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THE CONSUMER BANKRUPTCY LETTER |
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In This Issue:
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MAY 3, 2004
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BANKRUPTCY ACADEMY - ENROLL NOW AND SAVE $50
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PARTIAL RESULTS OF FEE PRACTICES SURVEY
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CITING UNPUBLISHED OPINIONS ADVOCATED
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SEARS ASSESSED ATTY FEES FOR BRINGING UNFOUNDED SUIT
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RECORD ATTENDANCE AT NACBA CONVENTION
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KING BANKRUPTCY ACADEMY SCHEDULES 3-DAY SEMINARS ON DISCHARGING TAXES - LAS VEGAS & SAN FRANCISCO
The first dates scheduled for the 5th annual Bankruptcy Academy program on discharging taxes in bankruptcy cases have been scheduled for LAS VEGAS, Nevada, on Sept. 8, 9 & 10, and at FISHERMAN'S WHARF, San Francisco, October 27, 28, 29, 2004.
Principal presenters will be; Morgan King, attorney and author of Discharging Taxes in Bankruptcy; Charles F. Rosen, former chief of the Los Angeles IRS office of Special Procedures (bankruptcy, insolvency); Eric M. Casper, formerly Senior Trial Attorney, Tax Division, U.S. Department of Justice - Washington, D.C.; and Robert N. Kolb, formerly with the IRS and recently the prevailing attorney for the debtor/taxpayer in two important appellate cases.
The 3-day seminar and workshop will be a thorough exploration of bankruptcy remedies for delinquent taxes and tax liens in consumer bankruptcy cases (chapter 7 and chapter 13), emphasizing hands-on handlng of tax discharge cases.
If you haven't already enrolled, you've missed the $100 Early Bird discount. However, you can still get a $50 discount. Early registration for either program SAVES $50 off the regular enrollment fee of $695. To get the discount enrollment must be received no later than June 1.
All previous programs have qualified for CLE in all states for which CLE accreditation was requested. On request the Academy will assist in obtaining CLE accreditation for an enrollee's state.
For more information about the Tax Discharge program, or to enroll, click on red below.
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The annual convention of the National Association of Consumer Bankruptcy Attorneys (NACBA) saw record enrollment in Boston last week. For more information visit NACBA.com, or contact NACBA officers:
Matthew Mason, Director and President
UAW-GM Legal Services Plan
Detroit MI 48202
(313) 872-0500
Henry Sommer, Director and Vice President
Miller, Frank & Miller
Philadelphia PA 19119
(215) 242-8639
James "Ike" Shulman, Director and Treasurer
Shulman Law Offices
San Jose CA 95126
(408) 297-3333
Carey Ebert, Director and Secretary
Attorney at Law
Hurst TX 76053
(817) 268-2468
William Brewer, Jr., Director
Raleigh NC
(919) 832-2288
John Rao, Director
National Consumer Law Center
Boston, MA 02110
(617) 523-8010
D. Jean Ryan, Director
Steel Hector & Davis
Miami, Fl 33131
(305) 577-7012
Norma Hammes, Director
Gold and Hammes
San Jose CA 95126
(408) 297-8750
Barbara May, Director
Attorney at Law
Arden Hills, MN 55126
(651) 486-8887
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TRUSTEE MAY REOPEN CASE TO PURSUE DEBTOR'S LAWSUIT
Having carefully considered the matter, the Court finds that the
Debtor's conduct does not warrant the application of judicial estoppel to
bar a Chapter 7 trustee from pursuing the State Court Action and that
cause exists to reopen the Debtor's bankruptcy estate.
IN RE ROCHESTER, (N.D.Ga. 2004)
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CHAPTER 7 DEBTOR'S EMBEZZLEMENT IS BAD FAITH - CASE DISMISSED
In this case, Debtor voluntarily filed a bankruptcy Petition and sought
the protection afforded by the Bankruptcy Code. While under the
protection of this Court, Debtor embezzled over $400,000 from her
employer. Following conversion of the case to Chapter 7, Debtor filed
amended schedules. Debtor has never disclosed in the Amended Schedules or otherwise provided an explanation of where the stolen funds went or where they are.
The actions of the Debtor and the activities undertaken during the
pendency of this case are exceptional circumstances in which the bad
faith of the Debtor is clearly demonstrated. The allowance of any
exemption in the known property of the estate would constitute a further abuse of the bankruptcy process. The Trustee's Amended Objections to Exemptions will be sustained and Debtor will be denied any and all exemptions from the bankruptcy estate.
IN RE BOGAN, (W.D.Pa. 2003)
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BK COURT MAY HEAR DISPUTE BETWEEN 3rd PARTIES
A dispute between third parties is related to a bankruptcy only if the dispute affects the amount of property for distribution [i.e., the debtor’s estate] or the allocation of property among creditors. Mere overlap between the dispute and the debtor’s affairs is not enough.
In re Mulder (Bankr. N.D. Ill.)
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DISCHARGE DENIED AND EXEMPT ASSETS SEIZED ON ACCOUNT OF DEBTORS' UNDISCLOSED FUNDS
Surcharge of the debtors' bankruptcy exemptions by their bankruptcy trustee to account for funds not properly disclosed in their bankruptcy filings was a permissible equitable remedy under the Bankruptcy Code, and was not barred by election of remedies or res judicata.
On January 12, 2000, Richard and Bettina Latman filed for Chapter 13 bankruptcy protection. On April 14, 2000, the Latmans dismissed their Chapter 13 petition, and, on April 18, 2000, they re-filed for protection under Chapter 7. During the four-day interval between the dismissal of their Chapter 13 petition and their refiling under Chapter 7, the Latmans sold a 1991 Ford Explorer automobile and a 1996 Sea Ray boat, for which they received a total of $8,500 in cash. Contrary to the requirements of the Bankruptcy Code, on their required Chapter 7 Schedule B submission of personal property owned as of the filing date, the Latmans did not list all of the proceeds of these vehicle sales, but instead listed only $1,500 cash on hand.
Noting this discrepancy, the Latmans' bankruptcy trustee (the "Trustee") requested that the Latmans account for the proceeds from the sale of the car and boat. In response to both the Trustee's request and a subsequent bankruptcy court order compelling an accounting of these proceeds, the Latmans gave only inaccurate accountings. The Trustee then commenced an adversary proceeding against the Latmans under 11 U.S.C. § 727 to deny the discharge of their debts. On April 27, 2001, the bankruptcy judge granted the Trustee's motion for summary judgment, finding as a matter of law that the Latmans had failed to explain the loss of the proceeds from the sales of their car and of their boat, had made material false statements on their bankruptcy schedules, had not kept adequate records of their assets and expenditures, and had fraudulently concealed an option to purchase real estate. This ruling was affirmed by the district court on March 6, 2002.
The Trustee filed subsequently a Motion to Charge Debtors' Exemptions for Failure to Make Accounting and for Turnover of Property in June 2001 (the "surcharge motion"). This motion contended that the $7,000 in unaccounted for proceeds from the sale of the Latmans' car and boat should be surcharged against the Latmans' 11 U.S.C. § 522(d)(5) "catch-all" or "wild card" exemption, thereby rendering non-exempt a Chrysler Town & Country minivan and engagement ring (or, $7,000 of the value of these items) that the Latmans had previously exempted under § 522(d)(5).*fn1 The ruling on this motion is challenged on this appeal.
The surcharge remedy fashioned by the bankruptcy judge prevented what would otherwise have been a fraud on the bankruptcy court and the Latmans' creditors caused by the Latmans' nondisclosure of monies that should have been listed on the bankruptcy schedules and available for the Latmans' creditors.
Latman v. Burdette (9th Cir. 2004)
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SEARS MUST PAY DEBTOR'S ATTORNEY'S FEES FOR BRINGING UNJUSTIFIED FRAUD SUIT
In November of 1997, Sears National Bank, a corporate subsidiary of Sears, issued debtor a MasterCard. On October 10, 2002, debtor used her Sears MasterCard to pay $1,127.00 to the San Francisco Department of Parking and Traffic for parking fees and fines. In the same month, debtor also incurred about $700.00 of additional charges on the account. On December 20, 2002, debtor filed a chapter 7 bankruptcy petition.
On March 21, 2003, Sears commenced this adversary proceeding against debtor based on the presumption of fraud under section 523(a)(2)(C).
In this present case, Sears has not provided any evidence that its actions were reasonably based in law or fact. Sears argues that it "had substantial justification for filing a complaint" without providing this Court with any support for its position. Sears based its entire case on the premise that the payment of parking fees and fines with a credit card was a cash advance under section 523(a)(2)(C). Sears did not attempt to prove liability under section 523(a)(2)(A).
This court finds that Sears was not substantially justified in bringing the non-dischargeability action against debtor.
For reasons stated above, the court is awarding debtor attorney's fees in the amount of $4,585.00. The court is concurrently entering an order consistent with the memorandum decision.
IN RE DAYTON, (N.D.Cal. 2004)
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WASHINGTON, D.C.: The Senate Committee on The Whole Shebang was shocked to learn in testimony last week that the actual purpose of the pending bankruptcy legislation is not to "reform" bankruptcy but to totally wreck it. For its work, the Committee was given the coveted "Duh!" award, and ordered to cut up their free parking passes.
According to Sen. Rooker Feldman (D.MD), Chairman of the Shebang committee, the discovery was made during hearings on the Natural Life Cycle of Debt.
This much was learned; raw products are consumed by manufacturers making consumer products, which are in turn consumed by consumers, who in turn are feasted on by debt collection agencies. Debt collection agencies are eventually harvested by bankruptcy lawyers and turned into tasty meatloaf.
Over eons of time, the dead carcasses of billions and billions of bankruptcy lawyers decompose into raw products, like oil, gas, and plastic, which is eventually turned into consumer products and credit cards, and the cycle begins all over again in all of its beauty, mystery and unconscionable interest rates. World without end, Amen!
After disclosing this startling news in a press conference, Sen. Feldman invited the press corps to a local bar, martinis all around.
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PUBLISHED BY KING BANKRUPTCY MEDIA FOR BANKRUPTCY PROFESSIONALS 7080 Donlon Way Suite 222 Dublin California 94568 (925) 829-6460
© King Bankruptcy Media 2004 CONTACT US AT editor@bankruptcymedia.com
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