Incredible! 1874 Supreme Court Tongue Lashing

Another memorable class with Prof. MJH when my jaw dropped upon reading Justice Miller’s opinion in a famous 1874 Supreme Court case about the balance between the purpose of the bankruptcy process versus what really goes on…….

Justice Miller writes….

“It is obviously one of the purposes of the Bankrupt law, that there should be a speedy disposition of the bankrupt’s assets.  This is only second in importance to securing equality of distribution……it is a wise policy, and if those who administer the law could be induced to act upon [the Codes] spirit, would do much to make the statute more acceptable than it is……….But instead of this, the inferior courts are filled with suits by or against [trustees], each of whom as soon as appointed retains an attorney, if property enough comes to his hands to pay one, and then instead of speedy sales, reasonable compromises, and efforts to adjust differences, the estate is wasted in profitless litigation, and the fee of the officers who execute the law.”  

I wish I could sarcastically ask Justice Miller — but how do you really feel?   This was in 1874…I gaze into the sky and wonder what he would think if he were to see the “suits” filed today (i.e. 547/548).  Smirk

SFVBA Program – Litigation Strategies

Email from Steve Fox:

Dear All:

We have a really practical program, put on by Judge Russell and Scott Bovitz, on litigation strategies when your clients are short of money.  We have all had this problem, a client in litigation who needs to do things on the cheap (relatively speaking) and cannot afford to pay us to handle the litigation in a first class manner.  Scott and the Judge have spoken to the bankruptcy section a few times.  They put on a good show, they teach and we learn.

Come and learn, pick up a few nuggets which could help you.  Enjoy the company and the food.  Unlike other bar associations, parking is free and the program charge is ½ what all of them charge.

Here are the program particulars: Read more…

RIP Hon. Stephen Reinhardt, Ninth Circuit Court of Appeals

Image result for stephen reinhardtThe “liberal lion” has passed.  He will be missed.  The LA Times article is here.

L.A. County Bar Assoc. Program on Bankruptcy Crimes (April 16)

Bankruptcy Crimes – the distinguished panelists will discuss the provisions of the United States Criminal Code that deal with bankruptcy cases, as well as recent litigated case outcomes and statistics. This is an important course for bankruptcy and criminal law practitioners alike because it analyzes the intersection between the U.S. Criminal Code and the Bankruptcy Code.

Speakers:
Honorable Sandra R. Klein, United States Bankruptcy Court, Central District of California
Monica Tait, Assistant U.S. Attorney, Office of the United States Attorney
Jill Sturtevant, Assistant U.S. Trustee, Office of the United States Trustee
Thomas P. Jeremiassen, Development Specialist, Inc.

When:
4/16/2018
Registration/Lunch: 11:30 a.m.
Program: 12:00 – 1:00 p.m.

Read more…

Bovitz – O’Halloran Writing Contest at California Bankruptcy Forum

Email from Scott Bovitz,

Mike O’Halloran and I are the sponsors of a lighthearted contest at each California Bankruptcy Forum.  Bankruptcy judges tell us that we should write shorter briefs and motions.  In 2018, we are challenging CBF attendees to write a bankruptcy brief or story — in exactly nine words.  See, https://en.wikipedia.org/wiki/For_sale:_baby_shoes,_never_worn (“…While lunching with friends at a restaurant … Hemingway bets the table ten dollars each that he can craft an entire story in six words. After the pot is assembled, Hemingway writes “For sale: baby shoes, never worn” on a napkin, passes this around the table, and collects his winnings.”)  We think that bankruptcy professionals will need three more words than Ernest Hemingway.

Nice Summary of new Consumer Tax Issues from Cathy Moran

Yikes!  Cathy’s article is here. 

“Under the new tax law,  any damage award a consumer recovers stands to go in large part to the IRS.

So even if you are successful in court in vindicating your legal rights, the expenses of getting the award aren’t deductible from the gross award. The taxing authorities end up getting a large hunk of the total recovery.

Welcome to tax ‘reform.’”

Automatic Stay: a Deep Dive

I wanted to see how much I knew about the automatic stay besides it’s general parameters so I opened section 362 and realized that at 6,518 words, section 362 is the longest section in the Code broken up into 15 parts (a-o).   There are 8 things that are “stayed” followed by 28 things not stayed.  Below are parts a-k for now and the rest to follow.  Pop quiz — I discovered a way to invoke the powers of the “stay” without ever filing bankruptcy (that’s my next blog post).

Let’s take a deep dive into the labyrinth:

Part (a) – 8 things that are Stayed 

  1. Commencement or continuation of any action against the debtor that could have been commenced prepetition;
  2. Enforcement of prepetition judgment
  3. Obtain possession or exercise control over property of the estate
  4. Recover re: lien against property;
  5. Recover re: prepetition secured claim
  6. Recover prepetition claim
  7. Set off
  8. US Tax Court re: corporate debtor re: tax liability

Read more…

Nice cdcbaa Program on Student Loans

Austin smith program

 

 

 

 

 

 

 

Leigh Ferrin from Public Law Center, Austin Smith and Christine Kingston.

I have to admit that I have told many debtors and prospective debtors that student loans are almost never discharged.  I definitely have a new view after the cdcbaa program last Saturday.  Loans made by the government, guaranteed by the government or made by a non-profit organization are clearly “student loans” and are not discharged unless the substantial hardship works.  But all other loans, made to students for the purpose, at least in part, of attending school, are not necessarily “student loans.”   The loan has to be an “educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986.”  Take a look at that code section.  The loan must be made by an “eligible student,” at an “eligible institution,” and for “eligible expenses.”  Loop holes all over the place there.

Results from the October 2017 Legal Specialist Examination Being Mailed

I am informed that the results from the October 2017 Legal Specialist Examination are being sent via U.S. mail today, March 15, right on schedule.  The pass rate for the examination overall was 74.9% compared to 75% during the 2015 examination.

Examinees will receive their results only via U.S. mail.  Those who do not receive their letters may request duplicate results on or after April 1, 2018.  For examinees who passed the examination, post-examination applications are available now on the Forms page.  They will need to file the applications or a request for an extension within eighteen months (April 24, 2019).  Consistent with past practice, no pass list is posted, and those who failed but had a score close to the pass line had their results automatically reconsidered before results were sent.

Congratulations once again on the successful administration of the 2017 Legal Specialist Examination!

Central District Filings so Far in 2018 About the Same as 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 3,782 3,923 4,496 5,430
April 3,209 3,584 4,486 5,364
May 3,384 3,484 3,971 5,500
June 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 37,262 39,819 44,880 55,445

For the first two months of 2018, by chapter:

Non-Commercial Commercial Chapter 7 Chapter 13 Chapt 11 Other TOTAL
4,960 489 4,043 1,314 91 1 5,449
91% 9% 74% 24% 2% 0% 100%