Interesting Article About Justice Thomas from the Volokh Conspiracy

I recently read a fairly snide article suggesting that Justice Thomas simply regurgitates the parties’ briefs when he writes opinions.  This is a great explanation from the Volokh Conspiracy about “the real story.”

Learning New Words from the 9th Circuit – Risible

In Blixseth v. Yellowstone Mountain Club LLC  (In re Blixseth),  — F. 3d — (9th Cir. August 2015), the 9th Circuit published an “Order re OSC on Sanctions” so you know where this is going.  I love this quote:

“[A]ll argue that the appeal was not frivolous because one could have inferred that the bankruptcy judge was biased against [the debtor] from the nineteen accusations that they raised.  As explained in our opinion and order to show cause, we find this argument risible.”

Risible?  One definition:  such as to provoke laughter.  Another definition: provoking laughter through being ludicrous.

Nice Tentative From Judge Scott Clarkson re Chapter 7 Trustee’s Commission

6:14-19644 Banning at 8th Street LLC Chapter 7

Hrg. on Chapter 7 Trustees First Interim Fee Application filed 8/12/15 For The Period From July 29, 2014 To August 11, 201 for Todd A. Frealy, Trustee Chapter 7, Period: 7/29/2014 to 8/11/2015, Fees: $164,686.51
Docket 235

Tentative for 9/2/2015:

The Chapter 7 Trustee has presented an interim fee application [Dk. 235] (“Interim Application”) to the Court, citing sections 326 and 330 of the Bankruptcy Court for support of his cause.  Of course, the Trustee means section 331, which guides interim fee applications.  This is anticipated to be a surplus estate.  All creditor and administrative claims are anticipated to be paid in full.  Equity will most likely be receiving a significant distribution.  As described below, the Trustee is requesting an interim maximum commission in an amount of approximately $164,686.00 based on distributions already made.  The carefully documented time and charge records of the Trustee indicate that his services to the estate as of this application can be calculated to be in the amount of approximately $75,000.00.  Equity objects that the approximate $85,000.00 difference is a windfall that should not be permitted.  The Chapter 7 Trustee has presented his reply. Read more…

Judge Zurzolo Recent Comments on Chapter 13 Procedures

This is an important note from Nancy Clark, President of the cdcbaa,

Dear Members:

At Judge Zurzolo’s last Chapter 13 Confirmation hearings, he asked me to pass along a message to the debtor bar regarding preparation for the confirmation hearings.  He was disappointed by the fact that debtor attorneys had failed to timely prosecute their cases and were asking for continuances for simple things like providing tax returns to the trustee, providing documents in response to the trustee’s object, or for not filing mortgage declarations.  He stated that if attorneys do not make the effort to prosecute chapter 13 cases in a timely manner he is ready to go to a same day 341(a) Meeting of Creditors Hearing and Confirmation Hearing as is done in Riverside which may result in more dismissals.

His next Chapter 13 Confirmation calendar is on September 28, 2015.  This is a friendly reminder that if you need to file a Motion for Order Disallowing Claim you need 30 days notice.  Therefore file it now. Also, if you need to amend the plan, you should do so soon as you need to have 28 days service if the amended plan contains any material changes.  Make sure your client provides you the information needed to file the mortgage declaration.  Remember, you no longer need to attach the copies of the payments and proof of mailing to the mortgage declaration.  Now is a good time to review the trustee’s objection and make sure you have provided the documents requested and prepared your written response, if necessary.

 All the Best,

Nancy B. Clark
Borowitz & Clark, LLP

6th Circuit Holds That FDCPA Protects Corporations

The FDCPA is a powerful piece of legislature designed to eliminate abusive debt collection practice. The teeth behind the act are an attorney fees clause and provisions that allow for emotional distress and punitive damages to be awarded.

One distinction between consumer debt collectors and commercial debt collectors is that those practicing consumer debt collections had to be very careful not to violate the FDCPA while commercial debt collectors did not have the same worries. Consumers are not as sophisticated as those engaged in business and so this additional protection makes sense.

That distinction now blurred because the 6th Circuit held that corporations may take advantage of the FDCPA.  This is a BIG deal.

You can find the case here.

Hat tip to Professor Dan Schechter, Loyola Law School, Los Angeles and the ABA’s Insolvency Law Committee.

Landlords Are Entitled To Priority Treatment of Lease Payments Which First Come Due During the Gap Period of an Involuntary Bankruptcy

In a case of first impression, Judge Montali had to decide whether a landlord’s claim for payment of rent during the gap period of an involuntary bankruptcy is entitled to priority.

Before delving into the facts of the case, a quick primer is appropriate. The treatment of a commercial landlord’s claims in bankruptcy is too complicated and will be discussed in more depth in a future article so this “quick primer” is very limited.

When a company files for bankruptcy, the landlord in a nonresidential context is usually the most powerful player in the scene. The landlord is entitled to be paid contract rate lease payments until the Debtor decides to either reject or assume the lease. This is provided for under § 365(d)(3) which states that “The trustee shall timely perform all the obligations of the debtor … arising from and after the order for relief under any unexpired lease of nonresidential real property … until such lease is assumed or rejected, notwithstanding section 503 (b)(1) of this title….” Read more…

Not All Expenses Of A Professional May Be Compensable By The Estate, Even In The Face Of A Clear Retainer Agreement And An Approved Employment Application!

The facts of the situation are not in dispute. The Debtor in a Chapter 11 case needed to hire a forensic accountant. The Debtor applied for permission to hire the accountant under § 327(a) of the Bankruptcy Code. The employment application did not contain any special provisions but the engagement letter contained the following clause:

In the event we are requested or authorized by Debtor or are required by government regulation, subpoena, court order, or other legal process to produce our documents or our personnel as witnesses with respect to our engagements for Debtor, Debtor will, so long as we are not a party to the proceeding in which the information is sought, reimburse us for our professional time and expenses, as well as the fees and expenses of our counsel, incurred in responding to such requests.

No objection to employment was filed and the Court entered an order approving the application. Read more…

9th Circuit to Finally Hear In re Zachary, Does Absolute Priority Rule Apply in Individual Cases? (No, says I)

In re Zachary has finally been set for oral argument.  Zachary is the case that deals with whether or not the absolute priority rule applies in individual chapter 11 cases.

The Notice of Appeal was filed 7/11/2013!  Briefing was completed on 12/10/2013.

08/13/2015  24  Notice of Oral Argument on Wednesday, October 21, 2015 – 09:30 A.M. – CA Stanford Sch Moot Courtroom – Stanford U CA.View the Oral Argument Calendar for your case here.[9645858] (GEV) [Entered: 08/13/2015 11:27 AM]

Wellness – What a Great Read!

I finally got around to writing my brief on the Wellness case.  I already forgot what a great read it is, especially if you like fundamental constitutional law which usually means you like American history.

The Wellness opinion thankfully seems to resolve the issue of what to do when the bankruptcy court’s authority seems to be infringing on the “constitutional birthright” of the Article III courts as Justice Roberts likes to say.  For sure now, a Stern matter,  that is a a matter that Congress designated as core but is possibly unconstitutionally core, may be decided on a final basis by a bankruptcy court if the parties consent.  And consent does not have to be express, only “knowing and voluntary.”

Justice Sotomayor has some good lines. Read more…

Hale Antico President Elect of the Inn of the Court

Hale Antico has been elected President-Elect of the James T. King  Bankruptcy Inn of Court.  This is a great organization.  Contact Cynthia Meza below to join.

Your 2015-2016 Board:

Wes Avery, President
Anthony Friedman, Vice President
Hale Antico, President-Elect
Doug Flahaut, Secretary
Jeff Hagen, Treasurer

 The James T. King Bankruptcy Inn of Court
sponsored by
American Inns of Court

Read more…