http://www.flsb.uscourts.gov/web_folder/NEWS/11-11-22_Notice_of_Entry_of_Administrative_Order_11-03.pdf
http://www.flsb.uscourts.gov/AdmOrders/AO_2011-03_Order_Adopting_Interim_Local_Rules_and_Clarifying_Status_of_Local_Forms_Related_to_Chapter_13_Case_Matters_Addressed_in_Local_Rule_3070-1_and_Related_to_Local_Rules_2002-1_and_4004-3.pdf
Showing posts with label bk. Show all posts
Showing posts with label bk. Show all posts
Friday, November 25, 2011
Tuesday, April 26, 2011
Bankruptcy = No Job? Well Maybe.
Section 525 of the Bankruptcy Code provides the following (applicable to private, non-government employers):
(b) No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt--
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.
In a recent case, the Fifth Circuit Court of Appeals reached a different conclusion and held that discrimination in the hiring process was not prohibited by Section 525(b).
In Burnett v. Stewart Title, Inc., No. 10-20250, 2011 WL 754152 (5th Cir. March 4, 2011) (click here for .pdf of opinion) the issue was whether §525(b) created a private cause of action for a debtor who was denied employment by a private employer.
The Court contrasted the language of §525(a), applicable to government units:
... a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act...
(emphasis added). The Court noted that Congress included specific language about denying employment in subsection (a), applicable to public employers, but omitted the language in subsection (b), applicable to private employers. Under the rules of statutory construction, it is presumed that Congress "acted intentionally and and purposefully in the disparate inclusion or exclusion" of specific language, and statutes are to be read as a whole. In short, had Congress wanted to include the denial of employment in §525(b), which was enacted several years after subsection (a), they knew very well how to so. We have to assume the omission was intentional.
Therefore, employers in the Fifth Circuit (Texas, Louisiana, Mississippi) apparently are free to discriminate against applicants based on a prior bankruptcy filing of the applicant or a person associated with the applicant (such as a spouse).
(b) No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt--
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.
In a recent case, the Fifth Circuit Court of Appeals reached a different conclusion and held that discrimination in the hiring process was not prohibited by Section 525(b).
In Burnett v. Stewart Title, Inc., No. 10-20250, 2011 WL 754152 (5th Cir. March 4, 2011) (click here for .pdf of opinion) the issue was whether §525(b) created a private cause of action for a debtor who was denied employment by a private employer.
The Court contrasted the language of §525(a), applicable to government units:
... a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act...
(emphasis added). The Court noted that Congress included specific language about denying employment in subsection (a), applicable to public employers, but omitted the language in subsection (b), applicable to private employers. Under the rules of statutory construction, it is presumed that Congress "acted intentionally and and purposefully in the disparate inclusion or exclusion" of specific language, and statutes are to be read as a whole. In short, had Congress wanted to include the denial of employment in §525(b), which was enacted several years after subsection (a), they knew very well how to so. We have to assume the omission was intentional.
Therefore, employers in the Fifth Circuit (Texas, Louisiana, Mississippi) apparently are free to discriminate against applicants based on a prior bankruptcy filing of the applicant or a person associated with the applicant (such as a spouse).
Monday, April 25, 2011
Retiring Bankruptcy Judge John Ninfo Still Plans to Educate Youth on Financial Dangers
s he approaches retirement from the U.S. Bankruptcy Court for the Western District of New York, where he has presided over thousands of cases of financial disarray, Bankruptcy Judge John Ninfo II is going to continue to preach his finely honed lessons on financial literacy, the Rochester (N.Y.) Democrat and Chronicle reported yesterday. However, with the recent recession still looming large, Judge Ninfo is adjusting his message: He now says we probably should live below our means, much as many of our parents and grandparents did in the 1950s and 1960s. Judge Ninfo will retire from the bankruptcy court at the end of the year, capping his time on the bench at an even two decades. He will continue on with one of his passions by continuing to volunteer with Credit Abuse Reduction Education (CARE), the national financial literacy program that he started in 2002.
http://www.democratandchronicle.com/article/20110424/BUSINESS/104240344/1001/BUSINESS
http://www.democratandchronicle.com/article/20110424/BUSINESS/104240344/1001/BUSINESS
Federal Reserve Launches Bankruptcy Studies
The Federal Reserve Board on Thursday announced that it is launching two studies examining whether the Bankruptcy Code needs revisions in order to better handle failures of big financial companies, the Deal Pipeline reported on Friday. The Fed is asking for comment on exactly what the studies should cover. While the Dodd-Frank Act established an alternative to the bankruptcy process to wind down systemically important financial firms to be led by the Federal Deposit Insurance Corp., Congress also ordered regulators to take a closer look at the bankruptcy process, as an option for winding troubled financial giants. One study will examine the adequacy of chapter 7 and chapter 11 for facilitating bankruptcies of systemically important financial companies. Another question in that study is whether the Bankruptcy Code should adopt a provision in the FDIC's orderly liquidation process to allow derivative contracts to remain open after a firm is put in receivership, lessening the possibility assets will be sold at fire sale prices.
Wednesday, April 20, 2011
FRB 2019
The Federal Rules of Bankruptcy Procedure (“FRBP”) usually generate little interest or concern among practitioners. At best, FRBP changes receive a casual perusal about the time of implementation on Dec. 1 of each year. This year, however, practitioners need to be aware of the change that is coming and give thought before implementation as to how the amended disclosure requirements may affect their clients and strategy.
Specifically, FRBP 2019 deals with disclosure of the relationships of creditors acting in concert with each other. Historically, despite the existing FRBP 2019, the general attitude that courts took was that from L. Frank Baum’s The Wizard of Oz: “Don’t worry about the man behind the curtain.” In other words, courts were not inclined to require disclosure and attorneys were not inclined to disclose.
That changed, most notably, in 2007 in the Northwest Airlines case, which is discussed in greater detail below. Several subsequent cases on this issue followed. The relatively recent rise in sales of discounted debt to parties previously uninvolved with the debtor, added to a perception of unfair strategies being utilized in bankruptcy cases.
In response, the Federal Rules Committee has proposed an amendment to FRBP 2019. The U.S. Supreme Court has until May 1, 2011, to stop the proposed amendment. Congress then has through Nov. 30, 2011, to legislatively stop or change the proposed amendment. Absent those unlikely events, the proposed amendment will go into effect Dec. 1, 2011.
Current FRBP 2019
Paraphrased, FRBP 2019 provides that in Chapter 9 or Chapter 11 cases, each “entity or committee representing more than one creditor or equity security holder” (with the exception of Official Committees defined in the Bankruptcy Code) as well as “every indenture trustee,” must file a verified statement with its name and address, “the nature and amount of the claim or interest and when acquired” (unless it was acquired more than one year before the bankruptcy filing), how the claim or interest came into existence, and the identity of the organizing parties. These initial disclosures could be viewed as just a ministerial filing with essentially “directory” information.
The balance of FRBP 2019, however, is more intrusive and alarming to entities competing in debt purchase markets. It requires disclosure of the amount paid for the bankruptcy claim, the date of acquisition and a copy of any agreement authorizing collective action. Any party failing to make these disclosures risks the court prohibiting further involvement in the bankruptcy case and invalidation of plan votes or objections.
FRBP 2019 Springs to Life in Northwest Airlines
FRBP 2019 obtained new vitality in a decision generated by the Northwest Airlines bankruptcy: (In re Northwest Airlines Corporation, 363 B.R. 701 (Bankr. S.D.N.Y. 2007)). In that case, the debtor requested that the court require additional disclosures from the “Ad Hoc Committee of Equity Security Holders.” Specifically, the debtor asked the court to order the committee to supplement its initial disclosure to include the amounts owned by individual committee members, when the claims were acquired, as well as the specific amounts paid to acquire the claims.
In its initial disclosure, the committee simply listed the number of shares it collectively held, as well as its aggregate claim. It did not, however, specify which member had which equity interests or claims, nor did it identify when the interests were acquired, the purchase price, or any disposition of the interests. Judge Allan Gropper, applied a “plain language” reading of FRBP 2019, granted the debtor’s motion and ordered full supplemental disclosure within three days.
Since then, a number courts have dealt with the FRBP 2019’s application and requirements, reaching differing conclusions. These cases include Washington Mutual, 419 B.R. 271 (Bankr. D.Del. 2009); Philadelphia Newspapers, 422 B.R. 553 (Bankr. E.D. Penn. 2010); and Premier International Holdings, 423 B.R. 58 (Bankr. D.Del. 2010). Courts taking a contrary view to Judge Gropper’s Northwest Airlines decision find the ad hoc committees are representing only themselves, and not other creditors, suggesting that full disclosure under FRBP 2019 does not apply.
The issue continues to be contentious. For example, as recently as March 30, 2011, a motion to compel compliance with FRBP 2019 was filed by the debtors in the Lehman Bros. Holdings Inc., Case No. 08-13555 (JMP) (Bankr. S.D.N.Y.) seeking disclosure of “the nature and amount of the claims or interests held by the members of the Ad Hoc Group, the time of acquisition and a recital of the pertinent facts and circumstances in connection with [the Ad Hoc Group’s attorneys’] retention ... ; or a copy of the instrument whereby [the attorneys are] empowered to act on behalf of the Ad Hoc Group.”
Economic/Policy Issues
FRBP 2019 was originally developed under the Bankruptcy Act of 1898 to deal with committees providing representation for other creditors. Large creditors later used Depression-era committees as a means to assert control over smaller creditors. Generally, that issue died a natural death due to statutory changes, but the concern that similar abuses would arise again kept FRBP 2019 in existence even with the advent of the Bankruptcy Code in 1978.
FRBP 2019 has more recently been used in response to complex financial structures of larger debtors. With a more ready market for the sale and purchase of debt and equity of financially distressed companies, parties frequently acquire the interests and claims at a discounted value.
Accordingly, a purchaser’s economic incentives may be radically different from those of the original holders. Moreover, their economic incentives may be adverse to reorganization or other more typical and traditional creditor incentives. Courts enforcing FRBP 2019 disclosures apply a plain language interpretation and the policy that transparency and disclosure assist the bankruptcy process.
Purchasers, however, take a different view. They buy in extremely competitive markets where disclosing the terms of the purchases is akin to publically disclosing trade secrets. They maintain that the amount and timing of their purchases is irrelevant. A $1 million claim purchased from the original owner for $350,000.00 is still a $1 million claim against the debtor. As long as the purchasers otherwise act within the law and do not represent any other party’s interest in the bankruptcy, they maintain that their business and strategic decisions should not be publically disclosed.
Moreover, critics contend that Rule 2019 is invoked as a litigation tactic rather than for more benign reasons. They assert that motions to enforce FRBP 2019 are brought to gain negotiating leverage by placing the claim or interest holder in a dilemma — disclose what they consider to be trade secrets or risk being excluded from further participation in the bankruptcy.
The Rules Committee Steps In
With the courts split regarding FRBP 2019’s application, and the issue arising more frequently, the Federal Rules Committee decided to address the issue: Is FRBP 2019 only applicable when a party is representing another party’s interest, or is it applicable in any situation when a group of parties in interest coalesce to form a group to represent their interests? The committee also addressed the secondary issue of whether detailed economic disclosures are necessary or desirable such that these should be mandatory as a condition of participation in a bankruptcy.
While some critics initially suggested eliminating FRBP 2019, a consensus developed that it should continue to exist but be modified to deal with its current usage.
First, the proposed modified FRBP 2019’s title has changed the reference from “Representation” to “Disclosure,” and “Represent” now has a definition. “Represent” or “represents” means to take a position before the court or to solicit votes regarding the confirmation of a plan on behalf of another.
The addition of a definition of “Disclosable Economic Interest” broadens the FRBP 2019’s scope. “Disclosable economic interest” means any claim, interest, pledge, lien, option, participation, derivative instrument, or any other right or derivative right granting the holder an economic interest that is affected by the value, acquisition, or disposition of a claim or interest.
Official Committees will not be exempt from all provisions. FRBP 2019 makes it clear that indenture trustees, agents under credit agreements, class action representatives and governmental units are excluded. Notably for debt purchasers, FRBP 2019 no longer mandates disclosure of what they consider confidential information irrelevant to their claim amount. It does this by limiting disclosure to the quarter and year of purchase, if acquired within a year before the bankruptcy.
Practical Applications
The new FRBP 2019 should, at least initially, clarify FRBP 2019’s application and meaning over which the courts are now split. It makes clear that FRBP 2019 is really about disclosure and not simply applicable to certain kinds of representation. That disclosure, however, is now more limited and generalized.
To the extent FRBP 2019 was used as a tactic to force a creditor to disclose sensitive market information, it will no longer be useful for that purpose. It is still possible, however, to compel that disclosure, but it will have to be done through standard discovery rather than by invoking FRBP 2019.
Lawyers advising interest purchasers need only be concerned with disclosure that can be obtained through normal discovery rather than contending with a rule that some courts interpreted to mandate disclosure. On the other side, FRBP 2019 does require interest holders to specify the nature of the holdings and gives some added transparency to parties’ interest in a bankruptcy case.
The new definition of disclosable economic interest includes instruments not conceived when the original rule was promulgated. It also clears up an ambiguity: whether a lawyer advising in a case, but not appearing in court, must file a disclosure. The answer under the new FRBP 2019 is “no.”
Conclusion
FBP 2019’s modification should end or at least reduce FRBP 2019 litigation. While parties’ required disclosures will be broader in the sense of the information that must be disclosed, the sensitive market-based elements will now be protected from disclosure, except in unusual circumstances.
Hopefully FRBP 2019’s new scope, specificity and clarity, will permit lawyers and their clients to better assess their risk in a bankruptcy proceeding while, simultaneously, providing more transparency.
--By Timothy F. Nixon, Godfrey & Kahn SC
Specifically, FRBP 2019 deals with disclosure of the relationships of creditors acting in concert with each other. Historically, despite the existing FRBP 2019, the general attitude that courts took was that from L. Frank Baum’s The Wizard of Oz: “Don’t worry about the man behind the curtain.” In other words, courts were not inclined to require disclosure and attorneys were not inclined to disclose.
That changed, most notably, in 2007 in the Northwest Airlines case, which is discussed in greater detail below. Several subsequent cases on this issue followed. The relatively recent rise in sales of discounted debt to parties previously uninvolved with the debtor, added to a perception of unfair strategies being utilized in bankruptcy cases.
In response, the Federal Rules Committee has proposed an amendment to FRBP 2019. The U.S. Supreme Court has until May 1, 2011, to stop the proposed amendment. Congress then has through Nov. 30, 2011, to legislatively stop or change the proposed amendment. Absent those unlikely events, the proposed amendment will go into effect Dec. 1, 2011.
Current FRBP 2019
Paraphrased, FRBP 2019 provides that in Chapter 9 or Chapter 11 cases, each “entity or committee representing more than one creditor or equity security holder” (with the exception of Official Committees defined in the Bankruptcy Code) as well as “every indenture trustee,” must file a verified statement with its name and address, “the nature and amount of the claim or interest and when acquired” (unless it was acquired more than one year before the bankruptcy filing), how the claim or interest came into existence, and the identity of the organizing parties. These initial disclosures could be viewed as just a ministerial filing with essentially “directory” information.
The balance of FRBP 2019, however, is more intrusive and alarming to entities competing in debt purchase markets. It requires disclosure of the amount paid for the bankruptcy claim, the date of acquisition and a copy of any agreement authorizing collective action. Any party failing to make these disclosures risks the court prohibiting further involvement in the bankruptcy case and invalidation of plan votes or objections.
FRBP 2019 Springs to Life in Northwest Airlines
FRBP 2019 obtained new vitality in a decision generated by the Northwest Airlines bankruptcy: (In re Northwest Airlines Corporation, 363 B.R. 701 (Bankr. S.D.N.Y. 2007)). In that case, the debtor requested that the court require additional disclosures from the “Ad Hoc Committee of Equity Security Holders.” Specifically, the debtor asked the court to order the committee to supplement its initial disclosure to include the amounts owned by individual committee members, when the claims were acquired, as well as the specific amounts paid to acquire the claims.
In its initial disclosure, the committee simply listed the number of shares it collectively held, as well as its aggregate claim. It did not, however, specify which member had which equity interests or claims, nor did it identify when the interests were acquired, the purchase price, or any disposition of the interests. Judge Allan Gropper, applied a “plain language” reading of FRBP 2019, granted the debtor’s motion and ordered full supplemental disclosure within three days.
Since then, a number courts have dealt with the FRBP 2019’s application and requirements, reaching differing conclusions. These cases include Washington Mutual, 419 B.R. 271 (Bankr. D.Del. 2009); Philadelphia Newspapers, 422 B.R. 553 (Bankr. E.D. Penn. 2010); and Premier International Holdings, 423 B.R. 58 (Bankr. D.Del. 2010). Courts taking a contrary view to Judge Gropper’s Northwest Airlines decision find the ad hoc committees are representing only themselves, and not other creditors, suggesting that full disclosure under FRBP 2019 does not apply.
The issue continues to be contentious. For example, as recently as March 30, 2011, a motion to compel compliance with FRBP 2019 was filed by the debtors in the Lehman Bros. Holdings Inc., Case No. 08-13555 (JMP) (Bankr. S.D.N.Y.) seeking disclosure of “the nature and amount of the claims or interests held by the members of the Ad Hoc Group, the time of acquisition and a recital of the pertinent facts and circumstances in connection with [the Ad Hoc Group’s attorneys’] retention ... ; or a copy of the instrument whereby [the attorneys are] empowered to act on behalf of the Ad Hoc Group.”
Economic/Policy Issues
FRBP 2019 was originally developed under the Bankruptcy Act of 1898 to deal with committees providing representation for other creditors. Large creditors later used Depression-era committees as a means to assert control over smaller creditors. Generally, that issue died a natural death due to statutory changes, but the concern that similar abuses would arise again kept FRBP 2019 in existence even with the advent of the Bankruptcy Code in 1978.
FRBP 2019 has more recently been used in response to complex financial structures of larger debtors. With a more ready market for the sale and purchase of debt and equity of financially distressed companies, parties frequently acquire the interests and claims at a discounted value.
Accordingly, a purchaser’s economic incentives may be radically different from those of the original holders. Moreover, their economic incentives may be adverse to reorganization or other more typical and traditional creditor incentives. Courts enforcing FRBP 2019 disclosures apply a plain language interpretation and the policy that transparency and disclosure assist the bankruptcy process.
Purchasers, however, take a different view. They buy in extremely competitive markets where disclosing the terms of the purchases is akin to publically disclosing trade secrets. They maintain that the amount and timing of their purchases is irrelevant. A $1 million claim purchased from the original owner for $350,000.00 is still a $1 million claim against the debtor. As long as the purchasers otherwise act within the law and do not represent any other party’s interest in the bankruptcy, they maintain that their business and strategic decisions should not be publically disclosed.
Moreover, critics contend that Rule 2019 is invoked as a litigation tactic rather than for more benign reasons. They assert that motions to enforce FRBP 2019 are brought to gain negotiating leverage by placing the claim or interest holder in a dilemma — disclose what they consider to be trade secrets or risk being excluded from further participation in the bankruptcy.
The Rules Committee Steps In
With the courts split regarding FRBP 2019’s application, and the issue arising more frequently, the Federal Rules Committee decided to address the issue: Is FRBP 2019 only applicable when a party is representing another party’s interest, or is it applicable in any situation when a group of parties in interest coalesce to form a group to represent their interests? The committee also addressed the secondary issue of whether detailed economic disclosures are necessary or desirable such that these should be mandatory as a condition of participation in a bankruptcy.
While some critics initially suggested eliminating FRBP 2019, a consensus developed that it should continue to exist but be modified to deal with its current usage.
First, the proposed modified FRBP 2019’s title has changed the reference from “Representation” to “Disclosure,” and “Represent” now has a definition. “Represent” or “represents” means to take a position before the court or to solicit votes regarding the confirmation of a plan on behalf of another.
The addition of a definition of “Disclosable Economic Interest” broadens the FRBP 2019’s scope. “Disclosable economic interest” means any claim, interest, pledge, lien, option, participation, derivative instrument, or any other right or derivative right granting the holder an economic interest that is affected by the value, acquisition, or disposition of a claim or interest.
Official Committees will not be exempt from all provisions. FRBP 2019 makes it clear that indenture trustees, agents under credit agreements, class action representatives and governmental units are excluded. Notably for debt purchasers, FRBP 2019 no longer mandates disclosure of what they consider confidential information irrelevant to their claim amount. It does this by limiting disclosure to the quarter and year of purchase, if acquired within a year before the bankruptcy.
Practical Applications
The new FRBP 2019 should, at least initially, clarify FRBP 2019’s application and meaning over which the courts are now split. It makes clear that FRBP 2019 is really about disclosure and not simply applicable to certain kinds of representation. That disclosure, however, is now more limited and generalized.
To the extent FRBP 2019 was used as a tactic to force a creditor to disclose sensitive market information, it will no longer be useful for that purpose. It is still possible, however, to compel that disclosure, but it will have to be done through standard discovery rather than by invoking FRBP 2019.
Lawyers advising interest purchasers need only be concerned with disclosure that can be obtained through normal discovery rather than contending with a rule that some courts interpreted to mandate disclosure. On the other side, FRBP 2019 does require interest holders to specify the nature of the holdings and gives some added transparency to parties’ interest in a bankruptcy case.
The new definition of disclosable economic interest includes instruments not conceived when the original rule was promulgated. It also clears up an ambiguity: whether a lawyer advising in a case, but not appearing in court, must file a disclosure. The answer under the new FRBP 2019 is “no.”
Conclusion
FBP 2019’s modification should end or at least reduce FRBP 2019 litigation. While parties’ required disclosures will be broader in the sense of the information that must be disclosed, the sensitive market-based elements will now be protected from disclosure, except in unusual circumstances.
Hopefully FRBP 2019’s new scope, specificity and clarity, will permit lawyers and their clients to better assess their risk in a bankruptcy proceeding while, simultaneously, providing more transparency.
--By Timothy F. Nixon, Godfrey & Kahn SC
Thursday, April 14, 2011
Identity Theft in Bankruptcy
Debtors in Pretension
by Magdalena Reyes Bordeaux
"Identity theft in the bankruptcy courts is a growing crime that often leaves unsuspecting consumers facing devastating consequences. Currently, when someone files for bankruptcy, there are no identification procedures at the time of filing to verify that the name on the petition is in fact the name of the person filing for bankruptcy relief. Accordingly, it is relatively simple for an identity thief to file a bankruptcy petition using a stolen identity. However, a victim of identity theft in a bankruptcy proceeding can clear up a tarnished record by filing a motion to expunge a fraudulent bankruptcy."
http://www.lacba.org/Files/LAL/Vol27No6/2059.pdf
by Magdalena Reyes Bordeaux
"Identity theft in the bankruptcy courts is a growing crime that often leaves unsuspecting consumers facing devastating consequences. Currently, when someone files for bankruptcy, there are no identification procedures at the time of filing to verify that the name on the petition is in fact the name of the person filing for bankruptcy relief. Accordingly, it is relatively simple for an identity thief to file a bankruptcy petition using a stolen identity. However, a victim of identity theft in a bankruptcy proceeding can clear up a tarnished record by filing a motion to expunge a fraudulent bankruptcy."
http://www.lacba.org/Files/LAL/Vol27No6/2059.pdf
Bankruptcy Judge to Sanction LPS for Lying to Court over Foreclosures
Bankruptcy Judge to Sanction LPS for Lying to Court over Foreclosures
Bankruptcy Judge Elizabeth Magner ( A federal bankruptcy judge in New Orleans) said that she will impose sanctions on Lender Processing Services, after concluding that the mortgage servicing company deliberately committed fraud on the court in a foreclosure case, by giving false testimony and submitting a "sham" affidavit, Reuters reported yesterday. Judge Magner's decision is the latest in a series of investigations and other legal actions involving Jacksonville, Fla.-based LPS for allegedly creating false documents for foreclosure cases and misrepresenting amounts homeowners actually owed. The judge granted a motion by the U.S. Trustee's Office for sanctions, and said that she would decide on financial and other penalties against LPS later, after holding a hearing. http://www.reuters.com/article/2011/04/13/financial-regulation-foreclosures-lps-idUSN1330259220110413
Bankruptcy Judge Elizabeth Magner ( A federal bankruptcy judge in New Orleans) said that she will impose sanctions on Lender Processing Services, after concluding that the mortgage servicing company deliberately committed fraud on the court in a foreclosure case, by giving false testimony and submitting a "sham" affidavit, Reuters reported yesterday. Judge Magner's decision is the latest in a series of investigations and other legal actions involving Jacksonville, Fla.-based LPS for allegedly creating false documents for foreclosure cases and misrepresenting amounts homeowners actually owed. The judge granted a motion by the U.S. Trustee's Office for sanctions, and said that she would decide on financial and other penalties against LPS later, after holding a hearing. http://www.reuters.com/article/2011/04/13/financial-regulation-foreclosures-lps-idUSN1330259220110413
Tuesday, April 12, 2011
BANKRUPTCY COURTS PREPARED TO RUN FOR TWO WEEKS IF GOVERNMENT SHUTS DOWN
If Congress is unable to agree on the continued funding of government before April 8th, the Judiciary is prepared to use non-appropriated fees to keep the courts running for up to two weeks, according to the Administrative Office of the U.S. Courts. Once that funding is exhausted, however, federal courts would limit operation to essential activities per their own contingency plans. For the federal bankruptcy courts, this would mean limiting activities to those functions necessary and essential to continue the resolution of cases. All other personnel services would be suspended.
Things of Interest
Florida Supreme Court- Foreclosure Case
http://www.aclu.org/racial-justice/merrigan-v-bank-new-york-petition-challenging-constitutionality-lee-county-fl-foreclo
https://www.aclu.org/files/pdfs/racialjustice/merrigan_appendix_20110407.pdf
http://my.firedoglake.com/cindykouril/2011/04/08/the-new-foreclosure-fraud-cops-on-the-beat-the-aclu/
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/Foreclosure+Release+and+Avail.pdf
60 Minutes
http://www.cbs.com/primetime/60_minutes/video/?pid=CzUKTPuRNBcG_rBEgSMWF27hKjSsZGyP&vs=homepage&play=true
http://www.cbsnews.com/video/watch/?id=7361457n&tag=contentMain;contentBody
mortgage industry response to 60 minutes
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/03_24_2011-60-Minutes.pdf
Foreclosure Defense Attorney- Novel
http://www.latimes.com/entertainment/news/books/la-et-book-20110405,0,6160502.story
Fl Courts
http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa900624829/71641da91f25d292852578650071778b!OpenDocument
Judge Tepper Order
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/Order+of+dismissal+J.+Tepper.pdf
Legal Twlight Zone
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/AdministrativelyClosing.pdf
Failure to Securize
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/case-file.pdf
Bad Service
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/CHANCELOR.pdf
Judge Glenn- MD FL sanctions creditor
New York Times Article
ACLU – Suit Lee County FL
The ACLU has petitioned a Florida appeals court to intervene in Lee County's foreclosure court system, claiming it "rushes cases toward summary judgment or trial without giving homeowners a meaningful opportunity to develop their cases or present defenses."http://www.aclu.org/racial-justice/merrigan-v-bank-new-york-petition-challenging-constitutionality-lee-county-fl-foreclo
https://www.aclu.org/files/pdfs/racialjustice/merrigan_appendix_20110407.pdf
http://my.firedoglake.com/cindykouril/2011/04/08/the-new-foreclosure-fraud-cops-on-the-beat-the-aclu/
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/Foreclosure+Release+and+Avail.pdf
60 Minutes
http://www.cbs.com/primetime/60_minutes/video/?pid=CzUKTPuRNBcG_rBEgSMWF27hKjSsZGyP&vs=homepage&play=true
http://www.cbsnews.com/video/watch/?id=7361457n&tag=contentMain;contentBody
mortgage industry response to 60 minutes
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/03_24_2011-60-Minutes.pdf
Foreclosure Defense Attorney- Novel
http://www.latimes.com/entertainment/news/books/la-et-book-20110405,0,6160502.story
Fl Courts
http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa900624829/71641da91f25d292852578650071778b!OpenDocument
Judge Tepper Order
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/Order+of+dismissal+J.+Tepper.pdf
Legal Twlight Zone
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/AdministrativelyClosing.pdf
Failure to Securize
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/case-file.pdf
Bad Service
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/CHANCELOR.pdf
Tuesday, March 29, 2011
Loan Lockdown: Could Mediation Leave Servicers' Hands Tied?
http://www.mortgageorb.com/e107_plugins/content/content.php?content.8157
Several pieces of servicing-related legislation were introduced in the first month of the 112th U.S. Congress. Among the bills brought to the floor in the Senate was the Limiting Investor and Homeowner Loss in Foreclosure Act of 2010 (S.222), which would amend the Bankruptcy Code and grant courts nationwide the authority to order servicers and borrowers.
Several pieces of servicing-related legislation were introduced in the first month of the 112th U.S. Congress. Among the bills brought to the floor in the Senate was the Limiting Investor and Homeowner Loss in Foreclosure Act of 2010 (S.222), which would amend the Bankruptcy Code and grant courts nationwide the authority to order servicers and borrowers.
Tuesday, March 8, 2011
2nd Miami Trustee charged with Fraud
http://www.bizjournals.com/southflorida/news/2011/03/03/bankruptcy-trustee-marika-tolz-charged.html
Court-appointed receiver and bankruptcy trustee Marika Tolz has been charged with felony fraud.
Tolz stands accused of misappropriating at least $16 million in several court cases, resulting in about $2.4 million in losses to parties in the cases. The alleged fraud and missing funds had been disclosed in mid-2010 in civil investigations; Tolz had been removed from a federal panel of bankruptcy trustees.
Court-appointed receiver and bankruptcy trustee Marika Tolz has been charged with felony fraud.
Tolz stands accused of misappropriating at least $16 million in several court cases, resulting in about $2.4 million in losses to parties in the cases. The alleged fraud and missing funds had been disclosed in mid-2010 in civil investigations; Tolz had been removed from a federal panel of bankruptcy trustees.
Kansas senator files for bankruptcy
"A state senator who serves on the Ways and Means Committee and other financial panels has filed for personal bankruptcy.
Andover Republican Ty Masterson says most of his debts are from a failed business in 2006. The Wichita Eagle reports Masterson lists more than $800,000 in unsecured debts that aren't tied to assets or collateral."
http://hutchnews.com/Localregional/bankruptcy2011-03-06T20-37-16
See even the powerful and rich file bankruptcy, there is no shame in it.
Andover Republican Ty Masterson says most of his debts are from a failed business in 2006. The Wichita Eagle reports Masterson lists more than $800,000 in unsecured debts that aren't tied to assets or collateral."
http://hutchnews.com/Localregional/bankruptcy2011-03-06T20-37-16
See even the powerful and rich file bankruptcy, there is no shame in it.
Monday, February 14, 2011
Hearing Set in Blockbuster Chap. 7 Motion
"A New York judge will hold a hearing on Feb. 24 to address a request by a Blockbuster Inc. creditor to move the Dallas movie and game rental chain's bankruptcy into Chapter 7 liquidation."
http://www.bizjournals.com/houston/news/2011/02/09/hearing-set-in-blockbuster-chap-7.html
http://www.bizjournals.com/houston/news/2011/02/09/hearing-set-in-blockbuster-chap-7.html
Tuesday, February 8, 2011
Bankruptcy Mediation RI
Sent By the ALFN Federal Legislative Subcommittee
Mortgages (BNA 02/01/11)
Bankruptcy Judge Upholds Court's Right To Set Up Foreclosure Mediation Program
The U.S. Bankruptcy Court for the District of Rhode Island, on an issue of first impression, Jan. 28 held in two cases heard together that it has the authority to require home mortgage lenders to participate in the court's loss mitigation program (In re Sosa, Bankr. D. R.I., No. 10-11702 (ANV), 1/28/11); In re Lawton, Bankr. D. R.I., No. 10-11302 (ANV), 1/28/11).
Judge Arthur N. Votolato overruled secured creditor PHH Mortgage Corporation d/b/a PHH Mortgage Service Center's (PHH) objection to debtor Alberto G. Sosa's request for loss mitigation.
Sen. Whitehouse Sees National Model
Sen. Sheldon Whitehouse (D-R.I.) applauded Votolato's decision in a Jan. 28 news release, saying that it "is a win for Rhode Island homeowners. The Rhode Island bankruptcy court's foreclosure mediation program helps distressed families to cut through the red tape of our broken mortgage modification process and has already saved at least 100 homes in our state." Whitehouse said he hopes the decision "will encourage other bankruptcy districts to follow Rhode Island's lead and adopt similar programs."
Whitehouse Jan. 27 introduced the "Limiting Investor and Homeowner Loss in Foreclosure Act" (S. 222) to support these successful programs, and plans to chair a Senate Judiciary Committee hearing Feb. 1 on " Foreclosure Mediation Programs: Can Bankruptcy Courts Limit Homeowner and Investor Losses?" The hearing will examine whether the Rhode Island Program can serve as a model for the rest of the nation.
Case Management Tool
Votolato explained that Rhode Island's Loss Mitigation Program and Procedures Program (LMP), which became effective Nov. 1, 2009, was conceived as a case management tool "designed to encourage the resolution of differences between residential mortgage lenders and their borrowers, and to provide a way for them to access the various federal housing programs available outside of bankruptcy, such as the Home Affordable Modification Program (HAMP)." The program is intended to "start a dialogue, giving the parties nothing more than the opportunity to discuss their respective positions," Votolato said.
The "alleged dire consequences of the implementation of such a Program, as predicted by PHH have not materialized," the court said, and "if any do emerge, they will be judicially addressed forthwith."
Resolve 'Information Exchange Deficit.'
The bankruptcy court explained that the LMP is now operating under the Third Amended Loss Mitigation Program, effective Aug. 23, 2010. The amendments have increased the efficiency and user friendliness of the program, the court said, and simplified the use of recommended forms. Because the debtor's request for loss mitigation was filed April 27, 2010, the court noted that this proceeding is governed by the terms of the Second Amended LMP.
According to the court, the LMP "was implemented in response to the home mortgage and foreclosure crisis generally..." and to address a communication issue. "With communication between parties and a consensual resolution as the objectives, but too often without enough information to assess the likelihood of an agreement, the Court repeatedly had to postpone hearings, order the parties to confer, and report their progress at yet another hearing," the court said. The court called this an "information exchange deficit" that needed to be resolved.
The court explained that under the LMP process, (1) either the debtor or a creditor can initiate the process; (2) if objections are filed, loss mitigation may not begin unless and until such opposition is resolved; (3) after entry of a loss mitigation order, a "Party ... may request that the loss mitigation period be terminated for cause," and (4) if cause for early termination is shown, the loss mitigation process is ended.
PHH's Objections
PHH argued that the LMP (1) enlarged the substantive rights of debtors by creating or granting a previously unauthorized retention option under Bankruptcy Code Section 521(a)(2)(A); (2) violated the relief from stay time constraints under Section 362(d); (3) exceeded bankruptcy court authority under Section 105; and (4) the procedures exceeded the scope of the court's Section 105(a)'s powers.
Amicus Argument
The debtor and amicus counsel, John Rao of the National Consumer Law Center Inc. (NCLC), appointed by the court July 12, 2010, contended that even without a formal loss mitigation program in place, there is "ample authority and precedent for the Court to regulate the administration of cases pending before it." They cited Bankruptcy Code Section 105(d), Fed. R. Bankr. P. 7016, which incorporates Fed. R. Civ. P. 16, and 9014.
Court's Interest in Loss Mitigation
The court noted that it is interested in loss mitigation "to encourage and facilitate home mortgage modifications, and thereby reduce foreclosures" and to "alleviate Court congestion and delay." Noting that the LMP is but one of the court's many case management tools available to manage its caseload, the court said that "[i]f the mediation process is successful, the parties go forward in their new relationship, and the resolved matter is removed from the Court's calendar. If mediation fails, the issues are adjudicated in accordance with applicable law."
The court also noted that the Rhode Island LMP "sets specific time frames and guidelines within which parties may negotiate mortgage modification(s) or any other agreement they deem to be mutually beneficial." Further, it "does not permit the mediation process to just drift, without direction," the court said.
The LMP also requires parties to negotiate within specific deadlines, the court pointed out, and "gives secured creditors the right to speedy hearings, and termination for cause if it is shown that further negotiations would be futile."
Codify 'Ride-Through' Option
The NCLC also noted that the addition of Section 524(j) to the Bankruptcy Abuse Prevention and Consumer Protection Act renders PHH's allegations of conflict regarding Section 521(a)(2) problematic. Section 524(j), the NCLC explained, exempts secured creditors from being in violation of the discharge injunction if they seek or obtain "periodic payments associated with a valid security interest ... [in the real property that is the debtor's principal residence] ..." According to the NCLC, this insertion was to codify the "ride-through" option for distressed debtors who, with creditor assent, continue, post-discharge, to pay their mortgages.
The court noted that several courts have held that the BAPCPA amendments to Section 524(j) and 521(a)(6), with additional changes to Section 362(h) show Congress's intent to eliminate the ride-through option only as to personal property and to permit debtors to take advantage of it with respect to relevant real property without affirming the underlying debt, citing In re Carabello, 386 B.R. 398 (Bankr. D. Conn. 2008). However, the court concluded that it was governed by In re Burr, 160 F.3d 843 (1st Cir. 1998), which holds that the "ride through option is not available with respect to personal property."
The court declined to address whether debtors can force a permanent ride through on their homes without reaffirming the underlying debt. According to the court, the loss mitigation process "in no way authorizes debtors to retain such property without the creditor's consent. Rather, it merely permits the Court to extend the time necessary to perform the stated intention until the parties know whether:
1) a new mortgage contract is being entered into (loan modification), or
2) the mortgage is to be reaffirmed, or
3) the property is being surrendered." Under Rhode Island's LMP, "no new substantive rights are created, nor are any existing Code provisions infringed upon," the court concluded.
'Compelling Circumstances' Exist
PHH also argued that the LMP conflicted with the relief from stay provisions of Section 362. The court disagreed, concluding that Section 362 is not so constraining that such a conflict should result in the nullification of the entire program. Section 362(e), the court explained, authorizes the court to extend the automatic stay for a specific time in "compelling circumstances." The court found that in light of the federal housing programs designed to assist distressed borrowers and their lenders, "compelling circumstances clearly exist to extend the stay for the 60 to 90 days required by the negotiating parties to complete the loss mitigation process."
The court, however, noted that the program is relatively new and it will, as a result, continue to "examine, refine, and amend the LMP as necessary to maintain its utility, integrity, and operation as long as necessary."
Allow Motions for Relief From Stay
To keep the program "as neutral and user friendly as possible," the court said that upon filing of this decision, the LMP would be amended, prospectively, to "allow motions for relief from stay to be filed during the loss mitigation period." The court noted, however, that "if it appears that such motions are being filed prematurely, and/or primarily to drive up costs to debtors, particularly when a consensual loan modification is in progress, the Court will consider, on a case by case basis, whether such fees and costs are appropriate."
Michael W. Favicchio of Warwick, R.I., represents the debtor. Lynn Bovier Kapiskas of Law Offices of Mark L. Smith, North Smithfield, R.I., represents PHH Mortgage Corporation d/b/a PHH Mortgage Service Center. Susan W. Cody and John McNicholas of Korde & Associates, Chelmsford, Mass., represents PHH Mortgage Service Center. John Rao of National Consumer Law Center Inc., Boston, Mass., is amicus counsel.
Mortgages (BNA 02/01/11)
Bankruptcy Judge Upholds Court's Right To Set Up Foreclosure Mediation Program
The U.S. Bankruptcy Court for the District of Rhode Island, on an issue of first impression, Jan. 28 held in two cases heard together that it has the authority to require home mortgage lenders to participate in the court's loss mitigation program (In re Sosa, Bankr. D. R.I., No. 10-11702 (ANV), 1/28/11); In re Lawton, Bankr. D. R.I., No. 10-11302 (ANV), 1/28/11).
Judge Arthur N. Votolato overruled secured creditor PHH Mortgage Corporation d/b/a PHH Mortgage Service Center's (PHH) objection to debtor Alberto G. Sosa's request for loss mitigation.
Sen. Whitehouse Sees National Model
Sen. Sheldon Whitehouse (D-R.I.) applauded Votolato's decision in a Jan. 28 news release, saying that it "is a win for Rhode Island homeowners. The Rhode Island bankruptcy court's foreclosure mediation program helps distressed families to cut through the red tape of our broken mortgage modification process and has already saved at least 100 homes in our state." Whitehouse said he hopes the decision "will encourage other bankruptcy districts to follow Rhode Island's lead and adopt similar programs."
Whitehouse Jan. 27 introduced the "Limiting Investor and Homeowner Loss in Foreclosure Act" (S. 222) to support these successful programs, and plans to chair a Senate Judiciary Committee hearing Feb. 1 on " Foreclosure Mediation Programs: Can Bankruptcy Courts Limit Homeowner and Investor Losses?" The hearing will examine whether the Rhode Island Program can serve as a model for the rest of the nation.
Case Management Tool
Votolato explained that Rhode Island's Loss Mitigation Program and Procedures Program (LMP), which became effective Nov. 1, 2009, was conceived as a case management tool "designed to encourage the resolution of differences between residential mortgage lenders and their borrowers, and to provide a way for them to access the various federal housing programs available outside of bankruptcy, such as the Home Affordable Modification Program (HAMP)." The program is intended to "start a dialogue, giving the parties nothing more than the opportunity to discuss their respective positions," Votolato said.
The "alleged dire consequences of the implementation of such a Program, as predicted by PHH have not materialized," the court said, and "if any do emerge, they will be judicially addressed forthwith."
Resolve 'Information Exchange Deficit.'
The bankruptcy court explained that the LMP is now operating under the Third Amended Loss Mitigation Program, effective Aug. 23, 2010. The amendments have increased the efficiency and user friendliness of the program, the court said, and simplified the use of recommended forms. Because the debtor's request for loss mitigation was filed April 27, 2010, the court noted that this proceeding is governed by the terms of the Second Amended LMP.
According to the court, the LMP "was implemented in response to the home mortgage and foreclosure crisis generally..." and to address a communication issue. "With communication between parties and a consensual resolution as the objectives, but too often without enough information to assess the likelihood of an agreement, the Court repeatedly had to postpone hearings, order the parties to confer, and report their progress at yet another hearing," the court said. The court called this an "information exchange deficit" that needed to be resolved.
The court explained that under the LMP process, (1) either the debtor or a creditor can initiate the process; (2) if objections are filed, loss mitigation may not begin unless and until such opposition is resolved; (3) after entry of a loss mitigation order, a "Party ... may request that the loss mitigation period be terminated for cause," and (4) if cause for early termination is shown, the loss mitigation process is ended.
PHH's Objections
PHH argued that the LMP (1) enlarged the substantive rights of debtors by creating or granting a previously unauthorized retention option under Bankruptcy Code Section 521(a)(2)(A); (2) violated the relief from stay time constraints under Section 362(d); (3) exceeded bankruptcy court authority under Section 105; and (4) the procedures exceeded the scope of the court's Section 105(a)'s powers.
Amicus Argument
The debtor and amicus counsel, John Rao of the National Consumer Law Center Inc. (NCLC), appointed by the court July 12, 2010, contended that even without a formal loss mitigation program in place, there is "ample authority and precedent for the Court to regulate the administration of cases pending before it." They cited Bankruptcy Code Section 105(d), Fed. R. Bankr. P. 7016, which incorporates Fed. R. Civ. P. 16, and 9014.
Court's Interest in Loss Mitigation
The court noted that it is interested in loss mitigation "to encourage and facilitate home mortgage modifications, and thereby reduce foreclosures" and to "alleviate Court congestion and delay." Noting that the LMP is but one of the court's many case management tools available to manage its caseload, the court said that "[i]f the mediation process is successful, the parties go forward in their new relationship, and the resolved matter is removed from the Court's calendar. If mediation fails, the issues are adjudicated in accordance with applicable law."
The court also noted that the Rhode Island LMP "sets specific time frames and guidelines within which parties may negotiate mortgage modification(s) or any other agreement they deem to be mutually beneficial." Further, it "does not permit the mediation process to just drift, without direction," the court said.
The LMP also requires parties to negotiate within specific deadlines, the court pointed out, and "gives secured creditors the right to speedy hearings, and termination for cause if it is shown that further negotiations would be futile."
Codify 'Ride-Through' Option
The NCLC also noted that the addition of Section 524(j) to the Bankruptcy Abuse Prevention and Consumer Protection Act renders PHH's allegations of conflict regarding Section 521(a)(2) problematic. Section 524(j), the NCLC explained, exempts secured creditors from being in violation of the discharge injunction if they seek or obtain "periodic payments associated with a valid security interest ... [in the real property that is the debtor's principal residence] ..." According to the NCLC, this insertion was to codify the "ride-through" option for distressed debtors who, with creditor assent, continue, post-discharge, to pay their mortgages.
The court noted that several courts have held that the BAPCPA amendments to Section 524(j) and 521(a)(6), with additional changes to Section 362(h) show Congress's intent to eliminate the ride-through option only as to personal property and to permit debtors to take advantage of it with respect to relevant real property without affirming the underlying debt, citing In re Carabello, 386 B.R. 398 (Bankr. D. Conn. 2008). However, the court concluded that it was governed by In re Burr, 160 F.3d 843 (1st Cir. 1998), which holds that the "ride through option is not available with respect to personal property."
The court declined to address whether debtors can force a permanent ride through on their homes without reaffirming the underlying debt. According to the court, the loss mitigation process "in no way authorizes debtors to retain such property without the creditor's consent. Rather, it merely permits the Court to extend the time necessary to perform the stated intention until the parties know whether:
1) a new mortgage contract is being entered into (loan modification), or
2) the mortgage is to be reaffirmed, or
3) the property is being surrendered." Under Rhode Island's LMP, "no new substantive rights are created, nor are any existing Code provisions infringed upon," the court concluded.
'Compelling Circumstances' Exist
PHH also argued that the LMP conflicted with the relief from stay provisions of Section 362. The court disagreed, concluding that Section 362 is not so constraining that such a conflict should result in the nullification of the entire program. Section 362(e), the court explained, authorizes the court to extend the automatic stay for a specific time in "compelling circumstances." The court found that in light of the federal housing programs designed to assist distressed borrowers and their lenders, "compelling circumstances clearly exist to extend the stay for the 60 to 90 days required by the negotiating parties to complete the loss mitigation process."
The court, however, noted that the program is relatively new and it will, as a result, continue to "examine, refine, and amend the LMP as necessary to maintain its utility, integrity, and operation as long as necessary."
Allow Motions for Relief From Stay
To keep the program "as neutral and user friendly as possible," the court said that upon filing of this decision, the LMP would be amended, prospectively, to "allow motions for relief from stay to be filed during the loss mitigation period." The court noted, however, that "if it appears that such motions are being filed prematurely, and/or primarily to drive up costs to debtors, particularly when a consensual loan modification is in progress, the Court will consider, on a case by case basis, whether such fees and costs are appropriate."
Michael W. Favicchio of Warwick, R.I., represents the debtor. Lynn Bovier Kapiskas of Law Offices of Mark L. Smith, North Smithfield, R.I., represents PHH Mortgage Corporation d/b/a PHH Mortgage Service Center. Susan W. Cody and John McNicholas of Korde & Associates, Chelmsford, Mass., represents PHH Mortgage Service Center. John Rao of National Consumer Law Center Inc., Boston, Mass., is amicus counsel.
Sunday, January 30, 2011
Special
Chapter 7 Individual or Joint $800* plus fees & costs till March 1,2011 mention this blog. Call 727-410-2705 to schedule an appoitment!
Tuesday, January 25, 2011
House Majority Leader: No Bankruptcy or Bailouts for States
U.S. House of Representatives Majority Leader Eric Cantor (R) said yesterday that he does not support any federal bailouts for states or allowing them to declare bankruptcy, Reuters reported yesterday. "I don't think that [bankruptcy] is necessary because state governments have at their disposal the requisite tools to address their fiscal ills," Cantor said. Last week, Newt Gingrich, the conservative Republican and former House Speaker, said that legislation was being prepared in Congress to let states declare bankruptcy -- an idea that the potential 2012 presidential candidate had been talking up. Gingrich's remarks came despite resistance from states and investors in the $2.8 trillion municipal bond market to such a move.
http://www.reuters.com/article/idUSTRE70N5T420110124
In related news, Connecticut Gov. Dannel P. Malloy (D) is ruling out any thought of Connecticut declaring bankruptcy, despite the state's deficit problems, saying that the idea is wrong-minded and would endanger the municipal bond market, the Associated Press reported yesterday. Malloy said that the marketplace for state and local bonds would disappear if states began filing for bankruptcy. Connecticut's deficit for the new fiscal year is predicted to be $3.4 billion to $3.67 billion.
http://www.bloomberg.com/news/print/2011-01-24/conn-gov-calls-state-bankruptcy-idea-crazy-talk-.html
http://www.reuters.com/article/idUSTRE70N5T420110124
In related news, Connecticut Gov. Dannel P. Malloy (D) is ruling out any thought of Connecticut declaring bankruptcy, despite the state's deficit problems, saying that the idea is wrong-minded and would endanger the municipal bond market, the Associated Press reported yesterday. Malloy said that the marketplace for state and local bonds would disappear if states began filing for bankruptcy. Connecticut's deficit for the new fiscal year is predicted to be $3.4 billion to $3.67 billion.
http://www.bloomberg.com/news/print/2011-01-24/conn-gov-calls-state-bankruptcy-idea-crazy-talk-.html
Monday, January 24, 2011
Judges to Weigh Mortgage Document Destruction
Bankruptcy judges in Delaware are due to hold separate hearings today on requests by two defunct subprime mortgage lenders to destroy thousands of boxes or original loan documents, Reuters reported yesterday. The requests, by trustees liquidating Mortgage Lenders Network USA and American Home Mortgage, come despite intense concerns that paperwork critical to foreclosures and securitized investments may be lost. In the Mortgage Lenders case, the U.S. Attorney in Delaware has formally objected to the requested destruction because loss of the records "threatens to impair federal law enforcement efforts."
http://www.reuters.com/article/idUSTRE70M1YJ20110123?feedType=RSS&feedName=topNews
http://www.reuters.com/article/idUSTRE70M1YJ20110123?feedType=RSS&feedName=topNews
HK bankruptcy petitions up 3.4 pct in Dec vs Nov
HONG KONG, Jan 21 (Reuters) - Hong Kong bankruptcy petitions totalled 704 in December, up 3.4 percent from November but down 22.4 percent compared with the same month last year, government data showed on Friday.
Monday, January 3, 2011
Bankruptcy Technical Corrections Act
On December 23,2010, President Obama signed the Bankruptcy Technical Corrections Act of 2010. The Act corrects spelling errors and incorrect cross-references enacted into law as part of BAPCPA. The Act makes similar changes to bankruptcy–related crimes in Title 18, as well.
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h6198enr.txt.pdf
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h6198enr.txt.pdf
Wednesday, December 22, 2010
Is Bankruptcy Right For You ?
Bankruptcy is a process designed to provide a financial “fresh start” to those with burdensome debts. Bankruptcy protects debtors against collections, garnishments, lawsuits, creditor harassment, and in certain cases avoids repossession of vehicles and foreclosure of homes. At the end of the process, bankruptcy results in a discharge, releasing the debtor from personal liability from specific debts, prohibiting creditors from collecting on those debts in the future, and ultimately gives the debtor peace of mind and a clean slate from which to start anew.
While nobody wants to file bankruptcy, it is important to understand that it is not the goal of the bankruptcy code to take away all of your assets, leaving you living in a cardboard box under a bridge. The code has certain exemptions, allowing you to keep assets such as home equity, vehicles, tools of the trade and the like - as well financial assets such as retirement funds.
There are two primary forms of consumer bankruptcy: Chapter 7 (liquidation) and Chapter 13 (reorganization). The decision of whether to file under Chapter 7 or Chapter 13 requires thorough analysis and may vary from case to case.
Bankruptcy is a process designed to provide a financial “fresh start” to those with burdensome debts. Bankruptcy protects debtors against collections, garnishments, lawsuits, creditor harassment, and in certain cases avoids repossession of vehicles and foreclosure of homes. At the end of the process, bankruptcy results in a discharge, releasing the debtor from personal liability from specific debts, prohibiting creditors from collecting on those debts in the future, and ultimately gives the debtor peace of mind and a clean slate from which to start anew.
While nobody wants to file bankruptcy, it is important to understand that it is not the goal of the bankruptcy code to take away all of your assets, leaving you living in a cardboard box under a bridge. The code has certain exemptions, allowing you to keep assets such as home equity, vehicles, tools of the trade and the like - as well financial assets such as retirement funds.
There are two primary forms of consumer bankruptcy: Chapter 7 (liquidation) and Chapter 13 (reorganization). The decision of whether to file under Chapter 7 or Chapter 13 requires thorough analysis and may vary from case to case.
Call (727) 410-2705 for an appointment today!
Subscribe to:
Posts (Atom)
Posts
