focus
 Springtime...has sprung! 

We are nationally experiencing continuing economic challenges and belt-tightening mixed with subtle signs of recovery...and change.

  

The legal updates in this newsletter reflect this time of transition. 

 

We report below continuing monetary cuts in the court system, which inevitably result in some frustrating litigation delays and new procedures as the courts deal with this reality.  Examples include looming personnel cuts in courtrooms and strict rules curbing delays in debtor exam dates.

 

Yet, there are also hints of growth...and again change...the LA Dodger's emerging from bankrupcy in the hands of new owners... the impact of upcoming national political elections...new bankruptcy court rulings confirming the rights of same-sex couples in bankruptcy, and also requiring courts to consider debtor resources when classifying unsecured deficiency claims.

 

We welcome you to read our newsletter, to learn more about our firm and how we can assist you in your business, and to contact us to discuss any legal questions or business concerns you may be facing.

 

And stay tuned for our Newsletter Next Month when we discuss the new requirement that California Finance Lenders License holders must file a comprehensive "annual report" by each March 15.

 

Warmest regards,
Marshall Goldberg

 

Expect delays at court as layoffs continue.  

 

State budget cuts will have a negative procedural impact this June when 350 more employees are laid off from more than 50 Los Angeles County courtrooms.  Expect slower response times from the judicial system, especially since the courts have already laid off 500 employees and reduced their budget by more than 30 percent in the last three years.  

 

Superior Court will not permit certain delays in debtor exams. 

 

Due to state budgetary constraints, the Los Angeles Superior Court will no longer allow debtors' exams for post judgments to be delayed, unless the debtor is a "no-show."  Thus, if a judgment debtor walks into an exam without the subpoenaed documents, the attorney cannot ask for a continuance and must proceed with the exam.  In such a situation, the judge will likely instruct the debtor to produce the documents at some point in the future or be held in contempt.  The attorney cannot examine the debtor regarding the documents until 120 days pass when the attorney becomes entitled to conduct another exam.  This procedural change threatens to create a loophole where debtors can indefinitely withhold important and time sensitive information. 

 

Courts may factor in third party sources for recovery when creating classes in Chapter 11

 

In Chapter 11, the court cannot discriminate between creditors in the same class.  Historically, classification has been based on the nature of the claim as it relates to the assets of the debtor. Commercial lenders with bifurcated loans (a secured claim for the value of the secured property and an unsecured deficiency for the balance of the loan) have their unsecured deficiencies grouped into the same class as unsecured creditors.  

 

The recent ruling in Wells Fargo Bank, N.A. v. Loop 76, LLC changes the basis for classification by allowing courts to factor in a creditor's third party sources for recovery on an unsecured deficiency claim.  As a result, commercial lenders with large unsecured deficiency claims may be relegated to a different class and have less ability to control the vote of unsecured creditors.  This will give debtors more opportunity to "cram down" Chapter 11 plans over secured creditors' objections.  

 

New rights for same-sex couples in bankruptcy.

 

According to a non-binding decision by 20 judges of the U.S. Bankruptcy Court for the Central District of California, same-sex couples who lawfully married pre-Prop 8 have the right to file joint bankruptcy petitions.  Same-sex couples in domestic partnerships still do not have the right to file joint bankruptcy petitions.  

 

 

Updated Proof of Claim form

 

Effective December 1, 2011, the Federal Rules of Bankruptcy Procedure has been updated for creditors wishing to file a proof of claim to receive a distribution in a bankruptcy case.  The proof of claim form is more comprehensive and designed to prevent creditors from filing inaccurate proofs of claim.  Take time to become familiar with the changes to the Official Form B10 of the Federal Rules of Bankruptcy Procedure.
April 2011

 

Scan me! 
_____________________

 

 Forbes Magazine honors 
G & G!
-------
Glass & Goldberg and Marshall Goldberg were showcased in the December 2011 issue of  Forbes Magazine as the Magazine's exclusive Southern California choice for outstanding lawyer and lawfirm in the area of Bankruptcy, Property, Commercial and Creditor/Debtor Rights law!

 

__________________
   Watch for our Blog Coming Next Month
_______________

 

Our Legal Team
-----------
Glass & Goldberg is comprised of talented attorneys and staff who have the utmost knowledge and experience in the legal community.

 Click here to meet
our members.
   ____________
Our Practice
____________ 
Since its inception in 1986,
 Glass & Goldberg has earned an unparalleled reputation in the areas of creditors' rights, commercial and business transactions and litigation, and bankruptcy and restructuring. 

Click here to learn about
what we can do for you.
  ____________ 
To Reach Us  
 
Call us or visit us on the web at
www.glassgoldberg.com or via our firm contact info below to learn more about the firm and to sign up for future newsletters!

 

   Feedback

 We invite you to contact us to discuss any topics presented in these articles or to learn how we might further assist your business. 
 -------

 

 Glass & Goldberg
21700 Oxnard St., #430 Woodland Hills, CA 91367   
Phone: (818) 888-2220
 Fax: (818) 479-9940

 

Contact Information

Call us at (818) 888-2220 or visit us on the web at www.glassgoldberg.com to learn more about the firm and to sign up for future newsletters.