Interview with Judge Alex Kozinski

The highlight of the Insolvency Conference on Coronado Island this year was the interview of Judge Alex Kozinski on Friday afternoon.  Judge Peter Bowie (Ret.) started off by asking Judge Kozinski for a word that describes who he is and what he is all about.  The word? – handsome!  He asked Judge Kozinski about his early life in Romania and his life after that in Vienna – when he first tasted ice cream and “immediately became a capitalist.”

After clerking for 9th Circuit Judge Anthony Kennedy and US Supreme Court Justice Warren Burger, his first job was with Quittner, Stutman, Triester & Glatt.  He was sworn in as a US citizen sometime in those years by Judge Harry Pregerson, then a district court judge, now his colleague on the 9th Circuit.   Judge Kozinski gushed about what a great judge William Lazarow was and determined to be like him.  After joining the 9th Circuit himself in 1985 at 35 years old, he somehow wangled himself the the job of running Judge Lisa Fenning’s calendar while she was off on maternity leave.   He described the effort as “the hordes coming at your.”  He was not derisive in the slightest.  The bankruptcy world has a lot of people who need help and the bankruptcy judge deals with that every day.  He said that bankruptcy “brings order from chaos.”  For that reason it is important.

There is a great hour-log interview with Judge Kozinski on youtube here.  Pretty fun.

29th Insolvency Conference May 2017

The California Bankruptcy Forum was kind to permit me to audit the Insolvency Conference this weekend on Coronado Island.  As a member of the State Bar Bankruptcy Specialist Commission, I am permitted to audit programs.  About a third of the Central District Bankruptcy Judges were there I would guess and several judges from other districts in California.  The value of sitting at tables and around the chairs in the lobby with the judges you appear in front of every day cannot be overstated.  The programs were great.  I highly recommend it.  Next year the meeting will be somewhere around Lake Tahoe.

Especially fun was the Brutzkus Gubner clambake at the Hotel Del Coronado on Friday night.  A special thanks to Steve Gubner for that.

 

Adequate Protection and Takings Issue?

Ever thought about “adequate protection” as being a 5th Amendment Takings Violation?

I never thought about it like this, but the bankruptcy concept of “adequate protection” presents an inherent constitutional 5th amendment takings issue!  Doesn’t it?  Think — a creditor who has a lien has both (a) right to payment [contract right] and (b) an interest in property of the debtor securing that right to payment [property right].   We all know that the Fifth Amendment protects this interest in property such that a persons interest in property cannot be deprived without due process or just compensation.

So my nerdy bankruptcy friends — isn’t Congress’s exercise of its bankruptcy powers under Article I subject to the Fifth Amendment?  In dealing with whether or not a creditor’s interest is “adequately protected” is Congress not prospectively regulating your property rights?   The answer after the jump….

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LACBA Event – Judge Ernest M. Robles: Pet Peeves and Best Practices 6/15/17

Join United States Bankruptcy Judge Ernest M. Robles and moderator J. Scott Bovitz as they discuss Judge Robles’ pet peeves, reveal the best way to handle the most common motions/trials in Judge Robles’ court, and make suggestions for improving practice in consumer and business cases.

Speakers:
Hon. Ernest M. Robles
, United States Bankruptcy Court
J. Scott Bovitz, Bovitz & Spitzer

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Can you file a time-barred proof of claim? Absolutely! said SCOTUS today.

Justice Breyer held that a debt collector can file a stale claim that is obviously barred by the statute of limitations and by doing so he/she does not violate the FDCPA because filing the stale claim is not a “false, deceptive, misleading, unconscionable, or unfair conduct.”  The dissent, led by Justice Sotomayor, said this will lead to more bottom-feeding (my words) professional debt collectors who “do not file these claims in good faith rather they file them hoping and expecting the bankruptcy system will fail” and nobody will notice.

The case is Midland Funding and can be found here.

Client’s been defrauded in sale of property — what date do you choose to determine the value of the property in calculating damages? Contract Date, Date of Close of Escrow, Trial Date?

In an unpublished BAP opinion (but citing published authority), the panel held that in order to determine the proper value of the damages re: the property that you were defrauded of — the court must use a date close to the contract date or date when escrow closed but not a date much later (i.e. trial date that was 7 years later or even date of confirmation).

In Joseph Zenovic (click here), the BAP found the proper date for valuing certain real property for the purpose of calculating damages claim is a date closer to the transaction date/close of escrow and not “as of the trial date” which in this case was about 6 years later.  The panel said that the danger of using an unduly late valuation date is that it might subject the defendant to liability for losses that the defendant did not cause.

As a side note, the panel found the proper prejudgment interest to apply is California’s 7.0% and not the fairly low, less than 1% federal rate.

Neat case.

Prober & Raphael Employment Opportunities

Message from Lee Raphael:

My firm is hiring. We are looking to hire:

- Bankruptcy Law Clerk/Paralegal
- Bankruptcy Drafter
- Collections Case Manager/Legal Assistant

Here comes the split re: trustee reach back for 10 years!

The circuit split starts!  Following up on my post below, this 10 year reach-back period for trustees is starting to garner some traction!  Judge Pappas, one of the nicest and astute judges I have met, recently issued an extremely thorough 76-page opinion siding with the Florida bankruptcy judge that allowed the trustee to step in the shoes of the IRS and reach back much farther than the 4-year limitation to avoid a fraudulent transfer.

I love it when courts cite nullum tempus occurrit regi meaning “no time runs against the king” (gives me goosebumps) which implies that the United States (i.e. IRS) is not bound by state statutes of limitation in enforcing its rights.

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Trustee Allowed to Reach Back 10 Years to Avoid a Fraudulent Transfer

Mr. Faucher’s post below re: 10 year clock on IRS debt reminded me of a case wherein a trustee was allowed to reach back 10 years (yes, 10!) to avoid a fraudulent transfer.  How far back is 10 years?  Obama was a junior senator.   A link to my original article published in the Law Journal Newsletter can be found by clicking here. Enjoy!

Neighborhood Legal Services Job Opening for Staff Attorney

The flyer is attached.  Staff Attorney 5.3.17