Trivia: Oldest Form of Security Arrangement?

Security agreements are made between a lender and a borrower that creates a security interest in property whereby if the borrower does not pay back the loan then the lender can take steps to get the property.  We see this in real estate of course.  But do you know one of the oldest and simplest security arrangement between two people?  It is ….

Read more…

Real Estate Law To Freshen The Mood

One of my colleagues at the college, Prof. Huber, just came out with a new easy-to-read California real estate law textbook.   I was fortunate to get a free copy and I wanted to share some things I read in this book that you may already know, but like Prof. Hayes — I like the way Prof. Huber explains real estate law.  I share the following below from his book.  I will post more later as I read more great stuff.

Read more…

Public Counsel William J. Lasarow Awards October 25, 2018

2018 William J. Lasarow
Awards Reception

Recognizing Outstanding
Bankruptcy Pro Bono Service

Thursday, October 25, 2018
6:00 – 8:00 P.M.

The Roybal Federal Building
Main Lobby & Reception Hall
255 East Temple Street
Los Angeles, California 90012

Please RSVP (with names of any guests)
to dap@publiccounsel.org mailto:dap@publiccounsel.org

Bankruptcy Filings for August, 2018

Bankruptcy filings in the central district in August were the highest since March of this year although the variance of the filings each month is not much.

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 3,057 2,953 3,239 3,731 4,701
Aug 3,337 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 24,690 37,262 39,819 44,880 55,445

Year to date figures by category:

Non-Commercial Commercial Chapter 7 Chapter 13 Chapter 11
22,674 2,023 18,993 5,388 313
92% 8% 77% 22% 1%

Getting Priority (and Other Headaches) at the 341(a) Meetings Downtown

Information from one of the chapter 7 trustee administrators:

The OUST informed us that a trustee should not grant or give priority requests to an attorney, unless the requesting attorney has a good reason.  For example, having hearings in multiple rooms, having to go to Roybal for another matter, client with young child(ren), etc.  Reasons such as “I want to finish early” or “I parked at the meter and my time is finishing” should not be given priority.  And yes, some attorneys have actually requested priority for those reasons.

There is a new rule in place where LA trustees need to stop conducting the 341 meetings at 12pm (even if they are not done with the 11am calendar) and resume at 1:30pm.  Based on this, some attorneys have been requesting priority at the 11am hour so they do not get stuck coming back in the afternoon.  The 12pm cutoff time has something to do with labor laws relating to lunch breaks for the security guard.

Also, the OUST has instructed trustees to use the interpreter service, even if someone from the audience volunteers to interpret.  If the debtor hires and pays an interpreter to attend the 341 with him/her, then that is acceptable. But no “volunteers”.

More Fallout from Taggart

In my Amicus Brief supporting the Debtor’s request for a rehearing en banc in In re Taggart, 888 F.3d 438, 443 (9th Cir. 2018), I said:

In its opinion, the [Taggart] panel held,

“the creditor’s good faith belief that the discharge injunction does not apply to the creditor’s claim precludes a finding of contempt, even if the creditor’s belief is unreasonable.” [emphasis added] 888 F.3d at 444

The statement is an incremental extension of a footnote in the Ninth Circuit case of ZiLog, Inc. v. Corning (In re ZiLog, Inc.), 450 F.3d 996 (9th Cir. 2006), a case easily distinguishable from Taggart on the facts. The statement disrupts the long-standing rule that a creditor who receives notice of the debtor’s discharge and still pursues the debtor for discharged debts may not plead ignorance of the discharge as a defense. The statement, if allowed to stand, will forever be treated by creditors as a blackletter rule which will quickly come to be known as the Taggart Rule. Creditors, using the above statement will respond to discharge violations by saying, “Taggart says we win!” “We weren’t sure about the discharge injunction and therefore we win because the Ninth Circuit said so!” There will be little reason to even have an evidentiary hearing regarding the creditor’s good faith belief because the Ninth Circuit said that even if the subjective good faith belief is unreasonable, there can be no consequences to violating the discharge.

My prediction is coming true.  The 9th Circuit BAP has even extended this to the automatic stay, reversing a ruling by Judge Sheri Bluebond who had awarded some $400,000 in fees for violating the automatic stay.  The BAP said in Ress Financial Corp v. Beaumont 1600, LLC (In re The Preserve, LLC), Adv. No. 2:13-ap-01406-BB, unpublished (9th BAP Sept 7, 2018), Read more…

Wife Files Bk But Title To House In Non-Debtor Husband’s Name – “Brace” Yourself!

“I’m not on title, only my husband is on title!” — wow, how many times a week do I hear this statement re: a house, a car, a boat, etc.

In last year’s BAP opinion of In re Brace by Judge Lafferty, the panel clarified an interesting fight:  who wins between Community Property Presumption (CFC 760) versus Record Title Presumption (CEC 662).  I enjoy reading Judge Lafferty’s opinions — it’s very tutorial and easy to follow.  In this opinion, the panel held that the community property presumption wins.  This means, to me, that it does not matter if debtor is “not on title” to the house — the house is still property of the estate due to debtor’s community interest in the house.   This case is on appeal to the Ninth.

Butner Principle From a Different Perspective – Simon Says May I?

I was reading this law review article on the Butner case and it provided a different view on the case that I wanted to share.  In essence,  Professor Adler questions why Butner  became so famous and a “guiding principle” when the underlying arguments and holdings are so obvious.   Butner says that since the Bankruptcy Code does not establish or define property rights, the parties must turn to nonapplicable law (state law) to answer it.  Well of course! Where else would you turn to!? That makes so much sense, why did we need nine Justices to clarify that?

This is akin to me telling you “in order to fix my plumbing problem, don’t look in the ‘House Operations Manual’ but instead look at the plumbing manual that will tell you how to fix my plumbing problem.“  We need a Supreme Court to tell us that?  The answer is so blatantly obvious let alone to become a “guiding principle!” Read more…

Where Does The Word “Bankruptcy” Come From?

There are two possibilities according to BankruptcyData:  the first and most recognized is that “bankruptcy” is a combination of Bancus (latin for bench or table) and Ruptus (broken).  Back in the days a banker would do his trading on an open marketplace bench.  If the banker would no longer be able to meet his obligations then his bench was physically broken as a symbolic gesture to show his failure and inability to negotiate or do business.  This phrase carried over to Italy where the term morphed into “banco rotto” which means broken bank.  The other source of origin for the word is believed to be from the French “banque route” which means a table trace which was a metaphor for a sign left at the banker’s table that was once in business but not is gone.

Bankruptcy Filings Up Slightly in July 2018

Total bankruptcy filings in July, 2018 was slightly higher than filings a year ago.  Only the third time in almost four years.

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 3,057 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 21,353 37,262 39,819 44,880 55,445

Filings by chapter year to date in the Central District of California and percent of total.

Non-Commercial Commercial Chapter 7 Chapter 13 Chapter 11
19,631 1,728 16,446 4,654 256
92% 8% 77% 22% 1%