► In This Issue:

• It’s a Commission: Chapter 7 Trustee Fees
• The Effect of Law v. Siegel on Claims of Exemption
• Chapter 7 Trustees, Abandonment, and When Abandonment Is Delayed
• Silence Is Golden? A Rebuttal
• Florida Experts Spoke at the Annual Spring Meeting

Breaking News: Supreme Court Issues Ruling in Bullard v. Blue Hills Bank

On May 4, 2015, in a unanimous decision, the Supreme Court resolved the circuit split regarding whether an order denying confirmation of a chapter 13 is a final, appealable order.  In Bullard, the debtor had attempted to bifurcate a mortgage claim and pay as partly secured and partly unsecured.  The lender objected, and the bankruptcy court denied confirmation.  The BAP affirmed the bankruptcy court, finding that it had jurisdiction under 28 U.S.C. § 158(a)(3), addressing interlocutory appeals, but the First Circuit dismissed for lack of jurisdiction because the BAP had not certified the appeal under 28 U.S.C. § 158(d)(2).

Writing for the court, Chief Justice Roberts found that an order denying confirmation of a Chapter 13 plan could not be final since the debtor can file an amended plan and the denial does not alter the status quo of the case in the interim.  As such, to object to the denial of confirmation a debtor must either allow the case to be dismissed and appeal the dismissal or object to his or her own, confirmable plan and appeal the confirmation of that plan.  Alternatively, a debtor may request an interlocutory appeal.  The decision acknowledges it creates an asymmetry in that confirmation orders can be appealed but “our litigation system has long accepted that certain burdensome rulings will be ‘only imperfectly reparable’ by the appellate process.”

Prepared by: Elizabeth L. Gunn (Consumer Newsletter Editor) and Richard Cole (Consumer Special Projects)

It’s a Commission: Chapter 7 Trustee Fees

Robert S. Thomas II Thomas, Trattner & Malone, LLC Akron, Ohio

Since the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), bankruptcy courts have struggled with how to follow certain provisions of the Bankruptcy Code directing the compensation of chapter 7 bankruptcy trustees. On Jan. 12, 2015, the U.S. District Court for the Eastern District of Wisconsin weighed in on the issue by finding that the bankruptcy court correctly presumed that the trustee was entitled to a commission calculated using the formula proscribed in 11 U.S.C. § 326. The decision in Mohns, Inc. v. Lasner illustrates the statutory scheme from which courts have struggled to determine chapter 7 trustee compensation, and correctly sets the stage for courts to award trustee compensation as a commission pursuant to the percentages contained in 11 U.S.C. § 326.
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The Effect of Law v. Siegel on Claims of Exemption

Kenneth Corey-Edstrom Larkin Hoffman Daly & Lindgren, Ltd. Minneapolis

Theoretically, an individual bankruptcy debtor may amend property claimed as exempt on his or her Schedule C at any time until the close of the bankruptcy proceeding. The debtor must give notice of the amendment to the trustee and to “any entity affected thereby,” which is usually all creditors. Under 11 U.S.C. § 522(l), a party in interest may object to the debtor’s list of exempt property:

(l) The debtor shall file a list of property that the debtor claims as exempt under subsection (b) of this section. If the debtor does not file such a list, a dependent of the debtor may file such a list, or may claim property as exempt from property of the estate on behalf of the debtor. Unless a party in interest objects, the property claimed as exempt on such list is exempt.
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Chapter 7 Trustees, Abandonment, and When Abandonment Is Delayed

John R. Bollinger Boleman Law Firm, P.C. Norfolk, Va.

Most chapter 7 clients are looking for the quickest and easiest way to discharge their debts, retain or protect their assets and move on with their lives. Difficulties in achieving these results can arise when assets are disclosed or discovered after the bankruptcy filing. This will usually result in negative consequences for the debtor and will frequently prolong their case.

A more common situation arises when a chapter 7 trustee believes that there is exposed equity in property of the estate, or the trustee believes that the property is a type that may appreciate in value, which may create exposed equity. This will usually result in a case remaining open until the asset is liquidated, which can sometimes take months or even years.
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Silence Is Golden? A Rebuttal

David Baker Law Office of David G. Baker Boston

In the January 2015 edition of the ABI Journal, Kathleen Furr and Brett Switzer (hereinafter “the authors”) lauded the decision in In re Rose. In that decision, the court rejected the concept of providing for the vesting of property of a chapter 13 estate in an entity other than the debtor, based solely on state law. The authors relegate the opposite view to a couple of footnotes. That is unfortunate because the opposite view — such as the one in In re Watt — correctly analyzes the applicable law. Because Rose focused on state law, its analysis is profoundly flawed.

We begin with “bankruptcy bromides,” as the First Circuit calls them.
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Florida Experts Spoke at the Annual Spring Meeting

The Consumer Bankruptcy Committee joined forces with the Mediation Committee at this year’s Annual Spring Meeting in April. The team’s session was titled “Consumer Mortgage Modification Mediation: A Florida Success Story.” Speakers for this lively session included Robert B. Branson of BransonLaw, PLLC in Orlando, Fla.; Laurie K. Weatherford, a Chapter 13 Trustee in Winter Park, Fla.; Hon. Michael G. Williamson of the U.S. Bankruptcy Court (M.D. Fla.) in Tampa; and Melissa A. Youngman of McCalla Raymer, LLC in Orlando, Fla.

Click here to view the materials for this session.