In remanding a case back to Arizona state court, an Arizona district court decision found that the case was never properly removed to the federal district court, and it may not have jurisdiction over the matter.   Great Western Bank v. Clear Vision Express Tucson 2 LLC, 2021 U.S. Dist. LEXIS 193166, case No CV-21-00883-PHX-MTL (Dist. Ariz. 6 October 2021).  While this is a matter that does not arise often, it illustrates the problems that can arise when proper procedures are not followed.  The case started in Arizona Superior court alleging a default on a $2.3 million promissory note secured by commercial real estate in Arizona, and included a number of guarantors as defendants.  The loan documents specified Maricopa County Arizona choice of venue.  Avery, the state court defendant then filed for relief under chapter 11 in the Southern District of Texas.  Avery filed a notice of removal in the state court action requesting removal to the Texas Bankruptcy Court, and Great Western sought to remand the case back to Superior Court, asserting that the removal did not comply with 28 U.S.C. §1452(a). Avery noted that it had tried to file the removal to the bankruptcy court for the district of Arizona, but that court refused to accept an adversary filing for a bankruptcy case pending in a bankruptcy court outside of Arizona.  The Texas bankruptcy court then transferred the adversary proceeding to the District Court of Arizona, which requested that the parties file with it the pleadings in order to create a record in the matter.  While the parties presumed that the above effected a transfer of the case and pending motions to the Arizona District Court, both the Arizona District Court and the Maricopa County Superior Court disagreed, with the Superior Court continuing to hold hearings on the matter.  The District Court first examined the removal statute.  28 U.S.C. 1452(a) permits removal of any claim or cause of action in a civil action to the district court where such civil action is pending, if the district court has jurisdiction  of such claim or action under 28 U.S.C. §1334.  Normally, to remove an action from state court to a bankruptcy court in a different district, the removing party must first remove the state court case to the federal district court within the district where the state court matter is pending,1 and then should seek to have the district court refer the matter to the bankruptcy court within that district, then seek to have the bankruptcy court transfer the matter to the district where the bankruptcy case is pending.  Failure to properly follow these procedures may create a jurisdictional issue.2  The court noted Avery should have first filed the notice of removal with the Arizona District Court, which would have then referred the matter to the Arizona Bankruptcy Court, and then Avery could have filed the motion to change venue to the Texas bankruptcy court.  Failing to follow the procedure caused confusion and slowed the proceedings in three different courts.  Since it is unclear the court has jurisdiction, the most equitable solution is to remand the matter back to the Arizona Superior Court under 28 U.S.C. 1452(b).  This statute permits remand of any action removed under §1452(a) for any equitable grounds.  The equitable basis for removal includes that the predominant issues are all issues of state law, the complaint raises only state law causes of action, the counterclaim is likewise a state law claim, the nature of the applicable law weighs in favor of remand to state court, and the loan documents provide the Maricopa County, Arizona to be the choice of venue. There also is a question of forum shopping, as only one of the ten defendants filed bankruptcy in Texas.   The only alleged jurisdictional basis for removal is 28 U.S.C. §1334.  No court has yet ruled on the relatedness of the Defendant's claims to the debtor's estate.  If the matter is core to the bankruptcy proceeding, this would weigh significantly against equitable remand, but no allegation has been made that such matter is core.  Further, remand could reduce the burden on the bankruptcy court.   Finally, comity favors removal, as the collateral and guarantors are all located in Arizona, and all claims are issues of Arizona state law.  The court thus remanded the case back to the Arizona Superior Court.1 The court cites to Roberts v. Bisno (In re Bisno), 433 B.R. 753, 757 (Bankr. C.D. Cal. 2010) for support of this proposition, however, the Bisno case actually states the first step is to refer the matter to the bankruptcy court whose district encompasses the state court where the case is pending, then have that bankruptcy court transfer to the district court where the bankruptcy is pending.  Id. at *7-8.↩2 Compare In re Bisno, Supra, finding improper procedures only resulted in a curable venue defect, to Peterson v. BMI Refractories, 124 F.3d 1386, 1388 (11th Cir. 1997) (finding a procedural defect) and Furr v. Barnett Bank (In re S & K Air Power, Inc.), 166 B.R. 193, 195 (Bankr. S.D. Fla. 1994) finding a lack of jurisdiction.↩Michael BarnettMichael Barnett, PA506 N. Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com

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Larry Cohen, a lawyer from Vermont and adjunct faculty member at multiple law schools used movie clips to teach legal and judicial ethics. Trying to describe movie clips without being able to play them may be a fool's errand but I will do my best.  I am sure that I didn't capture everything possible but at least this is some ethical food for thought.In Anatomy of a Murder (1959), Jimmy Stewart is defending a serviceman accused of murder. The prosecutor effectively cross-examines Stewart's expert witness doctor, getting him to concede that the defendant may have known right from wrong. The prosecution then calls for a conference in chambers and asks Jimmy Stewart if he wants to change his client's plea from not guilty to guilty. The prosecutor is really obnoxious. However, Jimmy Stewart pulls out a law book and hands it to the judge. The opinion he wants is marked by an object which the judge recognizes as a frog gig. The judge and Jimmy Stewart talk about the joys of hunting frogs and Stewart offers to let the judge keep the frog gig. The chastened prosecutor realizes that he has been outfoxed by Stewart and says "We're hooked."MPRC 3.5(a): A lawyer shall not:(a) seek to influence a judge, juror, prospective juror or other official by means prohibited by law;While we normally think of Jimmy Stewart as the good guy, here he is improperly trying to influence the judge. In And Justice for All (1979), there is a funny scene where there is a recess in a case. The defendant, who is on trial for selling fake lottery tickets, walks over to the prosecution table and begins eating the tickets. Someone points this out to the prosecutor and pandemonium ensues. The judge walks in and fires a gun to restore order.MPRC 3.4 A lawyer shall not: (a) unlawfully obstruct another party' s access to evidence or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act;The way the scene plays out, the defense lawyer does not notice his client eating the lottery tickets. However, if he observed this and didn't say anything, he would violate Rule 3.4(a).MPRC 8.3(b) A lawyer who knows that a judge has committed a violation of applicable rules of judicial conduct that raises a substantial question as to the judge's fitness for office shall inform the appropriate authority.Arguably the lawyers would have an obligation to report the gun-toting judge. I can't find a specific rule that says that a judge should not fire a gun in open court to maintain order. However, I have to think there must be one.In The Verdict (1982), a lawyer is examining a witness. The judge takes over and begins cross-examining the witness. The judge gets the expert to admit a point unfavorable to the plaintiff and cuts off the examination. The exasperated lawyer says something to the effect of if you're going to try my case for me, I wish you wouldn't lose it for me.Fed.R.Evid. 611- Mode and Order of Examining Witnesses and Presenting Evidence (a) Control by the Court; Purposes. The court should exercise reasonable control over the mode and order of examining witnesses and presenting evidence so as to: (1) make those procedures effective for determining the truth; (2) avoid wasting time; and (3) protect witnesses from harassment or undue embarrassment.Model Code of Judicial Conduct Canon 1A judge shall uphold and promote the independence, integrity, and impartiality of the judiciary, and shall avoid impropriety and the appearance of impropriety.The court is allowed to exercise "reasonable" control over examining witnesses. Taking over the examination does not seem to be reasonable. Certainly cutting off the examination and undercutting the lawyer's case violates the duty to maintain the integrity and impartiality of the judiciary.MRPC 3.5 is titled Impartiality and Decorum of the Tribunal. However, there is nothing in the rule which prohibits counsel from impugning the court other than Rule 3.5(d) which prohibits a lawyer from engaging in conduct designed to disrupt a tribunal. I think this one probably falls within the court's inherent ability to preserve the dignity of the proceedings.  Snow Falling on Cedars (1999) involves a murder trial. The context is an island in the Pacific Northwest where Japanese Americans were interned during World War II. The prosecutor is aggressively cross-examining the Japanese American defendant and his examination goes over the line. The defense attorney makes a mild objection which the judge sustains. The Judge then lectures the prosecutor and tells him to ask a proper question. When the prosecutor hesitates, the Judge says "Shame on you" and tells him to sit down.This would also invoke Judicial Canon 1 since the Court is making a personal attack on the prosecutor. There are so many teachable moments in My Cousin Vinny (1992). In the scene we watched, the judge calls Vincent Gambini back into chambers and tells him that the New York Bar has no record of a Vincent Gambini ever having tried a case. Vinny says that Vincent Gambino is just his stage name and that his real name is the name of a prominent lawyer. When he recounts this to Mona Lisa Vito, she asks him if he is stupid, because the lawyer's name he gave died the week before.MRPC 3.3(a) A lawyer shall not knowingly: (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;MPRC 3.5(b): A lawyer shall not:(b) communicate ex parte with (a judge) during the proceeding unless authorized to do so by law or court order;MPRC 5.5(a) A lawyer shall not practice law in a jurisdiction in violation of the regulation of the legal profession in that jurisdiction, or assist another in doing so.The interesting point here is that although Vinny Gambino has an ex parte communication with the court, he was invited to do so by the judge. Thus, he was arguably authorized to do so. Obviously, making a false representation to the judge and practicing without permission in a jurisdiction are bad. There is a scene from an episode of Law and Order where a defense lawyer attempts to do an impromptu demonstration that an Asian American witness cannot distinguish between European Americans. The judge calls the lawyers into chambers. The judge tells him he cannot do the demonstration and asks if he has an expert. The lawyer says that he does. The prosecution objects that the witness has not been disclosed. The defense lawyer says he just thought of it. The judge then tells him that he thinks he is lying and that if he can ever prove it, there will be consequences.The impromptu demonstrate may violate Rule 3.5(d) about not engaging in conduct intended to disrupt a tribunal.Under Rule 8.3 (a),  A lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer's honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority." However, here it is the judge who believes the lawyer has engaged in conduct raising a substantial question about his honesty. Perhaps the prosecutor, having heard the judge's admonition might be under a duty to report his counterpart. In Inherit the Wind (1960), the jury is just about to come back in. Someone comes up to the judge and says "Let this thing simmer down. Don't forget November's not too far off." Also, there is a radio reporter broadcasting live from in front of the bench.MRPC 3.5:  A lawyer shall not:(a) seek to influence a judge, juror, prospective juror or other official by means prohibited by law;(b) communicate ex parte with such a person during the proceeding unless authorized to do so by law or court order;Assuming that the person who approaches the judge is a lawyer, he has violated Rule 3.5(a). If he is a lawyer in the proceeding, he has violated Rule 3.5(b) as well. Model Code of Judicial Conduct Canon 3:  A judge shall conduct the judge’s personal and extrajudicial activities to minimize the risk of conflict with the obligations of judicial office.In this case, the Judge has complied with Canon 3 by not letting the appeal to his re-election affect his ruling. I think there must be something wrong with letting the radio broadcaster do so from right in front of the bench but I can't find the rule. If anyone has additional suggestions for ethical violations in these scenarios, please send them to me and I will be happy to give you credit. 

 ABI Editor at Large Bill Rochelle hosted a group of three panels discussing three different legal issues. The issues included one legitimate circuit split, a dispute between lower courts and a divided state court panel.RecharacterizationIssue one was whether recharacterization of debt is an issue of state or federal law. Recharacterization is where an obligation nominally characterized as a debt is recharacterized to be an equity contribution.  Recharacterization was first recognized in the Supreme Court case of  Pepper v. Litton, 308 U.S. 295 (1938). The Third, Fourth, Sixth, Tenth and Eleventh Circuits all state that the issue is one of federal law while the Fifth and Ninth Circuits hold that it is a matter of state law.  Luke Burbank argued the minority position arguing that where there is no clear and express bankruptcy authority, that state law would control and that state law defines property rights. Additionally, while each of the circuits applying the majority rule applies a multi-factor test, none of these tests are the same.Camisha Simmons argued the majority position stating that Congress granted Bankruptcy Courts the exclusive power to establish the priority and classification of claims. Priorities are governed by both sections 507 and 726 and Bankruptcy Courts have the authority to use their equitable powers to reclassify claims.  Ms. Simmons argued that her position was supported by the fact that equitable subordination, one of the remedies allowed by Pepper v. Litton, made it into the code. The Supreme Court granted cert to resolve the split but denied the writ as improvidently granted. PEM Entities LLC v. Levin, 138 S. Ct. 41 (2017) did not. Judge Jeffrey Hopkins ruled in favor of the minority position saying that he felt like Butner v. United States, 40 U.S. 48 (1979), which announced the rule that state law controls in the absence of a clear bankruptcy statute, but said he hoped that Supreme Court would give bankruptcy judges more  equitable power. Venue for Small Preference ClaimsIssue two was whether small dollar preference claims must be brought in the defendant's home district. 28 U.S.C. Sec. 1409(b) states that:  (b)Except as provided in subsection (d) of this section, a trustee in a case under title 11 may commence a proceeding arising in or related to such case to recover a money judgment of or property worth less than $1,000 or a consumer debt of less than $15,000, or a debt (excluding a consumer debt) against a noninsider of less than $25,000, only in the district court for the district in which the defendant resides.The legislative history to this statute makes clear that it was intended to require trustees to bring small preference suits in the defendant's home district. However, Congress left out the phrase "arising under" from the statute. There are three types of bankruptcy jurisdiction: arising under, which means created by the Bankruptcy Code, "arising in" which means a type of action which could only arise in a bankruptcy case and "related to" which means matters related to a bankruptcy case which do not arise under the Code and do not "arise in" a case.  The problem is that preference claims are defined by 11 U.S.C. Sec. 547, which is clearly a part of the Code. Thus, the question is whether the omission of "arising under" from the statute means that small preference claims can be brought wherever the trustee chooses. The Ninth Circuit BAP held that the statute did limit small preference cases, Muskin, Inc. v. Strippit Inc. (In re Little Lake Indus.), 158 B.R. 478 (B.A.P. 9th Cir.1993). while a recent opinion from Judge Robert Grossman, Mendelsohn v. Central Garden & Pet Co. (In re Petland Discounts Inc.), 20-08088 (Bankr. E.D.N.Y. 1/26/21) read the statute literally to say that preference suits were not covered.  Several unpublished opinions in the Western District of Texas also state that venue of preference suits is not limited.A young couple, Alexandra Duggan and Robert Miller, argued opposite sides and traded good-natured insults with each other.  Both advocates struggled to find an example of a dispute which would arise in a case under Title 11 but did not arise under Title 11 itself. While the legislative history suggests that the statute was intended to cover preference suits, "arising under" is used in each of the other four subsections of Sec. 1409 suggesting that its omission was intentional. However, a preference suit can only arise if there is a case under Title 11. A distinction not mentioned by the parties is that the bankruptcy courts have exclusive jurisdiction over bankruptcy cases but only concurrent jurisdiction over arising under, arising in and related to matters. Thus, although a preference suit may only be brought if there is a case under Title 11, it need not be brought in that case. While the banter between the couple was amusing, the straightforward answer appears to be that Congress committed legislative malpractice not once but twice when it drafted this section and then when it amended it to raise the floor for small actions to $25,000. The net result seems to be that a small action to recover an account receivable must be brought in the defendant's home forum but a small preference action need not. Pre-emption of State Law Tortious Interference Claims Issue three was whether federal law preempts third party tortious interference claims. This was not even a split between different courts. The New York Court of Appeals rendered a decision in Sutton 58 Assocs. LLC v. Pilevsky, 36 N.Y.3d 297 (N.Y. 2020), petition for cert. filed (U.S. Apr. 20, 2021) (No. 20-1483) holding that federal law does not preempt a tortious interference suit between non-bankrupt parties arising out of actions taken in connection with a bankruptcy case. The New York Court of Appeals is New York's highest appellate court. A petition for cert was filed supported by an amicus brief from eminent law professors, but the case settled before the Supreme Court could decide whether to take the case.  In this case, the split was between the majority opinion finding that there was no preemption and the dissent holding that there was.The case involved a transaction intended to be bankruptcy proof. A housing project borrowed $150 million from a lender. The loan covenants prohibited the debtor from incurring other debt and acquiring other property. Before bankruptcy, a group of non-debtors loaned the debtor $50,000 to hire bankruptcy counsel, transferred three apartment units into the debtor and acquired an indirect 49% interest in the debtor. All of these actions violated the loan covenants. They also kept the debtor from being a single asset real estate entity with no unsecured creditors. The lender eventually got the property back but claimed that it lost value due to the bankruptcy filing. It sued the debtor's would-be white knights for tortious interference.Keith Wofford of White & Case argued very persuasively for preemption. He pointed out that there are two types of preemption,  preemption of the field and obstacle preemption. When a party can be sued for actions taken in connection with a bankruptcy case, an obstacle to bankruptcy has been created. Although Mr. Wofford did not say so, all bankruptcies involve a breach of contract. If the loan covenants say that filing bankruptcy is a default, could debtor's counsel be sued for filing the case. Shelly DeRousse of Freeborn & Peters argued (convincingly in my opinion) that bankruptcy does not preempt all actions against anyone related to a bankruptcy. This is why suits against guarantors are neither stayed nor preempted.  She also argued that the offending conduct all occurred prior to the bankruptcy being filed and thus was not a part of the bankruptcy. Next she argued the presumption against preemption.  Finally, the argued that the Bankruptcy Code does not create a remedy for bad faith filings against third parties. Therefore, if state law remedies are preempted, there is effectively no remedy. In his rebuttal, Mr. Wofford argued that being allowed to bludgeon the supporting cast of a bankruptcy under state law will undermine Congress's intent to allow the bankruptcy remedy. Who is right? We will not find out because the parties settled and the petition for cert was withdrawn. 

Judge Scott Clarkson (Bankr. C.D. Cal.) gave a fascinating talk on the art, loves and insolvency of Rembrandt van Rijn. While this talk may not have a lot of practical import, Judge Clarkson tells a great story.IntroductionRembrandt van Rijn was born in Leyden in the Dutch Republic in 1603. The Dutch Republic dates back to the late 1500s and is the oldest continuous republican government in Europe. The town of Leyden, where he was born, was besieged by the Spanish and held them off. In return, William of Orange offered them ten years free from taxes but they asked for a university instead. The young Rembrandt attended Latin school where, among other things, he learned Bible stories that would form some of his later work. He was apprenticed to an artist and also attended university. To be a painter and a printmaker, he had to understand chemistry to work with oil paints and the properties of metal to work with copper plates.As an artist, he was known as a hyper realist because he painted what he saw. It was said of him "he seeks the ugly." He learned to create depth in his art by using light and shadow in a technique called chiaobscuro. In his paintings, the light is generally shown on the left hand side of the canvas because he was right handed and didn't want to smudge the art. About 10-20% of his paintings were self portraits so that he wouldn't have to pay a model.Rembrandt was originally quite an astute businessman. He would sell an oil painting for 400 guilders plus materials, which was a years' wage for a workman. He also did commercial art. Different guilds would pay him to do a painting including their members to be hung in their guild hall. If someone didn't pay his share, he would be painted out of the picture. One of these corporate paintings might sell for 1,000 guilders.  His painting The Night Watch, done for a local militia, was controversial because it showed the figures in action instead of rigorously posed. While this made for a more exciting painting, it did not showcase his patrons who were paying for the work.He also developed printmaking as a business. Unlike other artists, he would etch directly onto the copper. A print was more affordable to the general public, going for 20-30 guilders each but he could make many copies. His etching of Christ Healing the Sick was so popular that prints went for 100 guilders a piece.  Bankruptcy of RembrandtRembrandt filed bankruptcy in 1656. One cause was his complicated tragic personal life. His first wife died from disease shortly after their son was born. Under Dutch law, he was required to pay half of his assets to his son. His lawyer convinced the wife's family to delay this payment. He brought in a wet nurse named Gertie to feed the child and she became his lover. Later, he took up with his much younger housekeeper and sent Gertie away. She took him to court and was awarded an allowance of 200 guilders per year. However, with the connivance of Gertie's family, she was sent to an asylum and he only had to pay the cost of her confinement. His house was also a cause of his downfall. While many scholars thought that buying the house caused his losses, Judge Clarkson concluded otherwise. He bought the house with a Consol or perpetual bond. He only paid one-fourth of the cost of the home down and then had to pay 5% interest on the bond without the principal ever coming due except in the event of default. This was essentially an annuity and was a common financial vehicle. Thus, although the purchase of the house did not lead to his bankruptcy, the fact that the house was sinking and tilting did. All of the neighbors agreed to jointly pay to stabilize the row of houses. However, Rembrandt did not pay his share.He also lost money as his art went out of fashion. He was sued by purchasers of his art who felt that they did not get what was promised or did not receive anything in the case of a painting lost during a time of war.  He also was a profligate spender. He would go to sales and buy up whatever he thought he could use in his paintings, such as a suit of armor.Realizing that he was in dire financial straits, he went to Orphans Court and got an order to transfer the house to his son. However, to do that, he had to clear the mortgage from the property. To do this, he borrowed 7,000 guilders from the Mayor, which he did not pay back. Facing pressure from lawsuits, his neighbors and the Mayor, he filed a cessio bonorum, which means a cessation of goods. He could not receive a discharge but he would avoid jail. Under the cessio bonorum, he surrendered his goods and agreed to pay all of his future earnings to his creditors above the amount of bare necessities. This combined the most burdensome elements of today's Chapter 7 and Chapter 13. His trustee sued his son to get the house back under Amsterdam's recently passed fraudulent transfer law. The trustee won but the judgment was reversed before the funds could be disbursed because the fraudulent transfer law was not retroactive. Although he lost the house, the money that he and his son received back was more than the total of what he had paid on the house. Thus, he achieved what many debtors today seek--a free house--although he did not get to keep it.To avoid the requirement that he pay his future earnings to his creditors, his mistress and son formed a corporation and Rembrandt worked for it, receiving only enough pay to cover his necessities. After his bankruptcy, he had new financial success. In 1658, he painted Phoenix Rising. It was said that the Phoenix represented Rembradt. He died in 1669 at the age of 63.It is clear that Judge Clarkson is passionate about art and history and he told a good yarn. It also had enough bankruptcy content to (I hope) qualify for CLE credit. 

I have attended and blogged about this conference for a number of years. I remember being captivated by Paul Begala talking about Barack Obama's belief in American Exceptionalism and Gene Wedoff being honored for his service as a judge. This made me realize that NCBJ is a conference where really interesting people talk about important stuff. It was great to be back in person again. This year's conference was a hybrid model. About 750 participants attended in Indianapolis while additional participants attended virtually. For those of us who attended in person, we were propping up the struggling hospitality industry which has taken a hit during Covid. The conference was held in a cluster of Marriott hotels in Indianapolis. I was struck by how many of the hotel restaurants had closed. My biggest takeway was the individual stories offered, many of which I will include in posts on specific panels. Judge Christopher Sontchi from the District of Delaware spoke about how he conducted court from his dining room table where he did not wear his judicial robes. He said that in retrospect this was probably a mistake. Judge Harlan "Cooter" Hale said that when he held court in Wichita Falls, Texas, the judicial robe of his predecessor, Judge John Ford was still hanging in the courthouse and he chose to wear it out of respect for his predecessor. Jimmie McMillian of the Penske Organization spoke about his experience flunking out of college and working at Best Buy and Firestone until he could pay off his student loan obligations, return to college and graduate law school. Judge Christopher Lopez spoke about his experience attending college and getting his first credit card which he maxxed out and learned about minimum payments. He spoke about his experience going into a bank serving the minority community and speaking to the president of the bank who gave him a car loan and financial education. All of these stories remind me that the people we see at the top of our profession have had very human experiences on their way to success in the bankruptcy profession.I was really struck by how many people came up to me to offer condolences for my partner, Barbara Barron, who passed away this year. Barbara was someone who gave me a chance when I needed it and she touched many other people. It did my heart good to share memories with so many people who memories of their own.This conference I learned about a type of judge I did not know about before. In Guam and the Northern Mariana Islands, the same person serves as U.S. District Judge and Bankruptcy Judge. These judges are nominated by the president and receive Senate confirmation but serve a limited term. I had the great pleasure of speaking with Judge Frances Tydinco-Gatewood from Guam who certainly travelled the greatest distance to attend the conference. By way of contrast, the U.S. District Judges in Puerto Rico are full-fledged article III judges by virtue of the deal they cut with the United States. I really enjoyed the conference event at the Indy 500 race track. As a young boy playing with Hot Wheels cars, I used to watch the Indy 500 race every Memorial Day. This time I got to actually take a lap around the track at 120 mph. I also enjoyed the Dine Around program. I got to enjoy a dinner at a nice Italian place with Judge Mindy Mora and her husband, Beth Friedman from KCC, Julie Harrison from Norton Rose Fulbright and Martha Wyrick from Haynes & Boone. Ms. Harrison and Ms. Wyrick were both part of NCBJ's NextGen program. It was nice to meet some future leaders in the bankruptcy profession, especially since they were both from Texas!

 The National Conference of Bankruptcy Judges is back this year in Indianapolis with a hybrid format for in person and virtual attendees. About 750 in person attendees helped to prop up the local hospitality industry. Every year the conference kicks off with the Broken Bench presentation, an overview of hot issues in the bankruptcy world. This year's program was done in a Jeopardy format with host Chief Judge Pamela Pepper (E.D. Wis.). This was a fun presentation of bankruptcy trivia. While this post may not help your day to day practice, I hope you enjoy it.In the section introducing the contestants, we learned that Demetra Liggins once struck up a conversation with Tyne Daly on a New City bus. Nancy Rapoport is a competitive ballroom dancer. She experienced a wardrobe malfunction when her helper failed to secure the clasp on her gown and it started slipping down while she danced. Judge Catherine Furay (Bankr. W.D. Wisc.) both collects and designs bobbleheads.Sex and ReligionOne of the jeopardy categories was sex and religion.  One question was what should teenagers do and what bankruptcy judges can do in an appropriate case? Abstain. What is illegal except in Stockholm but required in Chapter 11? Solicitation. What must debtors provide and young people should use? Adequate protection.  What do people seek in church and debtors can use to reclaim exempt property encumbered by liens? Redemption.Famous DebtorsAnother category was famous debtors. MC Hammer was a batboy for the Oakland As before he became a famous rapper and later a Chapter 11 debtor. Cindy Lauper filed bankruptcy and was a waitress at IHOP before becoming a Grammy-winning artist.  NFL star George Foreman filed bankruptcy before the started selling his famous grills. Filmmaker Francis Ford Coppola filed bankruptcy not once but twice. Abe Lincoln filed bankruptcy in 1833 after his mercantile store failed and his partner died. He was required to surrender his horse and pay back his creditors over 17 years.  Charles Dickens's father was confined to Marshalsea Debtor's Prison. He remained confined until his mother died and he received enough money to pay his debts.The Pittsburg Penguins are the only sports franchise to have filed bankruptcy twice.Brick and MortarIn the questions on bricks and mortar, we learned that ToysR'Us is returning to the U.S. in Macy's stores. They had previously re-opened two locations which had to close due to covid. However, they retain a $2 billion foreign and ecommerce operation.Some communities are seeking to convert malls to affordable housing although they face zoning restrictions. In 2010, Blockbuster had 9000 stores in all 50 states. However, by the late 2000s Blockbuster began losing its grip on the retail rental market.  In 2019, its next to last store, located in Australia closed. There is still one store remaining in Bend, Oregon which survived covid by renting itself out as an Air BnB for 90s themed parties.Pier 1 filed bankruptcy just as covid hit. It "temporarily" closed all of its stores only to liquidate. It survives as a purely online retailer.Home Depot and Lowe's are two big box retailers which have not only survived but have thrived during covid.EthicsWizenberg v. Wizenberg (In re Wizenberg), 838 F. App’x 406 (11th Cir. 2020), involved an adversary proceeding between two brothers. The pro se Debtor (who was a lawyer) was sanctioned in the amount of $9,850 under 28 U.S.C. Sec. 1927 for shushing opposing counsel and filing lengthy and superfluous documents. Among other things, he  filed a 69-page motion to dismiss the complaint, a 153-page motion for reconsideration of the bankruptcy court’s order denying him summary judgment, and a 326- page opening statement (including exhibits) prior to the trial on the adversary complaint. His filings also included a "pointless" Haiku poem which read “All know: talk is cheap; Liars can claim anything; No evidence?! Balk!”By now, my lawyers have heard about the Texas lawyer who appeared in a Zoom hearing with a cat filter. The judge may have been purr-turbed. The attorney failed the duty of competence (including technical competence under Model Rule 1.1, comment a, but did show candor to the court when he told the court, "I'm not a cat." This was not part of the program, but I did hear the story of an attorney who fell asleep on his couch during a hearing and missed the opportunity to object to questions asked of his client. When a lawyer says, "with all due respect," they mean "with all due contempt." I made this mistake as a young lawyer and received an immediate dressing down from a U.S. District Judge. I have not used the phrase since then.StatisticsDuring 2020, Delaware led the nation with 1,660 chapter 11 filings. Close behind was the Southern District of Texas with 1,363.In 2020, Louisiana and Massachusetts each saw a 42% drop in filings./Notable and QuotableMedical bills outweigh all other types of debt in bankruptcy combined.Sen. Elizabeth Warren has stated that for every family that files bankruptcy, there are fifteen others who could benefit from bankruptcy.St. John's University School of Law  has filed an amicus brief in every bankruptcy Supreme Court case since 2006.Promesa is Spanish for promise and is also the name of the law allowing Puerto Rico to restructure its debts.

    A class action suit was filed against PNC Bank alleging violations of the Truth in Lending Act and Real Estate Settlement Procedures Act for failing to send ongoing monthly statements during and after the  chapter 7 bankruptcy case despite the HELOC being reaffirmed.  The magistrate judge issued a report and recommendation granting PNC's request to dismiss the case, but the District court rejected the recommendation.  The chapter 7 was filed in June 2018, and the HELOC reaffirmed in November 2018. The discharge was then also obtained in November 2018.  PNC has failed to send statements since at least May 2019 and appears to have continued through the decision in September 2021.  Counsel for Debtor notified PNC twice of it's failure to send statements but PNC refused to recommence sending statements.  Under TILA the HELOC constitutes an open end consumer credit plan per 15 U.S.C. §1637.  Subsection (b) of such section requires a statement for each billing cycle unless sending such statements would violate federal law.  12 C.F.R. §1026.5(b)(2)(i) ('Regulation Z').  The automatic stay of 11 U.S.C. 362 prohibits certain acts as to property of the estate or debtor, but per 11 U.S.C. 362(c)(1) the stay expires when the case is closed or a discharge is granted or denied.  As the discharge had been granted, even though the case had not yet been closed, the stay under §362(c) had expired.    RESPA applies to federally related mortgage loans, 12 U.S.C. §2605(e).  The statute defines these to include a loan secured by a lien on residential property designed principally for the occupancy of up to four families.  Regulation X, 12 C.F.R. §1024.31 excludes open-end lines of credit such as HELOC's from loans subject to this requirement.  The Magistrate recommended dismissing the count based on this exclusion.  The plaintiffs contended that the regulation impermissibly narrowed the scope of the statute, and that such regulation must fail as conflicting with the statute.  The District Court agreed with this argument, finding that the HELOC at issue was within the scope of RESPA.    The court also rejected PNC's arguments that it's act or omission was taken in good faith, finding that such defenses are affirmative defenses which must be plead and proven per 15 U.S.C. 1640(f); and that PNC did not show that a defense exists that legally defeats the claim for relief.  The District Court rejected the magistrate's recommendation and denied the motion to dismiss the case.Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com

Need debt relief in PA? Bankruptcy gives you a fresh start debt free and stress free! Can you get a fresh start through debt settlement in Philadelphia? Sometimes. But if you have multiple creditors it will be difficult to negotiate debt forgiveness with each of them.  Filing Chapter 7 bankruptcy or Chapter 13 bankruptcy brings all of your creditors to the table, allowing you to get unsecured debt discharged and renegotiate your secured debt, like your mortgage and your car loan! Concerned about what life will be like after bankruptcy? You needn’t be. Read on to find out what a bankruptcy discharge does for you, how bankruptcy affects your credit, and how you can start over after bankruptcy by renting or buying a house or buying a car. What is a Bankruptcy Discharge? The discharge in bankruptcy is an important part of how you get your fresh start. Your discharge order will provide that most of your unsecured debt, like credit cards, medical debt, and personal loans, is discharged – meaning, you are no longer personally responsible for paying off that debt.  Generally, alimony and child support are exempt from discharge and those obligations remain after the bankruptcy closes.  Student loans are rarely dischargeable. Chapter 7 and Chapter 13 both offer a discharge of unsecured debt, but Chapter 13 offers additional opportunities to: cram down a car loan and pay the car off in your 3- to 5-year plan;strip off a second mortgage and get it discharged as unsecured;get government fines and fees and IRS taxes discharged, under certain conditions;cure mortgage, car loan, or support arrears over your 3- to 5-year plan. How Long Does a Bankruptcy Stay on Your Credit Report? Up to ten (10) years. However in many cases, you can rebuild credit much quicker if you follow the instructions of the attorney who is filing your bankruptcy case. How Can I Improve My Credit Score After Bankruptcy? Again, the fact that you filed a bankruptcy petition will remain on your credit report up to ten years if you filed a Chapter 7 case, and seven years after the date of filing if you filed Chapter 13 and completed your plan, which for most Chapter 13 debtors is two years after receiving a discharge.   Many people who file bankruptcy successfully find that, since they had a low credit score prior to filing because of all their past-due debt, their credit score improves quickly after they receive a discharge because the discharge improved their debt-to-income ratio so dramatically. There are many ways in which you can rebuild your credit without having to wait seven to ten years. How Do I Rebuild Credit After Bankruptcy? The best way to rebuild credit following bankruptcy is to pay all bills in full and on time. And believe it or not, there are credit cards for people with bankruptcies. It is advisable to obtain a credit card with a low limit (like $500 or $1000) to use and pay off in full each month. This helps show your credit-worthiness. Other steps you might consider taking are: Become an authorized user on a card that a close friend or loved one with good credit has.Take out a “credit builder” loan, which is a small loan that is paid off quickly.Get a secured credit card, where you deposit the limit, usually $500 to $1000, and prove credit-worthiness by paying it off in full each month. How Do I Start Over After Bankruptcy? Once you’ve received a discharge of your unsecured debt, and perhaps restructuring of your secured debt, you have the opportunity to evaluate your budget against your income and make what adjustments you need to make to live within your means going forward. With regard to your secured debt, such as a car loan or a mortgage, if you filed under Chapter 7 you had the opportunity to surrender the collateral and get that debt discharged, or to reaffirm the debt and keep the collateral, or keep up with the payments without reaffirming the debt. You might even have been able to redeem the car, or get an affordable mortgage modification.  If you filed under Chapter 13 either you have gotten caught up with loan arrears or restructured the debt. In any case, your attorney will have worked with you to make sure that, with your unsecured debt discharged and perhaps your secured debt restructured, your income is sufficient to pay your expenses going forward. Can I Rent After Bankruptcy? Yes. What you need to do is show potential landlords that you are not a credit risk because the debt obligations you could not meet are now discharged.  Proof of income will likely be required, and some landlords might require a larger security deposit due to your bankruptcy – but you will be able to rent soon. How Soon After Bankruptcy Can I Buy a House? You CAN buy a house after filing Chapter 7 or Chapter 13 bankruptcy, but a waiting period will apply.  If you filed Chapter 7 bankruptcy, you will wait at least two years to be eligible for an FHA mortgage. During that two year period you must show a positive credit history. If you needed to file bankruptcy due to events out of your control, such as medical issues, job loss, death of your spouse, or natural catastrophe, the FHA can reduce the waiting period to one year before buying a house after bankruptcy. VA loans are also subject to the two-year waiting period and a minimum credit score. If you filed Chapter 13 bankruptcy, you can apply for an FHA loan anytime after 12 months, during which you must show you’ve made all of your Chapter 13 plan payments in full and on time. You will also need to seek the permission of the bankruptcy court to purchase a home while in Chapter 13. The Bankruptcy Court will typically grant permission as long as it sees that you are able to make the payments without struggling. If you are seeking a conventional loan, such as those made by lending institutions then sold to servicers Fannie Mae and Freddie Mac, the rules are different.  If you filed Chapter 7 due to mismanagement of your finances, you will need to wait four years before applying for a loan. If you had to file Chapter 7 due to circumstances beyond your control, the waiting period is reduced to two years. If you filed Chapter 13, completed your plan and received a discharge, you will need to wait two years before applying for a conventional loan. If your Chapter 13 case was dismissed and you did not receive a discharge, the waiting period is increased to four years. Those debtors filing multiple bankruptcy cases in the last seven years must wait five years before applying for a conventional loan.  Can I Buy a Car after Bankruptcy? Yes. Again, the rules are different depending upon whether you filed under Chapter 7 or Chapter 13. If you filed Chapter 7 you will need to wait until your case closes to apply for a car loan. But prior to applying for a car loan you should do what you can to improve your credit score. It takes about six months after you receive your bankruptcy discharge to see a bump up in your credit score as the credit bureaus take notice of your improved debt-to-income ratio. And in those months you should be making all of your monthly payments in full and on time.  Once these six months pass, you can start applying for car loans. Be advised that you will be offered a high interest rate or a longer repayment term because you are considered higher-risk having filed bankruptcy. If you have no other choice, take the loan and aim to pay it off a bit early, you will save on interest. Even an extra $50 per monthly payment will help. Another way to save money is to recruit a co-signer with good credit, or simply decide to purchase a less expensive car than you would otherwise. Certified pre-owned cars can be a very good value. If you’ve filed a Chapter 13 petition you will need either need the permission of the Court or the approval of the Chapter 13 Trustee to purchase a car while your case is active, and you will need to show that you can afford the payments as well as the Chapter 13 plan payments and your other expenses. An experienced Fresh Start Attorney in Philadelphia will help you. Do you need to start over? If you are considering debt settlement because you are concerned about the consequences of filing bankruptcy, we can help you decide which is best for your unique financial situation and goals. Your initial consultation with us is free of charge! If you are considering filing bankruptcy because you need a fresh start, but are concerned about your credit and know that you need to buy a car or a home soon, call or email us to schedule your free, no-obligation consultation. We will look at your finances and explain all of your options. Call us at 215-625-9600 to review your specific situation with us – free of charge! The post Philadelphia Bankruptcy Lawyer Helps with Fresh Start After Bankruptcy appeared first on David M. Offen, Attorney at Law.

 https://www.theguardian.com/us-news/2021/oct/02/new-york-city-taxi-medallion-drivers-debt