Chapter 11 filings in the Central District

Notwithstanding the low number of bankruptcy cases filed in January 2021 in the Central District, there were 22 chapter 11s which I think is pretty normal.  Of those, 9 were sub V small business cases.

January 2021 filings – ugh!

Total filings in the Central District of California for January 2021 were a whopping 37% less than January of last year.

2021 2020 2019 2018 2017 2016 2015 2014
Jan 1,783 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

Non-Comm’l Commercial Chapter 7 Chapter 13 Chapter 11
1,599 184 1,597 164 22
6% 1% 6% 1% 0%

Talk about slow?  Vermont had 18 cases in total in January.  Alaska 19, Montana 38.  New York had 1,194 in the whole state.  Texas 1,429 in the whole state.

Some thoughts on City of Chicago v. Fulton

So now we have to file something to get the auto lender to turn over the vehicle, or the judgment creditor who has seized something like money in the bank, equipment or other assets.  The attorneys in our office, who have more boots on the ground than I, are not particularly concerned.  The attitude in our office, at least with the auto lenders, is you contact them, give them proof of insurance, offer to make adequate protection payments and there likely will not be a problem.  I’m not so sure.  My spidey sense says that they now have a lot more clout and will use it. Read more…

San Fernando Valley Bar Assn program this Friday Feb 5, 2021

Email from Steve Fix:

Dear All:

This program, dismissing complaints under Rule 12, is anything but boring.  The bar association has put two top notch (and quite humorous) speakers together on the panel.  The Honorable Barry Russell and Scott Bovitz will take us through a neat power point presentation on taking apart an opponent’s complaint, strategies whether you should bring a motion to dismiss and all of the fun that goes into these motions. Read more…

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.” Read more…

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.’”