Volunteer Attorneys Honored at Bankruptcy Court Reception

On October 30, the United States Bankruptcy Court for the District of Massachusetts honored volunteer attorneys for their service at a ceremony at the John W. McCormack Post Office and Court House in Boston. In addition to the names listed in the 2014 Court’s Pro Bono Honor Roll, the judges of the Bankruptcy Court presented five Pro Bono Publico awards to distinguished attorneys.

Justin Dion of Bacon Wilson, PC in Springfield was presented with the Western Division Award for his innovative work in representing indigent debtors. As Chair of the Legal Studies department at Bay Path University in Longmeadow, Attorney Dion has accepted cases from local legal service agencies and incorporated the preparation of those cases into his paralegal studies curriculum. This resourcefulness results in indigent debtors being connected to legal services they might otherwise be unable to find.

Paul Carey of Mirick O’Connell in Worcester received the Central Division Award for his tireless efforts in assisting debtors impacted by the abrupt closing of a large consumer bankruptcy practice. He helped hundreds of individuals transition to new attorneys, and worked with local bar leaders and the courts to minimize this unforeseen and unfortunate disruption in the lives of these debtors.

David Prentiss of New Bedford received the South Coast/Cape & Islands Award for his pro bono representation of debtors. He was also recognized for his time to mentoring new attorneys and serving on non-profit boards of agencies dedicated to helping the disadvantaged.

Susan Grossberg of Boston received the Eastern Division Award for her mentoring of attorneys of the Volunteer Lawyers Project of the Boston Bar Association. She regularly conducted lunch programs at VLP with the goal of instilling greater confidence in them to navigate the complex legal terrain of bankruptcy.

The judges also presented the first ever District Award to Donald Lassman of Needham for his development of and participation in programs throughout the District of Massachusetts that support military veterans needing access to legal services and financial education. In addition to representing indigent parties in bankruptcy matters, his service included training attorney volunteers on such topics as mortgages, foreclosures, debt management and bankruptcy, who then help service members and their families facing financial difficulties. Attorney Lassman’s service has helped improve the quality of life for Massachusetts’ veterans and service members returning from active duty to Massachusetts.

 

BBA Blog Pic

(Photo:  Judge Henry J. Boroff presented the District Award to Donald R. Lassman)

The 2014 Honor Roll is posted on the Court’s website and attorneys attending the ceremony were presented certificates. Attorneys included on this list certified to the court that they met the volunteer criteria established by the Court with the guidance of the Pro Bono Legal Services Advisory Committee.

The October 30 ceremony was attended by the honorees and their families in addition to approximately 100 guests from across the District.   A reception followed in the 12th Floor Library.

 

 

Volunteer Lawyers Project Awarded Pro Bono Innovation Grant

The Legal Services Corporation (“LSC”), which funds civil legal aid for low-income Americans by awarding grants to legal services providers, recently announced the Volunteer Lawyers Project of the Boston Bar Association as a recipient of a 24-month $158,045 Pro Bono Innovation Grant to develop new legal aid clinics and technology to provide bankruptcy legal assistance to low-income clients.  More information on the VLP’s award is available on the LSC’s web site.

 

Bankruptcy Section Hosting Diversity Program on November 6

The BBA Bankruptcy Section will be hosting a Diversity Program on November 6, 2014 at the Boston Bar Association, 16 Beacon Street, Boston, MA.  The program will run from 4:00 pm to 6:00 pm, with a reception from 6:00 pm to 7:00 pm.  There will be a roundtable discussion of the current state of diversity in the field of bankruptcy law, the progress that has been made and goals for the future.  We will also be conducting an exploration of unconscious bias facilitated by Doug Reynolds of The New Law Center, LLC.

We think that this will be a very beneficial event and truly hope you will join us.  Please RSVP to [email protected].

 

Absolute Priority is now The Disclosure Statement

The BBA Bankruptcy Section is excited to share the launch of its newly re-named blog, The Disclosure Statement.  Here, you’ll continue to find a mix of news about the Bankruptcy Section and BBA events and initiatives, summaries of decisions from the Massachusetts Bankruptcy Court and other decisions relevant to our readers, articles on bankruptcy topics, and occasional musings and miscellany. We hope that you’ll continue to find these posts to be useful, entertaining, and/or thought provoking.  If you subscribed to Absolute Priority, you will continue to receive notifications directly to your email without interruption.  If you’re new to the blog, click on the subscription link to receive posts.

You may have noticed that our most recent post on case summaries contained a broken link.  Please excuse the growing pains as we migrated a few years’ worth of content over to the new platform!  If you’re interested in reviewing summaries of the Bankruptcy Court decisions from September, you can find them here.

Finally, the editors of The Disclosure Statement always welcome new content!  If you’re interested in contributing to The Disclosure Statement, please contact Chris Candon or Gina O’Neil.

Case Summaries — The September Bankruptcy Court Opinions

The following are summaries of the September opinions posted on the Massachusetts Bankruptcy Court’s website.

DeGiacomo v. Tashmoo Cove Realty, Inc. (In re Northwood Properties, LLC), Adv. P. No. 10-1314, Bankr. No. 05-18880-FJB (September 3, 2014).

The Chapter 7 Trustee sought damages against Tashmoo Cove Realty, Inc. (“Tashmoo”), an owner of the Debtor and a proponent of the Debtor’s confirmed, but subsequently failed, Chapter 11 plan, for breach of plan funding obligations. All of the counts in the Trustee’s complaint were predicated on Tashmoo having made some sort of promise to pay administrative claims, including professional fee claims. After a trial, however, the bankruptcy court found that no factual support existed for the Trustee’s contention that there existed on the date of the confirmation hearing or otherwise any agreement that Tashmoo would fund administrative claims. Instead, the court found that “every reference to professional fee claims, no matter by whom made, carried with it an indication that there was no expectation of effective date payment and no then-existing agreement that Tashmoo would fund those claims.” Accordingly, the bankruptcy court entered judgment for Tashmoo.

Agin v. PNC Mortgage (In re Spodris), Adv. P. No. 11-305, Bankr. No. 11-15925-WCH (September 4, 2014).

Prepetition, the Debtor and a non-debtor third party granted a mortgage on property they owned as joint tenants to the defendant.  The Chapter 7 Trustee avoided the Debtor’s transfer of the mortgage as preferential and then sought a monetary judgment for the value of the mortgage the Debtor transferred.  The issue was whether avoidance of the mortgage and its preservation for the estate pursuant to § 551 was sufficient to place the estate in a position it would have been prior to the transfer, or if a monetary judgment  under § 550 was necessary to do so.  The Court denied the Trustee’s request for a monetary judgment, holding that preservation of the lien for the estate was sufficient, and the difficulty in administering the interest was not a special circumstance warranting a monetary judgment in this case.

In re Kevin Spring, Bankr. No. 14-12205-JNF (September 4, 2014).

A pro se Debtor filed a chapter 7 bankruptcy case on the eve of a civil trial where his sister asserted twenty-two counts against him for myriad misdeeds.  Debtor failed to file any statements or schedules pursuant to 11 U.S.C § 521, and he failed to comply with credit counseling requirements pursuant to 11 U.S.C. § 109.  Further, amongst other things, he missed hearings, other Court imposed deadlines, and the 341 meeting.  The court provided an analysis on the minimum requirements needed for a Debtor to show cause to dismiss his own case.  In light of the lack of creditors filing notices of appearance, the lack of oppositions to his motion to dismiss, and despite Debtor’s failure to timely file statutorily required documents and attend Court established hearings, the case was dismissed.

Mbazira v. OCWEN Loan Serv., LLC (In re Mbazira), Adv. P. No. 14-1055, Bankr. No. 13-16586-WCH (September 11, 2014).

In this adversary proceeding, the Debtor sought to avoid a first mortgage arguing that the acknowledgment was materially defective.  The issue of first impression tackled by Judge Hillman was “[w]hether a mortgage encumbering registered land, whose certificate of acknowledgment mistakenly omits the mortgagor’s name, but which mortgage was accepted by the Land Court for registration and is noted on the certificate of title of such registered land, provides constructive notice.”  The Court analyzed the statutory text governing registered land and concluded, just like two decisions concerning unregistered land, that a mortgage with a materially defective acknowledgment does not provide constructive notice and therefore can be avoided in the context of 11 U.S.C. § 544(a)(3).  Because the Court resolved the motion to dismiss issue based on statutory text, there was no need to certify the question to the Massachusetts Supreme Judicial Court.

In re C.R. Stone Concrete Contractors, Inc., Bankr. No. 05-11119-WCH (September 15, 2014).

The Bankruptcy Court approved the Chapter 7 Trustee’s unopposed 9019 settlement motion and recommended that the District Court approve any stipulations of dismissal filed in connection with the underlying consolidated civil action (which had been previously transferred to the District Court after a withdrawal of the reference).  Because the reference for the main case had never been withdrawn, the District Court had directed the Trustee to file the settlement motion with the Bankruptcy Court.  The Bankruptcy Court reviewed the settlement and concluded that the Trustee had properly exercised his business judgment in reaching a fair and reasonable result.

Taatjes v. Maggio (In re Maggio), Adv. P. No. 14-1025, Bankr. No. 13-16257-JNF (September 22, 2014).

The matters before the court were cross-motions for summary judgment filed by the Plaintiffs and the Defendant, Debtor, in connection with alleged fraud committed by the Debtor that resulted in losses sustained by the Plaintiffs.  In denying Plaintiffs’ motion, the court held that in the absence of a fiduciary relationship between the Plaintiffs and the Debtor, Plaintiffs could not use collateral estoppel to establish that debts owed to them by the Debtor as a result of a state court judgment were nondischargeable under Section 523(a)(4) of the bankruptcy code. As for the Debtor, the court held that the evidence in support of her motion contradicted factual findings of the state court, as well as medical records submitted by the Plaintiffs, and therefore Debtor was not entitled to summary judgment.

Orumwense-Lawrence v. Osula (In re Osula), Adv. P. No. 10-1174, Bankr. No. 09-19922-JNF (September 30, 2014).

In this adversary proceeding, the Plaintiff sought a determination that the debt owed to him for the Debtor’s alleged misrepresentations, fraud, or defalcation while acting in a fiduciary capacity and embezzlement in connection with his use of Plaintiff’s property while the Plaintiff was detained by the United States Immigration and Naturalization Service is excepted from discharge pursuant to 11 U.S.C. § 523(a)(2)(A) and (4).  After a trial, the Bankruptcy Court ruled that, with the exception of a $62,200 embezzlement claim, the Plaintiff failed to establish that the Debtor owed any part of the $600,000 debt asserted to exist, let alone a nondischargeable debt under 11 U.S.C. § 523(a)(2)(A) or (4).  The embezzlement claim was found to be nondischargeable pursuant to 11 U.S.C. § 523(a)(4).

 

Contributions by:

John Joy, Boston College Law School
Devon MacWilliam, Partridge Snow & Hahn
Michael K. O’Neil, Murphy & King
Nathan Soucy, Soucy Law Office
Aaron S. Todrin, Sassoon & Cymrot
Gina Barbieri O’Neil, Mirick, O’Connell, DeMallie & Lougee
Christopher M. Candon, Sheehan Phinney Bass + Green

Absolute Priority is now the Disclosure Statement

Absolute Priority is now the Disclosure Statement, continue to expect the same great coverage of the issues important to the bankruptcy bar. If you subscribed to Absolute Priority you will continue to receive notifications without interruption.

B.A.P. To Hold Oral Argument on October 20, 2014 in Boston

On Monday, October 20, 2014, the U.S. Bankruptcy Appellate Panel for the First Circuit (Chief Judge Hillman, Judge Godoy, and Judge Harwood) will hear oral argument. The hearings will be conducted in Courtroom 1 of the U.S. Bankruptcy Court for the District of Massachusetts. The court is located in the McCormack Post Office and Court House, 5 Post Office Sq., 12th Floor, Boston, MA. The hearings commence at 9:30 a.m. and are open to the public. Please be courteous to the Panel and those appearing before the Panel and arrive early. To see the Scheduling Order, please go to the BAP’s website at www.bap1.uscourts.gov. The cases and issues on appeal are as follows:

The Panel will hear oral argument in the following cases commencing at 9:30 a.m.

RI 14-034 Mary Witkowski v. Kevin Knight (In re: Mary Witkowski)

Issue: Whether the bankruptcy court erred in denying appellant’s request for imposition of sanctions for alleged violations of automatic stay.

RI 14-040 Mary Witkowski v. John Boyajian (In re: Mary Witkowski)

Issue: Whether bankruptcy court erred in denying appellants’s motion to reconsider order dismissing Chapter 13 case.

The Panel will hear oral argument in the following case commencing at 10:30 a.m.:

EB 14-033 Wheeling & Lake Erie Railway Company v. Robert J. Keach, Chapter 11 Trustee of the Montreal, Maine & Atlantic Railway, Ltd. (In Re: Montreal, Maine & Atlantic Railway, Ltd.)

Issue: Whether the bankruptcy court erred in ruling that appellant does not have a valid enforceable and perfected security interest in the cash proceeds of a commercial property insurance policy.

 

Request for Public Comment on Proposed Amendments to BAP Rules

The U.S. Bankruptcy Appellate Panel for the First Circuit (“BAP”) has provided notice that it is seeking public comment on its amendments to the First Circuit BAP Local Rules. The proposed amendments were drafted in response to the amended Part VIII rules of the Federal Rules of Bankruptcy Procedure which will take effect on December 1, 2014. 

Please click on the link below for the official notice from the BAP:

Notice of Request for Comment on Proposed Amendments to the First Circuit BAP Local Rules

 

What’s in a Name?

In yet another decision addressing a potentially defective mortgage recorded in Massachusetts, Judge Boroff ruled that where a Debtor regularly used two last names spelled differently, either was legally sufficient. Therefore, a mortgage recorded under either spelling provided constructive notice to a Chapter 7 Trustee and the mortgage could not be avoided.   The decision is Steven Weiss, Trustee vs. JPMorgan Chase Bank, N.A., Adversary Proceeding Number 14-3001 issued on September 29, 2014.

The Debtor, Yvette Thibault filed a Chapter 7 bankruptcy proceeding on October 30, 2013. The Petition indicated that the Debtor was also known as Yvette Thibeault. The Debtor and her husband acquired their principal residence in 1964. The deed recited their last names as Thibeault. Thereafter the Debtor and her husband entered into a series of 6 mortgages (5 of the mortgages had been discharged prior to case commencement), 5 under the name Thibeault and 1 under the name Thibault. The sole remaining mortgage on the property at case commencement used the name Thibeault and this was the mortgage that the Trustee sought to avoid. The Debtor and her husband also recorded a “Certificate of Correction in Name of Owner of Real Estate” stating “our present name is ‘George and Yvette Thibault.’”  The Debtor’s drivers’ license listed the Debtor’s last name as Thibault.

The Trustee urged the Court to find that the mortgage was defective because the mortgage was not recorded using the “legally correct” spelling of the Debtor’s last name, which in the Trustee’s view was Thibault – the name that appeared on the Bankruptcy Petition, on the Debtor’s drivers’ license and in the Certificate of Correction. The Court disagreed, finding that under Massachusetts common law, “unless adopted for a fraudulent or nefarious purpose”, a person may be known by more than one name.  Because the Debtor regularly spelled her name with, and without, an “e”, both names were legally valid. The Court cites a long line of Massachusetts cases for the proposition that “recording under any name by which a person is known constitutes constructive knowledge of the instrument” and, therefore, the mortgage in question, containing a correct spelling of one of the Debtor’s two last names, could not be avoided by the Trustee.

My sense is that a key fact in the case was that the surnames on the challenged mortgage matched the surnames on the Deed. Indeed, in footnote 7 of the decision, the Court notes that its decision should not lead to “mischief” (e.g. debtor’s claiming multiple names) because M.G.L. ch. 184, Section 25 provides that “an instrument is ‘recorded in due course’ only if ‘so recorded in the registry of deeds . . . as to be indexed in the grantor index under the name of the owner of record.’” The lesson for counsel is clear – carefully review source documents to be sure spellings are accurate and for any hint that a party may be known by more than one name.

Contributed by:

Donald R. Lassman

Law Office of Donald R. Lassman
781-455-8400
[email protected]

Restructuring Bankruptcy through Mediation: Why in Bankruptcy, Imitation is the Sincerest Form of Learning

Bankruptcy mediation is the solution to reducing the skyrocketing costs of bankruptcy litigation.  John L. Joy, a 3L at Boston College Law School, and regular contributor to this blog, explores the use of bankruptcy mediation as a successful alternative to litigation.  Mr. Joy examines the mediation process used in Enron, Lehman Brothers, and Dewey & LeBoeuf and, as such, concludes that judges, attorneys and interested parties are well advised to look to the prior implementation of successful bankruptcy mediation procedures and protocol.

To read the full article please click this link:  RESTRUCTURING BANKRUPTCY THROUGH MEDIATION ARTICLE