The Los Angeles Dodgers filed for bankruptcy in a Delaware court Monday, a move that is expected to give a quick jolt of cash to the troubled team but also to ratchet up the fight between the owner, Frank McCourt, and Bud Selig, Major League Baseball’s commissioner, who last week rejected a proposed television deal by the team that was worth $2.5 billion to $3 billion. To read more from the NY Times, click here.
The training materials provided at the May 5, 2011 Free Training Opportunity for Attorneys Interested in Helping Veterans and Active Members of the Military and Their Families Experiencing Financial Difficulties are now available online. Click here to view the Primer on Bankruptcy-Related Provisions Applicable to Service Members. To view the powerpoint presentation entitled Commercial, Consumer, and Bankruptcy Law Issues Affecting Members of the Military Training Session, click here.
For more from the NY Times, click here.
As part of their continuing efforts to provide timely and relevant resources to bankruptcy practitioners, the editors are happy to announce the addition of streaming news stories from MarketWatch.com to the Bankruptcy Section’s Homepage. This news source will assist both consumer and business bankruptcy practitioners stay current on the changing market conditions that affect their clients.
The streaming news is conveniently placed in the right-hand sidebar.
Please feel free to contact the editors with question/comments.
Marketwatch (formerly known as CBS Market Watch) operates a financial information website that provides business news, analysis and stock market data to some 6 million people.
To view the website for MarketWatch.com, click here.
LOS ANGELES—Former new York Mets and Philadelphia Phillies outfielder Lenny Dykstra posted $150,000 bond Wednesday in a federal case where he’s accused of embezzling money from a bankruptcy estate. For more from Boston.com, click here
A humbled Philadelphia Orchestra drew a prolonged ovation on Saturday evening after the final strains of Mahler’s Symphony No. 4, one of his sunniest works. Just hours earlier, its board of directors had voted to send the orchestra to bankruptcy court, declaring the move the only way to survive financial disaster. For more, click here
The editors are happy to announce that the Bankruptcy Section’s Blog-Homepage has a new tool that allows readers to follow posts by email.
Any readers wishing to receive alerts via email for new postings should enter their email address in the “follow by email” space located on the right side of the page under the “search this blog” link.
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On May 5, 2011 from 4-6 p.m., the Bankruptcy Section of the Boston Bar Association is conducting a Training Session at the BBA that will review the many unique legal issues faced by active and veteran members of the armed services and their families in the areas of consumer law and bankruptcy law. This session is not to be missed if you are interested in representing veterans with financial problems.
• Did you know that disabled veterans need not complete the Means Test form used in Consumer Bankruptcy cases, but what if the veteran is only 25% disabled and what if the disability did not arise in the “line of duty”?
• Did you know that members of the armed forces have special rights that they may exercise with respect to leases and interest rates on credit cards if they are called to active duty?
• Did you know that certain overpayments stemming from circumstances where the service member does not complete active duty requirements are nondischargeable as a debt owed to the U.S. Government under a title of the US Code other than title 11?
A top notch resource guide covering the unique legal issues facing current and former members of the military has been assembled and will be distributed to all those in attendance. An experienced group of panelists, including staff from the Massachusetts Department of Veterans Services and former staff counsel for Shelter Legal Services – people in the know – will be available for questions.
This is an event you will not want to miss if you plan on assisting current and former members of the military with financial related legal issues. We hope to see you there.
It’s playoff time in Boston and that means it is time for the Bankruptcy Section to form its DREAM TEAM!
As part of the BBA’s ongoing commitment to assist with the legal problems being faced by past and present members of the armed services and their families, the Bankruptcy Section has been providing information about consumer issues and bankruptcy at Yellow Ribbon Events held in various locations throughout the Commonwealth of Massachusetts. At Yellow Ribbon events, attorneys from the BBA provide a 10 minute power point presentation on issues relating to consumer and bankruptcy law and then staff the BBA booth at the event for several hours to assist in directing those in attendance to the proper organization or service (such as the BBA Military Hotline) that may be able to provide assistance for specific legal questions. We would like to assemble a Dream Team of lawyers that would rotate handling the Yellow Ribbon Events during the course of the next year which will probably require volunteers to staff one event, may be two. For more information, please contact: Donald R. Lassman, Esq., P.O. Box 902385, Needham, MA 02492, 781-455-8400, email: [email protected]
Massillon v. Riley (In re Massillon), No. MB 10-024, 2011 Bankr. LEXIS 83 (B.A.P. 1st Cir. Jan. 11, 2011)
In an unpublished decision, the United States Bankruptcy Appellate Panel for the First Circuit reversed a Bankruptcy Court decision, which ordered that post-petition disbursements of trust income become part of the debtor’s estate. At issue was whether a debtor’s interests in a testamentary spendthrift trust created under New York law could become property of the bankruptcy estate. The BAP held that income disbursements from a testamentary spendthrift trust received by the debtor within 180 days after the date of petition became part of the estate, while exempting a spendthrift trust’s corpus and all other post-petition testamentary spendthrift trust income disbursements.
The BAP first determined that the corpus of the spendthrift trust was not part of the debtor’s estate. Under Section 541(c)(2) of the Bankruptcy Code, the inalienability of a debtor’s interest in a spendthrift trust is fully enforceable in a bankruptcy proceeding. Accordingly, if the BAP found that the trust at issue was a spendthrift trust, the panel would exclude the debtor’s interest in the corpus from the estate. Under New York law, all express trusts are spendthrift, unless the settlor provides otherwise. Because the settlor of the trust did not expressly provide otherwise, the BAP agreed with the Bankruptcy Court’s determination of a spendthrift trust and excluded the corpus from the debtor’s estate.
The second issue was whether distributions of income from the testamentary spendthrift trust would become property of the debtor’s estate. Section 541(a)(5)(A) of the Bankruptcy Code provides that any interest that the debtor acquires by bequest, devise, or inheritance within 180 days after the date of filing becomes part of the estate. Therefore, the BAP held that any distributions of income by a testamentary spendthrift trust within 180 days after filing became property of the debtor’s estate.
The BAP also held that distributions of testamentary spendthrift trust income after the 180 day period are not part of the bankruptcy estate. A New York statute, N.Y. C.P.L.R. 5205(d)(1), provides that a creditor can receive only ten percent of a judgment debtor’s trust income distributions to satisfy a money judgment. The bankruptcy court found this statute to be an exemption statute because it restricts creditors but not a debtor’s ability to alienate. The trustee argued that the debtor could not take advantage of the state exemption, as the debtor had already applied for federal exemptions. The bankruptcy court agreed with the trustee and held that future trust income distributions would be part of the estate because the debtor could not stack exemptions. The bankruptcy court failed to address Section 541(a)(5)(A), however, because the court held that the debtor’s right to trust distributions became fixed pre-petition and that all future distributions were therefore part of the estate under Section 541(a)(1). On appeal, the BAP noted that courts in three cases had applied N.Y. C.P.L.R. 5205(d)(1) in a bankruptcy context. These cases held that ten percent of all future disbursements of trust income became part of the debtor’s estate. However, none of the case law considered the New York statute in light of Section 541(a)(5)(A). Congress only enacted one provision that brought a post-petition entitlement into a debtor’s estate, and holding that future trust distributions are part of the estate under Section 541(a)(1) would make Section 541(a)(5)(A) superfluous. The BAP did not address the exemption stacking argument because the debtor did not claim an exemption under N.Y. C.P.L.R. 5205(d)(1).