San Fernando Valley Bar Program this Friday – March 22, 2019

Email from Steve Fox:

Dear All:

We practice law in a corner of the USA often without thinking about what the rest of the bankruptcy bar is doing.  They have a lot of good idea what we in the Valley, debtor and creditor attorneys, can use.

Judge Sandra Klein, Cassandra Richey and Roksana Moradi-Brovia will examine cases from other bankruptcy courts and appellate courts to give us some sense of what the rest of the country is doing in bankruptcy.  This is the type of program where you take notes because you get ideas which you can use in your own cases.  The cases are intended to make you think.

The panelists are well known and well respected.  Your time will be well spent.  Here are the program particulars: Read more…

Adjusted Dollar Values – April 1, 2019

I am posting this because I always have a hard time finding the adjusted dollar values. I admit, I stole this from the Eastern District. You can find it by clicking here, and I have pasted a few choice numbers for convenience:

Debt limits for Chapter 13 cases: unsecured, $419,275; secured $1,257,850.

Wages entitled to priority: $13,650.

Definition of a small business: $2,725,625.

Definition of assisted person: $204,425.

Paying the mortgage in advance as prepetition exemption planning

I have asked bankruptcy attorneys many times over the years whether they think that it is okay to use non-exempt cash in the bank to prepay the mortgage before filing a petition.  It would only work of course if the mortgage payment created equity that was then exempt.  Every attorney I have ever asked has said something like, “Of course it’s okay.”  Some have looked at me strangely like “Why are you asking when the answer is obvious?”

I don’t see it as obvious.  It is a transfer to delay, hinder or defraud creditors.  “But it is exchanging non-exempt assets for exempt assets which is okay,” is the usual response.  The answer to that is “sort of.”

The BAP has recently affirmed Judge Robert Kwan in an unpublished opinion, In re Ellison, who denied this guy’s discharge based on a bunch of prepetition transfers, (“But it’s allowed exemption planning says the debtor’s atty.”)  The debtor paid six months worth of his first and second mortgages.  Why you ask?  The debtor’s words, “to assure that my wife and my daughter and myself had a home to live in through the end of the year . . . I did prepay [the mortgage in the past] but not to that degree, not six months, or four months, five months, whatever it was in advance, normally.”  According to Judge Kwan, “This out of the ordinary course transaction and Defendant’s admissions are additional evidence of his intent to hinder or delay his creditors by putting these funds out of their reach for his personal benefit.”   See In re Ellison, 2:15-ap-01001-RK.  Docket No. 30.

There were other transfers to be sure which had the effect of protecting about $250,000 of equity in the debtor’s home (after the homestead exemption).  Judge Kwan concluded that the debtor “crossed over the line’ of what is permissible behavior.  See In re Beverly, 374 B.R. at 244-246 (discussing the difficulty in drawing the line between legitimate bankruptcy planning and intent to hinder, delay or defraud creditors).”

Bankruptcy Filings Flat in Jan and Feb, 2019 – Central District

Bankruptcy filings in the Central District of California were virtually the same for January and February 2019 as the same two months in 2018.

2019 2018 2017 2016 2015 2014
Jan 2,745 2,741 2,839 2,872 3,364 4,704
Feb 2,754 2,708 2,795 3,299 3,829 4,574
March 3,363 3,782 3,923 4,496 5,430
April 3,277 3,209 3,584 4,486 5,364
May 3,226 3,384 3,484 3,971 5,500
June 2,981 3,252 3,545 3,966 4,386
July 3,057 2,953 3,239 3,731 4,701
Aug 3,337 3,387 3,543 3,544 4,540
Sept 2,772 3,071 3,168 3,493 4,317
Oct 3,259 3,170 3,235 3,751 4,554
Nov 2,821 3,004 3,025 3,531 3,642
Dec 2,419 2,416 2,902 2,718 3,733
Total 5,499 35,961 37,262 39,819 44,880 55,445

Breakdown in the cases follows:

Non-Comm’l Commercial Chapter 7 Chapter 13 Chapter 11
5,042 457 4,233 1,200 66
92% 8% 77% 22% 1%

Great Program by Judge Scott Clarkson – April 30, 2019

Rembrandt: The Bankrupt Printmaker: His Life and Bankruptcy Proceedings of 1656

Tuesday, April 30, 2019

5:30 p.m. – Registration & Reception
7 p.m. – Program [1 Hour MCLE Qualified]

REGISTER HERE

First Street U.S. Courthouse
350 W 1st Street, Los Angeles

Lecture & Visual Presentation by Hon. Scott C. Clarkson, United States Bankruptcy Judge

This delightful lecture and presentation will combine art and insolvency law to reveal fascinating insights into the Dutch artist Rembrandt’s life (l606-1669), his Amsterdam workshop, his loves, real estate and art investing, and his eventual insolvency. Fraudulent transfers, secret corporations, asset auctions, and jurisdictional issues not seen since Stern v. Marshall.

image
Host Judge: Hon. Neil W. Bason, United States Bankruptcy Judge Read more…

California has Changed (slightly) Civil Code Section 1542 – Watch Your Settlement Agreements

California has made subtle changes to that Cal Civ Code section we all know and love.   Be sure the language you include in your settlement agreement cites the new language.

Effective January 1, 2019, Section 1542 now reads:

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

SFVB Program Tomorrow, Friday Feb 8, 2019 – “10 Local Cases”

Email from Steve Fox

Dear All:

Friday of this week, the bankruptcy section of the SFVBA is presenting a panel (Judge Geraldine Mund, Dean Rallis and David S. Hagen).  They will discuss, dissect and argue through 10 local cases (meaning in California) which have impacted bankruptcy practices of creditor attorneys, debtor attorneys and trustees.  The cases go back to 1980 covering a wide range of consumer and business issues including lien stripping, personal liability for claims, enforceability of stipulations in subsequent proceedings and a conflict between the general presumption under Calif. law that property acquired during marriage is community property and CA. Evid. Code Section 662.  These are ten cases which the panelists believe have had impact on our practices so this is not a year in review program. Read more…

Congratulations to Chief Judge Maureen Tighe

Image result for judge maureen tighe The Passing the Gavel ceremony yesterday at the 9th Circuit Court of Appeals in Pasadena was pretty fun.  I think it’s the fourth one I’ve been to now.  Outgoing Chief Judge Sheri Bluebond passed two gavels, one really large and one more ornate, to incoming Chief Judge Maureen Tighe before a huge throng of well-wishers and admirers.  Talk about hitting the ground running, the government shut down about the time Judge Tighe’s four year term began.  Judge Tighe told us she discovered quickly that there is no manual on how to deal with that.  So she met with the Chief District Court Judge Virginia Phillips, and the 9th Circuit staff, Cathy Campbell of course and others to try to figure out what to do.  She was determined to make sure the courts remained accessible to those who needed them which is what happened.  I say without exaggeration that if it came to a vote among bankruptcy lawyers today about who is the best judge in the Central District it would be Maureen Tighe.  She has the perfect blend of patience and firmness.  She has huge empathy for the parties, especially the little guy, along with the decisiveness the parties need from a judge.  Congratulations Judge Tighe.

Henry Sommer Comments at the Calvin Ashland Award Dinner

Henry’s comments at the cdcbaa Calvin Ashland dinner were stirring and meaningful.  I recorded his comments which he looked at and approved.

Comments by Henry Sommer

 upon receiving CDCBAA Attorney of the Year Award

 Recorded by M. Jonathan Hayes

November 15, 2018

Ken Klee:  [00:00:31]  And for the record, let me read the plaque.  “CDCBAA, Central District Consumer Bankruptcy Attorneys Association, Henry J. Sommer, Attorney of the Year 2018, Calvin K. Ashland Award, an annual award presented to those individuals who exemplify in the course of their profession, compassion, understanding, and concern for the individual consumer.” Each recipient has upheld these values that were found in the heart and in the courtroom of the Honorable Calvin K. Ashland.  This award alternates between judges, trustees, and attorneys, each of equal importance in our bankruptcy system of justice.

Henry Sommer:  [00:01:13]  Thank you.  (applause)  Thank you, Ken, for that very generous introduction.  And thank you to the CDCBAA for honoring me with this award.  I can see from the distinguished past recipients, of which Ken was the first, what an honor it is. Read more…

Think the Bankruptcy Business in California is Slow?

Total bankruptcy petitions filed in 2018:

Alaska – 441.

Vermont – 545.

Wyoming – 976.

South Dakota – 1068

Highest? Read more…