What is the Value of Property in a Chapter 11 Plan? The 9th Circuit Goofs.

To cram down a secured creditor, the debtor must pay the “allowed secured claim” in full.  Section 506(a) tells us that the allowed secured claim is the value of the property.  It clarifies that by saying, “Such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property.”  That means that if the debtor intends to keep the property, it must be valued as a going concern, i.e., the value for the use that the debtor proposes.

In In re Sunnyslope Housing Limited Partnership  — F. 3d, —- (9th Cir. April, 2016), we have some weird facts that have resulted in a totally wrong ruling. Read more…

I Love the Writing Style of 9th Circuit Judge John Owens

Pretty fun reading (and thankfully the right result).

Sheer v. State Bar of California (In re Sheer), — F. 3d, —- (9th Cir. April, 2016)

Issue: Was a state bar judgment requiring the debtor to repay fees to a client a non-dischargeable debt under 523(a)(7)?
Holding: No. The debt “is not a fine or penalty, but compensation for actual loss.” Read more…

Penrod Giveth and Bos Taketh Away – A Response from Peter Lively

My sense is that Judge Watford should have referred to the creditor’s objection to Penrod’s 506b motion rather than its objection to her Plan’s confirmation.

By challenging the bankruptcy code’s ability to modify the vehicle loan (no use of 506 where negative equity was added to the loan originated within 910 days of the petition), the creditor was litigating enforceability of its contract as falling outside the scope of the code rather than acknowledge that it’s contact was subject to the code and fighting over how the code functions – like the more general modification of contract rights that are the focus of plan confirmation, relief from stay and such.

If you take Judge Watford’s premise that the contract rights were at play because of the creditor’s plan confirmation objection, then the only way to reconcile Bos and David’s RFS opinion is to view everything through the OJ Dream Team lense where the highest priced legal team prevail in court.

Best regards,
Peter

Penrod Giveth and Bos Taketh Away

I thought I knew where we are on attorneys fees after the 9th Circuit ruled in In re Penrod that a creditor fighting with a debtor in a bankruptcy case, is an effort by the creditor to collect its debt form the debtor, and therefore an “action on the contract” and therefore, assuming there is a right to attorneys fees in the contract, the bankruptcy court can award attorneys fees to the debtor.

My friend Peter Lively was surprised to hear me say recently that I think that Penrod allows for attorneys fees to the debtor anytime the debtor defeats any creditor efforts in a bankruptcy case including stay relief motions, oppositions to plan confirmation, battles over property values, cash collateral, plan fights.  His sense was that since Penrod was over the issue of bifurcating a car loan, it didn’t necessarily extend out to everything else.  He promised to look into it further.

In Penrod Judge Watford wrote:

“Under California law, an action is ‘on a contract’ when a party seeks to enforce, or avoid enforcement of, the provisions of the contract.  AmeriCredit sought to enforce the provisions of its contract with Penrod when it objected to confirmation of her proposed Chapter 13 plan.”

“AmeriCredit insisted that it was entitled to have its claim treated as fully secured.  The only possible source of that asserted right was the contract—in particular, the provision in which Penrod granted a security interest in her Taurus to secure ‘payment of all you owe on this contract.’” Read more…

Ventura County Barristers Program Saturday July 23, 2016

How to Try a Case Like an Experienced Lawyer Without Sounding Like a New Lawyer – From a Judicial Perspective

This workshop will focus on practical trial preparation and courtroom presentation, not trial strategy, and will be presented by the Honorable Gilbert A. Romero, Ventura County Superior Court.

At the Ventura College of Law.

National and Central District Filing Statistics – 2015

Total filings in 2015 – 844,000 broken down as follows:  (You can access the full chart here)

National CACB
Total 844,000 46,523
Ch 7 535,000 35,266
Ch 11 7,241 460
Ch 12 407 5
Ch 13 302,000 10,791

OC Bar Association Program: Admit What You Do Not Know — Common Evidentiary Mistakes in Bankruptcy Court

Speakers:

Hon. Barry Russell –U.S. Bankruptcy Court, Central District of California
J. Scott Bovitz, Esq. — Bovitz & Spitzer
David S. Shevitz, Esq. — Shevitz Law Firm

Judge Russell is literally the one who wrote the book on how to present evidence in a bankruptcy proceeding. He will share his knowledge through an exciting PowerPoint presentation prepared by Mr. Bovitz and Mr. Shevitz. The materials alone are worth the price of admission. Read more…

SFVBA Program June 24, 2016 – Settling with the Trustee

Dear All:

We try real hard to have practical programs where you can walk out the door with nuggets and gems to use in your practices. We leave the ivory tower stuff (and the high admission fees) to the bankruptcy groups on the Westside and downtown. Read more…

New Chapter 13 MOMOD Pilot Program

This is from the master himself, Aki Koyama

Over the years, I’ve found that MOMODS are more successful and much more easier to process and comment on when I have an opportunity to discuss the terms of the MOMOD before it is filed. This way, your client’s MOMOD will reflect what the Trustee’s data base shows for delinquency, infeasibility etc. Also, we can discuss what kind of evidence the Trustee will require for a modification or suspension. Finally, there may be times when you want to propose an unusual modification and want some feedback from the Trustee before you even draft the MOMOD.

Congratulations to Nina Javan

Just heard that Nina Javan has joined Brutzkus Gubner Rozansky Seror Weber LLP in their Woodland Hills office.  Congratulations Nina.