Marriott Hotel Los Angeles
333 S. Figueroa Street, Los Angeles 

(Self-parking at World Trade Center lot across the street after 5:00 p.m.)

Any questions, please  call Pat Garcia at (818) 972-5343

This activity will count for one hour of MCLE credit with the State Bar of California.
The Los Angeles Bankruptcy Forum certifies that this activity conforms to the
standard for approved education activities prescribed by the rules and
regulations of the State Bar of California.

Controversial attorney Gleason apologizes to judge

"Hollywood attorney Kevin Gleason, who called a judge’s opinions 'half baked' and delivered a bottle of wine to the judge’s office, made a limited public apology in court Thursday for his actions."

Read more here.

GM says bankruptcy excuses it from Impala repairs

"General Motors Co (GM.N) is seeking to dismiss a lawsuit over a suspension problem on more than 400,000 Chevrolet Impalas from the 2007 and 2008 model years, saying it should not be responsible for repairs because the flaw predated its bankruptcy."

Read more here.

Indicted Ex-Fry’s Exec, Now Bankrupt, Owes Tens of Millions to Casinos

"An ex-Fry’s executive indicted on a charge of allegedly trying to shake down the electronics store’s vendors to support a lavish lifestyle has filed for bankruptcy, listing nearly $137 million in debt, much of it to Vegas casinos."

Read more here.

Harry & David cleared to emerge from bankruptcy

"Harry & David Holdings Inc won tentative court approval for its reorganization plan on Thursday, clearing the way for the gift basket maker to emerge from bankruptcy under the control of senior noteholders.

U.S. Bankruptcy Judge Mary Walrath, at a hearing in Wilmington, Delaware, said she was prepared to approve the reorganization, according to Brad Erens, a lawyer for Harry & David. Walrath had not entered an official order on the court docket by late Thursday."

Read more here.

Evergreen Solar files for bankruptcy, plans asset sale

"Evergreen Solar Inc. has filed for bankruptcy, the cash-strapped Marlboro company disclosed in a regulatory filing today.

Evergreen, which closed its taxpayer-supported Devens factory in March and cut 800 jobs, has been trying to rework its debt for months."

Read more here.

Lehman, Barzel, Harry & David, Hooters Casino: Bankruptcy

Bloomberg Businessweek weekly bankruptcy roundup:

Read it here.

For Bank of America, Countrywide Bankruptcy Is Still an Option

"The real issue around Bank of America is not whether it survives, but whether it sacrifices Countrywide to save itself. More specifically, will Bank of America put Countrywide into bankruptcy? And will this stem the bleeding?

The Countrywide acquisition will go down in history as a deal from hell. It has already cost Bank of America tens of billions of dollars in litigation settlements, let alone losses resulting in a $20.6 billion charge to earnings in the second quarter. Bank of America has already announced that it expects another $5 billion charge for earnings, and American International Group said this week that it would sue Bank of America for $10 billion, mostly for loans issued by Countrywide. It appears that $5 billion is the floor."

Read the article here.

Change in California Deficiency Law

SB 485: No Deficiency Judgments After a Short Sale
 
The California Legislature approved and the Governor has signed SB 458, which will eliminate any deficiency judgments that a holder of a Mortgage Loan may have against a Borrower after a short sale of a dwelling of 1-4 units that has been approved by the holder is completed, and also provides that no deficiency shall be collected or requested.  This legislation was passed as an urgency statute and became effective on July 15, 2011. 
 
It follows SB 931 which went into effect on January 1, 2011 and added Section 580e to the California Code of Civil Procedure. That section provides that no holder of a Note secured by a first Deed of Trust could obtain a deficiency judgment against a Borrower when a dwelling of 1-4 units  is sold in a short sale that has been approved by the holder. A short sale is a sale of the Secured Property for less than the remaining amount of the indebtedness due at the time of the sale with the written consent of the holder of the Deed of Trust.   The written consent of the holder obligates the holder to accept the sale proceeds as full payment of the debt. The prohibition against deficiency judgments in SB 931 applied only to first Deeds of Trust but included non-owner-occupied as well as owner-occupied dwellings.

 
SB 458 expands the prohibition against deficiency judgments in Section 580e to junior Deeds of Trust on the Secured Property. It is also applicable to owner-occupied and non-owner-occupied dwellings.  It does not apply when the property at issue is secured with multiple collateral (not solely the deed of trust or mortgage at issue).
 
Section 580e does not apply to Borrowers that are corporations, limited liability companies or limited partnerships.
 
For more information about this topic, please contact Julie Greenfield, (949) 230-3241, juliegreenfield@cox.net
 
For more information about the Business Law Standing Committees, please see the standing committees web page.

These periodic e-mails are being sent to you because you expressed interest in receiving updates from the Consumer Financial Services Committee of the State Bar of California's Business Law Section.  As a Section member, if you would also like to sign up to receive e-bulletins from other standing committees, simply click HERE and follow the instructions for updating your e-bulletin subscriptions in My State Bar Profile. If you have any difficulty or need assistance, please feel free to contact Susan Orloff Section Coordinator of the Business Law Section. If you are not a member, or know of friends or colleagues who might wish to join the Section to receive e-bulletins such as this, please click HERE to join online.

To keep up-to-date on the latest news, case and legislative updates, as well as events from the Business Law Section and other Sections of the State Bar of California as well as the California Young Lawyers Association (CYLA), you can follow them on Facebook or add their Twitter feed.
 

Raiders Legend BANKRUPT Sells Super Bowl Rings

"NFL legend Ray Guy -- widely considered the GREATEST punter of ALL-TIME -- has been forced to sell off his three SUPER BOWL rings after filing for bankruptcy back in the spring.

61-year-old Guy -- a seven-time Pro Bowler -- banked a total of $80,100 for the three rings he earned during his 14-year NFL career ... two while the Raiders were in Oakland ... and one after the team moved to Los Angeles."

Read more here.

 

Dodgers' merchandise vendor cries foul

"As the Dodgers operate under bankruptcy protection, their merchandise vendor has asked the U.S. Bankruptcy Court for protection from the Dodgers.

With Dodger Stadium merchandise revenue down by 25% this season, Facility Merchandising Inc. (FMI) could face a "business-threatening event" if the court does not intervene on its behalf, the company attorneys wrote in a court filing.

FMI pays the Dodgers a minimum of $4.5 million per year under a contract that extends through 2017, according to court papers. In its filing, FMI claims it will lose about $2.5 million over the first two years of the agreement.

The company contends it could recoup those losses over the life of the contract. However, bankruptcy law affords the Dodgers the option to walk away from the contract. FMI wants the court to order the Dodgers to decide whether to honor or reject the contract by the end of the season, before the company has to make this year's payments to the Dodgers and buy next year's merchandise."

Read the article here.

AIG sues Bank of America for $10B over mortgages

August 08, 2011 1:14 PM EDT

NEW YORK (AP) — American International Group Inc. said Monday it sued Bank of America Corp. for more than $10 billion, saying the bank cheated it by selling residential mortgage-backed securities that were overvalued.

Bank of America denied the allegations, saying AIG "recklessly" chased investments with high returns, and was big and sophisticated enough to know the risks.

Banks have been hit by a series of suits over misrepresentations of mortgage-based securities.

AIG said Bank of America and two companies that were later gobbled up by the bank, Countrywide and Merrill Lynch, sold the insurance company $28 billion in securities backed by home mortgages between 2005 and 2007, at the height of the housing boom. It said it looked at more than 260,000 of the underlying mortgages, and found that the bank's "stated metrics" for 40 percent of the securities were false.

In one case, a borrower said she had been the owner of a construction business for 25 years, which would have made her 10 years old when she took ownership, AIG said.

Bank of America spokesman Lawrence Grayson said the blame lies with AIG.

"AIG recklessly chased high yields and profits throughout the mortgage and structured finance markets. It is the very definition of an informed, seasoned investor, with losses solely attributable to its own excesses and errors," Grayson said.

AIG spokesman Mark Herr shot back: "It is disappointing but unsurprising that Bank of America continues to attempt to blame others for its own misconduct. Investors, no matter how sophisticated, were entitled to rely on its numerous written representations about the securities it sold."

Bank of America shares fell $1.17, or 14 percent, to $7 in noon trading as investors reacted to the downgrade of the U.S. government's credit rating by Standard & Poor's. Earlier in the day, they hit a 2-year low of $6.83.

AIG shares fell $2.08, or 8.3 percent, to $23.02, setting a one-year low.

In June, Bank of America agreed to pay $8.5 billion to a group of investors for selling them poor-quality mortgage securities. AIG's suit is separate, but the company is raising questions about whether the settlement went far enough. On Friday, New York Attorney General Eric Schneiderman urged the judge to reject the settlement, calling it unfair.

THE UNITED STATES TRUSTEE BROWN BAG SERIES

Chapter 11 Compliance Camp:
An Overview of New Electronic and
Existing Compliance Procedures

Presented by
Los Angeles Field Office, Region 16

Date: Friday August 19, 2011
Time: Noon to 1:30pm (you are welcome to bring your lunch)
Where: Office of the United States Trustee
Ernst & Young Plaza, Lobby Level, Room 101
725 South Figueroa Street, Los Angeles, CA 90017

This program has been approved for 1 hour of MCLE credit.

This program is designed for attorneys with a valid State Bar number who have
experience with Chapter 11 proceedings. To ensure adequate accommodations, be aware
that seating is limited to 91 persons.

This U.S. Trustee program is co-sponsored by the Los Angeles Bankruptcy Forum.
This activity will count for one hour of MCLE credit with the State Bar of
California. The Los Angeles Bankruptcy Forum certifies that this activity
conforms to the standard for approved education activities prescribed by the
rules and regulations of the State Bar of California.

Las Vegas Real Estate Agent Pleads Guilty to Tax Fraud and Bankruptcy Fraud Charges

"German A. Posada of Las Vegas pleaded guilty before U.S. District Judge Philip M. Pro to charges of filing a false 2004 individual income tax return and making a false statement in a bankruptcy proceeding, the Justice Department and the Internal Revenue Service (IRS) announced today."

Read more here.

Dodgers, MLB submit loan agreement to bankruptcy court

"The Dodgers and Major League Baseball submitted a $150-million loan agreement to the U.S. Bankruptcy Court on Friday, under which the league would loan the Dodgers the money needed to get through the season at 7% interest and would not seize the team in the event of default."

Read more here.

California: Crystal Cathedral Not for Sale

"The Crystal Cathedral Ministries board has decided not to sell the campus of the landmark Orange County church, as the ministry works to emerge from bankruptcy proceedings. Potential buyers, including the Diocese of Orange, had offered up to $50 million for the campus, which would have allowed Crystal Cathedral to pay its creditors in full. Instead, the church will try to raise the money through donations, its lawyer told a bankruptcy court on Monday. The church may have only about four months to do so while the creditors committee proceeds with its own plan for a sale of the church."

From the New York Times.

Bankruptcy Inn Alliance

From: Andrew R. Turner [mailto:ATurner@TurnerLaw.net]
Sent: Thursday, August 04, 2011 9:19 AM
To: Brett Curlee; Esq.
Subject: New Bankruptcy Inn of Court Alliance

Colleagues in the American Inns of Court Bankruptcy Community:

As our new Inn programming year begins, Michael McConnell and I very are pleased to announce the formation of the Bankruptcy Inn Alliance designed to foster the exchange of programs and information between the bankruptcy Inns, provide a forum to discuss issues of general concern to bankruptcy practitioners, and help encourage the formation of new Inns that focus on bankruptcy and insolvency law. 

Please follow this link http://www.innsofcourt.org/Content/Default.aspx?Id=6161 to read our formal announcement and the letter containing all the details. 

In addition, we have established a base on the American Inns of Court website to showcase our new alliance.  Here is a separate link to the letter by visiting Alliance homepage www.americaninnsofcourt.org/bankruptcyalliance. 

We look forward to your participation and collaboration in this effort.  Thank you for your continuing commitment to the American Inns of Court.

Kind regards,

Andrew Turner 
Co-Chair and Founder