My Los Angeles Daily Journal article on the means test

My article, Congress, it’s time to get rid of that stupid means test, was published in the Los Angeles Daily Journal on April 30, 2020.  Let me know what you think.  You can access it here.

What is a “contingent” debt for chapter 13 eligibility purposes

I love this definition from a recent BAP case, Fountain v. Deutsche Bank National Trust Company (In re Fountain), — B.R. —  (9th Cir. BAP  Mar, 2020)

A debt is contingent when “the debtor will be called upon to pay [it] only upon the occurrence or happening of an extrinsic event which will trigger the liability of the debtor to the alleged creditor.” Fostvedt v. Dow (In re Fostvedt), 823 F.2d 305, 306 (9th Cir. 1987). If “all events giving rise to liability occurred prior to the filing of the bankruptcy petition,” the claim is not contingent. In re Nicholes, 184 B.R. at 88. A dispute over liability for a claim does not make the debt contingent. Id. at 89 (citing In re Dill, 30 B.R. 546, 549 (9th Cir. BAP 1983))

In my world, this comes up most often when an individual has guaranteed his business loans, i.e., corporate debts.  Is his personal obligation to the bank contingent?  Of course says I.  And the above quote supports that position.  The individual is called on to pay the debt only when the corporate entity has failed to pay it.  But in fairness, you have to read the words of the “guaranty.”  In commercial corporate guarantees, the ones I have read at least, the individual typically waives any rights he may have to require that the bank go after the corp first.  The guaranty is likely to say that the bank can ignore the actual borrower entirely and go after the individual if that’s what it chooses to do.   That may not be a contingent debt.

Memorial Day – thanks to my brother Bill.

My little brother Bill.  Echo platoon, Seal Team One.  Bill is on the right sitting on the wall.  Thanks for your service Bill.  He is retired now on full disability.

Catt Mutler's photo.

cdcbaa Program Saturday May 30, 2020

To Help Mitigate the Spread of COVID-19, this CLE Program will ONLY be available as a WEBINAR via Zoom
Please join us on May 30, 2020 as the cdcbaa presents:
 
“CARES Act – Adjusting to the New Landscape and Understanding the Impact on Small Business Subchapter 5″
SPEAKERS: 
Aki Koyama, Esq. – Staff Attorney to Chapter 13 Trustee Kathy Dockery
Nancy Clark, Esq. 
Nicholas Gebelt, Esq.
Jon Hayes, Esq.

Please log on at 10:45am
Program: 11:00am - 1:00pm
 
2 Hours of MCLE Credit Provided
 
Haven’t renewed yet for 2020? Now is the perfect time! Our membership dues remain a tremendous bargain at only $250. Your 2020 membership includes up to 5 remaining seminars of 2 MCLE credits each per calendar year and the annual James T. King Symposium, one ticket to the annual Calvin Ashland Awards Dinner in November, remote webinar participation in MCLE programs (when available), and access to the listserve, on which you can discuss the latest bankruptcy issues with knowledgeable and experienced members. That’s like receiving up to ten hours of MCLE credits in subject-matter that’s relevant to you at a paltry $25 per unit, and getting a fancy ballroom dinner and message board access for free! Read more…

In re Brace oral argument – watch it here

The you tube oral argument at the California Supreme Court was released today.  The link posted by the Supreme Court is here.  

A YouTube video of Ed Hays arguing for the bankruptcy trustee is here.  

Summary of Chapter 13

This is a short and concise summary of chapter 13 in the Central District of California.  It is supported with code sections and case cites.  For a free pdf copy, click here - Summary of CH 13 final   A paperback version can be purchased on Amazon here.  I am always looking for comments.  Feel free to tell me what you think.

SFVBA Bankruptcy Section Meeting, Friday May 22, 2020, at 12 noon: Program: Really Interesting Bankruptcy Matters Emphasizing Consumer Issues: By ZOOM

Email from Steve Fox.  I think I’ll sign up for this one.  My two partners are among the presenters.

Dear All:

This is a fun program.  I have asked a lot of different bankruptcy attorneys and one judge to each contribute one case or topic that interests each of them and to take 5 to 10 minutes to speak about the matter.  For example, Jim Selth will speak about a recent unpublished opinion by one of our local judges which considered the means test, a high income individual and non-consumer debt in the context of a motion by the UST to convert.  Judge Ahart will speak about recent changes to the CA exemption laws and their impact on debtors.  Shai Oved will discuss a fascinating local case in Santa Ana where a family law attorney objected to a debtor’s discharge, lost and then what happened when the debtor sought attorneys’ fees of about $1,000,000 from the objecting family law attorney under Section 523(d) for the cost of defense.  Jeremy Rothstein looks at a recent BAP opinion on the ability of the bankruptcy court to modify a plan near the end of the 5 year term where the debtor has received unexpected monies.   Our other speakers include Matt Resnik and Roksana Moradi, Jeff Hagen and Stella Havkin, Lew Landau and Richard Brownstein, all on consumer issues. Read more…

Judge’s tentative awards $60,000 in attys fees for failure to admit requested admissions

A tentative today from Judge Saltzman:

The Plaintiffs demonstrate how the Debtor fails to admit several requests for admission that were later proved to be true. Most of the requests that the Debtor failed to admit were not objectionable, the requested admissions were material, the Debtor had no reasonable ground to believe that he might prevail on the fact of the admission, and there is no other good reason for the Debtor to have failed to admit. See Fed. R. Civ. P. 37(c)(2).

The Debtor makes no attempt to challenge any law or authorities for why the Plaintiffs are entitled to attorney’s fees. The Debtor argues that he should have prevailed on the motion for summary judgment. The Debtor tries to make technical arguments, twisting the meaning of “personal knowledge” to something utterly absurd. The Debtor’s attempts to justify his frivolous denials and objections to requests for admission are all unpersuasive, and none of those arguments explain why the Plaintiffs are not entitled to attorney’s fees for the continued litigation regarding their anti-SLAPP judgment. Read more…

Prober Raphael looking for an associate

From a post by Lee Raphael on Facebook:

My firm is in need of another attorney.  We were just awarded another 5-year contract to be a subcontractor for the DOJ in collections and bankruptcy matters.  Plus, we have a number of quiet title actions, surplus funds cases and other collection actions for our new attorney to lead.  If you are interested or know someone interested, please contact me.  We are willing to train the right candidate. I’m making this shareable in case you are so inclined.

In re Brace – California Supreme Court hears oral argument about what constitutes community property

My previous post on In re Brace is here.

The trustee was represented by Ed Hays, Marshack Hays LLP.  This is his post on social media.

Today, I was fortunate to be able to appear (virtually) and present oral arguments in a case before the California Supreme Court.  It was a very cool experience.  It took me 28 years to get a case before the high court and then Covid-19 kept me from appearing in person.  Hopefully, it won’t take as long to get another chance where I can appear in person.

What was the case about? Read more…