Chapter 13 bankruptcy cases are difficult for the debtor as well as the attorney. The debtor has to fulfill a series of requirements prior to filing as well as additional requirements subsequent to filing. The attorney does the bulk of his work upfront and fights to get paid as the case progresses. In recent weeks,+ Read More The post It’s Getting Harder And Harder To Get Paid In A Chapter 13 Bankruptcy Case appeared first on David M. Siegel.

Gawker Media Files For Bankruptcy Gawker Media is a commercial online media company and blog outlet that was founded and owned by Nick Denton. Gawker came from humble beginnings in 2003. Gawker Media is the parent company for several very successful and popular weblogs including Gawker.com, Lifehacker, Deadspin, Kotaku, Gizmodo, Jalopnik, and Jezebel. With so much success in Gawker Media’s timeline, nearly forty five million dollars in revenue, and so many desirable weblogs under its reign, it is hard to wrap one’s head around the fact that the company filed for bankruptcy in 2016. What exactly is bankruptcy? Bankruptcy is the act of being bankrupt or completely broke. Filing for bankruptcy essentially pauses any standing debts that cannot be repaid. Chapter 11 bankruptcy is available for individuals, corporations, and partnerships. Chapter 11 bankruptcy reorganization has no limit on debt and large companies typically choose this type of bankruptcy to restructure debt. The person, or business, in debt typically can still have all their assets and operate their company under supervision. Chapter 11 bankruptcy is considered the most flexible of the bankruptcy chapters and is subsequently difficult to really define. Things weren’t always so bad for Gawker Media. Gawker Media has seen some financial success in the past. New York Magazine Jossip founder David Hauslaib estimated that Gawker.com had an annual advertising revenue of nearly one million dollars. The very low operating needs paired with advertising success led to Gawker Media boasting a healthy twenty million dollar revenue and an operating income of over two million dollars in 2010. Gawker Media continued to make good money without the need for investments from venture capitalist firms. Blogs aren’t making as much money as we think and lawsuits can ruin a successful business. Gawker’s founder Nick Denton has been quiet on the financial details of Gawker. He has, however, said convicting things about the financial profit of blogs. Of the matter, Denton has said on his personal website, “Blogs are likely to be better for readers than for capitalists. While I love the medium, I’ve always been skeptical about the value of blogs as businesses.” While weblogs may not be a capitalist’s goldmine, other matters contributed to Gawker’s demise. The media organization has dealt with its share of controversy which lead to a large amount of lawsuits being filed in order to destroy Gawker Media. Those lawsuits came from Silicon Valley billionaire Peter Thiel’s third-party funding. Thiel’s actions have raised serious concern about rich people tanking publications by paying for lawsuits that will lead to their demise. Gawker Media is known for their controversy, the big reason Denton decided to file for bankruptcy. Gawker Media is widely considered controversial for their content. In 2012 Gawker published a pornagraphic video of Hulk Hogan and Hogan’s best friend’s wife that subsequently led to a massive sixty million dollar lawsuit to be paid to Hogan for emotional distress. This lawsuit was the beginning for Gawker Media’s path to bankruptcy. Director Quentin Tarantino filed a copyright lawsuit in early 2014 against Gawker Media for the leak of his 146-page script for his film The Hateful Eight. Tarantino said he gave the script to a small handful of trustworthy colleagues and never to Gawker Media for use. Tarantino said in his lawsuit, “Gawker Media has made a business of predatory journalism, violating people’s rights to make a buck. This time they went too far. Rather than merely publishing a news story reporting that Plaintiff’s screenplay may have been circulating in Hollywood without his permission, Gawker Media crossed the journalistic line by promoting itself to the public as the first source to read the entire Screenplay illegally.” In 2013, Gawk Media and its founder Denton faced a Fair Labor Standards Act action brought by unpaid interns that worked for the company. The interns claimed that work they contributed to Gawker Media’s sites, including Lifehacker.com and Gawker.tv, directly led to substantial financial gains and were central to Gawker Media’s business model of internet publishing. They claimed that Gawker Media’s refusal to pay them at least minimum wage for their contributions and work violated state labor laws and the Fair Labor Standards Act. Some interns were paid as a result of the action. A staff writer for Gawker Media published a post in 2015 that attempted to out an executive for Conde Nast by writing about alleged text correspondence between the executive and a gay porn star. There was outrage over the attempt to out the executive and Denton removed the story after his managing partnership voted it was unsavory. Gawker Media was rumored to have paid the executive a sum to avoid a future lawsuit. In 2015 Gawker Media editors decided to unionize and joined the Writers Guild of America, East. Nearly seventy five percent of eligible employees voted in favor. While not entirely controversial, the decision to unionize led to public criticism of Gawker Media’s work conditions. What is Gawker’s next steps? Filing for Chapter 11 bankruptcy will save the company and keep it running as long as the company is sold to another entity, free of legal liabilities, at auction. This entity has been revealed to be Ziff Davis publishing group, who now owns Gawker Media and all of its brands. I am thinking about filing for bankruptcy. Who can help me? Making the choice to file for bankruptcy is a difficult decision, and nobody should make that decision without consulting an experienced lawyer. The talented bankruptcy attorneys at My AZ Lawyers, PLLC can help. My AZ Lawyers is a professional limited liability company that can offer professional services and match you with an experienced bankruptcy lawyer trained to offer niche expertise in bankruptcy and financial law. You don’t have to settle for poor law services, especially when your finances or business are at stake. Calling My AZ Lawyers and meeting with a bankruptcy lawyer could be the best decision you could make. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post Gawker Media Files For Bankruptcy appeared first on My AZ Lawyers.

Gawker Media Files For Bankruptcy Gawker Media is a commercial online media company and blog outlet that was founded and owned by Nick Denton. Gawker came from humble beginnings in 2003. Gawker Media is the parent company for several very successful and popular weblogs including Gawker.com, Lifehacker, Deadspin, Kotaku, Gizmodo, Jalopnik, and Jezebel. With so much success in Gawker Media’s timeline, nearly forty five million dollars in revenue, and so many desirable weblogs under its reign, it is hard to wrap one’s head around the fact that the company filed for bankruptcy in 2016. What exactly is bankruptcy? Bankruptcy is the act of being bankrupt or completely broke. Filing for bankruptcy essentially pauses any standing debts that cannot be repaid. Chapter 11 bankruptcy is available for individuals, corporations, and partnerships. Chapter 11 bankruptcy reorganization has no limit on debt and large companies typically choose this type of bankruptcy to restructure debt. The person, or business, in debt typically can still have all their assets and operate their company under supervision. Chapter 11 bankruptcy is considered the most flexible of the bankruptcy chapters and is subsequently difficult to really define. Things weren’t always so bad for Gawker Media. Gawker Media has seen some financial success in the past. New York Magazine Jossip founder David Hauslaib estimated that Gawker.com had an annual advertising revenue of nearly one million dollars. The very low operating needs paired with advertising success led to Gawker Media boasting a healthy twenty million dollar revenue and an operating income of over two million dollars in 2010. Gawker Media continued to make good money without the need for investments from venture capitalist firms. Blogs aren’t making as much money as we think and lawsuits can ruin a successful business. Gawker’s founder Nick Denton has been quiet on the financial details of Gawker. He has, however, said convicting things about the financial profit of blogs. Of the matter, Denton has said on his personal website, “Blogs are likely to be better for readers than for capitalists. While I love the medium, I’ve always been skeptical about the value of blogs as businesses.” While weblogs may not be a capitalist’s goldmine, other matters contributed to Gawker’s demise. The media organization has dealt with its share of controversy which lead to a large amount of lawsuits being filed in order to destroy Gawker Media. Those lawsuits came from Silicon Valley billionaire Peter Thiel’s third-party funding. Thiel’s actions have raised serious concern about rich people tanking publications by paying for lawsuits that will lead to their demise. Gawker Media is known for their controversy, the big reason Denton decided to file for bankruptcy. Gawker Media is widely considered controversial for their content. In 2012 Gawker published a pornagraphic video of Hulk Hogan and Hogan’s best friend’s wife that subsequently led to a massive sixty million dollar lawsuit to be paid to Hogan for emotional distress. This lawsuit was the beginning for Gawker Media’s path to bankruptcy. Director Quentin Tarantino filed a copyright lawsuit in early 2014 against Gawker Media for the leak of his 146-page script for his film The Hateful Eight. Tarantino said he gave the script to a small handful of trustworthy colleagues and never to Gawker Media for use. Tarantino said in his lawsuit, “Gawker Media has made a business of predatory journalism, violating people’s rights to make a buck. This time they went too far. Rather than merely publishing a news story reporting that Plaintiff’s screenplay may have been circulating in Hollywood without his permission, Gawker Media crossed the journalistic line by promoting itself to the public as the first source to read the entire Screenplay illegally.” In 2013, Gawk Media and its founder Denton faced a Fair Labor Standards Act action brought by unpaid interns that worked for the company. The interns claimed that work they contributed to Gawker Media’s sites, including Lifehacker.com and Gawker.tv, directly led to substantial financial gains and were central to Gawker Media’s business model of internet publishing. They claimed that Gawker Media’s refusal to pay them at least minimum wage for their contributions and work violated state labor laws and the Fair Labor Standards Act. Some interns were paid as a result of the action. A staff writer for Gawker Media published a post in 2015 that attempted to out an executive for Conde Nast by writing about alleged text correspondence between the executive and a gay porn star. There was outrage over the attempt to out the executive and Denton removed the story after his managing partnership voted it was unsavory. Gawker Media was rumored to have paid the executive a sum to avoid a future lawsuit. In 2015 Gawker Media editors decided to unionize and joined the Writers Guild of America, East. Nearly seventy five percent of eligible employees voted in favor. While not entirely controversial, the decision to unionize led to public criticism of Gawker Media’s work conditions. What is Gawker’s next steps? Filing for Chapter 11 bankruptcy will save the company and keep it running as long as the company is sold to another entity, free of legal liabilities, at auction. This entity has been revealed to be Ziff Davis publishing group, who now owns Gawker Media and all of its brands. I am thinking about filing for bankruptcy. Who can help me? Making the choice to file for bankruptcy is a difficult decision, and nobody should make that decision without consulting an experienced lawyer. The talented bankruptcy attorneys at My AZ Lawyers, PLLC can help. My AZ Lawyers is a professional limited liability company that can offer professional services and match you with an experienced bankruptcy lawyer trained to offer niche expertise in bankruptcy and financial law. You don’t have to settle for poor law services, especially when your finances or business are at stake. Calling My AZ Lawyers and meeting with a bankruptcy lawyer could be the best decision you could make. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post Gawker Media Files For Bankruptcy appeared first on My AZ Lawyers.

Death Row Records Files For Bankruptcy Death Row Records’ saga of financial issues that has plagued the label since the early 2000’s might finally be coming to an end this year. Reports claim that the current owner of the label, WID Eawake Entertainment Group Inc., is filing for bankruptcy and wants to sell Death Row Records in order to save the company. What exactly is bankruptcy? Bankruptcy is a legal term. When a person or business entity accumulates a large amount of debt that they cannot pay back, they may file for bankruptcy. Typically a debtor will hire a lawyer to help add up the total amount of assets the filer has and how much accumulated debt they owe. If it is clear that the debtor cannot pay back the debt, then they can proceed with filing for bankruptcy. If successful, all debts the debtor owes will cease. Bankruptcies typically stick to your credit for ten years and make it difficult to get loans, credit cards, a house, car, etc. So only proceed with filing for bankruptcy if you are prepared to deal with the not so glamorous side of it. The history of one of the biggest record labels of the 1990’s Death Row Records was a record company founded by Dr. Dre, the D.O.C., and Suge Knight in 1991. The label featured and signed talented rappers and hip hop artists including Tupac Shakur, Snoop Dogg, Dr. Dre, The Outlawz, The Lady of Rage, MC Hammer, Young Soldierz, Sam Sneed, LBC Crew, RBX, Michel’le, Jewell, Danny Boy, DK Quik, O.F.T.B., Nate Dogg, and many others. In its hayday Death Row Records was making nearly one hundred million dollars a year. After the tragic death of beloved rapped Tupic in 1996, many of the above mentioned artist left the label but Death Row Records was still able to stay afloat. How could such a powerful record label go bankrupt? Death Row Records first filed for bankruptcy in 2006 with claimed debts exceeding nearly a hundred and thirty-seven million dollars and over four million dollars in assets. Warner Music group bid twenty five million dollars for all of Death Row Records’ musical assets. In 2009, Death Row Records was auctioned to the development and entertainment company WID Eawake Entertainment Group Inc. for nearly eighteen million dollars. Everything remaining in the Death Row Records office was also auctioned off, including the eponymous Death Row Records electric chair worth nearly three thousand dollars. Since the sale in 2009, Death Row Records continued to put out material found in archives, including B-sides and unreleased tracks from artists including Snoop Dogg and Danny Boy. The management from WID Eawake Entertainment Group Inc. has tried to improve the image of Death Row by keeping their promise to pay royalties to the artist, songwriters, and producers that contributed commercial releases to the label. However, WID Eawake Entertainment Group went bankrupt some time in 2012 and started looking for an entity to purchase the Death Row Records label in order to buoy their own company. Now the legacy of bankruptcy around Death Row Records seems to be over with. Since the sale in 2009, former Death Row Records artists continue the claim the label owes them an insane amount of money. Snoop Dogg is owed two million dollars, Nate Dogg is owed nearly five million dollars, and Dr. Dre is owed around eight million dollars. Suge Knight claims that he is owed nearly a ridiculous one hundred and forty four million dollars. The only artist to ever have been paid by the label was the late Tupac Shakur. The seventy five thousands dollars he received went to his mother’s estate. The final bankruptcy report being filed by WID Eawake Entertainment Group is set to be completed this year and artists aren’t expecting any money to come their way. The final report will likely be signed by a judge and the once huge Death Row Records will be totally defunct. I think I want to file for bankruptcy but I don’t want to make any mistakes! Help! If you want to file for bankruptcy on your own, chances are you may be making a not so wise choice. It is easy to make small mistakes that could lead to getting into trouble for bankruptcy fraud. The fantastic bankruptcy lawyers at My AZ Lawyers, PLLC will walk you through the steps of bankruptcy filing and can help you avoid mistakes. A bankruptcy lawyer should be experienced, have specialized expertise in the area of bankruptcy and financial law, and fight for your needs. Call My AZ Lawyers today if you want a bankruptcy lawyer that will fight to help you. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post Death Row Records Files For Bankruptcy appeared first on My AZ Lawyers.

   Judge Delano ruled in favor of my client, the ex-spouse of the debtor, allowing a secured claim of $50,000. In re Goesel, No. 8:15-BK-05591-RCT, 2016 WL 3085979 (Bankr. M.D. Fla. May 31, 2016).  The prepetition marital settlement agreement, incorporated in the divorce judgment required the debtor to pay $50,000 to the ex-spouse for the joint real estate they owned, or if not paid within 30 days of the divorce, ordering the property sold with the first $50,000 paid to the ex-spouse.  The Marital settlement agreement provided that the divorce judgment shall constitute a lien on the property until paid with interest.  The agreement required the ex-spouse to execute a quit-claim deed to the property to be held by her attorney until the $50,000 was paid.    The Debtor objected alleging that the claim was based on a property settlement, and was therefore dischargeable in the chapter 13.  Debtor alleged that the entry of a divorce judgment was insufficient to create a lien on the property Debtor also alleged that the lien was avoidable under 11 U.S.C. 522(f)(1)(A).    The Debtor's initial argument is that Florida Statute §55.10 requires the recording of a lien to be effective.1   Judge Delano rejected this argument, finding that in Dyer the ex-spouse had no interest in the property other than the judgment purportedly creating the lien.  In Butler, the property had been owned tenancy in common, and the ex-spouse was attempting to enforce the judgment lien against the debtor's own 1/2 interest in the property.  In Goesel, the ex-spouse is enforcing the judgment as a lien against her own interest in the property as awarded in the divorce.   The argument that the lien could be avoided under §522(f)(1) also failed.  The Debtor argued that the Court's decision in In re Lowe, 250 B.R. 422 (Bankr.M.D.Fla.2000) supports allowing avoidance of the lien under that section.  However, in Lowe the Debtor had been the sole owner of the property prior to the marriage, and the ex-spouse was again attempting to enforce a lien against property solely owned by the Debtor.  Again Judge Delano distinguished this as Ms. Goesel's ownership interest in the property is the functional equivalent of a security interest in the property.   The fact that a quit-claim deed had been signed to the debtor did not change the result, since the deed was never delivered to the Debtor. Mattox v. Mattox, 777 So.2d 1041 (Fla. 5th DCA 2001). ("delivery of a deed by the grantor and acceptance by the grantee are essential to the transfer title").   Note this case is on appeal, but Judge Roberta Colton (who took over the case subsequent to the order) has denied the Debtor's motion for stay pending appeal. 1 Citing Dyer v. Beverly & Tittle, P.A., 777 So.2d 1055 (Fla. 4th DCA 2001); Butler v. Butler, 870 So.2d 239 (Fla. 2d DCA 2004). Michael Barnett www.tampabankruptcy.com

“American Idol” Producer Files Bankruptcy After Show’s Last Episode Core Media Group files for Chapter 11 Bankruptcy Sometimes even successful people and companies run into financial problems. Core Media Group, the company behind hit TV shows American Idol and So You Think You Can Dance filed for bankruptcy protection in federal court only days after the final episode of the hit show American Idol. Fox’s television show, American Idol , once a huge profit maker and ratings topper for FOX, averaged more that 20 million viewers in seasons starting in 2003 (According to Nielsen ratings tracker). So how is it that the company responsible for of a top-rated show (8 consecutive seasons) that reached almost 31 million viewers in 2006 needs to file bankruptcy? All good things come to an end and Idol’s popularity and audiences plummeted and it created financial perils for Core Media Group. The company Core Media Group, founded 10 years ago, filed Chapter 11 bankruptcy in Federal Bankruptcy Court in New York, claiming it has not found a way to replace the revenue lost when hit American Idol’s ratings and subsequently income declined. Filing Chapter 11 bankruptcy does not mean the end of Core Media Group or that American Idol won’t ever come back. Chapter 11 bankruptcy allows a company to re-organize it’s debts and work with it’s creditors. (Chapter 11 bankruptcy is intended primarily for the reorganization of businesses with heavy debt burdens). Core Media Group should be able to continue operations and come out of this bankruptcy filing in a far better financial situation. In it’s bankruptcy filing, Core Media Group divulged that it owes approximately $400 million in debt to creditors, including individuals such as Simon Fuller (the creator of American Idol), and other parties like Sony Music Entertainment. The company also owes money to third parties. Core Media Group is claiming $73 million in assets, but less than $10 million cash on hand. A demand for payment in April from the aforementioned, Fuller, was a major contributing factor in the decision to file bankruptcy. The president of Core, Peter Hurwitz, in a statement about the Chapter 11 filing, cited American Idol’s recent failures as major reason for filing bankruptcy. According to Mr. Hurwitz, “Despite its long-running success, however, the company has recently experienced deterioration in its financial performance, primarily attributable to the decline in ratings for American Idol and the corresponding decline in revenues from IDOLS- related broadcast fees, international tape sales for rebroadcasts, touring fees, sponsorships and IDOLS- related merchandise sales.” As goes American Idol so goes Core Media’s profits. After having huge success, ratings fell hard. By the final season, American Idol was no longer America’s top rated show not too mention it wasn’t even number one with it’s own network. The show Empire grabbed higher ratings for FOX. The final episode aired in April 2016. Core Media Group claims that its capital structure is now “unsustainable,” as it is not able to replace a show and a money maker like American Idol. Now that the show is over, evidently Core is thinking about some restructuring and the Chapter 11 bankruptcy filing is a first step. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post “American Idol” Producer Files Bankruptcy After Show’s Last Episode appeared first on My AZ Lawyers.

WARNING: This is not a blog post written “In Plain English”.  It is a repaste of an article Daniel and I wrote for a technical business bankruptcy legal e-newsletter published by the American Bankruptcy Institute (“ABI”) Business Reorganization Committee.  Here is a link to the article replete with our bios. Foreign Claimants?  No Problem.  All You Need Is a Postage Stamp to Satisfy Claims Objection Service and Declarations from the Debtor to Assert 502(d) Disallowance  By Salene Mazur Kraemer, Esquire, MBA, CTA and Daniel Hart, Paralegal              On November 13, 2015, in the United States Bankruptcy Court for the Southern District of New York, Judge Glenn issued a memorandum opinion in the bankruptcy case, In re: Vivaro Corporation, et al.  (Case no. 12-13810), with the following rulings:  (1) a claim objection against a foreign entity may be served by U.S. mail under Bankruptcy Rule 3007 and need not be served in the same manner required for service of a summons and complaint in accordance with Rule 7004; and (2) when a claim objection is based on § 502(d) of the Bankruptcy Code, the Debtors must meet their burden under § 547 of the Bankruptcy Code  regarding the receipt of an avoidable transfer before the court will disallow and expunge such claims.          In Vivaro, various foreign entities from Pakistan, Costa Rica, Canada, London, El Savador, etc. filed proofs of claim in the debtors’ cases.  Vivaro Corporation, et al. (the “Debtors”) filed various objections to such claims as well as to scheduled claims of such foreign creditors.  At the same time, the Debtors initiated preference actions against such foreign creditors. The bases for the claims objections included § 502(d) of the Bankruptcy Code, which permits the disallowance (even if temporarily) of a claim if there are pending allegations of unreturned preference transfers.       Debtors served the claims objections upon the foreign creditors via U.S. mail and attached copies of the preference transfer complaints to the notices of claims objection.  Debtors used the address listed on the Debtors’ schedules or listed on the appropriate proof of claim.  In the packet sent to the foreign creditors, the Debtors included a declaration from the Debtors in support of their claim objections, which informed each claimant that they were in receipt of an avoidable preference transfer and provided the standard for a preference payment under § 547 of the Bankruptcy Code                  Judge Glenn ruled that Bankruptcy Rule 3007 applies to claims objections and permits service by U.S. mail which includes service by mail on foreign entities, and, therefore, the Debtors’ properly served notice of claims objection to each foreign entity by U.S. mail.   Bankruptcy Rule 3007 states that “[a] copy of the objection with notice of the hearing thereon shall be mailed or otherwise delivered to the claimant, the debtor or debtor in possession, and the trustee at least 30 days prior to the hearing.”  Fed. R. Bankr. P. 3007(a).   Service by Rule 7004(a) was not necessary.   Bankruptcy Rule 7004(a) provides that in adversary proceedings, personal service under Rule 4(e)–(j) F.R.Civ.P. may be made by any person at least 18 years of age who is not a party, and the summons may be delivered by the clerk to any such person.  Fed. R. Bankr. P. 7004(a).                The standard of service of a summons and complaint upon an individual in a foreign country is governed by F.R.Civ. P. Rule 4(f)(1), which is made applicable to adversary proceedings by Bankruptcy Rule 7004(a).  Service must be “[b]y any internationally agreed means reasonably calculated to give notice, such as those means authorized by The Hague Convention….” Fed. R. Civ. P. 4(f)(1).           This Vivaro Court rejected the  Jorgenson v. State Line Hotel, Inc. (In re State Line Hotel, Inc.), 323 B.R. 703, 713 (9th Cir. B.A.P. 2005), decision that Rule 7004 applies to the service of claims objections.  Rather, the Vivaro Court concluded that “Rule 9014 defers to Rule 3007 on the subject of claims objections: [Rule 3007] calls for an objection, not a motion, and authorizes notice, rather than requiring service.”  The Court further reasoned that there is no reason to require different rules of service when dealing with claims filed by foreign entities.  In respect to the second issue, the Vivaro Court ruled that if the Debtors showed proof to the Court that preferential transfers were made and not repaid, then § 502(d) of the Bankruptcy Code requires that the entire claim be disallowed unless the full amount of the avoidable transfer has been repaid.   The Court, however, must be satisfied that the estate or estate representative has established a prima facie basis that the claimants received and have not repaid avoidable transfers.  Although the complaint was not properly served in accordance with Rule 7004(a), copies of the complaint and Debtors’ declaration provided the claimants with notice and evidence of the avoidable transfers.  Such service shifted the burden to the claimants to rebut the evidence that they received an avoidable preference.  In this case, none of the claimants responded to the claims objections or made an attempt to repay the preference transfer to the estate.           The Court held that once a claimant’s liability has been determined, the claimant must be provided with a reasonable opportunity to turn over the property to the debtor’s estate in compliance with § 502(d) of the Bankruptcy Code before the claims may be disallowed.  If the creditor is liable to the estate for having received an avoidable transfer in any amount, the creditor’s entire pending claim must be disallowed in full. Practice Pointers: If you have a foreign claimant, service of a claims objection by U.S. Mail will suffice. If you are attempting to disallow a creditor’s claim based on 502(d) of the Bankruptcy Code, you must first establish a prima facie basis that the claimant received and has not repaid avoidable transfers. Copies of the preference complaint together with declaration from the debtor should suffice.

      A district court in Michigan affirmed the bankruptcy court's finding that once the debtor signed an lease assumption agreement post-petition, they could not revoke it despite the failure to comply with the requirements for reaffirmation.  Williams v. Ford Motor Credit Co., LLC, No. 15-CV-14201, 2016 WL 2731191 (E.D. Mich. May 11, 2016).  The debtors filed under chapter 7 on 8 June 2015, stating an intent to assume the lease with Ford Motor Credit.  Ford sent them an assumption agreement, which was signed by the debtors on 16 July 2015.  The assumption referenced 11 U.S.C. 365(p) as the basis of the assumption, and averred that the protections under 11 U.S.C. 524(a) did not apply to the lease.  Debtors also signed a stipulation for assumption of the lease, which was filed by Ford with the bankruptcy court on 28 July 2015.     Debtors changed their mind and filed a notice of rescission of the lease assumption on 4 August 2015. Ford's counsel sent a letter challenging the right to rescind the agreement.   A discharge was entered 15 September 2015.  The debtors reopened the case and filed to determine that the assumption was invalid for failure to comply with the reaffirmation requirements.  The bankruptcy court rejected this argument, finding that §524 does not apply to leases assumed under §365.  The district court affirmed, citing §365(p).  Section 365(p) specifically addresses the assumption of a personal property lease by a debtor. It provides as follows:(1) If a lease of personal property is rejected or not timely assumed by the trustee under subsection (d), the leased property is no longer property of the estate and the stay under section 362(a) is automatically terminated.(2)(A) If the debtor in a case under chapter 7 is an individual, the debtor may notify the creditor in writing that the debtor desires to assume the lease. Upon being so notified, the creditor may, at its option, notify the debtor that it is willing to have the lease assumed by the debtor and may condition such assumption on cure of any outstanding default on terms set by the contract.(B) If, not later than 30 days after notice is provided under subparagraph (A), the debtor notifies the lessor in writing that the lease is assumed, the liability under the lease will be assumed by the debtor and not by the estate.(C) The stay under section 362 and the injunction under section 524(a)(2) shall not be violated by notification of the debtor and negotiation of cure under this subsection.Id,  at *3.Thus, the Court found that the requirements for an enforceable assumption of a lease in chapter 7 is 1) an offer by the Debtor to assume the lease 2) agreement by the creditor, and 3) an signed agreement between the parties memorializing the agreement.      This contrasts with the requirements for a reaffirmation under §524, which include the making of the agreement prior to the discharge, disclosures required by §524(k), a cooling off period, a filing with the court, a certification by debtor's counsel if represented, and required approval by the Court if the debtor is not represented.      The Disctrict Court noted a diagreement among the circuits on this issue, citing In re Perlman, 468 B.R. 437, 441 (Bankr. S.D. Fla. 2012) finding that §524 does not have to be complied with, and Thompson v. Credit Union Fin Grp, 453 B.R. 823, 830 (Bankr. W.D. Mich. 2011).   Those decisions requiring reaffirmation as well as assumption generally cite the Bankruptcy Code's policy of protecting debtors, and assumptions without the protection of §524 can impair the debtors' fresh start. They also point out that the assumptions under §365(p) are not self-executing, rather that it simply provides that after a set of requirements are met the liability will be assumed.  The something more required to assume the liability is the reaffirmation of the debt under §524.   The contrary argument is that §365(p) does not reference §524, and Congress would have provided that §365 assumptions also must be reaffirmed under §524 if it had so intended.  Second, they argue that §365(p) would be superfluous if §524 has to be complied with for all assumptions.  Finally, the requirements of §365 and §524 could produce anomolous results.[A]ssumption of a lease under Section 365(p) binds the debtor to the lease terms and the discharge has no effect on the debtor's assumed obligation. Under the logic of [requiring reaffirmation], a lessor would have no ability to enforce a lease agreement assumed by the debtor in the event of a subsequent default. This interpretation would render section 365(p) a nullity and would create an absurd result.In re Mortensen, 444 B.R. 225, 230 (Bankr. E.D.N.Y. 2011).The point being that a creditor could be bound by the terms of the assumption negotiated with the debtor post-petition under §365(p) but the debtor may not be liable for the assumption under §524.   The District Court found the latter line of cases more pursuasive.  It concluded the Congress intentially omitted any requirement of §524 compliance from §365(p), that requiring reaffirmation would strip §365(p) of it's significance and produce anomolous results.   Thus an agreement that complies with §365(p) is enforceable without any §524(c) reaffirmation.  The Court also rejected the debtor's arguments that the agreement did not comply with §365(p).  First, the Debtor's argued that the agreement was made at a time when the trustee had sole authority to determine whether to continue the lease.  Under §365(p)(1) property subject to a personal property lease remains property of the estate for 60 days after filing.  The Court rejected this argument, finding that §365(p)(1) does not grant exclusive authority to negotiate an assumption of the lease to the trustee.  Second, Debtor's argue that §365(p)(2)(B) allows the debtor only 30 days after the creditor indicates it is willing to allow assumption for the debtors to actually assume the lease.  The Court found that this provision simply gave Ford the right to reject the assumption if it was made after the 30 days, but since Ford accepted the assumption the assumption was enforceable.Mike Barnett www.tampabankruptcy.com

  The Court in In re Doucet, No. 15-21531, 2016 WL 2603072 (Bankr. D. Kan. May 3, 2016) confirmed a chapter 13 plan paying only attorneys fees, after an extensive analysis of the current case law on the issue.  The Debtor had obtained an order to pay the filing fee in installments, was below median-income, and had no prior cases in the last 8 years.  She supported three dependents, including a 31 year old daughter.  The plan proposed 36 payments of $90 to pay $2,900 attorneys fees and the $310 court filing fee with no dividend to unsecured creditors.  She was employed as a registered nurse with $2,840 gross monthly income.  She owned no real estate, had no unsecured creditors, and no significant non-exempt assets.   The Debtor asserted she has insufficient funds to employ chapter 7 counsel, and may never be able to save funds to do so.  She indicated she was unable to get assistance from friends or family to pay counsel.  She had faced 17 garnishment actions since 2006, at least three of her vehicles had been repossessed, and she had faced numerous eviction actions.  The chapter 13 trustee argued that the “inability to pay attorneys fees for the filing of a Chapter 7, does not constitute ‘special circumstances' permitting the case to proceed as a Chapter 13.  The trustee did not object to the feasibility or reasonableness of the $2,900 fee requested.   In Chapter 13 cases, the court does not approve the employment of a chapter 13 debtor's counsel. Thus, a chapter 13 debtor may generally employ bankruptcy counsel without filing an application to employ.  Unlike other bankruptcy attorneys, a Chapter 7 attorney has no right to compensation under § 330.  Attorneys filing chapter 7 petitions must collect fees pre-petition or risk a discharge of pre-petition fees.  Under Chapter 13, attorney's fees are allowed pursuant to § 330(a) as an administrative expense described in § 503(b)(2). With the enactment of § 330, “Congress intended to provide adequate compensation, on a par with that available in other areas of practice, to attract competent counsel to the bankruptcy specialty.” The bankruptcy practice needs competent attorneys as[i]t is absolutely imperative that competent counsel be motivated to seek, accept and ably handle Chapter 13 cases. That motivation starts with being fairly compensated for the work they perform. The complexity and importance of the work, alone, justify such compensation, but there are other reasons able counsel are vital to the system. The most important reason is that this Court rather routinely sees pro se debtors “give away” rights or property that they would otherwise be legally entitled to retain because of their ignorance of the law.  In re Beck, 2007 Bankr.LEXIS 517, at *9 (Bankr.D.Kan. Feb. 21, 2007)“Studies show that debtors with legal representation tend to have a much higher success rate in bankruptcy proceedings than pro se filers.”1  In one study, only 0.8 percent of post-BAPCPA pro se debtors received a discharge . 2 The same study found that “[n]ot one of the post- BAPCPA cases filed with the assistance of a petition preparer ended in the debtor receiving a discharge.”  Fairly compensated counsel is beneficial to both debtors and the bankruptcy bar because “attorneys must be zealous advocates for their clients while attempting to keep their lights on in their own offices. Preserving the integrity of the bankruptcy system includes encouraging, not discouraging, excellence in legal representation of consumer debtors.  A requirement that attorneys provide pre-petition representation for free or that debtors find family members or friends to bankroll their case runs contrary to the priority structure outlined in §§ 330, 503, and 507 and to the notion that debtors are entitled to competent and properly compensated representation.     Bankruptcy courts are divided on this issue. Courts in New York, New Hampshire, and Massachusetts have rejected attorney-fee-only plans as contrary to the spirit and purpose of the Code.3  However, three circuit courts have found that attorneyfee-only Chapter 13 plans are not per se bad faith.4 Courts in North Carolina, New Mexico, Wisconsin, Illinois, and Kansas have also upheld attorney-fee-only Chapter 13 plans.5 The first circuit's decision in Pufer indicated that the test in determining whether a fee-only plan is filed in good faith is the totality of the circumstances, but added a court-made rule that the debtor “carries a heavy burden of demonstrating special circumstances” justifying their plan, a provision not applicable out of the 1st Circuit.        The Eleventh Circuit in In re Brown, 742 F.3d 1309 (11th Cir.2014) affirmed the bankruptcy court's denial of an attorneyfee-only plan, applying a totality-of-the-circumstances approach. The Eleventh Circuit noted that “the bankruptcy court did not apply a categorical rule prohibiting attorney-fee-centric or attorney-fee-only chapter 13 plans.”  742 F.3d. at 1318.  Additionally, a few months after denying Brown's Chapter 13 plan, the same bankruptcy judge confirmed an attorney-fee-centric Chapter 13 plan.      In Matter of Crager, 691 F.3d 671 (5th Cir.2012)., the Fifth Circuit found that “[t]here is no rule in this circuit that a Chapter 13 plan that results in the debtor's counsel receiving almost the entire amount paid to the Trustee, leaving other unsecured creditors unpaid, is a per se violation of the ‘good faith’ requirement....”  691 F.3d at 675–76.   The Crager bankruptcy court also noted “that it would ‘border on malpractice’ for Crager's attorney to advise her to file a Chapter 7.”Id. at 675.  Ultimately, applying the totality-of-the-circumstances test, the court found the debtor's filing responsible, given the debtor's circumstances.    In Missouri, In re Arlen, 461 B.R. 550 (Bankr.W.D.Mo.2011) held that a Chapter 13 plan which pays only the administrative expenses of the proceeding, primarily debtors' counsel's fees, and makes no payment to any creditor, secured or unsecured, violates the spirit and purpose of Chapter 13 and is not proposed in good faith.   The Doucet Court rejected this analysis, instead finding that a debtor in economic straights should be permitted to file a fee only plan.     The Court rejected the rulings that fee-only plans were automatically in bad faith, rather following the decisions that looked at the totality of the circumstances to determine good faith under §1325.  The purpose of the totality of the circumstances test is simply to determine if there has been an abuse of the provision, spirit, or purpose of chapter 13.  The Court quoted In re Wark, 542 B.R. 522 (Battler.D.Kan.2015) where the court noted that while in a perfect world chapter 13 debtors would be able to pay their debts in fullInstead, this is a world where debtors are harassed by daily collection calls for admittedly delinquent debts. Where they are repeatedly required to miss work to attend a cattle call docket to explain why they haven't paid old medical bills. Where they cannot afford to keep the gas on, and feel compelled to incur title or payday loans at exorbitant rates to feed their families. Where their meager wages are reduced even further by garnishments. Where they opt not to seek necessary medical care or take prescribed medication because they cannot afford it. This is the world these Debtors live in, and this real world sometimes requires bankruptcy, even if the debtor cannot save enough to pay the up front [sic] attorney's fees required to file a Chapter 7.Id at 578.  The Court rejected the argument that the fee-only cases benefit only the debtor's attorney rather than the debtor.  First, counsel take the risk that they do not receive fees if the case is not confirmed.  Second, if the case is dismissed post-confirmation a substantial portion of the fees may still go unpaid.  These are risks not faced by counsel in chapter 7 cases.  Much of the fees are spent preparing the case for confirmation, and the lower income debtor's often require more work than those of higher income.  Allowing fee-only plans gives debtors access to the automatic stay and the fresh start while adequately compensating counsel.  §1325(b)(1) provides for confirmation if a debtor is committing all their disposable income to the plan.  This suggests that the percentage to unsecured creditors is not a factor in determining good faith so long as the debtor complies with §1325(b)(1) and §1325(a)(4).  The court found that the plan met the requirements of §1325(a)(3) and (a)(7) for good faith, and should be confirmed. Michael Barnett, www.hillsboroughbankruptcy.com1 Alexander F. Clamon, Per Se Bad Faith? An Empirical Analysis of Good Faith in Chapter 13 Fee–Only Plans, 30 Emory Bankr.Dev. J. 473, 481 (2014).2 Lois R. Lupica, The Consumer Bankruptcy Fee Study Final Report, 20 Am. Bankr.Inst. L, Rev. 17, 81 (2012).3In re Paley, 390 B.R. 53, 59 (Bankr.N.D.N.Y.2008); In re Dicey, 312 B.R. 456, 459–60 (Bankr.D.N.H.2004); In re Buck, 432 B.R. 13, 21–22 (Bankr.D.Mass.2010).4 In re Brown, 742 F.3d 1309 (11th Cir.2014); In re Puffer, 674 F.3d 78 (1st Cir.2012); Matter of Crager, 691 F.3d 671 (5th Cir.2012).5 See In re Banks, 545 B.R. 241 (Battler.N.D.Ill.2016) (finding special circumstances allowing debtor to file an attorney fee-only Chapter 13 instead of a Chapter 7); In re Wark, 542 B.R. 522 (Battler.D.Kan.2015); In re Elkins, 2010 WL 1490585, at *3 (Bankr.E.D.N.C. Apr. 13, 2010) (stating that a Chapter 13 trustee should not summarily object to the presumptive fees in a Chapter 13 case solely because the case is an attorney-fee-only case); In re Molina, 420 B.R. 825, 829–33 (Bankr.D.N.M.2009); In re Guzman, 345 B.R. 640 (Bankr.E.D.Wis.2006) (confirming debtors' plan showing no disposable income); In re Alexander, 344 B.R. 742 (Bankr.E.D.N.C.2006) (debtors acted in good faith proposing a no projected disposable income plan).

Why Are Mesa Residents Still Filing for Bankruptcy if the Economy Is Said to Be so Much Better? For the last few years, we have been told just how much better the Arizona economy has gotten and that the hard times we faced in the early 2000s are over. However, if you look around, there is still plenty of hardship to be seen and many of our fellow Mesans are still filing for bankruptcy. So the questions remains: why, when are are supposedly doing so much better than before, do so many of us still need to file for bankruptcy to get ahead financially? Why Are Mesa Residents Still Filing for Bankruptcy if the Economy Is Said to Be so Much Better? Here are some important reasons why so many Arizona residents are still filing for bankruptcy despite a significant economical upswing! Mesa, AZ Here are some important reasons why so many Mesa residents are still filing for bankruptcy despite a significant economical upswing: Low Pay While it is undoubtedly true that the jobless rate has dropped significantly- in fact it is half of what it used to be- the pay rate in Arizona is still disturbingly low. And while many who used to be unemployed may have been able to finally find work, the odds are that the pay they receive is not able to move them out of debt and pay up what they owe. While the economy is doing better, employees are not paid more. In fact, many make less than they used to before they lost their job due to the disastrous economy. The only way to get ahead of the game or even just to even the playing fields is by filing for Chapter 7 and have your debt erased and start over. While bankruptcy can be a great way to jumpstart your financial future, it shouldn’t have to be that way. In 2016, minimum wage is still $8.05 which is hardly enough to pay all the bills that are coming in on a monthly basis. If you add to that the odds that employees have preexisting debt, the odds of catching up on your bills and paying off debts is almost impossible. Lingering Debt Just what type of debt does the typical Arizonan have to deal with? Student Loans For one, many young adults carry their tremendous student loans with them. The numbers relating to student debt are staggering. While in the 1990s about 50% left college with student loan debt, today it is over 70%. This means that currently more than 40 million Americans are paying off student loan debt. In fact, Arizona residents owe more in student loans that in credit card debt Student loans are the most common form of debt for those 24 years old and younger and account for over $8 billion of defaulted private loans. If you connect the dots between student loan debt and the low wages paid, you will understand why people are still not getting ahead. According to CNN, 260,000 Americans with a college or professional degree make at or below the federal minimum wage. Many bankruptcy attorneys may tell you that student loans cannot be discharged in a Chapter 7 bankruptcy proceeding in Mesa, but under certain limited circumstances you can file for bankruptcy because of your student loans and get them discharged. It is essential that you are working with an experienced and knowledgeable Mesa bankruptcy attorney who can clue you in as to which conditions you need to fulfil in order to qualify. Credit Card Debt Credit Card debt is another significant contributor to being indebted and which is driving many to file for bankruptcy. Credit card debt can be exceedingly difficult to pay off, especially in an economy that is on the rebound. While the going was rough, many Mesa residents have resorted to using their credit cards to buy necessary items in the hope they would be able to keep the boat afloat until the tide was coming in and things would get better. However, credit card interest rates are rarely known to be favorable (at least not once you have exceeded the introductory rate period), and if you are only able to make minimum payments, you will never be able to pay off your credit card (s). It is easy to be seduced in better times to purchase something on credit with the intention of paying it off. What consumers end up with are payments they cannot keep up with or only making minimum payments on their credit cards which doesn’t even make a dent in the mountain they owe. Why is that? Rates are on the Rise Interest rates have been on the rise and are predicted to continue to rise in 2016. While the pace of the increase is fairly moderate, an increase no matter how small, in interest rates is detrimental to many credit card holders. What exactly does that mean? The continued interest rate increase is going to cause consumers having to pay an additional $1.3 billion in credit card payments. Many will only be able to afford minimum or slightly above minimum payments, which won’t help to pay credit card balances down. This in conjunction with gas prices that are predicted to increase again, leaves less money in taxpayers pockets for other necessary living expenses. While increased employment opportunities and better economic times have led to a decrease in bankruptcy filings in Mesa and elsewhere, the trends is not significant enough to say that things have improved tremendously. There are other factors involved as well. But fact remains that many employees and workers are off worse than they should be and that the quest for debt relief is still strong. There is no shame in having to file for bankruptcy and getting the fresh financial start you deserve, but it also should not be necessary as often as it is. If you are trying to find out if filing for bankruptcy in Arizona could be the right choice for you, contact the experienced Mesa bankruptcy attorneys with My AZ Lawyers today. We can help you to assess your personal financial situation and we also offer free initial bankruptcy consultations. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post Why Are Mesa Residents Still Filing for Bankruptcy if the Economy Is Said to Be so Much Better? appeared first on My AZ Lawyers.