All posts in Chapter 11

Equipment / Inventory / Accounts Receivable

I had to refer to Article 9 to make sure I understood the difference.   We all know about cash collateral.  The most common business assets that are used for procuring a loan is inventory / equipment / accounts receivable.  Let’s break down the difference in order to understand what the secured creditor has a lien against.

Read more…

Dower and Curtesy? Sounds like a restaurant on Melrose

I had no idea what a dower and curtsy are.  Where did I find these words?  In Section 363 sale/use/lease of property.   Section 363(g) says the trustee may sell property free and clear of any right in nature of a dower or curtesy.    ::::go to google.com::::

A dower or curtesy is a surviving spouse’s right to receive a set portion of the deceased spouse’s estate (1/2 in California).  Dower (not dowry) refers to the portion to which a surviving wife is entitled, while curtesy refers to what a man may claim.  However, because discrimination on the basis of sex is now illegal in most cases, most states have abolished dower and curtesy and generally provide the same benefits regardless of sex — and this amount is often known simply as the statutory share.

Learn something new everyday.

Notifying the State Court of the Automatic Stay

More stuff I didn’t know.  A person on the California Bankruptcy Specialists listserve complained that the Superior Court in Orange wanted him to pay a first appearance fee in order to file a Notice of Automatic Stay.  A tip of the hat to Frank X. Ruggier for his response, ”If you haven’t appeared, it is the other parties responsibility to file Notice of Stay.”

ATTORNEY’S RESPONSIBILITIES FOR GIVING OF REQUIRED NOTICE TO COURT
Rule 3.650(a) of the California Rules of Court requires the party who requested or caused a stay of the proceedings to notify the court of its existence, unless that party has not appeared or is not subject to the jurisdiction of the court, in which case the plaintiff in the pending action must immediately notify the court of the stay.  Therefore, if you or your assignee commenced a civil action to recover attorney’s fees and/or costs from the client, and the clients has not appeared in the action, it is the responsibility of you or your assignee to notify the court of the automatic stay.  Judicial Council Form CM-180 has been adopted for mandatory use in giving notice of a stay of proceedings, and a copy is attached for your use.

Penthouse Global Media Files Chapter 11

U.S. Bankruptcy Court Central District of California (San Fernando Valley) Bankruptcy Petition #: 1:18-bk-10098-MB

Assigned to: Martin R. Barash Chapter 11
Date filed:   01/11/2018

 

Debtor Penthouse Global Media, Inc. 8944 Mason Ave. Chatsworth, CA 91311 LOS ANGELES-CA Tax ID / EIN: 47-2601335 represented by Michael H Weiss Weiss & Spees 1925 Century Park E Ste 650 Los Angeles, CA 90064 424-245-3100 Fax : 424-245-3101 Email: mw@weissandspees.com

Supreme Court Rejects Petition in Sunnyslope

This morning buried in the 45 page listing of Supreme Court Orders is the Order denying cert in the 9th Circuit en banc Sunnyslope case.  The Order List is here.  I thought they might take it.  It is not terribly complicated and the case discusses trying to reconcile the Supreme Court decision in Associates Commercial Corp. v. Rash with the facts in Sunnyslope.  My posting on Sunnyslope is here.   Prof. Dan Schechter says the 9th Circuit was “shockingly wrong.”  

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…

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…

Is Continuance of Hearing on MSJ a Violation of the Automatic Stay?

From the California Bankruptcy Specialists listserve:

Question:  Is it a violation to continue a hearing on a motion for summary judgment if a notice of stay is given to the Court before the hearing on the motion for summary judgment?

Answer from Wayne Silver, Santa Clara:

Eskanos & Adler, P.C. v. Leetien, 309 F.3d 1210 (9th Cir. 2002)
Under § 362(a), the prohibition against continuation of judicial actions requires that the action be automatically dismissed or stayed, and not merely that it not be pursued.

Toys R Us Files Chapter 11

U.S. Bankruptcy Court
Eastern District of Virginia (Richmond)
Bankruptcy Petition #: 17-34665-KLP


Assigned to: Keith L. Phillips
Chapter 11
Voluntary
Asset

Date filed:   09/19/2017
Deadline for filing claims (govt.):   03/19/2018

 

Debtor
Toys R Us, Inc.
One Geoffrey Way
Wayne, NJ 07470
PASSAIC-NJ
Tax ID / EIN: 22-3260693

represented by Peter J. Barrett
Kutak Rock L.L.P.
901 East Byrd Street
Suite 1000
Richmond, VA 23219-4071
804-644-1700
Fax : 804-783-6192
Email: peter.barrett@kutakrock.com

Prof. Dan Schechter Comments on Sunnyslope – Says Decision is “Shockingly Wrong!”

Below are the comments of Prof. Dan Schechter (from my alma mater, Loyola Law) to the 9th Circuit’s en banc ruling in In re Sunnyslope Housing Ltd. Partnership, 818 F.3d 937 (9th Cir. 2017).  The due date for the petition for cert is now September 22, 2017.  The bank’s attorney is Craig Goldblatt from the Wilmer Hale firm in Washington DC.

My thoughts on why the 9th Circuit got Sunnyslope right are here, here and here.   The en banc decision is here.

Prof. Schechter commented on the Insolvency Law e-Bulletin:

AUTHOR’S COMMENT: This decision is shockingly wrong.  If the lender in this case seeks and obtains certiorari (a big “if”), I predict reversal by the Supreme Court. (As long as I am making rash predictions, I also predict a 6-3 decision, with Justice Breyer joining the majority.) Read more…