Puerto Rico

Annual Business and Non-business Filings by District (1997-2000)

 

Annual Business and Non-business Filings by District (1997-2000)

ABI World

  1997 1998 1999 2000
District Total Filings Business Filings Non-Business Filings Percent Consumer Total Filings Business Filings Non-Business Filings Percent Consumer Total Filings Business Filings Non-Business Filings Percent Consumer Total Filings Business Filings Non-Business Filings Percent Consumer
District of Alaska 1373 147 1,226 89.29% 1,479 127 1,352 91.41% 1,492 115 1377 92.29% 1,419 118 1,301 91.68%
Middle District of Alabama 6,670 284 6,386 95.74% 6,753 159 6,594 97.65% 6,500 146 6354 97.75% 7,284 137 7,147 98.11%
Northern District of Alabama 22,732 442 22,290 98.06% 20,912 380 20,532 98.18% 19,385 254 19,131 98.68% 20,348 275 20,073 98.64%
Southern District of Alabama 4,774 150 4,624 96.86% 4,803 64 4,739 98.67% 4,679 34 4,645 99.27% 5,356 33 5,323 99.38%
Eastern District of Arkansas 9,942 283 9,659 97.15% 10,789 215 10,574 98.01% 10,252 148 10,104 98.55% 10,566 151 10,415 98.57%
Western District of Arkansas 5,701 256 5,445 95.51% 6,263 193 6,070 96.92% 6,218 147 6,134 98.64% 6,218 110 6,108 98.23%
District of Arizona 25,069 846 24,223 96.63% 24,191 762 23,429 96.85% 22,609 781 21,828 96.54% 20,955 765 20,190 96.34%
Central District of California 118,335 6,184 112,151 94.77% 120,981 4,787 116,194 96.04% 102,422 2,387 100,035 97.66% 80,782 2,232 78,550 97.23%
Eastern District of California 36,976 2,624 34,352 92.90% 39,345 2,012 37,333 94.89% 34,750 1,144 33,606 96.70% 29,756 1,139 28,617 96.29%
Northern District of California 34,781 2,116 32,515 95.40% 34,082 1,567 32,665 93.92% 26,564 1,308 25,256 95.07% 19,562 1,063 18,499 94.56%
Southern District of California 19,407 213 19,194 98.40% 18,805 180 18,625 99.04% 15,292 175 15,117 98.85% 12,619 161 12,458 98.72%
District of Colorado 19,146 518 18,628 97.29% 18,262 402 17,860 97.80% 1,6165 347 15818 97.85% 15,558 373 15,185 97.60%
District of Connecticut 13,499 205 13,294 98.48% 13,962 164 13,798 98.83% 11868 142 11726 98.80% 10,643 139 10,504 98.69%
District of Columbia 2,530 100 2,430 96.05% 2,885 88 2,797 96.95% 2718 81 2637 97.01% 2,346 58 2,288 97.52%
District of Delaware 2,646 214 2,432 91.91% 2,871 372 2,499 87.04% 4,526 21,115 2,411 53.26% 4,695 2,320 2,375 50.60%
Middle District of Florida 42,388 1,217 41,171 97.13% 45,472 1,090 44,382 97.60% 41,855 1,008 40,847 97.59% 40,551 777 39,774 98.72%
Northern District of Florida 4,787 442 22,290 98.06% 5,344 91 5,253 98.30% 5,002 74 4,928 98.52% 5,148 66 5,082 98.71%
Southern District of Florida 26,308 816 25,492 96.90% 29,373 686 28,687 97.66% 28,500 641 27,859 97.75% 27,032 604 26,428 97.76%
Middle District of Georgia 15,136 202 14,934 98.67% 14,921 161 14,760 98.92% 14,161 160 14,001 98.87% 14,833 113 14,720 99.23%
Northern District of Georgia 34,946 1,130 33,816 98.03% 33,763 834 32,929 97.53% 31,871 650 31,221 97.96% 32,242 727 31,515 97.74%
Southern District of Georgia 12,707 310 12,397 97.56% 12,441 202 12,239 98.38% 11,741 123 11,618 98.95% 12,852 172 12,680 98.66%
District of Hawaii 4,463 187 4,276 95.81% 5,829 114 5,715 98.04% 5426 87 5339 98.39% 4,549 63 4,486 98.61%
Northern District of Iowa 3,996 235 3,761 94.12% 3,880 180 3,700 95.36% 3,444 115 3,329 96.66% 3,399 163 3,236 95.99%
Southern District of Iowa 5,847 270 5,577 95.38% 5,638 103 5,535 98.17% 5,008 81 33,606 96.70% 4,894 51 4,843 98.95%
District of Idaho 6,973 532 6,441 92.37% 7,612 435 7,177 94.29% 7,285 340 6945 95.33% 7,119 269 6,850 96.22%
Central District of Illinois 12,854 295 12,559 97.70% 12,685 114 12,571 99.10% 11,765 167 11,598 98.58% 11,406 134 11,272 98.82%
Northern District of Illinois 44,087 854 43,233 98.06% 46,503 646 45,857 98.61% 44,790 553 44,237 98.769% 42,340 548 41,792 98.70%
Southern District of Illinois 7,013 639 6,374 90.89% 7,499 714 6,785 90.48% 7,406 1,965 6,732 90.89% 7,416 588 6,828 92.07%
Northern District of Indiana 13,658 213 13,445 98.44% 14,550 190 14,360 98.69% 14,288 148 14,140 98.96% 42,340 548 41,792 98.70%
Southern District of Indiana 23,150 470 22,680 97.97% 24,711 423 24,288 98.29% 23,954 353 23,601 98.52% 23,422 272 23,150 98.83%
District of Kansas 13,131 412 12,719 96.86% 13,208 264 12,944 98.00% 11538 172 11366 98.50% 11,315 169 11,146 98.50%
Eastern District of Kentucky 9,558 1273 9,285 97.14% 9,594 182 9,412 98.10% 8,996 143 8,853 98.41% 9,050 213 8,837 97.64%
Western District of Kentucky 12,129 176 11,953 98.55% 12,592 174 12,418 98.62% 11,825 138 11,687 98.83% 11,968 142 11,826 98.81%
Eastern District of Louisiana 7,365 141 7,224 98.21% 7,119 120 6,999 98.31% 7,657 131 7,526 98.28% 8,265 122 8,143 98.52%
Middle District of Louisiana 2,805 52 2,753 98.15% 2,940 41 2,899 98.61% 2680 29 2,651 98.91% 2,831 36 2,795 98.72%
Western District of Louisiana 12,988 481 12,507 96.30% 12,887 439 12,448 96.59% 12,293 429 11,864 96.51% 12,039 461 11,578 96.17%
District of Massachusetts 23,894 965 22,927 95.96% 22,325 739 21,586 96.69% 18,660 566 18,034 96.95% 15,601 393 15,208 97.48%
District of Maryland 31,991 1,678 30,313 94.75% 35,430 1,231 34,199 96.53% 32,273 795 31,478 97.53% 30,355 677 29,658 97.70%
District of Maine 4,218 310 3,908 92.65% 4,515 244 4,271 94.60% 4,177 197 3,980 95.28% 4,042 162 3,880 95.99%
Eastern District of Michigan 27,348 595 26,753 97.82% 28,198 373 27,825 98.68% 25,824 359 25,465 98.60% 25,122 333 24,789 98.67%
Western District of Michigan 12,261 511 11,750 95.83% 12,546 348 12,198 97.23% 11,428 275 11,153 97.59% 11,290 244 11,046 97.83%
District of Minnesota 20,225 2,478 17,747 87.75% 18,866 1,975 16,891 89.53% 15,853 1,584 14,269 90.00% 15,314 566 18,034 96.95%
Eastern District of Missouri 14,897 300 14,597 97.99% 16,423 255 16,168 98.45% 15,888 203 15,685 98.72% 15,118 184 14,934 98.78%
Western District of Missouri 11,218 433 10,785 96.14% 11,842 169 11,673 98.57% 11,141 155 10,986 98.60% 10,902 185 10,717 98.30%
Northern District of Mississippi 6,602 153 6,449 97.68% 6,226 135 6,091 97.83% 5,917 133 5,784 97.75% 6,314 99 6,215 98.43%
Southern District of Mississippi 12,667 146 12,521 98.85% 12,474 109 12,365 99.13% 11,833 68 11,765 99.42% 12,144 104 12,040 99.14%
District of Montana 3,572 278 3,294 92.22% 3,717 145 3,572 96.10% 3,386 121 3,265 96.42% 3,336 141 3,195 95.77%
Eastern District of North Carolina 9,788 426 9,362 95.65% 10,914 321 10,593 97.06% 10,325 263 10,062 97.45% 10,832 257 10,575 97.62%
Middle District of North Carolina 9,289 212 9,077 97.72% 9,014 144 8,870 98.40% 8,543 113 8,430 95.32% 9,398 115 9,283 98.77%
Western District of North Carolina 7,126 82 7,044 98.85% 7,056 69 6,987 99.02% 6,966 66 6,930 99.05% 6,861 73 6,788 98.93%
District of North Dakota 1,961 155 1,806 92.10% 2,192 87 2,105 96.03% 2,146 100 2,046 95.34% 1,933 92 1,841 95.24%
District of Nebraska 5,949 281 5,668 95.28% 6,116 129 5,987 97.89% 5,500 158 5,342 97.12% 5,629 115 5,514 97.95%
District of New Hampshire 4,902 187 4,715 96.19% 4,994 417 4,577 91.65% 4,104 348 3,756 91.52% 3,615 302 3,018 83.48%
District of New Jersey 42,434 1,112 41,322 97.38% 45,880 876 45,004 98.09% 40,814 877 39,937 97.85% 37,305 660 36,645 98.23%
District of New Mexico 7,560 384 7,176 94.92% 7,915 338 7,577 95.73% 7,336 554 6,782 92.44% 7,032 513 6,519 92.70%
District of Nevada 13,427 399 13,028 97.03% 15,708 428 15,280 97.28% 1,479 127 1,352 91.41% 14,010 332 13,678 97.63%
Eastern District of New York 29,459 566 28,893 98.08% 31,494 461 31,033 98.54% 26,449 378 26,071 98.57% 22,503 338 22,165 98.49%
Northern District of New York 16,173 777 15,396 95.20% 16,703 505 16,198 96.98% 14,466 394 14,072 97.27% 13,507 407 13,100 96.98%
Southern District of New York 15,972 846 15,126 94.70% 17,047 586 16,461 96.56% 14,798 565 14,233 96.18% 12,524 788 11,736 93.70%
Western District of New York 13,114 964 12,150 92.65% 13,398 727 12,671 94.57% 11,360 535 10,825 95.29% 10,636 427 10,209 98.72%
Northern District of Ohio 26,200 480 25,720 98.17% 28,353 649 27,704 97.71% 27,716 789 26,927 97.15% 28,016 1,001 27,015 96.42%
Southern District of Ohio 27,570 526 27,044 98.10% 28,351 512 27,839 98.19% 26,071 406 25,665 99.86% 26,168 470 25,698 98.20%
Eastern District of Oklahoma 3,462 176 3,286 94.92% 3,812 120 3,692 96.85% 3,550 104 3,446 97.07% 3,651 81 3,570 97.78%
Northern District of Oklahoma 6,007 648 5,359 89.21% 5,372 459 4,913 91.46% 5,042 328 4,714 93.45%
Western District of Oklahoma 13,100 545 12,555 95.84% 12,756 254 12,502 98.01% 11,436 296 11,140 97.41% 10,619 351 10,268 96.69%
District of Oregon 18,197 1,434 16,763 92.12% 18,103 2,660 15,443 85.31% 18,168 2,939 15,229 83.82% 18,227 1,453 16,774 92.02%
Eastern District of Pennsylvania 21,773 561 21,212 97.42% 23,187 392 22,795 98.31% 21,752 328 21,424 98.49% 21,099 328 20,771 98.44%
Middle District of Pennsylvania 9,593 852 8,741 91.12% 10,693 837 9,856 92.17% 10,212 706 9,506 93.08% 10,370 745 9,625 92.81%
Western District of Pennsylvania 11,601 472 11,129 95.93% 12,772 456 12,316 96.43% 11,950 363 11,587 96.96% 12,501 382 12,119 96.94%
District of Rhode Island 5,472 180 5,292 96.71% 5,480 130 5,350 97.63% 5060 116 4944 97.70% 4,457 74 4,383 98.33%
District of South Carolina 11,232 346 10,886 96.92% 11,672 254 11,373 97.82% 11,442 191 11,251 98.33% 11,958 138 11,820 98.84%
District of South Dakota 2,366 221 2,145 90.66% 2,299 186 2,113 91.91% 2,223 152 2,071 93.16% 2,105 133 1,972 93.68%
Eastern District of Tennessee 16,254 422 15,832 97.40% 15,984 336 15,648 97.90% 14,944 236 14,708 98.42% 15,703 239 15,464 98.47%
Middle District of Tennessee 12,478 457 12,021 96.34% 12,131 292 11,839 97.59% 10,968 251 10,717 97.71% 11,739 254 11,485 97.83%
Western District of Tennessee 24,052 187 23,865 99.22% 23,081 241 22,840 98.96% 20,613 315 20,298 98.47% 21,794 148 21,646 99.32%
Eastern District of Texas 9,734 522 9,212 94.64% 9,817 360 9,457 96.33% 9,272 303 8,969 96.73% 8,962 387 8,575 95.68%
Northern District of Texas 25,373 1,546 23,827 93.91% 24,934 1,191 23,743 95.22% 21,447 921 20,526 95.70% 20,674 937 19,737 95.46%
Southern District of Texas 19,508 754 18,754 96.13% 19,352 657 18,695 96.61% 17,506 614 16,892 96.49% 17,157 823 16,334 95.20%
Western District of Texas 18,114 644 17,470 96.44% 17,696 488 17,208 97.24% 16,488 464 16,024 97.18% 15,328 445 14,883 97.09%
District of Utah 12,147 434 11,713 96.43% 13,996 460 13,536 96.71% 14,108 464 13,644 96.71% 15,192 451 14,741 97.03%
Eastern District of Virginia 31,921 767 31,154 97.60% 32,398 545 31,853 98.32% 28,262 369 27,893 98.69% 26,131 296 25,835 98.86%
Western District of Virginia 11,198 589 10,609 94.74% 11,041 593 10,448 94.63% 10,182 472 9,710 95.36% 10,060 519 9,541 94.84%
District of Vermont 1,911 164 1,747 91.42% 1,965 88 1,877 95.52% 1,757 83 1,674 95.27% 1,492 71 1,421 95.24%
Eastern District of Washington 7,052 448 6,604 93.65% 7,838 442 7,396 94.36% 7,823 297 7,526 96.20% 8,376 382 7,994 95.43%
Western District of Washington 26,285 926 25,359 96.48% 25,565 554 25,011 97.83% 23,818 335 23,483 98.59% 22,755 335 22,420 98.52%
Eastern District of Wisconsin 12,940 348 12,592 97.31% 12,962 267 12,695 97.94% 12,615 213 12,402 98.31% 12,075 172 11,903 98.57%
Western District of Wisconsin 6,257 865 5,392 86.18% 6,452 870 5,582 86.52% 5,874 606 5,268 89.68% 5,774 513 5,261 91.11%
Northern District of West Virginia 3,475 179 3,296 94.85% 3,550 179 3,371 94.96% 3,339 115 3,224 96.55% 3,404 121 3,283 96.44%
Southern District of West Virginia 5,067 188 4,879 96.29% 5,141 150 4,991 97.08% 4,812 138 4,674 97.13% 5,242 156 5,086 97.02%
District of Wyoming 2,031 91 1,940 95.52% 2,257 89 2,168 96.06% 2009 69 1940 96.56% 2,078 47 2,031 97.73%
District of Guam 114 21 93 81.58% 109 25 84 77.06% 131 21 110 83.96% 155 31 124 80.00%
District of the Northern Mariana Islands 2 1 1 50% 18 8 10 55.56% 12 6 6 50.00% 15 6 9 60.00%
District of Puerto Rico 15,670 162 15,508 98.97% 17,447 126 17,321 99.28% 17,909 206 17,703 98.84% 14,919 209 14,710 98.59%
District of the Virgin Islands 74 17 57 77.03% 73 11 62 84.93% 66 12 54 81.81% 56 7 49 87.50%
United States 1,404,145 54,027 1,350,118 96.15% 1,442,549 44,367 1,398,182 96.92% 1,319,465 37,884 1,281,581 97.12% 1,253,444 35,472 1,217,972 97.17%


Annual Business and Non-business Filings by District (1985-1989)

 

Annual Business and Non-business Filings by District (1985-1989)

ABI World

  1985 1986 1987 1988 1989
District Total Filings Business Filings Non-Business Filings Percent Consumer Total Filings Business Filings Non-Business Filings Percent Consumer Total Filings Business Filings Non-Business Filings Percent Consumer Total Filings Business Filings Non-Business Filings Percent Consumer Total Filings Business Filings Non-Business Filings Percent Consumer
District of Alaska 673 276 397 58.99% 1117 343 774 69.29% 1428 362 1066 74.65% 1239 226 1013 81.76% 1340 208 1132 84.48%
Middle District of Alabama 2354 230 2124 90.23% 2959 171 2788 94.22% 3386 268 3118 92.09% 4042 321 3721 92.06% 4764 293 4471 93.85%
Northern District of Alabama 8540 495 8045 94.20% 10677 743 9934 93.04% 11806 1060 10746 91.02% 13103 714 12389 94.55% 15525 956 14569 93.84%
Southern District of Alabama 1560 243 1317 84.42% 1898 284 1614 85.04% 2017 287 1730 85.77% 2378 205 2173 91.38% 2703 87 2616 96.78%
Eastern District of Arkansas 2979 373 2606 87.48% 3461 370 3091 89.31% 3899 450 3449 88.46% 4060 328 3732 91.92% 4225 285 3940 93.25%
Western District of Arkansas 1158 226 932 80.48% 1542 223 1319 85.54% 1827 263 1564 85.60% 1991 224 1767 88.75% 2163 169 1994 92.19%
District of Arizona 5665 1444 4221 74.51% 8940 1906 7034 78.68% 11528 1814 9714 84.26% 13776 1677 12099 87.83% 16313 2401 13912 85.28%
Central District of California 36977 3764 33213 89.82% 46818 4390 42428 90.62% 49522 4307 45215 91.30% 51112 2709 48403 94.70% 54283 3017 51266 94.44%
Eastern District of California 11181 2725 8456 75.63% 14533 2825 11708 80.56% 15411 2703 12708 82.46% 17399 1865 15534 89.28% 18368 1540 16828 91.62%
Northern District of California 13489 2661 10828 80.27% 18436 3074 15362 83.33% 19474 2824 16650 85.50% 19329 2402 16927 87.57% 18348 2132 16216 88.38%
Southern District of California 6777 793 5984 88.30% 8390 791 7599 90.57% 9460 910 8550 90.38% 9951 507 9444 94.91% 10126 406 9720 95.99%
District of Colorado 8280 2362 5918 71.47% 12858 3699 9159 71.23% 15950 5291 10659 66.83% 18071 4336 13735 76.01% 17579 3806 13773 78.35%
District of Connecticut 2013 349 1664 82.66% 2200 202 1998 90.82% 2344 190 2154 91.89% 2550 219 2331 91.41% 3436 218 3218 93.66%
District of Columbia 788 104 684 86.80% 946 95 851 89.96% 1144 79 1065 93.09% 1070 62 1008 94.21% 1069 73 996 93.17%
District of Delaware 504 48 456 90.48% 509 34 475 93.32% 553 65 488 88.25% 690 50 640 92.75% 775 64 711 91.74%
Middle District of Florida 7139 1213 5926 83.01% 10565 1097 9468 89.62% 12736 1008 11728 92.09% 14816 1052 13764 92.90% 18995 1177 17818 93.80%
Northern District of Florida 784 300 484 61.73% 1326 425 901 67.95% 1583 346 1237 78.14% 1805 283 1522 84.32% 2087 235 1852 88.74%
Southern District of Florida 3184 633 2551 80.12% 4061 536 3525 86.80% 4842 510 4332 89.47% 5368 529 4839 90.15% 6969 610 6359 91.25%
Middle District of Georgia 4067 279 3788 93.14% 5193 297 4896 94.28% 5653 348 5305 93.84% 6081 266 5815 95.63% 7521 262 7259 96.52%
Northern District of Georgia 9464 1313 8151 86.13% 12860 1740 11120 86.47% 13844 1345 12499 90.28% 15417 1187 14230 92.30% 21155 1901 19254 91.01%
Southern District of Georgia 2807 203 2604 92.77% 3577 170 3407 95.25% 4115 330 3785 91.98% 4841 192 4649 96.03% 6263 187 6076 97.01%
District of Hawaii 680 264 416 61.18% 860 255 605 70.35% 1016 183 833 81.99% 854 119 735 86.07% 887 129 758 85.46%
Northern District of Iowa 2719 1345 1374 50.53% 2927 1381 1546 52.82% 2674 1199 1475 55.16% 2070 708 1362 65.80% 2054 610 1444 70.30%
Southern District of Iowa 2883 946 1937 67.19% 3445 1013 2432 70.60% 3187 818 2369 74.33% 2904 439 2465 84.88% 2971 350 2621 88.22%
District of Idaho 2753 718 2035 73.92% 3579 633 2946 82.31% 3955 721 3234 81.77% 3871 408 3463 89.46% 3949 360 3589 90.88%
Central District of Illinois 6189 1423 4766 77.01% 6795 1412 5383 79.22% 6577 1284 5293 80.48% 6243 801 5442 87.17% 6710 536 6174 92.01%
Northern District of Illinois 19933 2034 17899 89.80% 22295 1765 20530 92.08% 21420 1575 19845 92.65% 22376 1362 21014 93.91% 24109 1223 22886 94.93%
Southern District of Illinois 2014 549 1465 72.74% 2685 672 2013 74.97% 2738 765 1973 72.06% 2853 626 2227 78.06% 3093 640 2453 79.31%
Northern District of Indiana 5594 653 4941 88.33% 6599 683 5916 89.65% 7196 803 6393 88.84% 6960 641 6319 90.79% 7757 580 7177 92.52%
Southern District of Indiana 8366 767 7599 90.83% 10622 922 9700 91.32% 11225 753 10472 93.29% 11760 541 11219 95.40% 13383 514 12869 96.16%
District of Kansas 5537 1247 4290 77.48% 7227 1551 5676 78.54% 7278 1421 5857 80.48% 7151 762 6389 89.34% 7620 554 7066 92.73%
Eastern District of Kentucky 2798 543 2255 80.59% 3723 649 3074 82.57% 3984 660 3324 83.43% 4844 610 4234 87.41% 5902 718 5184 87.83%
Western District of Kentucky 5063 458 4605 90.95% 6140 373 5767 93.93% 6009 542 5467 90.98% 6093 388 5705 93.63% 6880 438 6442 93.63%
Eastern District of Louisiana 3681 396 3285 89.24% 5345 454 4891 91.51% 5795 483 5312 91.67% 5250 367 4883 93.01% 5142 319 4823 93.80%
Middle District of Louisiana 1563 188 1375 87.97% 2090 501 1589 76.03% 2157 440 1717 79.60% 1661 211 1450 87.30% 1691 161 1530 90.48%
Western District of Louisiana 4106 955 3151 76.74% 6440 1669 4771 74.08% 6436 1633 4803 74.63% 5811 1006 4805 82.69% 6098 893 5205 85.36%
District of Massachusetts 2017 437 1580 78.33% 2546 514 2032 79.81% 2780 512 2268 81.58% 3419 591 2828 82.71% 5402 1159 4243 78.54%
District of Maryland 4663 481 4182 89.68% 6117 442 5675 92.77% 6804 965 5839 85.82% 7658 397 7261 94.82% 8447 480 7967 94.32%
District of Maine 703 183 520 73.97% 819 172 647 79.00% 874 213 661 75.63% 986 215 771 78.19% 1160 205 955 82.33%
Eastern District of Michigan 6113 707 5406 88.43% 8591 693 7898 91.93% 10279 730 9549 92.90% 11096 740 10356 93.33% 12334 745 11589 93.96%
Western District of Michigan 3218 839 2379 73.93% 3968 990 2978 75.05% 4184 894 3290 78.63% 4527 772 3755 82.95% 5195 833 4362 83.97%
District of Minnesota 6475 1735 4740 73.20% 8592 1735 6857 79.81% 9429 1729 7700 81.66% 10654 1416 9238 86.71% 12890 1511 11379 88.28%
Eastern District of Missouri 3491 515 2976 85.25% 4234 537 3697 87.32% 4879 697 4182 85.71% 5600 446 5154 92.04% 6587 278 6309 95.78%
Western District of Missouri 4806 1324 3482 72.45% 5639 1382 4257 75.49% 5690 1789 3901 68.56% 5728 987 4741 82.77% 5986 891 5095 85.12%
Northern District of Mississippi 1439 179 1260 87.56% 2041 376 1665 81.58% 2453 485 1968 80.23% 2691 191 2500 92.90% 3181 190 2991 94.03%
Southern District of Mississippi 3829 198 3631 94.83% 4858 193 4665 96.03% 5742 451 5291 92.15% 6626 172 6454 97.40% 7129 147 6982 97.94%
District of Montana 1295 356 939 72.51% 1592 441 1151 72.30% 1698 485 1213 71.44% 1936 483 1453 75.05% 1750 354 1396 79.77%
Eastern District of North Carolina 2462 394 2068 84.00% 3059 449 2610 85.32% 3149 533 2616 83.07% 3009 458 2551 84.78% 3285 503 2782 84.69%
Middle District of North Carolina 2067 279 1788 86.50% 2653 312 2341 88.24% 2754 481 2273 82.53% 2856 331 2525 88.41% 3268 327 2941 89.99%
Western District of North Carolina 1912 335 1577 82.48% 2325 246 2079 89.42% 2302 256 2046 88.88% 2561 162 2399 93.67% 3057 175 2882 94.28%
District of North Dakota 818 354 464 56.72% 1137 278 859 75.55% 1127 302 825 73.20% 1114 197 917 82.32% 1039 211 828 79.69%
District of Nebraska 3033 622 2411 79.49% 3748 992 2756 73.53% 3802 1502 2300 60.49% 3270 567 2703 82.66% 3418 393 3025 88.50%
District of New Hampshire 557 139 418 75.04% 540 117 423 78.33% 608 127 481 79.11% 831 186 645 77.62% 1324 320 1004 75.83%
District of New Jersey 6988 1009 5979 85.56% 8089 1167 6922 85.57% 7947 1033 6914 87.00% 8535 917 7618 89.26% 10505 1135 9370 89.20%
District of New Mexico 1819 375 1444 79.38% 2552 469 2083 81.62% 2674 413 2261 84.55% 3047 405 2642 86.71% 3769 303 3466 91.96%
District of Nevada 3371 679 2692 79.86% 4687 742 3945 84.17% 5188 394 4794 92.41% 5801 432 5369 92.55% 5778 406 5372 92.97%
Easter District of New York 5042 491 4551 90.26% 5664 513 5151 90.94% 5804 475 5329 91.82% 6362 392 5970 93.84% 8333 588 7745 92.94%
Northern District of New York 2909 540 2369 81.44% 3390 534 2856 84.25% 3693 583 3110 84.21% 4133 643 3490 84.44% 5237 587 4650 88.79%
Southern District of New York 3240 716 2524 77.90% 3626 716 2910 80.25% 3822 633 3189 83.44% 4296 720 3576 83.24% 5687 1104 4583 80.59%
Western District of New York 4033 828 3205 79.47% 4249 740 3509 82.58% 4602 588 4014 87.22% 4910 198 4712 95.97% 5818 226 5592 96.12%
Northern District of Ohio 10063 1028 9035 89.78% 11897 922 10975 92.25% 13333 1157 12176 91.32% 14124 921 13203 93.48% 15832 915 14917 94.22%
Southern District of Ohio 10838 1274 9564 88.25% 13114 1155 11959 91.19% 14620 1050 13570 92.82% 15950 564 15386 96.46% 17760 532 17228 97.00%
Eastern District of Oklahoma 855 287 568 66.43% 1350 410 940 69.63% 1536 316 1220 79.43% 1609 207 1402 87.13% 1626 217 1409 86.65%
Northern District of Oklahoma 2477 539 1938 78.24% 3824 791 3033 79.31% 3792 734 3058 80.64% 4152 606 3546 85.40% 4174 453 3721 89.15%
Western District of Oklahoma 5197 1173 4024 77.43% 8090 1579 6511 80.48% 9373 1464 7909 84.38% 8432 1122 7310 86.69% 8516 1050 7466 87.67%
District of Oregon 7774 2059 5715 73.51% 9780 2621 7159 73.20% 9851 1812 8039 81.61% 9935 1112 8823 88.81% 10621 890 9731 91.62%
Eastern District of Pennsylvania 5639 455 5184 91.93% 6055 455 5600 92.49% 6924 350 6574 94.95% 6538 347 6191 94.69% 7107 418 6689 94.12%
Middle District of Pennsylvania 1714 363 1351 78.82% 2129 351 1778 83.51% 2108 314 1794 85.10% 2226 280 1946 87.42% 2338 405 1933 82.68%
Western District of Pennsylvania 3553 539 3014 84.83% 3989 539 3450 86.49% 4331 651 3680 84.97% 4154 505 3649 87.84% 4283 448 3835 89.54%
District of Rhode Island 842 131 711 84.44% 897 87 810 90.30% 876 80 796 90.87% 941 118 823 87.46% 1289 170 1119 86.81%
District of South Carolina 2870 299 2571 89.58% 4222 342 3880 91.90% 4101 330 3771 91.95% 4290 405 3885 90.56% 4670 312 4358 93.32%
District of South Dakota 1072 622 450 41.98% 1586 988 598 37.70% 1649 879 770 46.69% 1198 370 828 69.12% 1248 320 928 74.36%
Eastern District of Tennessee 4882 708 4174 85.50% 5453 784 4669 85.62% 6107 705 5402 88.46% 6939 364 6575 94.75% 8555 384 8171 95.51%
Middle District of Tennessee 4249 583 3666 86.28% 5608 637 4971 88.64% 7297 772 6525 89.42% 8651 702 7949 91.89% 9992 929 9063 90.70%
Western District of Tennessee 7964 226 7738 97.16% 9890 241 9649 97.56% 10748 363 10385 96.62% 12018 198 11820 98.35% 13079 216 12863 98.35%
Eastern District of Texas 1311 459 852 64.99% 1945 694 1251 64.32% 2591 766 1825 70.44% 2942 731 2211 75.15% 2891 698 2193 75.86%
Northern District of Texas 6708 2523 4185 62.39% 10483 3445 7038 67.14% 13022 3502 9520 73.11% 15040 3143 11897 79.10% 15450 2898 12552 81.24%
Southern District of Texas 8613 2518 6095 70.77% 13856 2841 11015 79.50% 14262 2413 11849 83.08% 12874 1977 10897 84.64% 11875 1634 10241 86.24%
Western District of Texas 4043 857 3186 78.80% 6286 1415 4871 77.49% 9069 1717 7352 81.07% 10993 1784 9209 83.77% 11281 1250 10031 88.92%
District of Utah 4505 1227 3278 72.76% 5747 1396 4351 75.71% 6836 1276 5560 81.33% 7686 1249 6437 83.75% 7976 723 7253 90.94%
Eastern District of Virginia 7453 1318 6135 82.32% 8892 1227 7665 86.20% 10130 1185 8945 88.30% 10999 1558 9441 85.84% 12682 1881 10801 85.17%
Western District of Virginia 3292 588 2704 82.14% 3843 536 3307 86.05% 4117 521 3596 87.35% 4209 472 3737 88.79% 4814 582 4232 87.91%
District of Vermont 259 69 190 73.36% 260 74 186 71.54% 307 54 253 82.41% 322 60 262 81.37% 380 226 154 40.53%
Eastern District of Washington 3170 658 2512 79.24% 3884 783 3101 79.84% 4219 1076 3143 74.50% 4343 814 3529 81.26% 4051 492 3559 87.85%
Western District of Washington 9565 1028 8537 89.25% 13449 1860 11589 86.17% 13452 1852 11600 86.23% 13851 1831 12020 86.78% 13560 1707 11853 87.41%
Eastern District of Wisconsin 5115 949 4166 81.45% 5660 194 5466 96.57% 5749 187 5562 96.75% 5892 141 5751 97.61% 6373 375 5998 94.12%
Western District of Wisconsin 2635 1073 1562 59.28% 3272 1186 2086 63.75% 3415 1183 2232 65.36% 3080 826 2254 73.18% 3317 675 2642 79.65%
Northern District of West Virginia 627 167 460 73.37% 801 201 600 74.91% 901 190 711 78.91% 944 109 835 88.45% 1059 140 919 86.78%
Southern District of West Virginia 1521 246 1275 83.83% 1794 296 1498 83.50% 2062 281 1781 86.37% 2198 232 1966 89.44% 2383 261 2122 89.05%
District of Wyoming 1154 493 661 57.28% 1500 529 971 64.73% 1642 420 1222 74.42% 1441 172 1269 88.06% 1405 124 1281 91.17%
District of Guam 52 21 31 59.62% 59 18 41 69.49% 50 12 38 76.00% 49 10 39 79.59% 52 10 42 80.77%
District of the Northern Mariana Islands 3 3 0 0.00% 3 3 0 0.00% 2 1 1 50.00% 3 2 1 33.33% 3 2 1 33.33%
District of Puerto Rico 1897 541 1356 71.48% 2432 518 1914 78.70% 3055 515 2540 83.14% 3983 550 3433 86.19% 5958 766 5192 87.14%
District of the Virgin Islands 36 18 18 50.00% 34 19 15 44.12% 19 8 11 57.89% 23 10 13 56.52% 29 9 20 68.97%
United States 412510 71277 341233 82.72% 530438 81235 449203 84.69% 577999 82446 495553 85.74% 613465 63853 549612 89.59% 679461 63235 616226 90.69%


Total Bankruptcies Eclipse the 2 Million Mark in 2005 as Consumers File in Record Numbers Prior to Implementation of New Bankruptcy Law

Contact: John Hartgen

              Phone: 703-739-0800

              Email: jhartgen@abiworld.org

 

Total Bankruptcies Eclipse the 2 Million Mark in 2005 as Consumers File in Record Numbers Prior to Implementation of New Bankruptcy Law

March 24, 2006 Alexandria, Va. — Bankruptcy filings eclipsed the two million mark for the first time in the United States as 2,078,415 filings were reported in calendar year 2005, according to data from the Administrative Office of the U.S. Courts. The total in this 12-month period ending December 31, 2005, represents a record 30 percent increase compared with the 1,597,462 total filings for the same period in 2004.

Driven largely in response to the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), consumers provided 98 percent of the overall total filings, the highest concentration of consumer filings on record, as nonbusiness filings during the 12-month period ending December 31, 2005, increased to a record 2,039,214, which was a 31 percent increase from the total of 1,563,145 of the same period in 2004. Business filings also increased to 39,201 for the 12-month period ending December 31, 2005, representing a 14 percent increase from the total of 34,317 from same period in 2004. This is the highest total of business bankruptcies in a calendar year since 2001’s total of 40,099.

“It is ironic that, at least in the short term, a law Congress hoped would reduce bankruptcies instead caused the largest upward spike in history,” said Samuel J. Gerdano, ABI Executive Director.  “Bankruptcies have in fact fallen dramatically so far in 2006 under the new, more-restrictive law,” he added.

The record high of 667,431 bankruptcies recorded during the 4th calendar quarter of 2005 (October 1-December 31, 2005), is representative of the many debtors who rushed to file prior to the Oct. 17 implementation date of BAPCPA. October 2005 filings alone totaled 630,497, representing 95 percent of the filings for the three-month period and 30 percent of the 12-month period ending December 31, 2005. Nonbusiness filings in October 2005 reached 619,588, which represented 30 percent of the nonbusiness filings for the 12- month period ending December 31, 2005, and 95 percent of the 654,633 total nonbusiness filings for the 4th quarter of 2005. The 10,909 October business filings were representative of 28 percent of the 12-month period ending December 31, 2005 business filings and 85 percent of the 12,798 business filings for the 4th quarter 2005.

Largely as a result of the BAPCPA, dramatic decreases in filings were seen during the months of November and December 2005 as the combined filings of 36,934 for those two months represented just 1.78 percent of the total 12-month period ending December 31, and 6 percent for the 4th quarter 2005. November’s total filings dropped to 14,324, which represented less than one percent (0.69%) of the total for the 12-month period ending December 2005 and 2 percent of the 4th quarter total. The total of 13,643 nonbusiness filings in November was representative of less than one percent of the total nonconsumer filings (0.67%) for the 12-month period ending December 31, 2005 and just 2 percent of the 4th calendar quarter nonbusiness filings. Business filings experienced a similar decline as the 681 filings in November represented less than 2 percent (1.74%) for CY2005 and 5 percent of the 2005 4th quarter’s total of 12,798. By comparison, 2004 totals for the month of November were 122,796 total filings, 2,643 business filings and 120,153 nonbusiness filings, each representative of nearly 8 percent of the 12-month total for their respective categories.

Total filings increased in December 2005 to 22,610, which represented a 63 percent increase over November total filings, but just over 1 percent of the 12-month period ending December 31, 2005 total (1.09%) and just over 3 percent (3.39%).for the 4th quarter 2005. December nonbusiness filings reached 21,402, representing just over one percent (1.05%) of the total nonbusiness filings for the 12-month period ending December 31, 2005, and only 3 percent of the 4th quarter 2005 nonbusiness filings. December business filings increased as well to 1,208, but only comprised 3 percent of the total business filings for the 12-month period and represented just over 9 percent of the 4th quarter total business filings. By comparison, 2004 totals for the month of December were 118,193 total filings, 2,493 business filings and 115,700 nonbusiness filings. Each was representative of just over seven percent of the 12-month total for their respective categories.

However, the 667,431 filings in the 4th quarter of 2005 (October 1-December 31, 2005) represent an 80 percent increase in comparison to the 371,668 filings for the same quarter of 2004 (October 1-December 31, 2004) and a 23 percent increase from the previous record total 542,002 from the 3rd quarter of 2005 (July 1- September 30, 2005).

Of the total number of bankruptcy filings in the 12-month period ending December 31, 2005, there were 1,659,017 chapter 7 filings, a 46 percent increase over the 1,137,958 chapter 7 filings for the same period in 2004. Chapter 7 filings also increased 33 percent from the 2005 third quarter from 429,299 to 570,355 in the 2005 fourth quarter.

The next-largest group of filings in the 12-month period ending December 31, 2005, was chapter 13 at 412,130, a 9 percent decrease from the 449,129 filings in the 12-month period ending December 31, 2004. CY2005 chapter 12 filings totaled 380, a 252 percent increase from the 108 filings in the 12-month period ending December 31, 2004. Reflecting the strong economy and low interest rates, chapter 11 filings fell from 10,132 in CY2004 to 6,800 in the 12-month period ending December 31, 2005, a 33 percent decrease.

BUSINESS FILINGS for the 3-month period ending December 31, 2005, totaled 12,798, a 64.54 percent increase from the 7,778 bankruptcy business cases filed in the same period in 2004. NONBUSINESS FILINGS for the 3-month period ending September 30, 2005, totaled 654,633, an 80 percent increase from the 363,890 total in the same quarter in 2004.

The chapter* breakdown of BUSINESS filings for the 3-month period ending December 31, 2005, is: 9,701 chapter 7s, 1,692 chapter 11s, 87 chapter 12s and 1,308 chapter 13s.

The chapter breakdown of NONBUSINESS filings for the 3-month period ending December 31, 2005, is 560,654 chapter 7s, 263 chapter 11s and 93,714 chapter 13s.

Districts with the Highest Percentage INCREASE in Total Filings for the 12-month period ending December 31, 2005 (compared to the identical period in 2004):

  1. District of Virgin Islands: 68.42%
  2. Northern District of Ohio: 57.47%
  3. Southern District of West Virginia: 57.02%
  4. District of North Dakota: 54.68%
  5. District of Vermont: 54.42%

Districts with the Highest Percentage DECREASE in Total Filings for the 12-month period ending December 31, 2005 (compared to the identical period in 2004):

  1. Southern District of Georgia: 9.79%
  2. Middle District of Georgia: 6.67%
  3. District of Puerto Rico: 0.82%
  4. District of South Carolina: 0.47% (Increase)
  5. Middle District of Tennessee: 4.19% (Increase)

More information will be available at  ABI’s Statistics Page,http://www.abiworld.org/statistics.

###

ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.

*Definitions from Bankruptcy Overview: Issues, Law and Policy, by the American Bankruptcy Institute

Chapter 7 of the Bankruptcy Code is available to both individual and business debtors. Its purpose is to achieve a fair distribution to creditors of the debtor’s available non-exempt property.  Unsecured debts not reaffirmed are discharged, providing a fresh financial start.  

Chapter 11 of the Bankruptcy Code is available for both business and consumer debtors. Its purpose is to rehabilitate a business as a going concern or reorganize an individual’s finances through a court-approved reorganization plan.

Chapter 12 of the Bankruptcy Code is designed to give special debt relief to a family farmer with regular income from farming. 

Chapter 13 of the Bankruptcy Code is available for an individual with regular income whose debts do not exceed specific amounts; it is typically used to budget some of the debtor’s future earnings under a plan through which unsecured creditors are paid in whole or in part.

 

Collier Bankruptcy Case Update December-10-01

 

 

Collier Bankruptcy Case Updates

The following case summaries appear in the Collier Bankruptcy Case Update, which is published by Matthew Bender & Company Inc., one of the LEXIS Publishing Companies.

December 10, 2001

CASES IN THIS ISSUE
(scroll down to read the full summary)

  • 1st Cir.

    § 106(b) Court of Appeals upheld the constitutionality of section 106(b)’s waiver of sovereign immunity.
    Arecibo Cmty. Health Care, Inc. v. P.R. (1st Cir.)

    2d Cir.

    § 522(b)(2)(A) Deferred compensation plan funds deemed exempt.
    In re Maurer (Bankr. W.D.N.Y.)

    § 523(a)(8) Tuition incentive program fell within the ambit of section 523(a)(8).
    Mehlman v. N.Y. City Board of Educ. (In re Mehlman) (Bankr. S.D.N.Y.)

    28 U.S.C. § 157(b) Core proceeding was remanded for arbitration.
    Cibro Petroleum Prods. v. City of Albany (In re Winimo Realty Corp.) (S.D.N.Y.)

    3d Cir.

    § 366(a) Utility improperly refused to restore service.
    One Stop Realtour Place, Inc. v. Allegiance Telecom, Inc. (In re One Stop Realtour Place, Inc.) (Bankr. E.D. Pa.)

    § 503(b) Plaintiff’s motion for administrative expense priority granted, in part and denied, in part.
    In re Grand Union Co. (Bankr. D.N.J.)

    4th Cir.

    § 727(a)(4)(A) Denial of discharge was upheld on appeal because the debtor knowingly made a false oath in his chapter 7 case. Brown v. Presidential Fin. Corp. (In re Brown) (W.D. Va.)

    5th Cir.

    Rule 9006(b)(1) Creditors demonstrated excusable neglect in late filing of proofs of claim.
    In re Babcock & Wilcox Co. (E.D. La.)

    6th Cir.

    § 362(b)(4) Automatic stay was applicable to lawsuit.
    Chao v. Hosp. Staffing Servs., Inc. (6th Cir.)

    § 502 Government entitled to offset debtor’s postpetition claim for tax refund against IRS’s prepetition tax penalty claims.
    Gordon Sel-Way, Inc. v. United States (In re Gordon Sel-Way, Inc.) (6th Cir.)

    § 510(c) Court of Appeals refused to equitably subordinate participation interest claims.
    Bayer Corp. v. Mascotech, Inc. (In re Autostyle Plastics, Inc.) (6th Cir.)

    7th Cir.

    § 553(a) Bank was entitled to setoff against funds in joint account.
    Mottaz v. Union Planters Bank, N.A. (In re Dame) (Bankr. S.D. Ill.)

    § 1322(b)(1) Denial of plan confirmation was upheld on appeal.
    Crawford v. Chatterton (In re Crawford) (W.D. Wis.)

    8th Cir.

    § 507(a)(8) Debtor could not change status of tax claim from priority to general unsecured claim absent clear notice to the IRS.
    De Jesus v. United States (In re De Jesus) (Bankr. D. Minn.)

    9th Cir.

    § 1322(b)(1) District court vacated bankruptcy court order that confirmed debtor’s plan and excused her from proving that plan classification favoring her mother did not discriminate unfairly.
    Meyer v. Hill (In re Hill) (B.A.P. 9th Cir.)

    10th Cir.

    § 510(b) Application of section 510(b) subordination hinged on whether issuer of note was the debtor’s affiliate.
    NationsBank, N.A. v. Commercial Fin. Servs. (In re Commercial Fin. Servs.) (Bankr. N.D. Okla.)

    Rule 9011(b) Sanctions warranted where debtors primary motive in filing multiple chapter 13 petitions was to stop the bank’s foreclosure sales rather than participate in debt adjustment.
    In re Copeland (Bankr. D. Kan.)

    11th Cir.

    § 362(d) Stay was lifted to permit regulatory proceedings to commence.
    White v. Weatherford (In re Abrass) (Bankr. M.D. Fla.)

    § 522(g) Debtors could not exempt assets that they failed to disclose in initial schedules.
    Henkel v. Green (In re Green) (Bankr. M.D. Fla.)

    § 523(a)(6) Attorney’s fees were recoverable in nondischargeability action based on willful and malicious injury.
    USAA Cas. Ins. Co. v. Auffant (In re Auffant) (Bankr. M.D. Fla.)

Collier Bankruptcy Case Summaries

1st. Cir.

Court of Appeals upheld the constitutionality of section 106(b)’s waiver of sovereign immunity. 1st Cir. In 1984 the health department of the commonwealth (Puerto Rico) entered into a series of contracts with the debtor, a private entity, for the administration of a hospital. In 1991, the department filed suit against the debtor in superior court, alleging failure to render services pursuant to the contract. Shortly thereafter, the debtor filed its chapter 11 petition, which was later converted to chapter 7. The department filed a proof of claim in the approximate amount of $1.6 million. The trustee commenced an adversary proceeding against the department, based on various state law claims, and arising out of the same contract and operative facts as the superior court action. The department argued that the trustee’s claims were barred by the Eleventh Amendment. The bankruptcy court held that sections 106(a) and (b) were invalid as to the department, reasoning that Congress could not abrogate states’ Eleventh Amendment sovereign immunity by a conditional waiver, namely, by filing the proof of claim. On appeal, the district court affirmed the ruling as to the invalidity of section 106(a), but concluded that waiver of immunity was permissible because it was premised upon the affirmative undertaking of the state to participate in the bankruptcy process. The department asked the court to reconsider its ruling, and during the pendency of that request, the United States Supreme Court decided College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 144 L.E.2d 605, 119 S.C. 2219 (1999), which reasoned that a constructive waiver approach was incompatible with cases requiring the express waiver of sovereign immunity. The district court upheld the constitutionality of section 106(b), and an appeal followed. The Court of Appeals for the First Circuit reversed, holding that section 106(b) was constitutionally infirm. The debtor moved for a rehearing, which was granted. The department grounded its argument in the College Savings ruling, which stated that the voluntariness of a waiver was destroyed when it was presumptively triggered by 'otherwise lawful activity,' which, the department contended, was the nature of its claim filing. The debtor argued that section 106(b) was a permissible means of obtaining a waiver of sovereign immunity with respect to compulsory counterclaims arising from a proof of claim. The Court of Appeals vacated its prior decision and affirmed the ruling of the district court, holding that the College Savings decision recognized that a state relinquished its sovereign immunity when it voluntarily invoked federal court jurisdiction. The Court of Appeals concluded that the department waived its immunity when it availed itself of federal jurisdiction by filing the proof of claim. The Court of Appeals also held that the waiver was broad in scope, and not restricted to defensive counterclaims for recoupment, because nothing in College Savings purported to impose such restrictions once the waiver was triggered.Arecibo Cmty. Health Care, Inc. v. P.R., 2001 U.S. App. LEXIS 23202, – F.3d. – (1st Cir. October 29, 2001) (Torruella, C.J.).

Collier on Bankruptcy, 15th Ed. Revised 2:106.06

 

 

ABI Members, click here to get the full opinion.

2d. Cir.

Deferred compensation plan funds deemed exempt. Bankr. W.D.N.Y. In connection with a request made by the court in an earlier decision regarding the debtor’s claimed exemption for certain deferred compensation plan funds, the debtor’s counsel provided the court with a copy of an IRS ruling concluding that, at least as of the end of 1999, the plan was 'qualified' under section 457 of the Internal Revenue Code. The court then held that a section 457-qualified plan is a plan 'on account of age'; thus, the deferred compensation plan funds in this case were deemed exempt. The court analyzed case law interpreting the phrase 'on account of age' and concluded that the phrase seems to require simply that rights and benefits be defined, by statute, by reference to age; it is not necessary that achieving a particular age be a precondition to receiving any rights or benefits.In re Maurer, 2001 Bankr. LEXIS 1330, 268 B.R. 339 (Bankr. W.D.N.Y. August 17, 2001) (Kaplan, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 5:522.10

 

 

ABI Members, click here to get the full opinion.

Tuition incentive program fell within the ambit of section 523(a)(8). Bankr. S.D.N.Y. The creditor was a city (New York) board of education, which provided occupational and physical therapy services to special education students. The creditor created an incentive program providing training in such therapy, whereby a student enrolling in a training program could receive tuition benefits from the incentive program in exchange for accepting employment as directed by the creditor for a number of years commensurate with the years during which the student received tuition payments. The debtor was accepted into the incentive program in 1996. In 1998, the debtor failed two consecutive fieldwork projects and was removed from her occupational therapy program. In 2000, the debtor received a letter from the creditor requesting repayment of approximately $42,000 in scholarship monies. Shortly thereafter, the debtor filed a chapter 7 petition and commenced an adversary proceeding, seeking a declaration that her obligation to the creditor was dischargeable. The debtor argued that the incentive program was not an 'educational benefit program' or 'student loan' within the meaning of section 523(a)(8). The creditor argued that the tuition payments made on the debtor’s behalf were precisely the type of debt barred from discharge by section 523(a)(8). The bankruptcy court ruled for the creditor, holding that the funds paid by the creditor were based on a contract whereby the creditor delivered a sum of money to the debtor, who agreed to return at a future time the rendering of services equivalent to that which was borrowed, constituting a paradigm of a loan as encompassed by section 523(a)(8).Mehlman v. N.Y. City Board of Educ. (In re Mehlman), 2001 Bankr. LEXIS 1340, 268 B.R. 379 (Bankr. S.D.N.Y. October 16, 2001) (Hardin, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:523.14

 

 

ABI Members, click here to get the full opinion.

Core proceeding was remanded for arbitration. S.D.N.Y. The public lessor appealed the bankruptcy court’s order denying its motion to compel arbitration of disputes arising under prepetition contracts between the chapter 11 debtor and itself and for a stay of proceedings pending arbitration. Although the leases between the parties provided that any claim arising out of the leases was to be settled by arbitration, the debtor filed an adversary proceeding against the lessor seeking a declaratory judgment with respect to payments made in lieu of taxes. The bankruptcy court concluded that the matter was a core proceeding and refused to compel arbitration of the proceeding. The district court reversed, holding that although the proceeding was core, the bankruptcy court improperly determined that it had discretion to proceed to trial rather than compel arbitration. The bankruptcy court’s determination that the matter was a core proceeding was correct, because the lessor’s codefendant had filed proofs of claim against the estate, and the debtor’s interest in the leases was the single biggest asset of the estate that remained to be liquidated. Nevertheless, because there was no evidence that arbitration of the proceeding would have jeopardized an underlying policy of the Bankruptcy Code, the bankruptcy court lacked the discretion to proceed to trial.Cibro Petroleum Prods. v. City of Albany (In re Winimo Realty Corp.), 2001 U.S. Dist. LEXIS 17500, – B.R. – (S.D.N.Y. October 25, 2001) (Scheindlin, D.J.).

Collier on Bankruptcy, 15th Ed. Revised 1:3.02

 

 

ABI Members, click here to get the full opinion.

3d. Cir.

Utility improperly refused to restore service. Bankr. E.D. Pa. The debtor filed a complaint against the telephone service provider, arguing that the provider wrongly refused to restore telephone service upon the filing of the company’s chapter 11 petition as required by section 366. After the debtor filed its petition and its principal contacted the provider requesting that service be restored, the provider refused to restore service prior to receipt of a cash deposit. The provider subsequently restored service pending receipt of adequate assurances approximately one month later, in accordance with an agreement obtained by the debtor’s counsel. The bankruptcy court determined that the provider violated section 366, holding that the filing of the debtor’s petition required the service provider to restore telephone service prior to obtaining adequate assurance payment. Because the debtor could be entitled to compensatory damages, the court allowed the debtor an opportunity to present further evidence of damages suffered as a result of the violation (citing Collier on Bankruptcy, 15th Ed. Revised).One Stop Realtour Place, Inc. v. Allegiance Telecom, Inc. (In re One Stop Realtour Place, Inc.), 2001 Bankr. LEXIS 1353, 268 B.R. 430 (Bankr. E.D. Pa. October 17, 2001) (Carey, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 3:366.02

 

 

ABI Members, click here to get the full opinion.

Plaintiff’s motion for administrative expense priority granted, in part and denied, in part. Bankr. D.N.J. Pursuant to a prepetition contract, the plaintiff provided prepetition and postpetition warehousing, ice manufacturing, supply and transportation services to the chapter 11 debtor. After the debtor rejected the contract, the plaintiff moved to obtain administrative expense priority and payment for certain of its claims against the debtor. The debtor opposed this relief on the ground that all of the plaintiff’s claims constituted rejection damages pursuant to section 502(g) and, thus, were not entitled to priority under section 503(b). The bankruptcy court granted the plaintiff’s motion, in part, and denied the motion, in part. The court held that the plaintiff’s claim for excess inventory that had been delivered qualified as an administrative priority expense because it arose postpetition, and was incurred at the request of the debtor and for the benefit of the debtor’s estate. However, the court also held that claims that arose pursuant to 'shortfall' and 'repurchase' provisions contained in the parties’ agreement were not entitled to administrative priority status. The court concluded that the plaintiff’s right to payment under the 'shortfall' and 'repurchase' provisions were part of the plaintiff’s rejection damages and were only entitled to be treated as prepetition unsecured claims.In re Grand Union Co., 2001 Bankr. LEXIS 1326, 266 B.R. 621 (Bankr. D.N.J. August 30, 2001) (Winfield, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:503.06

 

 

ABI Members, click here to get the full opinion.

4th. Cir.

Denial of discharge was upheld on appeal because the debtor knowingly made a false oath in his chapter 7 case. W.D. Va. The chapter 7 debtor appealed the bankruptcy court’s order denying his discharge pursuant to section 727(a)(4)(A). The debtor failed to disclose in his schedules and statement of affairs the sale of his residence eight days prior to his petition, the payment of creditors with a portion of the sale proceeds and the transfer of a substantial portion of the proceeds to his wife. The debtor also falsely testified at the meeting of creditors that he had paid a share of the proceeds to the IRS. The district court affirmed, holding that the record adequately supported the bankruptcy court’s finding that the debtor knowingly and fraudulently made a false oath in connection with the case. The omissions in the debtor’s schedules and statement were material because they related directly to the discovery of the debtor’s assets, and the false testimony was material because it falsely construed the disposition of the debtor’s property. Brown v. Presidential Fin. Corp. (In re Brown), 2001 U.S. Dist. LEXIS 17676, – B.R. – (W.D. Va. October 26, 2001) (Wilson, D.J.).

Collier on Bankruptcy, 15th Ed. Revised 6:727.04

 

 

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5th. Cir.

Creditors demonstrated excusable neglect in late filing of proofs of claim. E.D. La. The debtors filed petitions in February 2000. In April 2000, the district court withdrew the reference of these cases with respect to certain issues, including motions to set a bar date, setting procedure for notifying claimants, and prescribing the form of proofs of claim. On October 6, 2000, the bankruptcy court entered an order requiring persons with settled claims to submit proofs of claim by March 29, 2001. On October 30, 2000, the district court entered an order requiring all personal injury claimants to file proofs of claim by July 30, 2001. On August 20, 2001, the court granted the claimants’ motion for an enlargement of time to file a proof of claim under the 'excusable neglect' provision of Rule 9006(b)(1). The debtors then moved the court to reconsider that decision, arguing that the claimants failed to meet their burden of showing excusable neglect. The court rejected the debtors’ argument and denied the motion to reconsider, holding that the requirements for demonstrating excusable neglect had been met. Namely, (1) the debtors acted in good faith in seeking more time; (2) the claimants’ stated reasons for seeking the motion were sufficient, because the admitted clerical errors and oversight were understandable when their attorney filed nearly 7,000 proofs of claim; and (3) the length of delay was negligible, since the claims were filed only 10 days after the original deadline. In re Babcock & Wilcox Co., 2001 U.S. Dist. LEXIS 16741, – B.R. – (E.D. La. October 11, 2001) (Vance, D.J.).

Collier on Bankruptcy, 15th Ed. Revised 10:9006.06[3]

 

 

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6th. Cir.

Automatic stay was applicable to lawsuit. 6th Cir. The chapter 7 trustee appealed the district court’s preliminary injunction ordering him to deposit sufficient funds with the clerk of district court. The United States Secretary of Labor filed a lawsuit postpetition in the district court to enforce certain provisions of the Fair Labor Standards Act. The secretary contended that certain of the debtor’s records had been produced in violation of the Act’s wage provisions, because the debtor’s employees had not been paid their wages during the company’s last weeks of operation. The district court allowed the trustee to transfer the records, which were necessary to generate accounts receivable, only upon the payment of the employees’ wage claims. The Court of Appeals for the Sixth Circuit reversed, holding that because the secretary’s lawsuit was not in furtherance of her statutory powers to regulate and enforce labor standards, but rather was designed to promote the private rights of the unpaid workers vis-a-vis other creditors of the estate, the suit did not fall within the police power exception to the automatic stay. Because the automatic stay was applicable, the district court lacked jurisdiction to entertain the secretary’s lawsuit.Chao v. Hosp. Staffing Servs., Inc., 2001 U.S. App. LEXIS 23426, – F.3d – (6th Cir. October 31, 2001) (Boggs, C.J.).

Collier on Bankruptcy, 15th Ed. Revised 3:362.05[5]

 

 

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Government entitled to offset debtor’s postpetition claim for tax refund against IRS’s prepetition tax penalty claims. 6th Cir. The debtor filed a voluntary petition for relief under chapter 11. The debtor’s plan of reorganization and liquidation called for the debtor to sell all its assets and cease doing business. The IRS had filed claims for unpaid unemployment tax ('FUTA') penalties and, under the reorganization plan, these claims were treated as general unsecured claims. After the plan was confirmed, the debtor paid its unemployment taxes and became entitled to FUTA refunds. Although the IRS agreed that the debtor was entitled to the tax refund, it refused to pay the refund because it argued that the debtor was liable for past tax penalties. The debtor then filed an adversary complaint against the IRS to subordinate the IRS’s claim, and the bankruptcy court granted the debtor’s motion. The IRS appealed the bankruptcy court’s decision and, while this appeal was pending, the debtor liquidated all of its assets (except for the tax refunds) and disbursed the proceeds pursuant to the terms of the plan, except that the debtor did not make any disbursements to the IRS. The bankruptcy court ultimately reversed its ruling regarding subordination of the IRS’s claim but still ruled that the government was not entitled to setoff. The IRS appealed the setoff ruling. On appeal, the district court reversed the bankruptcy court’s ruling and the Court of Appeals for the Sixth Circuit affirmed the district court’s decision. In this case, setoff was permissible because the debtor’s status as a debtor in possession had expired upon confirmation of the plan, and, thus, there was no mutuality problem. Further,because the IRS had not been paid its pro rata share of the monies that were distributed to all unsecured claims, allowing setoff was necessary in order to prevent a situation where the government would be treated worse than other creditors in the same class. Gordon Sel-Way, Inc. v. United States (In re Gordon Sel-Way, Inc.), 2001 U.S. App. LEXIS 22938, – F.3 – (6th Cir. October 26, 2001) (Jones, C.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:502.03

 

 

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Court of Appeals refused to equitably subordinate participation interest claims. 6th Cir. In 1982, the debtor entered into a long-term, revolving loan agreement with Creditor A, secured by a continuously perfected blanket lien on substantially all the debtor’s assets. Subsequently, Creditors B and C entered into subordinated participation agreements that provided for an extension of funds to allow Creditor A to fund additional borrowings by the debtor. In 1988, the debtor formally asked Creditor D to guarantee a proposed $4 million loan from a separate lender. That proposed loan was characterized as a bridge loan. Creditor D later stated that it was never informed by the debtor that the loans were secured by senior security interests in favor of Creditor A. Creditor B extended the loan, and the debtor granted a security interest in machinery and equipment, second in priority only to Creditor A’s lien. The participation interests of Creditors B and C were disclosed in general terms in the debtor’s audited financial statements. In 1996, the debtor filed a chapter 11 petition, which was later converted to chapter 7. In 1997, Creditor D filed a motion for adequate protection, asserting that it had a security interest in property of the debtor that was second in priority to Creditor A’s security interest, but ahead of the claims of Creditors B and C. The bankruptcy court treated the motion as an adversary proceeding, and the parties filed cross-motions for summary judgment. The court granted summary judgment to Creditors B and C, rejecting Creditor D’s contention that the B and C claims must be equitably subordinated to Creditor D’s claim. Later, the court found that the participation agreements were valid. The district court affirmed, and this appeal followed. Creditor D argued that equitable subordination was mandated because (1) the subordination agreements were essentially 'secret liens' that were concealed from Creditor D; (2) Creditors B and C engaged in inequitable conduct by not putting Creditor D on notice of their claim to share Creditor A’s senior lien position; and (3) the debtor was undercapitalized at the time the subordination agreements were made. The Court of Appeals for the Sixth Circuit affirmed, holding that Creditor D had failed to meet the requirements of equitable subordination pursuant to section 510(c). Specifically, (1) the assertion regarding bridge loans was baseless, since there was no evidence that Creditors B and C used power to control in such a way that they engaged in inequitable conduct, particularly in that the subordination agreements were valid; (2) the notice argument was insufficient, since the loans were discussed in the financial statements within the context of Creditor A’s credit facility; and (3) undercapitalization alone was not adequate to justify subordination of insider claims, which required some additional showing of inequitable conduct.Bayer Corp. v. Mascotech, Inc. (In re Autostyle Plastics, Inc.), 2001 U.S. App. LEXIS 22602, – F.3d. – (6th Cir. October 22, 2001) (Boggs, C.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:510.05[1][a]

 

 

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7th. Cir.

Bank was entitled to setoff against funds in joint account. Bankr. S.D. Ill. The married debtors opened a deposit account in joint tenancy, with the right of survivorship, at the creditor bank. The debtor wife was the chief executive officer of a corporation, which executed a promissory note payable to the creditor in the principal sum of $120,000. The codebtor personally guaranteed payment of the note, which matured in 1999, and remained unpaid. In 2000, the debtors deposited the sum of $15,400 in the joint account and shortly thereafter, the creditor set off deposit account funds of $14,852.18 against the unpaid balance of the note. After the debtors filed their chapter 7 petition, the trustee commenced this adversary proceeding to recover the sum of $7,426.09, representing the debtor husband’s share of the funds. The trustee argued that the account documents did not contractually authorize the creditor to set off funds belonging to the debtor husband, and that state (Illinois) law created only a presumption that each of the owners of a joint account could be treated as the absolute owner of all funds, which presumption could be rebutted by proof that a portion of the funds was owned individually. The bankruptcy court examined the deposit agreement and determined that it unequivocally granted the creditor the right to set off the debtor wife’s obligation under the guaranty against any funds she had at the bank, including funds in a joint account. The court then held that extrinsic evidence of the debtor husband’s ownership of funds was of no bearing, because the creditor was contractually entitled to exercise its right to setoff. Mottaz v. Union Planters Bank, N.A. (In re Dame), 2001 Bankr. LEXIS 1347, 268 B.R. 529 (Bankr. S.D. Ill. October 12, 2001) (Meyers, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 5:553.03

 

 

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Denial of plan confirmation was upheld on appeal. W.D. Wis. The chapter 13 debtor appealed the order of the bankruptcy court denying confirmation of his proposed plan and dismissing his petition. Under the debtor’s plan, his general unsecured nondischargeable claim for child support assigned to a governmental entity was to be paid before the other unsecured claims. The debtor argued that such discrimination between classes of claims was not unfair, but rather promoted the public policies of encouraging the payment of child support obligations and giving him a fresh start. The district court affirmed, holding that the bankruptcy court did not err when it concluded that the assigned child support obligation could not be classified more favorably than other general unsecured claims. The court noted a split of authority on the issue and followed the line of cases that focused on the disparate treatment received by unsecured claimants not in the favored class.Crawford v. Chatterton (In re Crawford), 2001 U.S. Dist. LEXIS 17473, 268 B.R. 832 (W.D. Wis. July 27, 2001) (Crabb, D.J.).

Collier on Bankruptcy, 15th Ed. Revised 8:1322.05

 

 

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8th. Cir.

Debtor could not change status of tax claim from priority to general unsecured claim absent clear notice to the IRS. Bankr. D. Minn. The debtor filed a chapter 13 petition, and the IRS was scheduled as a creditor in the case. In the debtor’s plan of debt adjustment, the debtor typed language stating, in part, that 'notwithstanding a creditor’s proof of claim... the classification of tax debts... [are classified] as unsecured... and confirmation of the plan will be considered a determination of proper classification.' The IRS filed several proofs of claim asserting priority status, but the IRS did not object to the debtor’s plan. The debtor’s plan was confirmed, and the debtor made payments as called for under the plan. After the end of the plan term, the trustee filed a motion to dismiss the debtor’s case without discharge because, while the debtor had paid the 'raw-dollar amount' contemplated by the debtor’s plan, the debtor had failed to pay the trustee an amount sufficient to satisfy all allowed priority claims in full, and the maximum term of the debtor’s plan had expired under statute. At the hearing on the trustee’s motion, the debtor indicated that he would file an adversary proceeding against the IRS, seeing declaratory relief regarding the IRS’s claim. The court noted that the debtor had submitted his plan on the standard form mandated by local bankruptcy rules, and the prefatory language on the form clearly preserved the process of formal allowance of claims as the means by which a priority creditor’s actual distribution rights are fixed. The court also found that the IRS’s right to the status of a priority claim and the total amount it was entitled to receive were established by that process. Further, the court found that, had the debtor desired to change the IRS’s claim from priority status to unsecured status, the simple requirements of due process required a clear notice to the IRS. The court then ruled that (1) the IRS’s claim was properly treated as a priority claim, (2) confirmation of the debtor’s plan did not result in the IRS’s claim being transformed to a general unsecured claim, and (3) the debtor was not entitled to discharge under chapter 13 until he paid the trustee sufficient funds to pay the allowed IRS claim in full.De Jesus v. United States (In re De Jesus), 2001 Bankr. LEXIS 1337, 268 B.R. 185 (Bankr. D. Minn. September 28, 2001) (Kishel, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:507.10

 

 

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9th. Cir.

District court vacated bankruptcy court order that confirmed debtor’s plan and excused her from proving that plan classification favoring her mother did not discriminate unfairly. B.A.P. 9th Cir. The chapter 13 trustee appealed a bankruptcy court order that confirmed the debtor’s plan and excused her from proving that a plan classification favoring her mother over other creditors did not discriminate unfairly. The debt arose, apparently, from the debtor’s use of her mother’s personal credit cards. The bankruptcy court held that because of the 'however' clause contained in section 1322(b)(1), which allows a debtor to treat claims for consumer debt with a coobligor differently than other unsecured claims, the ban on unfair discrimination contained in section 1322(b)(1) did not apply. The B.A.P. for the Ninth Circuit vacated the bankruptcy court’s decision and remanded the matter for further proceedings. The court held that the 'however' clause did not apply in this case, because there was no individual who was liable on the relevant debt with the debtor within the meaning of section 1322(b)(1); thus, the bankruptcy court incorrectly premised confirmation on a hypothetical question. The court explained that the 'liable with' requirement of section 1322(b)(1) means that both the debtor and the co-obligor must be liable to some other creditor. In this case, absent evidence that the credit card issuers were parties to any arrangement between the debtor and her mother regarding the use of the mother’s credit cards, the debtor’s mother did not qualify as an individual who was 'liable on the debt with the debtor' (citing Collier on Bankruptcy 15th Ed. Revised).Meyer v. Hill (In re Hill), 2001 Bankr. LEXIS 1323, 268 B.R. 548 (B.A.P. 9th Cir. September 28, 2001) (Klein, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 8:1322.05

 

 

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10th. Cir.

Application of section 510(b) subordination hinged on whether issuer of note was the debtor’s affiliate. Bankr. N.D. Okla. The debtor was engaged in the business of purchasing defaulted consumer loans and receivables, and then attempting to collect them. In 1998, the debtor and creditor entered an agreement whereby the debtor would effectuate the transfer of loan packages to a master business trust, which would issue trust certificates. The creditor would receive a promissory note from one of the certificate holders, in consideration for extending a loan whose proceeds would be redirected to the debtor. The note was to be repaid with proceeds from collections by the debtor on the loans contained in the master trust. The creditor entered the note purchase agreement, after performing a due diligence investigation prior to committing to the proposed agreement, during which the debtor made a number of false or misleading statements to explain its financial status, principally by failing to disclose that it had been relying on bulk sales of loans to an affiliated company at inflated prices to meet its collection goals. Accordingly, the master trust issued trust certificates to a series trust, which in turn issued a series note to the creditor, who transferred $189 million to the debtor. After the debtor filed its chapter 11 petition, the creditor filed an adversary proceeding, arguing that certain funds held by the debtor had been impressed with a constructive or resulting trust in the creditor’s favor and that, consequently, such funds were not property of the estate and were, therefore, within the creditor’s reach. The debtor filed a motion to dismiss, arguing that the creditor’s claim for a constructive trust was essentially a claim for the rescission of the sale of a security and therefore conflicted with section 510(b), which mandated that such rescission claims must be subordinated to other claims. The creditor countered with the assertion that the funds were not estate property because the note’s issuer, the series trust, was not an affiliate of the debtor. The bankruptcy court held that the series note was a security encompassed by the language of section 510(b), but declined to rule whether the creditor’s claim fell within the parameters of subordination as required by that provision. The court found that it could not yet determine as a matter of law whether the series note was a security of the debtor or a security of an affiliate of the debtor. The court concluded that, because the creditor could present a set of facts that would exclude it from the reach of section 510(b) if the issuer of the series note was not an affiliate of the debtor, the adversary complaint could not be dismissed (citing Collier on Bankruptcy 15th Ed. Revised). NationsBank, N.A. v. Commercial Fin. Servs. (In re Commercial Fin. Servs.), 2001 Bankr. LEXIS 1342, 268 B.R. 579 (Bankr. N.D. Okla. October 15, 2001) (Rasure, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:510.04

 

 

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Sanctions warranted where debtors primary motive in filing multiple chapter 13 petitions was to stop the bank’s foreclosure sales rather than participate in debt adjustment. Bankr. D. Kan. On the day before the bank was to foreclose against the debtor’s residence, the debtor filed an individual chapter 13 petition, automatically staying the sale. When the debtor’s petition was dismissed, the debtor filed a second chapter 13 petition, stopping a second foreclosure sale. When that petition was dismissed, the debtor’s husband filed his individual petition, stopping a third sale. At a hearing on the bank’s motion for relief from the stay in the third case, the court sua sponte ordered the debtor, his wife and counsel to show cause why sanctions should not be imposed pursuant to Rule 9011. At the show cause hearing, where the debtors and counsel did not appear, the court found that the debtors did not evidence an intent to comply with the rules and procedures of chapter 13 or to complete a plan of debt adjustment. The court also found that their primary motive from the outset was to stop the bank’s foreclosure sales by filing chapter 13 petitions. The court further found that counsel for the debtors failed to show cause why his conduct in filing and participating in the debtors’ multiple filings did not constitute an abuse of the bankruptcy process. After finding that the conduct of the debtors and their counsel constituted an abuse of the bankruptcy system, the court imposed sanctions against the debtors to reimburse the bank for its attorney’s fees, publication costs and other expenses. The court also imposed sanctions against the debtors’ counsel for its participation in the debtors’ abuses.In re Copeland, 2001 Bankr. LEXIS 1344, 268 B.R. 273 (Bankr. D. Kan. June 14, 2001) (Flannagan, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 10:9011.04[8], 06[2], 08

 

 

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11th. Cir.

Stay was lifted to permit regulatory proceedings to commence. Bankr. M.D. Fla. After the bankruptcy court determined that the chapter 13 debtor had committed actual fraud against the creditor, the creditor moved for relief from the automatic stay to initiate a complaint with the state (Florida) real estate commission. The creditor intended to assert a claim against the debtor, stating that as his company’s real estate broker, she committed fraud resulting in a loss of funds. The creditor further sought to recover a portion of his monetary damages from the state real estate recovery fund, which had been established to reimburse parties defrauded by real estate brokers. The bankruptcy court granted the motion, holding that the creditor demonstrated sufficient cause to justify modification of the automatic stay to allow the filing of a claim before the state regulatory commission. The creditor was entitled to pursue recovery from the fund, and the public deserved protection from the commission’s oversight. The court further noted that in the event the commission revoked or suspended the debtor’s license, she would likely be unable to propose a feasible chapter 13 plan.White v. Weatherford (In re Abrass), 2001 Bankr. LEXIS 1361, 268 B.R. 665 (Bankr. M.D. Fla. September 28, 2001) (Jennemann, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 3:362.07

 

 

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Debtors could not exempt assets that they failed to disclose in initial schedules. Bankr. M.D. Fla. In January 1999, the debtors, who were married, filed a chapter 7 petition, but failed to disclose various financial accounts whose value was approximately $800,000. In addition, the debtors listed their combined 1998 income as $45,840, but it developed that their income for the four years prepetition was over $2.6 million. It was not until September 2000 that the debtors filed amended schedules disclosing the financial accounts, all of which the debtors designated as exempt. The trustee objected to the claims of exemption, arguing that the debtors were not entitled to exempt the belatedly-scheduled accounts because they deliberately failed to disclose them until 18 months after the original schedules were filed. The trustee asserted that the exemptions were claimed in bad faith and that, pursuant to section 522(g), the debtors were not entitled to exempt recovered property. One debtor explained the omission by stating that the original schedules were signed in blank, with the required information to be entered by their attorneys afterward, and that access to necessary information was frustrated by the FBI’s investigation of one debtor’s medical practice. The trustee also sought denial of the debtors’ discharge pursuant to various subsections of section 727(a), and sought to recover the debtors’ $50,000 wedding gift to their daughter. The bankruptcy court, noting the omission of property in the original schedules and the failure to disclose transfers of estate property worth $300,000, termed the debtors’ pattern of behavior a 'textbook illustration' of when discharge should be denied. The court went on to examine the trustee’s section 522(g) arguments and held that the provision did not apply because the trustee did not actually bring any property into the estate that was not already in the debtors’ possession. But the court followed Eleventh Circuit precedent and determined that the debtors could not exempt property omitted from their initial schedules, because it was clear that the debtors intended to hide assets from the reach of creditors. The court concluded that if the only penalty imposed on the debtors was the requirement to amend schedules once the omissions were detected, dishonesty would be too attractive. The court also found that the trustee was entitled to recover the wedding gift as a fraudulent conveyance and that the debtors were entitled to retain an exempt annuity account because it was listed in the initial schedules.Henkel v. Green (In re Green), 2001 Bankr. LEXIS 1362, 268 B.R. 628 (Bankr. M.D. Fla. July 10, 2001) (Jennemann, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:522.12[1]

 

 

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Attorney’s fees were recoverable in nondischargeability action based on willful and malicious injury. Bankr. M.D. Fla. The debtor commenced an action in state (Florida) court against the creditor, her insurance carrier, which had denied the debtor’s claim for a theft loss of a laptop computer. The basis for the denial was that the debtor had (1) intentionally concealed and misrepresented material facts in the investigation of the claim and (2) made false statements or engaged in fraudulent conduct during the investigation. The jury returned a verdict for the creditor, based on both of the creditor’s allegations. Specifically, the jury found that the debtor had made the claim in an inflated amount and that certain supporting documents were either fabricated or materially misleading. Thereafter, the creditor filed a motion for attorney’s fees and costs of approximately $57,000. After the debtor filed a chapter 7 petition, the creditor filed a motion for summary judgment, seeking a determination that the award of attorney’s fees and costs was nondischargeable pursuant to section 523(a)(6). Both parties stipulated that the state court judgment should be given collateral estoppel effect. The bankruptcy court held, as a threshold matter, that the debt resulted from the debtor’s intentional misrepresentation, which was intended to cause injury to the creditor by the prosecution of a false claim. The court went on to find that because the actions of the debtor were willful and malicious, the attorney’s fees and costs were nondischargeable. USAA Cas. Ins. Co. v. Auffant (In re Auffant), 2001 Bankr. LEXIS 1321, 268 B.R. 689 (Bankr. M.D. Fla. October 16, 2001) (Williamson, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:523.12

 

 

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Collier Bankruptcy Case Update March-17-03

 

Collier Bankruptcy Case Update

The following case summaries appear in the Collier Bankruptcy Case Update, which is published by Matthew Bender & Company Inc., one of the LEXIS Publishing Companies.

 

March 17, 2003

CASES IN THIS ISSUE
(scroll down to read the full summary)

 

1st Cir.

§ 362(a) Bankruptcy court properly held debt that creditor’s refusal to return seized property of debtor violated stay.
Reliable Equip. Corp. v. Turabo Motors Co. (In re Turabo Motors Co.) (B.A.P. 1st Cir.)

§ 523(a)(8) A consolidation note combining several student loans, guaranteed by a governmental unit and made pursuant to a non-profit foundation, was nondischargeable.
Sperl v. New Hampshire Higher Educ. Assistance Found. (In re Sperl) (Bankr. D.N.H.)

2d Cir.

§ 365(a) Bankruptcy court properly authorized retroactive rejection of executory contract.
BP Energy Co. v. Bethlehem Steel Corp. (S.D.N.Y.)

§ 707(b) Case ordered dismissed or converted to chapter 13 due to 40 year-old debtor’s lack of candor regarding prebankruptcy increase in retirement contributions.
In re Aiello (Bankr. E.D.N.Y.)

§ 1101 Creditor’s appeal of plan confirmation dismissed as moot due to substantial consummation of plan and creditor’s failure to seek stay pending appeal.
Six West Retail Acquisitions, Inc. v. Loews Cineplex Entm’t Corp. (S.D.N.Y.)

3rd Cir.

§ 544(a) Where mortgage was indexed under debtor’s married name and debtor filed under different name, trustee’s search under filing name was sufficiently reasonable to allow sale of property.
Pope v. Corbett (In re Corbett) (Bankr. W.D. Pa.)

4th Cir.

§ 548 Debtor’s motion to recover payments to creditors for which it allegedly received less than reasonably equivalent value required evidentiary hearing.
Pathnet, Inc. v. Nortel Networks, Inc. (In re Pathnet, Inc.) (Bankr. E.D. Va.)

Rule 9011 Bankruptcy court erred in sanctioning attorney as failure to report relevant state court judgment was based on reasonable belief that judgment was not yet final.
Community Mgmt. Corp. v. Weitz (In re Community Mgmt. Corp.) (D. Md.)

6th Cir.

§ 330 Bankruptcy court properly awarded reduced fee to trustee based on hourly rate rather than percentage.
Schilling v. Moore (W.D. Ky.)

7th Cir.

§ 362(d) Stay lifted to allow IRS to apply debtors’ overpayment to debtors’ tax liabilities.
In re Bare (Bankr. N.D. Ill.)

 

8th Cir.
§ 503 On debtor’s objection, court determined that administrative fees for several financial advisors would be based on amount of recovery achieved by each for unsecured creditors.
In re Farmland Indus., Inc. (Bankr. W.D. Mo.)

§ 541 Property purchased by debtor’s former spouse with own funds and funds given to spouse by debtor was not property of the estate.
Helena Chem. Co. v. True (In re True) (Bankr. W.D. Mo.)

§ 541(a) Funds due debtor from another state’s unclaimed property office had previously been acknowledged as debtor’s by state agency and were property of the estate.
Kroh Operating Ltd. P’ship v. Great Payback Office (In re Kroh Bros. Dev. Co.) (Bankr. W.D. Mo.)

 

 

 

9th Cir.

§ 523(a) Dischargeability of debtor’s liability for conversion remanded absent evidence of willful or malicious intent although liability based on fraud was clearly nondischargeable.
Thiara v. Spycher Bros. (In re Thiara) (B.A.P. 9th Cir.)

§ 525(b) Termination of employee who informed employer of imminent bankruptcy filing was not discriminatory.
Majewski v. St. Rose Dominican Hosp. (In re Majewski) (9th Cir.)

 

 

 

 

10th Cir.

§ 362 Stay of personal injury action lifted where debtor was not a defendant and subject only to actual defendants’ indemnity claims.
Teufel v. Rosenberg (D. Kan.)

§ 507(a)(7) Debtor’s obligation to pay mortgage on marital home occupied by former spouse was entitled to priority as a maintenance and support payment.
Miller v. Miller (In re Miller) (B.A.P. 10th Cir.)

 

 

 

 

11th Cir.

§ 505 Debtor did not meet evidentiary burden for adjustment of equipment valuation from that listed on earlier tax returns.
Chipman-Union, Inc. v. Greene County (In re Chipman-Union, Inc.) (Bankr. M.D. Ga.)

§ 1324 Chapter 13 plan ordered modified for failure to account for court ordered attorneys’ fees and child support.
McKenna v. Dupree (In re Dupree) (Bankr. M.D. Ga.)

 

 

 

 

D.C. Cir.

28 U.S.C. § 1927 Defendant entitled to hearing to determine amount of attorney’s fees to be reimbursed due to plaintiff’s reckless filing of claim that properly belonged to trustee.
Healey v. Labgold (D.D.C.)

Rule 1014(b) Trustee’s motion to transfer spouse’s bankruptcy to same court as debtor’s bankruptcy denied as a spouse is not an “affiliate.”
In re Feltman (Bankr. D.D.C.)

 

 

 

 

 

 

Collier Bankruptcy Case Summaries

1st Cir.

Bankruptcy court properly held debt that creditor’s refusal to return seized property of debtor violated stay. B.A.P. 1st Cir. PROCEDURAL POSTURE: Appellant creditor challenged a decision from the Bankruptcy Court for the District of Puerto Rico relating to its postpetition retention of assets of appellee debtor seized prepetition pursuant to a judgment by the lower court. OVERVIEW: After filing chapter 11 bankruptcy, the debtor sent a letter to the creditor requesting the return of the seized property for use in its ongoing business. The creditor refused to return the seized assets unless the debtor recognized its secured status and provided adequate protection. The debtor refused the demand, and the creditor refused to return the property. The bankruptcy court found that the creditor’s action constituted an exercise of control over property of the estate in violation of 11 U.S.C. § 362(a)(3). It also denied the creditor’s request to disqualify a law firm. The reviewing court addressed the creditor’s appeal of its request to disqualify the law firm and found that the order denying the creditor’s request was not a final order, and that no exception to the final judgment rule conferred appellate jurisdiction on the reviewing court. In deciding whether the bankruptcy court erred in finding that the creditor violated the automatic stay, the reviewing court held that there was no exception to section 362(a)(3) that excused a creditor’s refusal to deliver possession of estate property based on the creditor’s subjective opinion of adequate protection. Reliable Equip. Corp. v. Turabo Motors Co. (In re Turabo Motors Co.), 2002 Bankr. LEXIS 1278, — B.R. — (B.A.P. 1st Cir. October 21, 2002) (per curiam).

Collier on Bankruptcy, 15th Ed. Revised 3:362.03  [back to top]

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A consolidation note combining several student loans, guaranteed by a governmental unit and made pursuant to a non-profit foundation, was nondischargeable. Bankr. D.N.H. PROCEDURAL POSTURE: In bankruptcy proceedings, plaintiff debtor sued defendant state student-loan foundation, seeking to disallow the foundation’s claim for payment of student loans. OVERVIEW: Debtor claimed that the claim should be disallowed since, among other things, the claim imposed an undue hardship on debtor. As to the argument that the consolidation note, which combined numerous separate loans, did not qualify as an educational loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, the court held that debtor cited no authority to support her theory that the consolidation note did not qualify as an educational loan under 11 U.S.C. § 523(a)(8) because of the failure of the foundation to comply with certain governmental regulations. Proof of the guarantee was self-evident since the foundation assumed legal responsibility for the note after debtor defaulted. The note was an educational loan within the meaning of section 523(a)(8) because it was guaranteed by a governmental unit, and was made under a program funded in whole or in part by a non-profit institution. As to the undue hardship claim, the court held that the record did not support a finding that debtor was unable to maintain a minimal standard of living if forced to repay the consolidation note. Sperl v. New Hampshire Higher Educ. Assistance Found. (In re Sperl), 2002 Bankr. LEXIS 1294, — B.R. — (Bankr. D.N.H. November 7, 2002) (Deasy, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:523.14  [back to top]

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2d Cir. Bankruptcy court properly authorized retroactive rejection of executory contract. S.D.N.Y. PROCEDURAL POSTURE: A creditor natural gas supplier appealed an order of the bankruptcy court that authorized the debtors to reject executory contracts with the creditor retroactively under 11 U.S.C. § 365(a). The creditor argued that court approval was a condition precedent to rejection, and that retroactive rejection was inconsistent with a prior order which compelled the creditor’s continued performance. OVERVIEW: The bankruptcy court was not prohibited as a matter of law from assigning a retroactive rejection date under section 365(a), when the equities demanded it. The prior “utility order” entered under 11 U.S.C. § 366 did not preclude retroactive rejection; it did not preclude a termination of service upon the debtors’ request. The utility order was a protective order from the perspective of the debtors’ estate and provided adequate assurance of payment to the creditor, but was not intended in any way to interfere with the debtor’s right to rejection under 11 U.S.C. § 365(a). Since the utility order was not intended to prevent rejection, there was no evidence suggesting that the rejection motion was an attempt to work a fraud or injustice. And, the debtor filed the motion for rejection prior to instructing the creditor to cease providing gas. Thus, the debtor was not equitably estopped from retroactive rejection. Due to a drop in gas price, the debtor was paying $15,000 more per day under its contract with the creditor. Since the rejection motion was filed prior to the requested rejection date, the creditor was placed on advance notice of the proposed effective date. BP Energy Co. v. Bethlehem Steel Corp., 2002 U.S. Dist. LEXIS 22052, — B.R. — (S.D.N.Y. November 14, 2002) (Buchwald, D.J.).

Collier on Bankruptcy, 15th Ed. Revised 3:365.03 [back to top]

 

 

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Case ordered dismissed or converted to chapter 13 due to 40 year-old debtor’s lack of candor regarding prebankruptcy increase in retirement contributions. Bankr. E.D.N.Y. PROCEDURAL POSTURE: The United States trustee moved to dismiss the debtor’s chapter 7 case for substantial abuse under 11 U.S.C. § 707(b), arguing that the given that the debtor had the ability to repay a significant portion of his consumer prepetition debts out of his postpetition earnings under a chapter 13 plan and that the debtor quadrupled his voluntary contribution to his retirement plan on the eve of the bankruptcy and attempted to conceal that fact. OVERVIEW: The debtor’s monthly income was $2,209 and expenses were $2,170. He made retirement contributions of $576 per month, or about 27 percent of his gross income. The contributions should be reduced to, at most, $300 per month. The debtor was only 40 years old, had no dependents, and would not suffer any adverse employment conditions if the contributions were reduced. He had no obligation to buy back pension contributions if they were reduced. Before meeting with his bankruptcy attorneys, the debtor had been funding his pension plan at $140 per month, or 6 percent of his gross income. Under a chapter 13 plan, with disposable income of $315 per month, the debtor could repay over 40 percent of his unsecured debt in 36 months. Under a five-year plan, he could repay 67 percent. The debtor had quadrupled his voluntary contributions only one month before filing bankruptcy. Under the equitable “totality of circumstances” test of section 707(b), when he had contributed only one-fourth of that amount for one and one-half years before, the increase smacked of abuse. The debtor had exhibited a lack of candor when the trustee questioned him about it. There were no mitigating circumstances. In re Aiello, 2002 Bankr. LEXIS 1274, 284 B.R. 756 (Bankr. E.D.N.Y. November 4, 2002) (Craig, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 6:707.04 [back to top]

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Creditor’s appeal of plan confirmation dismissed as moot due to substantial consummation of plan and creditor’s failure to seek stay pending appeal. S.D.N.Y. PROCEDURAL POSTURE: A bankruptcy judge issued an order confirming appellee debtors’ chapter 11 plan, including a settlement agreement involving unsecured claims. The bankruptcy judge refused appellant unsecured creditor’s request to appoint an independent examiner to investigate claims against shareholders and board members of the debtors. The creditor appealed the confirmation order and the denial of its motion for an examiner. OVERVIEW: The creditor had owned or leased movie theaters that were managed by the debtors. The creditor claimed that a prepetition transfer of $417 million dollars to a shareholder of the debtors should have been investigated. The creditor also challenged the settlement, which dealt with the creditors’ committee’s concerns over the release of potential causes of action. The court found that the appeal was moot because the plan had been substantially consummated and because the creditor never sought a stay. Following confirmation, liens had been granted on substantially all of the debtors’ assets, prepetition notes and preexisting securities had been cancelled, shareholder agreements had been terminated, and new common stock had been issued, among other things. The creditor’s failure to seek a stay made it inequitable to proceed with the appeal, and it was impossible to restore the pre-consummation status quo by excising the settlement provisions. Approval of the confirmation order was not an abuse of discretion. Also, the creditor asked for an examiner too late in the proceedings, and deposition testimony offered to show reason for an investigation was properly excluded as hearsay. Six West Retail Acquisitions, Inc. v. Loews Cineplex Entm’t Corp., 2002 U.S. Dist. LEXIS 21927, 286 B.R. 239 (S.D.N.Y. November 13, 2002) (Berman, D.J.).

Collier on Bankruptcy, 15th Ed. Revised 7:1101.01 [back to top]

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3rd Cir.

Where mortgage was indexed under debtor’s married name and debtor filed under different name, trustee’s search under filing name was sufficiently reasonable to allow sale of property. Bankr. W.D. Pa. PROCEDURAL POSTURE: Debtor owned a certain parcel of real estate. Movant chapter 7 trustee filed a motion to sell the property. Respondent bank, inter alia, objected to the sale claiming that it had a valid second mortgage on the property. The debtor gave this mortgage while she was married and used her married name on the mortgage documents. When she filed bankruptcy, she used a different name. At issue was whether a title search should have found the mortgage. OVERVIEW: The land records in the county in which the property was located were indexed by name. Thus, a hypothetical purchaser, which the chapter 7 trustee was deemed to have been, who had searched the alphabetical index in the county property record on the date of the bankruptcy filing would have had no notice of the mortgage because it was indexed under the debtor’s married name. The bank argued that the county maintained a separate index by tax identification number, and the trustee had a duty to search this index as well. However, the county never adopted an ordinance that required all transactions recorded in the recorder’s office to be indexed by tax identification number. The trustee, as a hypothetical bona fide purchaser, was required to undertake reasonable steps to inquire as to the presence of liens against the debtor’s property. A search of the alphabetical index was a reasonable and complete step. The additional step of checking the tax identification number index was a duplicative effort that was not required for a search to constitute reasonable inquiry. Pope v. Corbett (In re Corbett), 2002 Bankr. LEXIS 1263, 284 B.R. 779 (Bankr. W.D. Pa. November 7, 2002) (Bentz, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 5:544.02 [back to top]

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4th Cir

Debtor’s motion to recover payments to creditors for which it allegedly received less than reasonably equivalent value required evidentiary hearing. Bankr. E.D. Va. PROCEDURAL POSTURE: Plaintiff debtor filed a chapter 11 petition. Five related companies also filed chapter 11 petitions at the same time. The debtor commenced an adversary action against defendants, two companies, seeking recovery of alleged insufficient transfers. The companies filed a motion to dismiss the complaint for failure to state a claim for relief. OVERVIEW: The adversary action sought to recover millions of dollars which the debtor had allegedly spent for the benefit of the companies without receiving anything. The companies claimed in the motion that: (1) the debtor was judicially estopped from attacking payments which had been previously represented as made in the ordinary course of business; and (2) the companies were not to be treated as parties for whose benefit the payments were made. The court held that the prior pleadings filed by the debtor could be properly considered in determining whether the debtor was judicially estopped from claiming that payments it made under the agreement or on another entity’s behalf were avoidable as constructively fraudulent transfers. The debtor’s claims were based upon 11 U.S.C. § 548 and Va. Code § 55-81. The debtor’s position was that its failure to actually receive the payment that was contractually or otherwise due effectively caused the debtor to receive less than reasonably equivalent value or consideration valuable in law. The court not resolve the issue on a Fed. R. Civ. P. 12(b)(6) motion to dismiss. Pathnet, Inc. v. Nortel Networks, Inc. (In re Pathnet, Inc.), 2002 Bankr. LEXIS 1262, — B.R. — (Bankr. E.D. Va. August 14, 2002) (Mitchell, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 5:548.01 [back to top]

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Bankruptcy court erred in sanctioning attorney as failure to report relevant state court judgment was based on reasonable belief that judgment was not yet final. D. Md. PROCEDURAL POSTURE: The Bankruptcy Court for the District of Maryland sanctioned debtor’s attorney in the amount of $33,249, which represented 50 percent of the attorney’s fees in an adversary action, under Fed. R. Bankr. P. 9011, and dismissed debtor’s complaint. The attorney appealed on the basis that any award of sanctions against him was unjustified. Creditor cross-appealed on the grounds that the award was not substantial enough. OVERVIEW: On appeal, the attorney argued that the bankruptcy court erred when it awarded sanctions against him because it was objectively reasonable for him to believe that a relevant prior state court judgment was not final when he filed the adversary proceeding. First, the state court judgment was against fewer than all parties; thus, under Md. R. 2-602(a)(1) it was not a final judgment. Second, even if debtor was somehow in privity with other parties as to the state court judgment, the attorney could have objectively reasonably believed that the fact that the judgment against the other parties was on appeal militated against the judgment for purposes of res judicata and collateral estoppel. Because the state court never entered an order under Md. R. 2-602(b), which was required under the circumstances, the attorney was correct as to the non-finality of the state court’s judgment. The same was true with regard to the appeal taken by the parties with whom debtor was supposed to be in privity. Accordingly, the bankruptcy court abused its discretion in sanctioning the attorney under Fed. R. Bankr. P. 9011. His actions under the circumstances were sufficiently reasonable to avoid that result. Community Mgmt. Corp. v. Weitz (In re Community Mgmt. Corp.), 2002 U.S. Dist. LEXIS 21951, 288 B.R. 104 (D. Md. October 10, 2002) (Messitte, D.J.).

Collier on Bankruptcy, 15th Ed. Revised 10:9011.01 [back to top]

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6th Cir

Bankruptcy court properly awarded reduced fee to trustee based on hourly rate rather than percentage. W.D. Ky. PROCEDURAL POSTURE: Before the court was an appeal from a decision of the bankruptcy court awarding appellant bankruptcy trustee a fee of $450 and expenses of $7.00 for work he did as chapter 7 trustee that brought certain assets to the estate. The assets were collected and distributed after the case was converted to chapter 13. OVERVIEW: The bankruptcy court was within its discretion when it based its award on an hourly rate fee rather than a percentage fee. Even if the trustee normally charged percentage based fees, he could not receive anything under 11 U.S.C. § 326 unless it met the requirements of 11 U.S.C. § 330. Also, it was not an abuse of discretion for the bankruptcy court to reduce the trustee’s hourly rate to $150 per hour. The court took judicial notice of the fact that within the local legal community, hourly rates of counsel seeking compensation in routine chapter 7 proceedings ranged from $75 to $150. The court’s determination that the trustee failed to justify an hourly rate in excess of $150 per hour was reasonable based on the record. Additionally, the bankruptcy court’s determination that the trustee had already been paid a statutory fee for attending the 11 U.S.C. § 341 meeting, and thus, was not entitled to be compensated for that time under a quantum meruit award, was not clearly erroneous. Finally, the bankruptcy court’s determination that the time the trustee spent litigating his fee award was not reasonable was not an abuse of discretion. Schilling v. Moore, 2002 U.S. Dist. LEXIS 22367, 286 B.R. 846 (W.D. Ky. November 13, 2002) (Simpson, D.J.).

Collier on Bankruptcy, 15th Ed. Revised 3:330.01 [back to top]

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7th Cir.

Stay lifted to allow IRS to apply debtors’ overpayment to debtors’ tax liabilities. Bankr. N.D. Ill. PROCEDURAL POSTURE: Married debtors filed a chapter 13 petition and the court later confirmed the debtors’ chapter 13 plan. The federal government, on behalf of the Internal Revenue Service, filed a motion to lift the automatic stay pursuant to 11 U.S.C. § 362(d) to allow it to apply the debtors’ overpayment to the debtors’ tax liabilities. The debtors objected to the motion. OVERVIEW: The debtors’ objection to the motion claimed that the right to setoff was lost by the IRS because it waited until after confirmation. The IRS asserted that: (1) the application of a tax overpayment to reduce prebankruptcy petition debts to the IRS was not a setoff within the meaning of the Bankruptcy Code, but instead a netting, permitted under I.R.C. § 6402; (2) the IRS’ setoff rights were preserved by 11 U.S.C. § 553; and (3) IRS setoffs were protected by sovereign immunity and other special government rights. The court agreed with the IRS where the confirmed chapter 13 plan’s terms only referenced the debtors’ estimate of the allowed property claims. The debtors did not schedule the overpayment as an asset and secured claimants were not subject to the time limits imposed upon unsecured creditors under Fed. R. Bank. P. 3002(c)(1). In re Bare, 2002 Bankr. LEXIS 1267, 284 B.R. 870 (Bankr. N.D. Ill. November 12, 2003) (Squires, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 3:362.07 [back to top]

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8th Cir.

On debtor’s objection, court determined that administrative fees for several financial advisors would be based on amount of recovery achieved by each for unsecured creditors. Bankr. W.D. Mo. PROCEDURAL POSTURE: A debtor and various subsidiaries filed chapter 11 petitions, which were jointly administered. The committee of unsecured creditors moved to employ financial advisors, pursuant to 11 U.S.C. § 1103(a). The debtors objected to a proposed fee as an administrative expense under 11 U.S.C. § 503. The court allowed the retention of the advisors, but the parties were unable to agree on the payment source. OVERVIEW: All of the parties agreed that the financial advisors’ transaction fee was an administrative expense, but disagreed where the expense should be allocated. The committee argued that fee should be treated as a general administrative expense because the clear and unambiguous language of 11 U.S.C. § 1103 authorized it and allowed the committee to employ one or more attorneys, accountants, or other agents, to represent or perform services for such committee. The debtors disagreed and claimed that two separate committees had hired financial advisors and made different agreements concerning the fees. The court viewed the fee as a contingent fee that would be based on the amount of any recovery the advisors obtained for the unsecured creditors. The court believed that the fee should be paid out of the distributions made to the general unsecured creditors because the advisors were working specifically for the benefit of those creditors, and not for the benefit of all creditors or the overall benefit of the bankruptcy estate. In re Farmland Indus., Inc., 2002 Bankr. LEXIS 1632, 286 B.R. 895 (Bankr. W.D. Mo. November 27, 2002) (Venters, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:503.01 [back to top]

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Property purchased by debtor’s former spouse with own funds and funds given to spouse by debtor was not property of the estate. Bankr. W.D. Mo. PROCEDURAL POSTURE: Plaintiff creditor asserted that debtor should be denied discharge pursuant to 11 U.S.C. § 727(a)(2), (a)(4). In a second proceeding against the debtor’s spouse, defendant there, the chapter 7 trustee sought a declaratory judgment that the debtor held an interest in farm property, and sought to sell that interest. OVERVIEW: The controversy revolved around the debtor’s alleged ownership interest in a 200-acre farm property and whether he should be denied a discharge for failing to disclose that alleged ownership interest in his bankruptcy filings. The trustee claimed that the debtor acquired an ownership interest in the property because he provided part of the money required for the farm purchase when he was married to his spouse. Accordingly, the trustee asserted that his interest in the property was property of the bankruptcy estate pursuant to 11 U.S.C. § 541. However, the court found that the spouse acquired the farm property with her separate funds and with money given to her by the debtor as a gift, and that under state law, it was her separate property and not property of the bankruptcy estate. Next, addressing the creditor’s claim that the debtor concealed assets, given the court’s finding that the farm was not property of the estate, it followed that his nondisclosure of the transfer on his bankruptcy schedules was not violative of 11 U.S.C. § 727. Further, it could not have been a violation of the statute for the debtor not to list an interest in the property on his schedules. Helena Chem. Co. v. True (In re True), 2002 Bankr. LEXIS 1276, 285 B.R. 405 (Bankr. W.D. Mo. November 4, 2002) (Venters, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 5:541.01 [back to top]

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Funds due debtor from another state’s unclaimed property office had previously been acknowledged as debtor’s by state agency and were property of the estate. Bankr. W.D. Mo. PROCEDURAL POSTURE: Plaintiff, a limited partnership established to liquidate the assets of a bankruptcy estate, brought an adversary proceeding against defendants, the Unclaimed Property Division of the Colorado Department of the Treasury and two potential claimants of funds held by the Division. The limited partnership sought to recover $626,855.87 from the Division. OVERVIEW: The funds at issue resulted from a claim by the bankruptcy debtor filed with the Iowa Commissioner of Insurance as liquidator of an insurance company. The liquidator found the claim to be valid and obtained an Iowa state court’s approval to pay the debtor. However, a check mailed to the debtor at a Colorado address was returned to the liquidator, as the Colorado office was closed. The funds were turned over to the Division, which claimed that the limited partnership had not proved its ownership interest in the funds. The bankruptcy court concluded that the funds were part of the bankruptcy estate because the liquidator and the Iowa court, following Iowa law, had determined that the debtor was entitled to the funds. It was the bankruptcy court’s duty to give full faith and credit to the Iowa court’s order, and the Division was not entitled to relitigate the issue. Although the Division argued that it appeared that the check was sent to one of the potential claimants in care of the debtor, both of the potential claimants disclaimed any interest in the funds. Colorado law did not allow the limited partnership to collect interest on the funds, however. Kroh Operating Ltd. P’ship v. Great Payback Office (In re Kroh Bros. Dev. Co.), 2002 Bankr. LEXIS 1268, 284 B.R. 264 (Bankr. W.D. Mo. September 23, 2002) (Venters, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 5:541.01 [back to top]

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9th Cir.

Dischargeability of debtor’s liability for conversion remanded absent evidence of willful or malicious intent although liability based on fraud was clearly nondischargeable. B.A.P. 9th Cir. PROCEDURAL POSTURE: Chapter 11 debtor/farmer appealed from a judgment of the Bankruptcy Court for the Eastern District of California which found that the farmer’s liability for conversion concerning certain crop insurance proceeds was nondischargeable, 11 U.S.C. § 523(a)(6), and that his fraud-based debt was similarly nondischargeable under 11 U.S.C. § 523(a)(2)(A). OVERVIEW: The farmer filed a voluntary chapter 11 petition on May 9, 2000, and plaintiff, general partnership filed a timely complaint to determine nondischargeability, alleging, inter alia, that the farmer obtained crop financing under a false pretense and misrepresentation and had improperly converted insurance proceeds. The bankruptcy court held that when the farmer received the insurance check, he knew that he owed $321,111 to the partnership from the prior crop year, that he had executed documents granting the partnership a security interest, and that although he had agreed to repay the debt formally, he had every intention of not repaying it. The bankruptcy appellate panel noted that the evidence was clear that the farmer did not tell the partnership about the insurance settlement or money, but applied the money to his own use, knowing that the partnership would not be paid the full amount of its debt. However, the panel held that the bankruptcy court did not make the necessary finding regarding the farmer’s subjective intent to injure the partnership, in order to determine conclusively that the conversion was “willful and malicious” for purposes of 11 U.S.C. § 523(a)(6). Thiara v. Spycher Bros. (In re Thiara), 2002 Bankr. LEXIS 1289, 285 B.R. 420 (B.A.P. 9th Cir. November 1, 2002) (Marlar, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:523.01 [back to top]

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Termination of employee who informed employer of imminent bankruptcy filing was not discriminatory. 9th Cir. PROCEDURAL POSTURE: Plaintiff trustee filed suit against defendant employer under 11 U.S.C. § 525(b), alleging that the employer discriminated against the debtor by firing him after he indicated his intent to file bankruptcy. The bankruptcy court dismissed the case, and the District Court for the District of Nevada affirmed. The trustee appealed. OVERVIEW: The debtor incurred large medical expenses at the hospital where he was employed, and he did not pay them. After repayment negotiations failed, he told the employer he intended to file for bankruptcy, and the employer fired him before he did so. The trustee claimed that the firing violated section 525(b), which barred termination of an individual who “is or has been” a bankruptcy debtor solely because the individual was or had been a debtor in bankruptcy. The appeals court held that section 525(b) only applied to individuals who had already filed bankruptcy at the time of the alleged discriminatory action. This was because the reporting of statutory violations was to be encouraged, but the filing of bankruptcy was not something that should be encouraged. Section 525(b), by its plain language referred only to a debtor who “is or has been” in bankruptcy, not to someone who “has been or will be” a debtor. Since at the time of the termination, the debtor had not been fired, that section was not applicable. Majewski v. St. Rose Dominican Hosp. (In re Majewski), 2002 U.S. App. LEXIS 23426, 310 F.3d 653 (9th Cir. November 13, 2002) (Schroeder, C.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:525.04 [back to top]

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10th Cir.

Stay of personal injury action lifted where debtor was not a defendant and subject only to actual defendants’ indemnity claims. D. Kan. PROCEDURAL POSTURE: Plaintiff instituted a negligence action involving a motor vehicle accident against defendant. The defendant was driving a car that his employer (also a defendant) leased from a car rental company. The rental company was obligated to provide a defense and to indemnify the defendants. The plaintiff did not sue the rental company. The company filed for bankruptcy and the action was stayed. The plaintiff moved to set aside the automatic stay. OVERVIEW: The district court agreed with the plaintiff that the automatic stay provision of 11 U.S.C. § 362 did not apply to this case because that provision only stayed actions against the “debtor.” The only debtor in the instant case was the car rental company which was not a defendant in the case. The fact that the plaintiff did not initially oppose the imposition of the stay was irrelevant because the automatic stay was imposed as a matter of statute, and the statute either applied or it did not. Although the defendants may have had a right to be defended by the car rental company and a right to be indemnified for any judgment, those rights did not provide a legal basis under the Bankruptcy Code for the court to stay the action. The defendants argued that Kan. Stat. §§ 40-3619 and 40-3627 provided a stay under state law. These were insurance statutes and the rental company was not an insurer. Even if the car rental company were an “insurer,” there was nothing in the record to have indicated that a “rehabilitation order” or “liquidation order” had been entered against the car rental company. Teufel v. Rosenberg, 2002 U.S. Dist. LEXIS 21940, — B.R. — (D. Kan. November 8, 2002) (Waxse, M.J.).

Collier on Bankruptcy, 15th Ed. Revised 3:362.01 [back to top]

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Debtor’s obligation to pay mortgage on marital home occupied by former spouse was entitled to priority as a maintenance and support payment. B.A.P. 10th Cir. PROCEDURAL POSTURE: In his appeal, the debtor argued that the Bankruptcy Court for the District of Utah erred in finding that the creditor ex-wife’s state court divorce judgment was entitled to priority status under 11 U.S.C. § 507(a)(7). The state court’s order was based on the debtor’s having failed to pay the mortgages on the marital home, as previously ordered, as a combination of spousal and child support. OVERVIEW: The divorce decree’s language established the intent of the state court that the house payments were to be in the nature of support. When the state court entered its order, the parties had three minor children; the ex-wife had primary custody. In determining the amount of alimony to be paid directly to the ex-wife, only $43 per month, the state court considered the fact that it had ordered the debtor to make the house payments. The evidence justified the characterization of the mortgage payments as maintenance and support entitled to priority under 11 U.S.C. § 507(a)(7). The bankruptcy court did not commit clear error. When the state court learned that the debtor had failed to make the mortgage payments, it ordered him to make those payments directly to the ex-wife. It was that latter obligation which she sought to enforce. The bankruptcy court order did not change the state court’s order in any way, shape, or form. The argument that any payments to the ex-wife would be a windfall was specious. The mere fact that the ex-wife and children managed to survive notwithstanding the debtor’s failure to pay support did not justify the elimination of all past due support obligations. Miller v. Miller (In re Miller), 2002 Bankr. LEXIS 1242, 284 B.R. 734 (B.A.P. 10th Cir. November 4, 2002) (Michael, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:507.09 [back to top]

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11th Cir.

Debtor did not meet evidentiary burden for adjustment of equipment valuation from that listed on earlier tax returns. Bankr. M.D. Ga. PROCEDURAL POSTURE: In bankruptcy proceedings, movant debtor sued respondent county, seeking a determination of tax liability under 11 U.S.C. § 505. OVERVIEW: The debtor claimed that the fair market value of its equipment was $1,296,000 for purposes of ad valorem taxation. However, the debtor’s prior tax returns listed a much higher value. The court held that the ad valorem tax returns required the debtor to determine the basic cost approach value of its equipment. That required the debtor to determine the original cost and the economic life of the equipment. The debtor then multiplied the cost times a depreciation factor. The result was the basic cost value. Should the debtor have believed that the basic cost value did not reflect fair market value, then debtor needed to list its estimate of value under a column titled “taxpayer returned value.” From the evidence presented, the court was not persuaded that the debtor carried its evidentiary burden for the court to adjust the valuation that debtor reported in its 2001 and 2002 ad valorem tax returns. Specifically, the court was not persuaded by the testimony of the debtor’s witness regarding the $1,296,000 valuation. Thus, the debtor’s tax returns with their declarations of value contained the appropriate value for purposes of taxation. Chipman-Union, Inc. v. Greene County (In re Chipman-Union, Inc.), 2002 Bankr. LEXIS 1261, 285 B.R. 752 (Bankr. M.D. Ga. November 1, 2002) (Hershner, C.B.J.).

Collier on Bankruptcy, 15th Ed. Revised 4:505.01 [back to top]

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Chapter 13 plan ordered modified for failure to account for court ordered attorneys’ fees and child support. Bankr. M.D. Ga. PROCEDURAL POSTURE: Two creditors objected to debtor’s chapter 13 plan. OVERVIEW: One creditor contented that she had a $250 nondischargeable priority claim for attorney’s fees pursuant to a contempt order in state court. The other creditor contended that she had a $2,900 nondischargeable priority claim for back child support, not subject to a $1,500 off-set as proposed by debtor’s plan. Debtor could not prove that the state court lacked jurisdiction to render the contempt order; therefore, the one creditor’s claim for $250 was valid and nondischargeable. It had to be treated as such in the chapter 13 plan. Further, as to the other creditor, there was no agreement reached between her and debtor to reduce the child support arrearage. In any event, debtor did not meet his burden of proving that the court had power to modify a claim for child support arrearage. Thus, the second creditor’s objection was sustained. McKenna v. Dupree (In re Dupree), 2002 Bankr. LEXIS 1258, 285 B.R. 759 (Bankr. M.D. Ga. November 7, 2002) (Laney, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 8:1324.01 [back to top]

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D.C. Cir

Defendant entitled to hearing to determine amount of attorney’s fees to be reimbursed due to plaintiff’s reckless filing of claim that properly belonged to trustee. D.D.C. PROCEDURAL POSTURE: Plaintiff attorney sued defendant attorney, alleging claims relating to bankruptcy. Defendant moved for reimbursement of attorney’s fees. The matter was before a magistrate judge (“M.J.”) for a report and recommendation. OVERVIEW: Defendant alleged that plaintiff should never have filed the lawsuit in the instant court, because plaintiff included as the first five counts of his complaint the same five counts that another district court said he could not press because those claims belonged to plaintiff’s bankrupt estate and could be pressed only by the trustee in bankruptcy. The instant court found that plaintiff had taken the kind of purposeful, intentional action that rose above negligence to the level of recklessness, required to establish a violation of 28 U.S.C. § 1927. It was silly for a man who made a handsome living as a trial lawyer in patent cases in federal courts and tribunals to pretend that he was merely negligent in filing a lawsuit that contained five counts that another court had previously concluded did not belong to him. The court also noted a mean-spirited e-mail that plaintiff sent to the firm that defendant had joined. That action spoke volumes about plaintiff’s true intentions and made his claim of filing this lawsuit to preserve his original claims from a statute of limitations ring hollow. Healey v. Labgold, 2002 U.S. Dist. LEXIS 21776, 231 F. Supp.2d 64 (D.D.C. October 17, 2002) (Facciola, M.J.).

Collier on Bankruptcy, 15th Ed. Revised 1:8.07 [back to top]

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Trustee’s motion to transfer spouse’s bankruptcy to same court as debtor’s bankruptcy denied as a spouse is not an “affiliate.” Bankr. D.D.C. PROCEDURAL POSTURE: In debtor husband’s bankruptcy, the trustee moved for transfer of debtor’s wife’s bankruptcy case, filed in Maryland, to the instant court pursuant to Fed. R. Bankr. P. 1014(b). OVERVIEW: The spousal relationship between the debtor and his wife was the only basis the trustee asserted for invoking the court’s authority to oversee the wife’s bankruptcy pursuant to Fed. R. Bankr. P. 1014(b). However, that relationship, alone, was not a basis for invoking Rule 1014(b), which identified specific categories of cases to which it applied. Based on the history of the rule and the definitions in related statutory provisions — 11 U.S.C. § 101(2), 28 U.S.C. § 1408, and former 28 U.S.C. § 1472 — the term “affiliate” in Fed. R. Bankr. P. 1014(b) restricted the rules application to the particular categories described in the rule, which did not include a category for “spouses” or “husband and wife.” In re Feltman, 2002 Bankr. LEXIS 1266, 285 B.R. 82 (Bankr. D.D.C. November 12, 2002) (Teel, B.J.).

Collier on Bankruptcy, 15th Ed. Revised 9:1014.04 [back to top]

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Annual Business Filings by District (2007-08)

 

Annual Business Filings by District (2007-08)      
                 
                 
                 
ABI World                
                 
District 2007 2008            
District of Alaska 70 81            
Middle District of Alabama 85 150            
Northern District of Alabama 170 314            
Southern District of Alabama 51 72            
Eastern District of Arkansas 190 262            
Western District of Arkansas 207 235            
District of Arizona 479 1,069            
Central District of California 1,780 3,511            
Eastern District of California 786 1,208            
Northern District of California 634 1,117            
Southern District of California 305 568            
District of Colorado 645 965            
District of Connecticut 264 392            
District of Columbia 36 47            
District of Delaware 306 1,198            
Middle District of Florida 1,109 2,230            
Northern District of Florida 121 239            
Southern District of Florida 799 1,454            
Middle District of Georgia 161 313            
Northern District of Georgia 1,154 1,748            
Southern District of Georgia 141 176            
District of Hawaii 56 86            
Northern District of Iowa 113 150            
Southern District of Iowa 130 192            
District of Idaho 116 215            
Central District of Illinois 181 191            
Northern District of Illinois 731 1,209            
Southern District of Illinois 128 157            
Northern District of Indiana 227 297            
Southern District of Indiana 381 538            
District of Kansas 223 252            
Eastern District of Kentucky 168 288            
Western District of Kentucky 143 233            
Eastern District of Louisiana 127 180            
Middle District of Louisiana 41 62            
Western District of Louisiana 342 365            
District of Massachusetts 333 440            
District of Maryland 380 628            
District of Maine 152 180            
Eastern District of Michigan 790 1,166            
Western District of Michigan 404 518            
District of Minnesota 520 863            
Eastern District of Missouri 176 334            
Western District of Missouri 208 342            
Northern District of Mississippi 132 179            
Southern District of Mississippi 130 178            
District of Montana 55 88            
Eastern District of North Carolina 223 366            
Middle District of North Carolina 187 306            
Western District of North Carolina 187 259            
District of North Dakota 59 66            
District of Nebraska 208 259            
District of New Hampshire 327 393            
District of New Jersey 864 1,067            
District of New Mexico 142 202            
District of Nevada 321 505            
Eastern District of New York 380 449            
Northern District of New York 297 263            
Southern District of New York 467 871            
Western District of New York 231 266            
Northern District of Ohio 689 787            
Southern District of Ohio 663 800            
Eastern District of Oklahoma 51 62            
Northern District of Oklahoma 129 142            
Western District of Oklahoma 173 256            
District of Oregon 265 429            
Eastern District of Pennsylvania 297 407            
Middle District of Pennsylvania 211 264            
Western District of Pennsylvania 509 522            
District of Rhode Island 105 144            
District of South Carolina 144 268            
District of South Dakota 90 96            
Eastern District of Tennessee 200 302            
Middle District of Tennessee 180 394            
Western District of Tennessee 157 192            
Eastern District of Texas 383 531            
Northern District of Texas 899 1,171            
Southern District of Texas 668 831            
Western District of Texas 530 591            
District of Utah 183 419            
Eastern District of Virginia 416 783            
Western District of Virginia 178 190            
District of Vermont 65 49            
Eastern District of Washington 155 186            
Western District of Washington 322 528            
Eastern District of Wisconsin 219 397            
Western District of Wisconsin 193 255            
Northern District of West Virginia 84 93            
Southern District of West Virginia 66 85            
District of Wyoming 36 63            
District of Guam 3 4            
District of the Northern Mariana Islands 2 0            
District of Puerto Rico 276 349            
Virgin Islands 8 4            
United States 28,322 43,546            
                 
                 
                 


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