UST After Attorney in Riverside in Chapter 7 Cases for Disgorgement

A thank you and tip of the hat to Keith Higginbotham, always looking out for us.

Dear Colleagues!

I came across an interesting UST adversary complaint filed yesterday that alleges improper Ch7 business practices as it relates to “bifurcating Ch7 atty fees between prepetition and post petition” and then “assigning the debt to a collection agency called BK Billing, Inc., to service the debt”.

   The complaint alleges violations of 9th Circuit law as it relates to a novel Ch7 fee arrangement.  My intent is to alert you to a company called BK Billing, LLC.
   Check out:  6:17-ap-01271-MJ  Docket #1

Keith A. Higginbotham
Note from MJH:  The docket states  ”Complaint For Disgorgement Of Fees, Civil Penalties, Sanctions, And Declaratory, Injunctive, And Other Relief Nature Read more…

Occam’s Razor

One of the side benefits of writing all the briefs I write is learning new words and phrases.  In her dissent in Henry v. Official Committee of Unsecured Creditors (In the Matter of Wlldesign, Inc.), — F.3d —, (9th Cir. Oct. 2017), Judge Jacqueline Nguyen commented (quoting from another case),

“To avoid this result, the court opted to ‘slice these [steps] off with Occam’s Razor and leave a more functional rule’ in their place.”

68 years now and I have never heard that term.   Have to look it up.  It seems Occam was a monk in the 1400′s.  He espoused the concept that the easiest and most obvious answer to a question is likely the right answer and the analysis should stop there.  Don’t delve into “ifs,” unless there is something suggesting that the if might bring the right answer.  If it was windy last night and this morning a tree in your yard is laying on the ground, the wind probably blew it over.  Stop there.  Don’t think that maybe someone snuck into your yard and pushed it over or a meteor hit it unless there is something that clearly shows that those things might have happened.


Vendor’s Right to Reclaim

Put this in the category of “stuff I didn’t know.”  I knew that vendors have a right to reclaim goods from an entity that files a bankruptcy petition.  I thought it was goods shipped within 20 days of the petition – typical sort of right.

There are two code sections that deal with this issue.

Section 503(b)(9):  A vendor has an administrative claim for “the value of any goods received by the debtor within 20 days before the date of commencement of a case under this title in which the goods have been sold to the debtor in the ordinary course of such debtor’s business.”  This is really nice.  Read more…

Central District Filing Stats for November 2017

It looks like we are going to just barely miss 40,000 filings for the year.

2017 2016 2015 2014
Jan 2,839 2,872 3,364 4,704
Feb 2,795 3,299 3,829 4,574
March 3,782 3,923 4,496 5,430
April 3,209 3,584 4,486 5,364
May 3,384 3,484 3,971 5,500
June 3,252 3,545 3,966 4,386
July 2,953 3,239 3,731 4,701
Aug 3,387 3,543 3,544 4,540
Sept 3,071 3,168 3,493 4,317
Oct 3,170 3,235 3,751 4,554
Nov 3,004 3,025 3,531 3,642
Dec 2,902 2,718 3,733
Total 36,863 41,835 46,895 57,459

Here are the number of filings per chapter for the 11 months of 2017.

Non-Commercial Commercial Chapter 7 Chapter 13 Chapt 11 Other
32,163 2,689 25,761 8,734 350 7

More on Sundquist: Are Fees Based on Contingency Fee Agreement here Reasonable?

No according to Judge Klein (in 40 pages).

Sundquist v. Bank of America (In re Sundquist) — B.R. — (Bkrtcy, E. D. Cal. Nov, 2017) Klein, J.

Issue:   Is it appropriate to “expunge” an attorney’s lien on the facts here?

Holding:   Yes.  The court here “canceled” the fee agreement between counsel and the debtor on the basis, in part, that fees exceeding $70,000 here were unreasonable.

Judge Christopher Klein

This is a 40 page diatribe excoriating the efforts of debtor’s counsel on behalf of the debtor.  It lays out very nicely however the rules of determining what fees are “reasonable” and how that determination intersects with state law.    Read more…

Hon. Harry Pregerson 1923 – 2017 RIP

Judge Harry Pregerson

I interviewed Judge Harry Pregerson about ten years ago in his chambers in Woodland Hills.  I was writing a short profile of him for the San Fernando Valley Bar Journal.  To say he regaled me over four hours with stories is to put it very mildly.  He was seriously wounded in the Pacific at the Battle of Okinawa when he was 22 years old.  He spent a few months I believe recovering on the island of Tinian.  He loved talking about the time he presided over the Oakland Raiders v. NFL trial, especially how smart the lawyers were and a few little tricks that they played trying to get an advantage with the jury.  In the bankruptcy arena, Judge Pregerson was on the panel in the Kagenveama case and later on the en banc panel in Flores where he dissented.

The article I finally wrote is below the jump.  The LA Times article on his death is here.

Judge Harry Pregerson
“Senior Judge on the Ninth Circuit Court of Appeals” Read more…

Can a Corporation file Chapter 7 Without Approval of the Shareholders?

The genesis of this is a post on the cdcbaa list serve.  The answer? – No.

I’m interested in this issue because it will make a great final exam for my Biz Org class next year.  My students can recite in their sleep, “the board of directors makes all consequential decision,” and, the shareholders do little except appoint the board and vote on other “fundamental changes to the corporate structure.”  Liquidating all of the assets of the corp seems to me to be a “fundamental change in the corporate structure.”

Cal Corps Code section 1001 says:

(a) A corporation may sell, lease, convey, exchange, transfer, or otherwise dispose of all or substantially all of its assets when the principal terms are approved by the board, and, unless the transaction is in the usual and regular course of its business, approved by the outstanding shares ( Section 152 ), either before or after approval by the board and before or after the transaction.

The chapter 7 is certainly an “otherwise dispose of” the assets of the corp outside of the ordinary course of business.

The Chapter 13 Rights and Responsibilities Agreement (RARA) Form Allows For What?!

When the Law Offices of M. Jonathan Hayes merged with Simon & Resnik in 2012 (has it really been 5 years!?) I began to work exclusively on petitions filed under my beloved chapter of the Bankruptcy Code, 11.  I recently began to again work on Chp. 13 cases, albeit on a fairly limited basis, and I am continually amazed at the differences between these two most popular reorganizing chapters of the code.

Take a look at the “no-look” fee form we use here in the Central District, the Rights and Responsibilities Agreement between Chapter 13 Debtors and their Attorneys (“RARA”) [court form F3015-1.7.RARA], specifically pages 5-6 (I have added emphasis):

The guidelines in this district for payment of costs incurred in performing the services described in bold face type in this agreement (“Included Costs”) and attorneys’ fees in chapter 13 cases without a detailed fee application provide for the following maximum Included Costs and fees for the services described in this agreement in bold face type (that is, the services described on pages 3 through 5 of this agreement)…

Other than the initial retainer, the attorney may not receive fees directly from the Debtor prior to confirmation. All other fees due through confirmation shall be paid through the plan unless otherwise ordered by the court. Read more…

Nice Profile of Judge Laura Taylor, Chief Bankruptcy Judge in San Diego

This is a nice profile of Chief Judge Laura Taylor, written by Gary Rudolph for the state bar Business Law Section, Insolvency Law Committee eBulletin:

November 14, 2017  
Dear constituency list members of the Insolvency Law Committee, the following is a judicial profile of the Hon. Laura S. Taylor, Chief Bankruptcy Judge of the United States Bankruptcy Court, Southern District of California.  Gary Rudolph, a member of the Insolvency Law Committee, met with Judge Taylor to discuss her personal and professional background and her experience so far as a member of the bankruptcy bench.

In the Beginning

Judge Taylor has known since high school that she wanted to be a lawyer because it blended her interest in law and the political process.  After engaging in private practice, including taking time away from a successful bankruptcy and finance practice with a large law firm to represent  disadvantaged families on a pro bono basis through a non-profit program she helped to found, she set a new challenge for herself that would best use her talents and interests–namely, to become a judge.  Judge Taylor had two respected judges as mentors and role models to follow on this path to the bench–most immediately, her husband, the Hon. Timothy B. Taylor, Judge of the Superior Court for the State of California, and the Hon. Irma E. Gonzalez, United States District Judge (Ret.), who was Judge Taylor’s neighbor and whose daughter babysat Judge Taylor’s oldest son. Read more…

UWLA will host the 2018 Roger J. Traynor California Appellate Moot Court Competition

Dear Faculty, Students, and Alums,

The University of West Los Angeles School of Law is pleased to announce it will host the 2018 Roger J. Traynor California Appellate Moot Court Competition on April 14-15, 2018 at the LAX campus of the law school.

Moot court is an extracurricular activity at most established law schools in which law students, competing as teams, take part in simulated appellate court proceedings.  Students draft written briefs and present oral argument to a panel of judges in a format that follows rules and procedures that apply to actual appellate litigation. Read more…