BANKRUPTCY UPDATE
November 29, 2007
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New Member
Please welcome Donald Srstka to the group.
CLN Decision
You can use the link provided in the “Links” section below to view the following decision:
In re Huffman
Issue: Whether an objection to the chapter 7 trustee’s final report and proposed distribution should be sustained where the objector argued some personal injury settlement funds the trustee proposed to distribute belonged to it, not the bankruptcy estate?
Ruling: The objection was overruled as untimely. The objector had earlier, more appropriate opportunities to raise its ownership argument regarding the subject funds, but failed to do so.
Bankruptcy Rules Changes
Some new and amended Federal Rules of Bankruptcy Procedure will become effective on December 1, 2007. The new Bankruptcy Rules are 6003, 9005.1, and 9037. Rules 1014, 3007, 4001, 6006, and 7007.1 have been amended. Following is a brief summary of each change. The new and amended Bankruptcy Rules may be found on-line at www.uscourts.gov/rules/.
Bankruptcy Rule 1014 (Dismissal and Change of Venue). Allows a court to initiate a change of venue on its own motion after giving notice and an opportunity to be heard.
Bankruptcy Rule 3007 (Objections to Claims). Prohibits a party in interest from including in a claim objection a request for relief that requires an adversary proceeding. Places restrictions on, and provides procedures for, omnibus objections to claims. Also establishes minimum standards intended to protect the due process rights of claimants.
Bankruptcy Rule 4001 (Relief from Automatic Stay; Prohibiting or Conditioning the Use, Sale, or Lease of Property; Use of Cash Collateral; Obtaining Credit; Agreements). Requires a moving party to provide more extensive notice and a summary of the relief requested when seeking authority to use cash collateral, obtaining debtor-in-possession financing, or the approval of related agreements.
New Bankruptcy Rule 6003 (Interim and Final Relief Immediately Following the Commencement of the Case - Applications for Employment; Motions for Use, Sale, or Lease of Property; and Motions for Assumption or Assignment of Executory Contracts). Limits the type of motion and relief that can be granted during the first 20 days of a case.
Bankruptcy Rule 6006 (Assumption, Rejection or Assignment of an Executory Contract or Unexpired Lease). Authorizes use of an omnibus motion to assume, assign, or reject up to 100 multiple executory contracts and unexpired leases in a single motion.
Bankruptcy Rule 7007.1 (Corporate Ownership Statement). Clarifies that a party must file a corporate ownership statement with its initial paper filed with the court in an adversary proceeding.
New Bankruptcy Rule 9005.1 (Constitutional Challenge to a Statute - Notice, Certification, and Intervention). Applies Fed.R.Civ.P. 5.1, regarding notification requirements concerning constitutional challenges to a statute, to all proceedings in a bankruptcy case.
New Bankruptcy Rule 9037 (Privacy Protection for Filings Made with the Court). Addresses privacy and security concerns arising from electronic case filing.
Amendments to Official Bankruptcy Forms
The Judicial Conference has approved amendments to Bankruptcy Official Forms 1, 3A, 3B, 4, 5, 6, 7, 9, 10, 16A, 18, 19, 21, 23, and 24. These amendments will be effective on December 1, 2007. Attorneys who utilize petition software for bankruptcy forms should contact their vendors to ensure the amended forms are updated prior to December 1, 2007. Following is a summary of the form changes:
Official Form 1, Voluntary Petition: The ranges for estimated number of creditors, estimated assets, and estimated liabilities are amended to assist the courts in fulfilling the new statistical requirements of 28 U.S.C. § 159. A notice is provided advising the attorney that the attorney’s signature constitutes a certification that the attorney has no knowledge after an inquiry that the information in the schedules filed with the petition is incorrect.
Official Form 3A, Application and Order to Pay Filing Fee in Installments: Amended to direct the debtor to state that, until the filing fee is paid in full, the debtor will not make any additional payment or transfer any additional property to an attorney or any other person for services in connection with the case.
Official Form 3B, Application for Waiver of Chapter 7 Filing Fee: Fed.R.Bankr.P. 1006 adds a new subdivision (c). Official Form 3B is the form referenced in that subdivision and is to be used by individual chapter 7 debtors when applying for a waiver of the filing fee. A corresponding standard order also is included.
Official Form 4, List of Creditors Holding 20 Largest Unsecured Claims: Amended to require only the initials of a minor and not the full name if a creditor is a minor.
Official Form 5, Involuntary Petition: Amended to delete statistical information about the debtor that no longer is required, and to substitute check boxes similar to those on the voluntary petition form.
Official Form 6, Schedules: Amended to require only the initials of a minor and not the full name. Schedules I and J will include a statement advising debtors that the income and expense amounts on the schedules may differ from the income and expense amounts listed on the means test forms.
Official Form 7, Statement of Financial Affairs: Amended to require only the initials of a minor and not the full name.
Official Form 9, Notice of Commencement of Case under the Bankruptcy Code, Meeting of Creditors, and Deadlines: Amended in a variety of ways to implement the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
Official Form 10, Proof of Claim: Amended to provide more accurate addresses for transmittal of payments and notices, and indicate that a particular proof of claim has been replaced.
Official Form 16A, Caption: Amended to require the title of the case to include all names used by the debtor within the eight years prior to the filing of the petition.
Official Form 18, Discharge of Debtor: Amended to require the title of the case to include all names used by the debtor within the eight years prior to the filing of the petition.
Official Form 19, Declaration and Signature of Non-Attorney Bankruptcy Petition Preparer: This form is new. It is derived from form 19B and replaces forms 19A and 19B.
Official Form 21, Statement of Social Security Number: A taxpayer who does not have a Social Security number will be required to provide a taxpayer identification number on the form.
Official Form 23, Debtor’s Certification of Completion of Postpetition Instructional Course Concerning Personal Financial Management: Amended to remind the debtor that the form should not be used to file a certification of prepetition credit counseling.
Official Form 24, Certification to Court of Appeals by All Parties: Amended to include a signature line for the appellee and the appellee’s attorney.
Links
You may either click on the links provided below or cut and paste them into your browser.
In re Huffman
http://www.sdb.uscourts.gov/Decisions/2007 Decisions - Judge Nail/2007 - 10 Huffman.pdf
Previous UPDates
http://www.sdb.uscourts.gov/BankruptcyUpdates.htm
Please let us know if you have questions regarding this UPDate or anything else concerning your dealings with the Court or the Clerk’s office.