All posts in Current Events

State Bar “Sections” to Separate from the State Bar, Effective as Early as January 1, 2018

From Jim Hill, Chairman of the Business Law Section of the State Bar:

The bar restructuring legislation, SB 36, passed unanimously in the Senate and has been sent to the Assembly for its consideration in the early days of the summer.  If all stays on track, we are looking for the Sections to emerge into the new entity as early as January 1, 2018.

The summary of Senate Bill 36 provides:    Read more…

ABI Commission on Consumer Bankruptcy – First Public Meeting is May 6, 2017

From Prof. Bob Lawless,

As you may have read, the American Bankruptcy Institute has announced the formation of a Commission on Consumer Bankruptcy ( The Commission has been given the task of recommending improvements in consumer bankruptcy at all levels. Chaired by retired Bankruptcy Judges William Houston Brown and Elizabeth Perris, the Commission is composed of seventeen experts who broadly represent the various stakeholders in the consumer bankruptcy system. The Commission has been saddled with me as its reporter. The Commission will issue a final report in December 2018.

The Commission’s first public meeting will be held during the National Association of Consumer Bankruptcy Attorneys’ (NACBA) 2017 Annual Convention on May 6 from 8:00 AM – 10:30 AM in Oceanic Room 1 of the Walt Disney Dolphin Hotel, the conference hotel. The Commission invites interested persons to request time to make an oral statement at this public meeting, and in addition (or alternatively) to submit a written statement to the Commission. To request a time for a public statement or to send a written statement, please use the Commission’s public email address: (I monitor this account.) Read more…

Sixth Annual LCL 5K Benefiting Public Counsel’s Debtor Assistance Project!

Registration is now open for the Sixth Annual LCL 5K Benefiting Public Counsel’s Debtor Assistance Project (“DAP”)!

For over 17 years, Public Counsel’s DAP has helped thousands of individuals and families struggling under crushing debt loads navigate the bankruptcy system. The DAP provides greatly needed pro bono legal services to close to 3,000 individuals and families every year.

This premier event is happening on Saturday, April 22 at 8 am at beautiful Dockweiler Beach in Playa Del Rey!   The 5k is an all flat, 100% ocean front, chip-timed course that will be enjoyable for everyone from elite runners to casual walkers (strollers welcome).  Free race photo downloads will be available for all participants.  Easy parking in the beach lot at the race start or free parking on Vista del Mar.  We are limited to 400 participants so please register soon, before the race fills up! Read more…

State of Washington & State of Minnesota v. Trump

From Judge Martin Barash

For those of you that may be interested in following the Ninth Circuit appeal of the TRO enjoining the President’s executive order regarding immigration, here’s a link to the public webpage containing the case docket. This page contains links to all of the legal briefs filed in the appeal–on all sides of the issue–as well as the orders of the Ninth Circuit Court of Appeals. The final reply brief of the government is due later today, at 3pm Pacific.

The link is here.

Nice Post by Cathy Moran on Hamp

Last Call For Loan Modifications Under HAMP


By Cathy Moran, Certified Consumer Bankruptcy Specialist, Mountain View, CA

HAMP, the government program incentivizing home loan modifications, ends in 2016. Read more…

Judge Sheri Bluebond Named Assistant Vice President of Los Angeles County Bar Assn

Metropolitan News-Enterprise

Wednesday, July 27, 2016

Stevens Names Bankruptcy Judge Sheri Bluebond Assistant Vice President of LACBA

 By a MetNews Staff Writer Read more…

Debt-collection proposals: fewer calls, easier to dispute

I have highlighted in red the section of this article that I found very interesting — third-party debt collectors fairly often file proofs of claim for debts that were discharged in a prior bankruptcy or are years beyond the California statute of limitations!

Read more…

Carryover Basis on Property Taxes for Us Empty Nesters

My friend Richard Girgado and I were discussing property taxes in court while waiting for a hearing yesterday.  Richard represents the County of Los Angeles in its tax matters and is an exceptionally good guy and very helpful to debtor lawyers like me.  I was complaining that if I sell my home and downsize, my property taxes will go up because the new home will cost more than the basis in my present home.  Richard told me that a person who is over 55 years old and sells his home and buys another home for less than the sales price of the original home, gets carryover basis for property tax purposes.  In other words, the taxes you are paying on your present home will be the same as on the new home.    He even looked up the code section for me:  Rev & Tax Code 69.5.  One caveat is that this may not apply if you buy a home in a different county than the county you live on now.

Public Counsel legal action on behalf of Corinthian students re: private student loan debt

On July 14, 2016, Public Counsel and partners filed a class action lawsuit on behalf of former Corinthian students to stop the unlawful, abusive tactics of private debt buyers and debt collectors.

Watch the compelling video and read the press release here.

Check out the press webcast on Public Counsel’s Facebook page, and the media coverage so far is below: Read more…

Down with “Bankruptcy Remote Vehicles”

I was bitten by this concept once.  At the time I was stunned to learn that the courts seem to say that bankruptcy remote vehicles were appropriate and enforceable.  Finally Bankruptcy Judge Timothy Barnes, Northern District of Illinois, has ruled that public policy overrides the veto given to the lender that was appointed in a workout to be a “special member” of the debtor, a Michigan LLC.  The article can be accessed here.  The case is In re Lake Michigan Beach Pottawattamie Resort LLC, 2016 WL 1359697 (Bankr. N.D.Ill. April 5, 2016).  The court also denied the lender’s motion to dismiss the bankruptcy as a bad faith filing under section 1112 (b) of the Bankruptcy Code because the lender failed to meet its burden of showing bad faith.

So what’s this all about?  The lender agrees to lend to an LLC but only if the Operating Agreement provides that the lender or some third party be entitled to vote on whether the LLC may file a bankruptcy case.  In fact, the lender or the third party is given a complete veto on the issue.  This means that the members that owe fiduciary duties to the entity are prevented from voting for bankruptcy protection by a person whose sole interest is the lender.  Assuming the lender’s appointee has fiduciary duty of care to the LLC, Delaware law permits “exculpation from all fiduciary duties except the duty of loyalty.”

So the foreclosure sale of the LLC’s sole asset is next week.  The managing members are trying to figure out the best course for the LLC.  The third person is not involved in this.  It is only when the members decide to vote on a bankruptcy filing that they must give notice to the new person, appointed by the bank, who then gives a thumbs up or thumbs down.  This is simply a waiver in advance of the right to file bankruptcy!  That violates public policy but is largely, hopefully until now at least, permitted by the courts.