Follow this link to see the interactive Job Loss Heat Map pictured below that chronicles the state of U.S. employment from 2004 to the Present. Prepare to be disappointed and maybe a bit shocked. I know I was.
According to the American Bankruptcy Institute, interpreting the data supplied by the National Bankruptcy Research Center, the number of consumer bankruptcies filed last month was 11% lower than it was last year. That fact is also consistent with the 2011 trend of fewer new filings each month than in the same month of 2010.
All of which sounds promising until we remember that last month 113,432 Americans still had to file bankruptcy to ward off severe financial turmoil, much of it due to their upside down mortgages and ever-sinking home values: trends that have not changed in 2011.
According to ABI Executive Director Sam Gerdano, consumer bankruptcies are declining due to the deleveraging of credit card accounts by consumers and the fact that new credit is so hard to get.
Again I ask: how is that good news? No new credit? What if you need new appliances? A new vehicle? What if you are in a once-in-a-lifetime cash crunch? I guess it's alright as long as it's some else's pain.
But hey, at least the August filings represented a 1% decrease from July. I know, I'm not that impressed either. Hey O'Bama, where's your messiah now? But seriously... the President had better do something or he'll end up as a one-term-wonder.
According to a NY Times article, bankruptcy filings are down. There are projected to be between 5 and 10% few filings this year. There are a number of factors cited: access to credit, amount of consumer debt, and economic factors (unemployment and foreclosures).
There, but for the grace of God, go I.
[vimeo http://www.vimeo.com/23376949 w=400&h=225]
Click here to download and view the Opinion in .pdf format.
In re Braden J. Adolph, 09-32836
Issued: January 28, 2011
By: A. Benjamin Goldgar
The Issues: The proper use and interpretation of 11 USC 707(a) and (b), the dynamic duo of bankruptcy dismissal. Under consideration is the distinction between dismissal for cause via 707(a) and the presumption of abuse in 707(b).
The Upshot: Judge Goldgar engages in a close analysis of 11 USC 707 and determines that bad faith is not a reason to dismiss under 707(a) and only consumer debts can be excepted from discharge under 707(b) - especially in light of BAPCPA. In this case, where an Attorney seeks his fees from a business debtor of his Client, the Court finds him to be out of luck - not a consumer debt, and not a bad faith filing. Boom shakalaka.
Click here to view and download the opinion in .pdf format.
The Upshot: A Chapter 7 Debtor that was the sole shareholder and director of a debt-ridden company is not a fiduciary as to creditor of his company merely because the company was insolvent when he filed his personal bankruptcy.
Discussion: Chapter 7 Debtor was the sole shareholder and director of a company that owned money as the result of activity that pre-dated his filing. One of the creditors of his company argued that since it had incurred debts while it was presumptively insolvent, the debts were presumptively fraudulent, making the Debtor a "special fiduciary" as to creditors under Illinois law. The 7th Circuit Court of Appeals disagreed, ruling that even if the Debtor did constitute a so-called "special fiduciary" under state law, he was not a fiduciary under 11 USC 523(a)(4). In other words, not all fiduciaries as the term is defined in State law stand in a "fiduciary capacity" under Bankruptcy law. Moreover said the Court, Congress did not intend for Sec. 523(a)(4) of the Bankruptcy Code to render officers and directors de facto liable for corporate debts; although they might be, if some other rationale justified holding them liable (i.e. fraud or defalcation).
In re: Kleibrink (Cir. 5, Sep. 28)
In a debtor's appeal from a district court's affirmance of a bankruptcy court's ruling that a creditor held an enforceable security interest in a property of his, despite his having received a discharge in an earlier bankruptcy proceeding, the order is affirmed where the notice given to the creditor did not satisfy the due process standard for notice set forth in Mullane.
In re: NM Holdings Co., LLC (Cir. 6, Sep. 30)
In a bankruptcy trustee's suit against debtor-company's former auditor, claiming that the auditor negligently performed its audits by failing to uncover and report unsound related-party transactions entered into by the company's sole shareholder and CEO, as well as aided and abetted the CEO's breach of his fiduciary duty to the company, district court's grant of the auditor's motion for summary judgment is affirmed where: 1) the trustee's amended complaint does not allege reliance by the company or by the company's fairness committee, and the alleged reliance by the company's creditors cannot support a claim brought by the trustee on behalf of the company; and 2) district court did not err in holding that the residual statute of limitations applied to the trustee's aiding-and-abetting claim.
In Re: Res. Tech. Corp. (Cir. 7, Oct. 1)
District Court affirmed Bankruptcy Court's rejection of Trustee's proposed assignment of Debtor's contracts to a company managed by its former officers in exchange for that company paying debtor's operating expenses because
1) Bankruptcy court carefully evaluated the assumption-and-assignment proposal under section 365(f)(2)(B), and its decision to deny the trustee's motion was sound;
2) There was no reason to disturb Bankruptcy judge's determination that the company failed to comply with its order requiring an escrow deposit; and
3) District Court's contempt finding was fully supported by the record, and the court thoroughly considered and properly rejected the company's defense to contempt.
Reed v. City of Arlington (Sep.17) (Cir. 5)
In a Chapter 7 case in which debtors omitted a pending $1 Million+ judgment from sworn statements and filings, district court's order discharging debts and allowing the Trustee to collect on behalf of the Estate is reversed to protect the integrity of the judicial processes.
Deutsche Bank v. Tucker (Sep. 15) (Cr. 6)
Chapter 13 Debtor claims that she need only cure the amount of her mortgage default that is secured, and that all additional fees and expenses should be treated as unsecured. The bankruptcy court agreed, but the district court vacated and remanded. Following remand the bankruptcy court held that bank fees and advances allowed under the Note, Mortgage, and applicable State law, should be included in the cure amount set forth in the Chapter 13 Plan.
In re: Gebhart (Sept. 14) (Cir. 9)
Court may have property sold and any non-exempt equity distributed even if the property only rose in value after the filing date. In this case the value of debtors' home increased during his Chapter 7 and the bankruptcy court's order approving appointment of a broker was affirmed on appeal. The fact that the value of the debtor's homestead exemption, plus encumbrances, had been equal to the market value of the residence at the time of filing did not prevent the trustee from taking advantage of the windfall.
Bankruptcy In re Stuart M. Hanson d/b/a Hanson & White, LLC, 09-04820
Adversary Michael Deady v. Stuart M. Hanson, 09-00457
Issued October 14, 2010 By Judge John H. Squires
For Plaintiff: William P. Suriano, Esq.
For Defendant: Robert R. Benjamin Esq. & John M. Brom, Esq.
Trustee: Gina B. Krol, Esq.
The Upshot: Motion to Amend judgment order is not a second bite at the apple. The points of law and fact being referred to in the moving party's pleadings must be placed before the Court so that the Judge is not forced to dig through the record. The outcome here was the same as the outcome in the companion case of Grant, LLC v. Hanson: motion denied.
Download and view the Opinion in .pdf format here.
Bankruptcy: In re Stuart M. Hanson, 09-04820
Adversary: 6050 Grant LLC v. Hanson, 09-00447
Opinion issued Oct. 5, 2010 by the Honorable John H. Squires
Upshot: After a hearing the Court determined that $93,461.29 owed by the Debtor to 6050 Grant was non-dischargeable under §523(a)(2)(A). Two weeks after entry of the Opinion, Debtor filed a motion to alter it. According to Rule 59(e) of the Federal Rules of Civil Procedure, incorporated here by Bankruptcy Rule 9023, a judgment may be amended based on one or more of the following: the Court's manifest error of law or fact, newly discovered evidence, or a change in controlling law. Under the circumstances, the Court found none of these conditions, so the judgment stands.
Click here to view and download the Opinion in .pdf format.
December 16, 2011 Max Out Your Credit Score! Use this step-by-step guide to rebuilding and safeguarding credit.
November 17, 2011 US v. Robertson (7th Cir) - How Harsh is Too Harsh? The 7th Circuit seemed to be balancing the inflexible Sentencing Guidelines imposed by Congress with the need to tailor the outcome to the facts. But it was the Defendants' own actions that saved them, so overall the rules remain as strict as ever. If you can't do the time, don't do the crime.
October 25, 2011 Can You Refinance under HARP 2.0? Recent changes to the Home Affordable Refinancing Program allow some to refinance to a lower interest rate and save on their monthly payments even if they would not ordinarily qualify.
October 10, 2011 In re Persfull - Death and Bankruptcy The old saying is that you can't escape death and taxes. This is especially true...
October 5, 2011 Consumer Bankruptcies Down (Again) in 2011 According to this press release from the American Bankruptcy Institute, total consumer bankruptcy filings in...
September 23, 2011 The Long (sad) Story of U.S. I harbor no love for The New York Times, which I consider to be arrogant,...
