MCLE Program – Bankruptcy and the Supreme Court: A Discussion of Cases Past, Present, and Future

The SBCBA Debtor/Creditor Section Presents: Bankruptcy and the Supreme Court: A Discussion of Cases Past, Present, and Future.

Tuesday, September 26, 2018, at 12:00 to 1:00 p.m. – Santa Barbara College of Law, 20 E. Victoria St, Santa Barbara, CA 93101

Lunchtime panel discussing bankruptcy-related decisions by the Supreme Court of the United States. The discussion will cover selected hidden treasures among the Supreme Court’s decisions from the 1800s, key practice pointers from cases decided between 2015-2018, and predictions about future issues that the Supreme Court will or should consider.

Moderator:
Meghann A. Triplett, Margulies Faith, LLP, San Luis Obispo, CA

Speakers:
Hon. Deborah J. Saltzman, United States Bankruptcy Judge (C.D. Cal.)
Jerry Namba, Law Office of Jerry Namba / Chapter 7 Trustee, Santa Maria, CA
Whitman L. Holt, Partner at Klee, Tuchin, Bogdanoff & Stern LLP, Los Angeles, CA

Read more…

Happy Birthday Jim King

Jim’s oral history is at the Biddle Law Library, at Penn Law School.  You can read it here.

Employment Law & BK — “Will Filing BK Affect My Chances of Getting Hired?”

Section 525 deals with protection of debtors against discrimination.  Section 525 is broken up into two main sections relating to two main standards:  one for governmental employers and one for private employers.   Let’s take a look…and note the big omission by Congress for private employers.

525(a) says a governmental unit may not:

  • Deny employment to
  • Terminate the employment of…
  • Discriminate re: employment against a person on basis of their bankruptcy filing.

525(b) says a private employer may not:

  • Terminate the employment of…
  • Discriminate re: employment against a person on basis of their bankruptcy filing.

Government cannot deny your employment because you filed bk but a private employer can!  This is also how rental companies can ask you “did you file bk in past” and deny your rental application.

 

Prison Love Story + Bankruptcy — “Pay My Debt and I Promise To Love You Forever”

I came across a memorandum re: decision by one of my favorite judges, Peter Carroll, about a prison love story involving bankruptcy.  There should be a Lifetime channel movie made about this.  Debtor, a married prison correctional officer became romantically involved with an intern.  They moved in together and debtor continually told her he loved her and wrote love letters saying they would be together happily ever after.  She believed him and used $130,000 of her savings to pay his old debts.  The relationship soured and she sued him for fraud alleging he lied to her to induce her to use her funds to pay for his old debts.  Naturally, he files for bankruptcy and she commences an adversary proceeding to except that debt from discharge under 523(a)(2).

Judge Carroll, after hearing testimony and reviewing the love letters, wrote this riveting opinion.

Difference Between “False Pretense” and “False Representation” under 523(a)(2)

Section 523(a)(2)(A) excepts from discharge any debt for money obtained by false pretense, a false representation or actual fraud.   But how can you tell the difference?

False representation is an express representation.  “There are no leaks in the roof of my house.” 

False pretense is an implied representation or conduct intended to create a false impression.  “Whenever it rains, it is dry as a bone in this house.”

 

Will the Retirement of Anthony Kennedy Change the Makeup of the Court?

I could sit for hours and listen to Prof.  Erwin Chemerinski talk about anything.  He did his Review of the Supreme Court last week for the 9th Circuit Judicial Conf.  Before he spoke, Judge Jay Bybee put a whole bunch of statistics about the last Supreme Court term on the screen.  One statistic that kind of jumped out is that on every 5-4 vote last term, Kennedy voted with the “conservatives.”  That suggests that replacing Kennedy with a “conservative” judge will not change, significantly for sure, the judicial makeup of the court.

When Chemerinski spoke then he commented on that fact and said that Kennedy typically joined the “liberals” of the court in five specific areas and in those areas, the new makeup will be significant.  The five areas are:

  • Abortion
  • Affirmative Axtion
  • Gay rights
  • Exclusionary rule
  • Limits on the death penalty

More on Reaffirmation Agreements

I had a short very enlightening conversation on reaffirmation agreements with a bankruptcy judge at the 9th Circuit Judicial Conf last week.  The conversation started with my comment at the program I was doing that I don’t sign – ever – the attorney declaration in 524(c)(3).  The conversation was about the consequences of not signing it.  I now have a new way of looking at the whole process.

Section 524(c) states that a reaffirmation agreement is not enforceable unless:

(3) such agreement has been filed with the court and, if applicable, accompanied by a declaration or an affidavit of the attorney that represented the debtor during the course of negotiating an agreement under this subsection, which states that—
(A) such agreement represents a fully informed and voluntary agreement by the debtor;
(B) such agreement does not impose an undue hardship on the debtor or a dependent of the debtor; and
(C) the attorney fully advised the debtor of the legal effect and consequences of—
(i) an agreement of the kind specified in this subsection; and
(ii) any default under such an agreement;

(5) the provisions of subsection (d) of this section have been complied with; and
(6) (A) in a case concerning an individual who was not represented by an attorney during the course of negotiating an agreement under this subsection, the court approves such agreement as—

(i) not imposing an undue hardship on the debtor or a dependent of the debtor; and
(ii) in the best interest of the debtor.

So far so good.  If I sign the declaration, the agreement is enforceable.  If I don’t, it’s unenforceable.  Can’t the court approve it anyway?  That is certainly what I and I’m sure 99% of consumer bankruptcy lawyers think.  But the debtor is still “represented by an attorney” – me – so (c)(6) doesn’t seem to apply. Read more…

Can a Lawyer Give Advice to a Client to Incur Prepetition Debt?

Tip of the hat to Mr. Dennis McGoldrick who pointed me to Justice Sotomayor’s footnote 6 in during a wonderful class session.

Dennis McGoldrick

Thus, advice to refinance a mortgage or purchase a reliable car prior to filing because doing so will reduce the debtor’s interest rates or improve his ability to repay is not prohibited, as the promise of enhanced financial prospects, rather than the anticipated filing, is the impelling cause.  Advice to incur additional debt to buy groceries, pay medical bills, or make other purchases “reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor,” §523(a)(2)(C)(ii)(II), is similarly permissible.  Milavetz, Gallop & Milavetz, P. A. v. United States, 559 U.S. 229 (2010)

University of West Los Angeles School of Law Granted WASC Accreditation

Email from Robert W. Brown,

Dear Board of Managers, Faculty and Staff,

I am writing to inform you that UWLA has just received its formal action letter from the Western Association of Schools and Colleges Senior College and University Commission (“WASC”) granting accreditation to our institution.

This is an honor earned by you, from your efforts in this communal passion project; also a gift from you that you have now bestowed upon future generations of alums- some of whom have yet to even be born.

Our institutional mission is, “Through the strengths and virtues of education in the classroom, online or in life, UWLA provides opportunities that empower students of great diversity to live successfully inspired lives.”  As all of you know, this is not a slogan for marketing, but rather evidence of our credo dating back to 1966 when UWLA was founded to “democratize the practice of law” by our founders.

It is heartwarming and professionally gratifying that WASC witnessed the evidence of our mission, as noted in the following quotes from the WASC Site Visit Team’s commendations: Read more…

June Filing Holding Steady Again

June filings in the central district were slightly lower than last month as well as June of last year.

2018 2017 2016 2015 2014
Jan 2,741 2,839 2,872 3,364 4,704
Feb 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 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 2,416 2,902 2,718 3,733
Total 18,296 37,262 39,819 44,880 55,445

Year to date totals by chapter are:

Non-Commercial Commercial Chapter 7 Chapter 13 Chapter 11
16,828 1,474 14,120 3,959 220
92% 8% 77% 22% 1%