December filings, pretty low again

There were a total of 1,665 bankruptcy petitions filed in the Central District of California in December 2020.  That is the lowest month of 2020.  Total filings for the year are 26,895 or 28% fewer than last year.

2020 2019 2018 2017 2016 2015 2014
Jan 2,828 2,745 2,741 2,839 2,872 3,364 4,704
Feb 2,781 2,754 2,708 2,795 3,299 3,829 4,574
March 2,736 3,481 3,363 3,782 3,923 4,496 5,430
April 1,669 3,631 3,277 3,209 3,584 4,486 5,364
May 2,080 3,347 3,226 3,384 3,484 3,971 5,500
June 2,257 2,967 2,981 3,252 3,545 3,966 4,386
July 2,415 3,270 3,057 2,953 3,239 3,731 4,701
Aug 2,355 3,274 3,337 3,387 3,543 3,544 4,540
Sept 2,169 2,934 2,772 3,071 3,168 3,493 4,317
Oct 2,210 3,355 3,259 3,170 3,235 3,751 4,554
Nov 1,730 2,636 2,821 3,004 3,025 3,531 3,642
Dec 1,665 2,723 2,419 2,416 2,902 2,718 3,733
Total 26,895 37,117 35,961 37,262 39,819 44,880 55,445

Filings by chapter for the year were

Non-Comm’l Commercial Chapter 7 Chapter 13 Chapter 11
24,451 2,449 23,072 3,525 299
91% 9% 86% 13% 1%

It’s not only slow here:  Texas had 1,789 – that is the total for the four Texas districts!  So the whole state of Texas.  New York had a total of 1,365 – again for all four districts!  The whole state of New York.  More?  The state of Washington – 552 cases in December.  Alaska you ask?  36 cases in December – 313 cases the whole year!  You get the idea.  Filings are slow.

Chapter 11 filings in December 2020 – 14 total.

There were 18 chapter 11 petitions filed in the Central District of California in December 2020.  Five of those appear to be related, and will be jointly administered – so the total is really 14.  Of the 14, five were “subchapter V, small business” cases.  One case is SFV, two Santa Ana, one SB and one Riverside.   The “big one,” i.e., five filings, Airport Van Rental, Inc., was filed by Zev Shechtman and John Tedford, assigned to Judge Sheri Bluebond.

Brown v. Board of Education redux

I was looking up something the other day and saw the Supreme Court opinion in Brown v. Bd of Ed.  I’m not sure I’ve ever actually read the case.  So I copied it and read it this morning, Saturday morning after my daily walk with my wife to get coffee.

My first thought about the case is the length of the opinion – 4 and a half pages before footnotes, 1873 words!  Oh for those days again, simplicity!

As for the merits, there is an interesting (and short) summary of grade school education in 1868 when the 14th Amendment was enacted, trying to figure out what Congress and the state meant when ratifying the 14th amendment.   Grade school education was largely non-existent then, certainly public education and especially in rural areas – so not much help there.  “We must look instead to the effect of segregation itself on public education.”

Chief Justice Earl Warren took his place on the court on Oct 5, 1953.  Brown came down on May 17, 1954, so seven months later.  As I understand it, the court under Chief Justice Fred Vinson was prepared to hold, 5-4, that separate but equal schools were just fine thank you.  They decided to rehear argument though at the end of the term and put it over to the next term.  Justice Vinson died just before the next term began and Earl Warren became the new chief justice.  (Side Note:  From Vinson’s death to Warren’s swearing in was 27 days.)   Warren went to work convincing the justices to look at the issue another way and the final ruling to overturn Plessey v. Ferguson, at least as to public grade schools, was 9-0.

Earl Warren stated simply:

We come then to the question presented: Does segregation of children in public schools solely on the basis of race, even though the physical facilities and other ‘tangible’ factors may be equal, deprive the children of the minority group of equal educational opportunities? We believe that it does.

We conclude that in the field of public education the doctrine of ‘separate but equal’ has no place. Separate educational facilities are inherently unequal.

Thurgood Marshall, one of my heroes, argued for the schools, some of them anyway.

Small Business Reorganization Task Force Issues its Report

The United States Bankruptcy Court for the Central District of California Small Business Reorganization Task Force has issued its report.  The report can be accessed here.    They created some new forms, suggested four new local rules and refinements of seven other existing rules.  The report has a spreadsheet with the names of all the SBRA cases filed (or converted) so far in our district.  Looks like a ton of effort was made.  Let me know what you think.

Married couple should consider holding title as “community property with right of survivorship.”

More stuff I didn’t know.  Yikes, this has been around since 2001?

I finally got around to writing my case summary of Brace.  I forgot that Judge Lafferty wrote the opinion for the BAP a while back.  I can’t wait to hear his comments at the 9th Circuit Review on January 23, 2021 (click here to join the cdcbaa and see the program for free).  One thing the court commented on that I didn’t know is that there is a new “form of title,” new since 2001 I guess.   The Supreme Court said:

In addition, the rule that form of title controls at death was a key motivation for the Legislature’s 2000 enactment of Assembly Bill No. 2913, which created a new form of title: community property with a right of survivorship. (… Civ. Code, § 682.1.)  This form of ownership combines the tax benefits of holding community property at the death of one spouse — a stepped-up basis in the full value of the community property — with the right of survivorship in a joint tenancy.

Civil Code Section 682.1 says: Read more…

Nice explanation of the difference between recoupment and set off from the 9th Circuit.

In re Gardens Regional Hospital and Medical Center, Inc.  975 F.3d 926 (9th Cir. September, 2020)

Historically, “[s]etoff allowed a reduction of [the] plaintiff’s claim by the amount of a liquidated claim of the plaintiff to the defendant; recoupment allowed a defendant to assert a claim arising out of the same transaction as the plaintiff’s claim.”  “The defining characteristic of setoff—as opposed to recoupment—is that, in a setoff, ‘the mutual debt and claim . . . are generally those arising from different transactions.’” [emphasis in original]   “[R]ecoupment is not the adjustment of separate mutual debts but the process of defining the amount owed under a single claim.”  “[R]ecoupment is in the nature of a right to reduce the amount of a claim, and does not involve establishing the existence of independent obligations.”  But “courts should apply the recoupment doctrine in bankruptcy cases only when ‘it would . . . be inequitable for the debtor to enjoy the benefits of that transaction without meeting its obligations.’”

Re-reading a local rule re chapter 11 fee apps

I’ve filed a million chapter 11 fee applications, well maybe not that many.  I re-read the local rules re fee apps a couple years ago when a judge told me I’m supposed to say in the application that I have read the rules and that this application follows those rules (he was right).

Well, I’m sitting on Zoom.gov last week, listening to a judge and an attorney discussing the attorney’s fee application – minding my own business.  The attorney acknowledges that he violated the local rule that says the declaration by the client agreeing to the fees requested must be filed as a separate pleading.  Huh?  So I look it up.  Local Rule 2016-1(a)(1)(J) says the fee app must include “A separately filed declaration from the client indicating that the client has reviewed the fee application and has no objection to it.”

Just my curiosity wondering how long that’s been there?  If anyone knows, please say so in the comments.

November filings in Central District drop 22% from last month and 35% from last year.

November filings dropped to 1,730 compared to 2,210 in October, or 22% fewer filings than last month.  The filings were lower than November a year ago by 35%.

2020 2019 2018 2017 2016 2015 2014
Jan 2,828 2,745 2,741 2,839 2,872 3,364 4,704
Feb 2,781 2,754 2,708 2,795 3,299 3,829 4,574
March 2,736 3,481 3,363 3,782 3,923 4,496 5,430
April 1,669 3,631 3,277 3,209 3,584 4,486 5,364
May 2,080 3,347 3,226 3,384 3,484 3,971 5,500
June 2,257 2,967 2,981 3,252 3,545 3,966 4,386
July 2,415 3,270 3,057 2,953 3,239 3,731 4,701
Aug 2,355 3,274 3,337 3,387 3,543 3,544 4,540
Sept 2,169 2,934 2,772 3,071 3,168 3,493 4,317
Oct 2,210 3,355 3,259 3,170 3,235 3,751 4,554
Nov 1,730 2,636 2,821 3,004 3,025 3,531 3,642
Dec 2,723 2,419 2,416 2,902 2,718 3,733
Total 25,230 37,117 35,961 37,262 39,819 44,880 55,445

Filings by chapter for the 11 months this year.

Non-Comm’l Commercial Chapter 7 Chapter 13 Chapter 11
22,960 2,274 21,566 3,384 280
91% 9% 85% 13% 1%

 

An important comment on writing from Hon. Thomas Reavley, RIP.

Note today from Bryan Garner

Remembering Thomas M. Reavley.

On Tuesday, a legal giant died: Thomas M. Reavley of Houston, who was a Fifth Circuit judge for 41 years and a Texas Supreme Court justice for 7. You can read his obituaries [here] and [here].

Two years after I finished my clerkship with Judge Reavley, he wrote the foreword to my first book—which has been carried through to the third edition titled Garner’s Dictionary of Legal Usage (2011). Here’s part of what this quintessential judge wrote there:

“Excess language misdirects. Ambiguous language confuses. Errors in grammar, in diction, in spelling, as well as in fact or logic, distract and destroy confidence. No writer can afford to underestimate the importance of precise, well-placed words.”

Judge Reavley, RIP.

Bryan A. Garner

SFVBA Program Friday December 4, 2020 – “Late-Filed Returns and How To Discharge Them”

Email from Steve Fix:

Dear All:

Sorry for the late notice.  Bankruptcy Judge Robert Kwan (who worked at the Justice Department representing the IRS prior to taking the bench), John Tedford IV (at Danning Gill and who wrote a fascinating article on this issue for the ABI) and John Faucher (who spent a decade at the Justice Department on tax matters) have put together a good program.  It is called “Late-Filed Returns and How To Discharge Them”  The program looks at the problem – Section 523(a) – what constitutes a return, how BAPCAP has complicated the analysis, the IRS’ position on late filed returns, how to figure out if your client has the problem and what to do about it.  Of course the panel will also look at how the Franchise Tax Board and its position can complicate the analysis.

Why attend this program?  Easy.  The intersection of bankruptcy and tax is complicated.  This is probably the area of the highest legal malpractice for bankruptcy attorneys.  We have to know the subject well enough to at least know the issues, the questions, and hopefully a lot more.  For those of you who think the subject is dry, first, it is not but second, the program is only hour long.

I hope you can join us.  Here are the particulars: Read more…