In Matter of Pro-Snax Distributors, Inc., 157 F.3d 414 (5th Cir. 1998), a panel of the Fifth Circuit made the uncontroversial ruling that a chapter 11 debtor’s attorney could not recover attorney’s fees from the bankruptcy estate after appointment of a trustee. However, the court went one step further and stated that in order to recover fees for the period prior to appointment of the trustee, the applicant must demonstrate an “identifiable, tangible and material benefit to the estate” in order to be compensated. Most courts to consider this standard have concluded that when a case does not generate results notwithstanding the best professional efforts of the attorney that compensation may not be allowed except for certain mandatory services. That consensus was broken when Judge Michael Lynn ruled that an “identifiable, tangible and material result to the estate” means that an attorney acted at the behest of his client acting in the exercise of its business judgment. In re Broughton Ltd. Partnership, No. 10-42327 (Bankr. N.D. Tex. 4/25/12), a copy of which can be found here. Judge Lynn’s ruling transforms the standard for compensation from a one-sided contingency fee to a professional judgment standard and is consistent with the text of 11 U.S.C. §330. (Disclosure: I am currently appealing a Pro-Snax ruling and will be relying upon the Broughton Ltd. Partnership case.).What HappenedThe facts are straightforward. The debtors’ business was “the development of high-end residential subdivisions and sales of the developed lots.” Special counsel was retained to negotiate the sale of 22 lots to a specific purchaser. The purchaser required that a homeowners association waive certain rights. When the homeowners association refused, the contract fell through notwithstanding counsel's efforts. When the sale fell through, the case ultimately converted. When special counsel applied for its fees, the U.S. Trustee objected based upon Pro-Snax. The Ruling The Court noted that bankruptcy courts within the Fifth Circuit following Pro-Snax had required that fees be reasonable on both a prospective basis and based on a retrospective review. The prospective test is based on section 330(a)(3)(C) which provides that “the services (be) necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, [the bankruptcy case].” The retrospective or hindsight test incorporates the Pro-Snax requirement that the services actually result in an “identifiable, tangible and material benefit to the estate.”Prospective TestThe U.S. Trustee argued that it was not even necessary to apply the retrospective test since the attorney should have realized early on that the proposed transaction would not result in a benefit to the estate. The Court disagreed, noting that “(t)he proposed sale to SPOT was viewed in late 2010, not only by the court, but by the various parties, as the keystone of Debtors’ potential reorganization.” Opinion, p. 5. The Court went on to state that: That the transaction was a difficult one to put together and that the idiosyncrasies of the parties might frustrate the efforts of counsel does not mean that counsel was required to cease work and give up. Rather, so long as a professional is doing its principal’s bidding and there is a reasonable prospect of success, the professional is entitled to work in the expectation of being paid. Opinion, p. 6. It is nice to see that the Court did not adopt the position that when the going gets tough, those who want to get paid give up. Retrospective TestThe Court approached the question of what constituted an “identifiable, tangible and material benefit to the estate” from several angles. First, the Court noted that a literal application of the phrase could result in absurd results. The problem posed by Pro-Snax is that use of the word “benefit” suggests a positive contribution is required. An “identifiable, tangible, and material” benefit to the estate at first blush would appear to be something that augments the estate. Yet it seems clear that professionals serving a debtor or other fiduciary in a chapter 11 case cannot be limited in their compensation to those activities that actually add to the estate. First, such a determination would exclude from compensation many critical functions performed by professionals in the course of a chapter 11 case. Administrative matters, operational oversight, disputes respecting control, steps in the plan process such as extensions of exclusivity and many other matters dealt with by professionals covered by Pro-Snax do not increase the debtor’s estate or reduce the claims against it – yet the chapter 11 case could not work if professionals did not perform services in connection with these functions. Second, as with the Firm’s work, that work which a professional undertakes doesn’t always lead to success.16 Deals – as with SPOT – fall through. Litigation on behalf of the estate may offer the prospect of substantial recoveries, but will not necessarily be won. It may be that counsel representing Stern, the estate representative in Stern v. Marshall, --- U.S. ----, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011), was unsuccessful, ultimately losing the estate’s case in the United States Supreme Court in a 5-4 decision. It is unthinkable that that counsel’s work leading to that result should be uncompensated. The very fact that section 328(b) permits (but does not require) retention of professionals on, inter alia, a contingency basis demonstrates that Congress did not intend all professional services to be compensable only on that basis. Yet, as some courts have noted, to apply Pro-Snax as requiring estate augmentation would be tantamount to doing so. Opinion, pp. 10-11. Digging deeper, the Court looked at the Pro-Snax case itself. The only clue that the Fifth Circuit gave as to the meaning of “identifiable, tangible and material” was a citation to In re Melp, Ltd., 179 B.R. 636 (E.D. Mo. 1995). That case in turn referred to: In undertaking a “benefit analysis,” a court should consider: (1) whether the debtor’s attorney’s actions duplicated the duties of the trustee or the trustee’s counsel under 11 U.S.C. § 1106; (2) whether the services have in fact, obstructed or impeded the administration of the estate; and (3) whether the debtor’s attorney’s actions are consistent with the debtor’s duties under 11 U.S.C. § 521. In re Melp, 179 B.R. at 640. Since the Fifth Circuit relied on Melp in formulating its test, it is only reasonable to see what the Melp Court meant.Judge Lynn also examined the construction given to “identifiable, tangle and material benefit” by District Judge Jane Boyle in Kaye v. Hughes & Luce, LLP, (In re Gadzooks, Inc.), 2007 WL 2059724, at *9 (N.D. Tex. Jul.13, 2007). I have previously written about the Gadzookscase here, here and here. The Gadzooks court, which applied the benefit test to counsel representing an equity committee, struggled with how to reconcile the Pro-Snax requirement of an “identifiable, tangible, and material benefit” to the estate, including its suggestion of a retrospective review of counsel’s work, with section 330(a)(3)(C) which indicate a professional’s efforts should be assessed prospectively, as of the time they were to be performed. Judge Boyle, in Gadzooks, concluded that the requirement set by the Court of Appeals of a benefit to the estate constituted a gloss on the provision in section 330(a)(1)(A) that counsel be awarded “reasonable compensation for actual, necessary services rendered by the…professional person.” See In re Gadzooks¸ 2007 WL 2059724, at *9. That is, services will benefit the estate if they are actual and necessary. Opinion, pp. 14-15. The Court also looked to how similar language in section 503(b)(1) has been interpreted. As it happens, the term “actual, necessary” is found not only in section 330(a)(1)(A) but as well in section 503(b)(1)(A), where it modifies the words “costs and expenses of preserving the estate” and limits what costs and expenses are entitled to priority payment as administrative claims. As used in section 503(b)(1)(A), “actual, necessary” clearly does not mean administrative expenses are limited to only those that enhance or at least preserve a debtor’s estate. It has been black letter law since the Supreme Court rendered its decision in Reading Co. v. Brown, 391 U.S. 471, 478, 88 S.Ct. 1759, 20 L.Ed.2d 751 (1968), that torts committed by an estate representative in the course of performing his, her or its duties give rise to claims entitled to administrative priority. This is because, as the Court reasoned in Reading, a bankruptcy estate, just like any other participant in the business world, must pay those costs necessarily incident to its operations, including satisfying claims arising from torts attributable to the estate. Similar reasoning can be applied to the efforts of the professionals of a debtor in possession (or other statutory bankruptcy fiduciary). It is the duty of a debtor in possession –like any estate representative – to realize any possible value from assets of the estate. If it eventually proves true that an asset cannot be realized upon, that does not mean it should not be investigated and its liquidation (or other means of realization) pursued, so long as, as the Pro-Snax court observed, “the chances of success…outweigh the costs of pursuing the action.” 157 F.3d at 426. Thus, for example, in Stern v. Marshall, pursuit of Stern’s counterclaim was appropriate and compensable, since the chances of success were good. That the case ultimately was lost 5-4 in the Supreme Court (on the basis of the bankruptcy court’s constitutional inability to enter a final judgment on Stern’s counterclaim) does not change the fact that the estate representative and estate professionals were doing their duty in pursuing it. Opinion, pp. 15-16.The ConclusionHaving considered all of these factors, the Court reached its ultimate conclusion that a professional confers an identifiable, tangible and material benefit to the estate when it performs services at the direction of the representative of the estate which is acting within its business judgment. The court today holds that a professional provides an “identifiable, tangible and material benefit” to a bankruptcy estate within the meaning of Pro-Snax through assisting the estate representative in administering an asset of the estate, whether or not the effect of administration of the asset is enhancement of the estate, so long as the professional’s services are performed at the direction of the estate representative and the estate representative is acting in accordance with the Code and its sound business judgment. In doing so, the court focuses on the nature of the benefit provided but also takes account of public policy and an estate representative’s decision making authority in bankruptcy. With regard to the latter, the court relies on an estate representative’s sound business judgment in approving acts outside the ordinary course of business. (citation omtted).Unless the manner in which an estate representative arrives at a decision is seriously flawed, the court will defer to the estate representative. (citation omitted). A professional should similarly be able to rely on its client’s business judgment in acting in accordance with the client’s instructions. As to public policy, professionals are retained by an estate representative to advise and assist the representative in carrying out his, her or its duties under the Code. To burden professionals by making their compensation contingent upon the result of the estate representative’s decisions must necessarily skew the regime intended in the Code and will surely create conflicts where a professional believes its client’s decision, though arrived at through due diligence, is not the right one. Had Congress wished professionals retained under section 327 of the Code to second-guess and perhaps veto decisions of a trustee or debtor in possession, it surely would have said so. Opinion, pp. 17-18.What It MeansWhile I acknowledge my own bias, I think that Broughton Ltd. Partnership should change the way that Courts in the Fifth Circuit interpret Pro-Snax. Judge Lynn’s interpretation allows courts to follow the language used in Pro-Snax without doing violence to the language or the logic of the Code.Unlocking the Code Section 330(a) contains several criteria for allowing compensation in bankruptcy, but does not use the words identifiable, tangible and material benefit. In fact, it expressly adopts a prospective analysis.The statute reads:§ 330. Compensation of officers(a) (1) After notice to the parties in interest and the United States Trustee and a hearing, and subject to sections 326, 328, and 329, the court may award to a trustee, a consumer privacy ombudsman appointed under section 332, an examiner, an ombudsman appointed under section 333, or a professional person employed under section 327 or 1103-- (A) reasonable compensation for actual, necessary services rendered by the trustee, examiner, ombudsman, professional person, or attorney and by any paraprofessional person employed by any such person; and (B) reimbursement for actual, necessary expenses.*** (3) In determining the amount of reasonable compensation to be awarded to an examiner, trustee under chapter 11, or professional person, the court shall consider the nature, the extent, and the value of such services, taking into account all relevant factors, including-- (A) the time spent on such services; (B) the rates charged for such services; (C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title; (D) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed; (E) with respect to a professional person, whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field; and (F) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title. (4) (A) Except as provided in subparagraph (B), the court shall not allow compensation for-- (i) unnecessary duplication of services; or (ii) services that were not-- (I) reasonably likely to benefitthe debtor's estate; or (II) necessary to the administration of the case.*** (6) Any compensation awarded for the preparation of a fee application shall be based on the level and skill reasonably required to prepare the application. *** (emphasis added).Interpreting Pro-Snax to require a positive result in order to get paid would be to eliminate the words “at the time at which the services were rendered” and “reasonably likely to benefit the debtor’s estate” from section 330(a). Such a view (even though it has been the prevailing one) effectively accuses the panel of negligence at best or judicial activism at worst. This tension was acknowledged by Judge Frank Monroe in In re Weaver, 336 B.R. 115 (Bankr. W.D. Tex. 2005), when he stated: Applicant Borsheim argues that Pro-Snax is at odds with the statute and misinterprets it since the statute plainly authorizes fees "for actual, necessary services"-as well as services that are "reasonably likely to benefit the debtor's estate". Even if such be true, this Court is constrained to follow the 5th Circuit's interpretation. Weaver, at 119. Judge Lynn, by following Judge Boyle’s conclusion that “identifiable, tangible and material benefit” was merely a gloss upon “actual, necessary services,” has tethered Pro-Snax to the language of the Code and has consistently followed the underlying authority relied upon by the Pro-Snax panel. With all respect to Judge Monroe (who was a venerable and well-respected judge), it is far better to follow the Fifth Circuit and follow the language of the Code at the same time. Judge Lynn has succeeded in doing both.(In fairness to Judge Monroe, he had a subsequent opinion in In re Spillman Development Group, Ltd., 376 B.R. 543 (Bankr. W.D. Tex. 2007), in which he which took a more nuanced approach to Pro-Snax.) When the Going Gets ToughThe Broughton Ltd. Partnership opinion is also good for the system. The English common law system adopted in the United States relies upon an adversarial system in which opposing parties are represented by zealous advocates. Bankruptcy is a multi-party process. If the most aggressive creditor can threaten debtor's counsel with not getting paid, debtor's counsel will have an incentive to placate that party at the expense of everyone else. Moreover, if the court increases the risk of not getting paid, then either lawyers will demand higher fees to compensate for that risk or will forego those representations altogether, leaving them to less qualified lawyers. In order for the system to work, good lawyers need to have a reasonable opportunity to be compensated without being a guarantor of the success of their client's case. While some debtors may be less than deserving scoundrels who use bankruptcy to escape payment of their just debts, the opposite is also true. Some creditors are more interested in using their position to prevent debtors from paying their debts, either so that they can foreclose and reap a windfall or simply to crush another party out of malice and spite. While the bankruptcy court cannot grant equal resources to all parties, it can at least avoid penalizing one side.
Myths and Truths About Chapter 7 Bankruptcy: Part II Myth: Debtors can include some creditors in a bankruptcy and leave out other creditors so that some creditors can be discharged while debtors continue to pay other creditors.Truth: Debtors may not include some creditors in a bankruptcy but not others. Any creditor who debtor owes money at the time of the filing of the bankruptcy must be listed in the bankruptcy petition. The debtor may not pick the creditors he/she wishes to continue paying while other creditors will be discharged and will not receive any money. The trustee will ask the debtor under oath at the 341 Creditor meeting whether all creditors have been listed. If not all creditors who the debtor owes money are listed, the debtor will have to pay the additional court fees in order to amend the creditor matrix to make sure all creditors they are aware of are listed. The trustee does not want some creditors to get preferential treatment. If the balance on a particular account is $0, the debtor does not need to list that creditor on the petition.A debtor can continue to pay on secured loans, such as a house or a car. The trustee allows those debts to be paid back because they are secured. Those debts do still need to be listed in the bankruptcy so the trustee knows what assets a debtor has at the time of filing.Myth: If a debtor has equity in a home, vehicle, or any other un-exempt property, they can transfer the property into someone else's name so the trustee will not attempt to seize the equity.Truth: A debtor cannot transfer property to avoid the trustee or their creditors. The debtor has an obligation to list in the Statement of Financial Affairs any transfers of property or any sales in the two years prior to the filing of the bankruptcy. The trustee can void the sale or transfer of the property if within the two years prior to the filing. If the sale or transfer is voided, the trustee can regain possession of the property, sell it, and use the money to pay the debtor's creditors. If the transfer is not listed in the bankruptcy petition, the debtor would be in violation of the bankruptcy rules.If you have any questions, please contact a St. Louis or St. Charles bankruptcy attorney.
Myths and Truths About Chapter 13 Bankruptcy: Part II Myth: Debtors who file a Chapter 13 bankruptcy will lose their entire tax refund every year they are in the Chapter 13 without exception.Truth: Sometimes debtors in a Chapter 13 bankruptcy are required to turn over their tax refunds. The debtor is obligated to turn over tax refunds; however, the debtor may retain the lesser amount of either $600 or two months plan payments. The debtor is required to turn the excess over to the trustee and should not spend the rest of the refund. If the debtor would like to retain more than that amount, they can contact their attorney and have their attorney file a Motion to Retain Tax Refunds. The motion states the legitimate expenses debtor would like to spend the money on, and receipts or bids for the services or products would be attached so the trustee can confirm the amounts the debtor wishes to retain. The trustee has 21 days to object. If no objection is filed, the debtor can retain the portion of their refund accounted for by the motion. If the trustee objects, the debtor would be required to surrender their tax refund to the trustee. Myth: When the debtor makes his or her Chapter 13 plan payment every month, the trustee takes most of the money for himself.Truth: The trustee gets paid a small percentage of the total plan base as his fee. The percentage rate fluctuates but is usually about five percent. The trustee disperses the rest of the monthly plan payments to various creditors. The trustee pays on secured debts, such as vehicle loans, arrears on houses, and monthly mortgage payments if the debtor wishes. They also pay taxes, unsecured debts, sewer bills, and other debts as well. If the debtor is required to surrender tax refunds or employee bonuses, the trustee does not keep that money for himself. He generally uses those proceeds to pay unsecured creditors a portion of their debt if they have filed a proof of claim. The trustee may pay certain creditors before other creditors based on their priority level.If you have questions, please contact a St. Louis or St. Charles bankruptcy attorney.
Myths and Truths About Chapter 7 Bankruptcy: Part II<br />Myth: Debtors can include some creditors in a <a href="http://en.wikipedia.org/wiki/Bankruptcy">bankruptcy</a> and leave out other creditors so that some creditors can be discharged while debtors continue to pay other creditors.<br />Truth: Debtors may not include some creditors in a bankruptcy but not others. Any creditor who debtor owes money at the time of the filing of the bankruptcy must be listed in the bankruptcy petition. The debtor may not pick the creditors he/she wishes to continue paying while other creditors will be discharged and will not receive any money. The trustee will ask the debtor under oath at the 341 Creditor meeting whether all creditors have been listed. If not all creditors who the debtor owes money are listed, the debtor will have to pay the additional court fees in order to amend the creditor matrix to make sure all creditors they are aware of are listed. The trustee does not want some creditors to get preferential treatment. If the balance on a particular account is $0, the debtor does not need to list that creditor on the petition.<br />A debtor can continue to pay on secured loans, such as a house or a car. The trustee allows those debts to be paid back because they are secured. Those debts do still need to be listed in the bankruptcy so the trustee knows what assets a debtor has at the time of filing.<br />Myth: If a debtor has equity in a home, vehicle, or any other un-exempt property, they can transfer the property into someone else's name so the trustee will not attempt to seize the equity.<br />Truth: A debtor cannot transfer property to avoid the trustee or their creditors. The debtor has an obligation to list in the Statement of Financial Affairs any transfers of property or any sales in the two years prior to the filing of the bankruptcy. The trustee can void the sale or transfer of the property if within the two years prior to the filing. If the sale or transfer is voided, the trustee can regain possession of the property, sell it, and use the money to pay the debtor's creditors. If the transfer is not listed in the bankruptcy petition, the debtor would be in violation of the bankruptcy rules.<br />If you have any questions, please contact a <a href="http://www.lickerlawfirm.com">St. Louis or St. Charles bankruptcy attorney</a>.<br />
Myths and Truths About Chapter 13 Bankruptcy: Part II<br />Myth: Debtors who file a Chapter 13 <a href="http://en.wikipedia.org/wiki/Bankruptcy">bankruptcy </a>will lose their entire tax refund every year they are in the Chapter 13 without exception.<br />Truth: Sometimes debtors in a Chapter 13 bankruptcy are required to turn over their tax refunds. The debtor is obligated to turn over tax refunds; however, the debtor may retain the lesser amount of either $600 or two months plan payments. The debtor is required to turn the excess over to the trustee and should not spend the rest of the refund. If the debtor would like to retain more than that amount, they can contact their attorney and have their attorney file a Motion to Retain Tax Refunds. The motion states the legitimate expenses debtor would like to spend the money on, and receipts or bids for the services or products would be attached so the trustee can confirm the amounts the debtor wishes to retain. The trustee has 21 days to object. If no objection is filed, the debtor can retain the portion of their refund accounted for by the motion. If the trustee objects, the debtor would be required to surrender their tax refund to the trustee. <br />Myth: When the debtor makes his or her Chapter 13 plan payment every month, the trustee takes most of the money for himself.<br />Truth: The trustee gets paid a small percentage of the total plan base as his fee. The percentage rate fluctuates but is usually about five percent. The trustee disperses the rest of the monthly plan payments to various creditors. The trustee pays on secured debts, such as vehicle loans, arrears on houses, and monthly mortgage payments if the debtor wishes. They also pay taxes, unsecured debts, sewer bills, and other debts as well. If the debtor is required to surrender tax refunds or employee bonuses, the trustee does not keep that money for himself. He generally uses those proceeds to pay unsecured creditors a portion of their debt if they have filed a proof of claim. The trustee may pay certain creditors before other creditors based on their priority level.<br />If you have questions, please contact a <a href="http://www.lickerlawfirm.com">St. Louis or St. Charles bankruptcy attorney</a>.<br />
If a debtor chooses to file bankruptcy he/she files a voluntary petition for bankruptcy with the court. If a creditor attempts to force an individual into a bankruptcy it is considered involuntary. Basically, this happens when a creditor feels that the only way they will recover anything from the debtor is to force them into bankruptcy. At this point, the creditor will file a motion with the court. If the court grants this motion the debtor is required to proceed with the bankruptcy. If a debtor receivesnotice of an involuntary bankruptcyand does not wish to be in bankruptcy, he/she should contact an attorney as soon as possible. It is possible to defend against this motion, but there is a very small window of time to respond. If you do not respond in time the court may grant the motion. If a debtor does win his/her case and does not have to file for bankruptcy he/she may be able to get the costs of attorney's fees and the defense reimbursed. This may all sound frightening, however, there are certain minimum amounts of debt. A creditor cannot just force anyone into a bankruptcy. Minimumsdepend on whether a debtor has a business or it is simply personal. Importantly, and involuntary bankruptcy cannot be filed as a Chapter 13. Depending on your situation, you may prefer, or need to file a Chapter 13. The long and short is, if you get notice of an involuntary bankruptcy proceeding, you should contact an attorney as soon as possible. It may be in your best interest to file for bankruptcy, and that is something an attorney can help you determine. Whether you want to defend against an involuntary case, or consider a voluntary bankruptcy, it is always a good idea to speak with an experienced attorney.If you have any questions, or would like to set up a free consultation, contact a St. Louis Bankruptcy Attorney today.
If a debtor chooses to file bankruptcy he/she files a voluntary petition for bankruptcy with the court. If a creditor attempts to force an individual into a bankruptcy it is considered involuntary. Basically, this happens when a creditor feels that the only way they will recover anything from the debtor is to force them into bankruptcy. At this point, the creditor will file a motion with the court. If the court grants this motion the debtor is required to proceed with the bankruptcy. If a debtor receives notice of an involuntary bankruptcy and does not wish to be in bankruptcy, he/she should contact an attorney as soon as possible. It is possible to defend against this motion, but there is a very small window of time to respond. If you do not respond in time the court may grant the motion. If a debtor does win his/her case and does not have to file for bankruptcy he/she may be able to get the costs of attorney's fees and the defense reimbursed.<br />This may all sound frightening; however, there are certain minimum amounts of debt. A creditor cannot just force anyone into a bankruptcy. Minimums depend on whether a debtor has a business or it is simply personal. Importantly, and involuntary bankruptcy cannot be filed as a Chapter 13. Depending on your situation, you may prefer, or need to file a Chapter 13. The long and short is, if you get notice of an involuntary bankruptcy proceeding, you should contact an attorney as soon as possible. It may be in your best interest to file for bankruptcy, and that is something an attorney can help you determine. Whether you want to defend against an involuntary case, or consider a voluntary bankruptcy, it is always a good idea to speak with an experienced attorney.<br />There is another circumstance where debtor(s) may find themselves in an involuntary bankruptcy. Any time an individual files for bankruptcy the bankruptcy trustee has the ability to look into financial records, <a title="Missouri Bankruptcy Exemptions" href="http://www.lickerlawfirm.com/blog/missouri-bankruptcy-exemptions.cfm">assets</a>, and property. If the bankruptcy property finds an asset (that could be a house, cars, property, money, etc.) particularly one that was not properly disclosed or valued on the petition, you may be held in an involuntary bankruptcy. As a general rule, a debtor has the right to dismiss their case at any time, however, as stated, if the bankruptcy trustee determines there are assets that could be liquidated to pay some of your debts you may not be able to dismiss your case.<br />If you have any questions, or would like to set up a free consultation, contact a <a title="St. Louis Bankruptcy Attorney" href="http://www.lickerlawfirm.com/">St. Louis Bankruptcy Attorney </a>today.<br />
After a long weekend with 900 bankruptcy colleagues, I’ve been thoroughly reminded about all that remains to be learned about this marvelous profession. What did I learn, and what was missing? I took my first bankruptcy case 32 years ago, and looking back, I blanch at what I didn’t know then. Even now, I see new angles, new complexities in a law I’ve been reading almost daily for more than 3 decades. An Ocean Of Education Lots of the learning this weekend happened in the formal presentations by judges and law professors at the NACBA 20th annual convention in San Antonio. Almost every panel chaffed against the constraints of time. Even subjects that seemed tidy and discrete threatened to overflow the allotted time. But perhaps equally useful and stimulating was the learning that went on around the tables and in the hallways, where my teachers were my friends, old and new, from around the country. I’d hear that “my judge does it this way” or “I’m bringing cases that argue that”. Someone would lean over and show me a software program or an operating system trick that saved time or filled a need. I tried live blogging, until the interest in the endeavor crashed our host’s server and they shut us down as a nuisance<g>. Of course, no program is perfect. There was a critical piece of the puzzle that was missing from the weekend. What We Missed In San Antonio What didn’t get much play in San Antonio was the nitty-gritty issue of finding clients and making a living in the bankruptcy business. It doesn’t matter how well you know the Code; if you can’t draw people who both need you and can pay the freight for a fresh start then you’re engaging in an academic, rather than a commercial, endeavor. There was a marketing discussion but, as I’ll leave to Jay when he’s ready to speak on the subject without hyperventilating, it was woefully inadequate. Some of the information provided was questionable, at best. Some of it could land an attorney in an ethical quandary if taken literally. Here’s The Missing Piece – Your Cure For An Ailing Bankruptcy Practice On June 9, 2012 Jay Fleischman and I will join forces at the Crowne Plaza Hotel – St. Louis Airport in (obviously) St. Louis for the Bankruptcy Practice Workshop, a day-long intensive live educational experience that happens to suffer from an exceptionally boring name. Brush aside boredom, and fend off involuntary dieting. Sharpen your skills by learning: how to attract more clients how to ensure that your website is designed for maximum usability and conversions how to get paid what you’re worth – not what the court arbitrarily sets as your “no look” fee how to create online content that convinces your visitors to work with you – not your competition – while improving your search engine placement how to use the most important WordPress plugins more effectively how to build a profitable network online and offline how to compete where the world seems to be a race to the bottom of the fee scale how to budget your time among social and business media platforms how to unearth the hidden gems in Adobe Acrobat to make your life easier how to stack your office with low cost/high return products and procedures how to grow your referral base quickly and easily and more As a reader of Bankruptcy Mastery, you can save $100 off the registration price when you use the Promo Code bkmllp at checkout. You can learn more about the Bankruptcy Practice Workshop by clicking here. For now, I’m back to my convention materials, trying to transfer an ocean of information to my head with a teaspoon. Like This Article? You'll Love These! Bankruptcy Mastery Will Provide Live Coverage Of NACBA San Antonio Convention Stripping in San Antonio NACBA San Antonio: Marketing A Bankruptcy Practice
Here’s what I would have blogged live if the interest in our live blogging hadn’t crashed the server and required uninstallation of the software that would allow us to be really live. Honorable Robert Berger, KC KS; James Molleur counsel in Pratt case Long standing problem, previously with cars, now endemic with housing. Surrender shows up lots of places in Code. Doesn’t mean they have to turn collateral over to creditor, just make it available to creditor. What does surrender mean when creditor ignores it? Court in Pratt and Rash repeat: “you can always surrender.” Pratt court created a theory of objective coercion. Page 198-199 discussion of the theory. Debtor filed statement, made it available to creditor, couldn’t junk it, Judge noted behavior of mortgage lenders who in absence of reafffirmation won’t speak to debtor or send mortgage statements. Equally coercive. Real Estate Molleur: when clients simply want to move on and shed the house, if the creditor doesn’t take it back, the property acrues taxes, sewer charges, water fees, property needs to be winterized, secure it against break in. Liability for personal injury remains and insurance companies won’t insure a vacant property. HOA dues continue to accrue. Berger decided that the non dischargeable HOA fees did not entitle the HOA to attorneys fees for the HOA; notes that there is little guidance in Colliers or anywhere else. He filed the Canning case for Chapter 13 debtors with huge HOA fees for an old building with huge maintenance costs. Judge: food for thought about using 363 sales for the value of the collateral. Chapter 13 debtor can use the other powers of the Code. Judge thinks the trustee and the debtor in 13 hold the Chapter 5 powers concurrently. Look at Chapter 13 beyond just the confirmation issues. Molleur: ideas for dealing with surrender issues In his area, the courts don’t allow forced short sales under 363 short sales deeds in lieu Chapter 13 plan language, requiring lender to X (to accept deed, perhaps) r/s order requiring lender to take certain action deed house to homeless person municipal ordinances that penalize or hold lenders discharge injunction violation Canning run down house on river in Sanford, ME. Debtors elected to surrender and moved out. A foreclosure was commenced then dismissed the foreclosure. Creditor sent letter to debtor (in materials page 206 of materials) indicating they wouldn’t foreclose or pay taxes and insurance. Molleur claimed it was discharge injunction violation. He tried it on stipulated and facts and now thinks having trial testimony on some of these subjects. What he wished he had was testimony on the motivation of creditor in doing nothing. HSBC claimed this was too quick to claim Pratt and that real estate always has some value, distinguished from the worthless car in Pratt. He got award of damages for dunning letters saying that debtors had to pay. Tips: have evidentiary hearing and get motivation testimony. Have a Chapter 13 sale plan with an eye on Espinosa. Like This Article? You'll Love These! Struggling with “adequate protection” Surrendering Property in Bankruptcy Here’s How To Charge More For A “Simple” Bankruptcy Case
Welcome to the 20th annual NACBA convention, here in San Antonio, TX. We’ll be live blogging much of the convention over the next few days, so stay on this site for all the updates. [liveblog] Like This Article? You'll Love These! Bankruptcy Mastery Will Provide Live Coverage Of NACBA San Antonio Convention Bankruptcy Lawyers Convene [...] Like This Article? You'll Love These! Bankruptcy Mastery Will Provide Live Coverage Of NACBA San Antonio Convention Bankruptcy Lawyers Convene in San Francisco Blog Heaven