Judge Specie in Pensacola, Florida sanctioned counsel for a creditor in a Subchapter V chapter 11 case for submitting a written order on the request of a state court judge substituting their client for the debtor in a pending lawsuit.  The background was a stipulated deficiency judgment against the debtor by NWE165, LLC in the amount of $300,000, which judgment was then assigned to 4 Dakota.  Subsequent to that judgement, debtor sued Schwizer for over $1.5 million asserting a failure to perform under a purchase and sale agreement.  On 15 January 2021 the district court entered an order of execution assigning to 4 Dakota all of debtor's  right, title and interest in and to the Schwizer lawsuit.  This order provided that it would operate as a full and complete assignment giving 4 Dakota standing to seek substitution as the plaintiff in such lawsuit.  4 Dakota filed the substitution motion on 20 January 2021, and the state court held a hearing on the motion on 5 March 2021, taking the matter under advisement.  On 7 March 2021 the debtor filed for relief under chapter 11, listing 4 Dakota as a creditor, and filed a suggestion of bankruptcy in the Schwizer lawsuit.  On 18 April the judicial assistant to the state court judge emailed counsel requesting an order granting the motion to substitute counsel.  Counsel for 4 Dakota submitted a proposed order on 23 April, which was signed on 27 April at 1:08pm.  At 1:30 p.m. Debtor's counsel objected to the substitution order by calling and emailing the state judge, noting their opinion that the order violated the bankruptcy automatic stay.  4Dakota's attorneys immediately filed a reply disagreeing that the order violated the stay, rather being a ministerial act related to a prepetition hearing.  Debtors filed for sanctions on 29 April. Judge Specie held a hearing on 4 May finding that the substitution order was void ab initio, given the debtor's bankruptcy estate's interest in the Schwizer lawsuit.  Further, that the submission of the substitution order was an act to obtain or exercise control over the lawsuit in violation of 11 U.S.C. 523(a)(3).  Debtor filed a motion to vacate the substitution order which 4 Dakota responded to on 11 May, which response did not mention the court's ruling from May 4.  Judge Specie noted the underlying regime for sanctions for violation of the automatic stay.  11 U.S.C. §362 prohibits the enforcement of a prepetition judgment against the debtor or its property, and any act to obtain possession or control over such property.  While 11 U.S.C. 362(b) sets for certain exceptions to the automatic stay, unless the action falls into one of the exceptions or the party obtains relief from the stay, the code requires that an individual injured by any willful violation of a stay shall recover actual damages, including costs and attorney fees, and in appropriate circumstances, punitive damages.  The test on whether a violation is willful is whether the offending party 1) knew the automatic stay was invoked, and 2) intended to commit the actions which violated the stay.   Knowledge that a bankruptcy petition has been filed satisfies the first requirement.  The intention requirement does not require specific intent to violate the automatic stay, but rather that the act itself was committed deliberately, even if acting on advice of counsel.  Rather than seeking relief from the bankruptcy court prior to submitting the substitution order, counsel for 4 Dakota submitted the order knowing the state court judge had not decided whether to enter such order prior to the filing of the bankruptcy petition.  The opposition to the Debtor's request to vacate the order constituted a further violation.  The subjective belief of counsel that the act was solely a ministerial act rather than a violation of the stay does not protect them.  Judge Specie cited the case In re Sanders1  for support for this proposition.  In Sanders counsel for a creditor filed in state court a request to hold the debtor in contempt after filing an appearance in the bankruptcy case.  While accepting that the filing of a contempt motion was a mistake by counsel, the court found that a mistake of law was no excuse, and that the violation was willful.    Judge Specie also cited the In re Lyubarsky2 case for the proposition that such sanctions could be awarded both against the creditor and it's counsel.  These sanctions were based on a demand for $250,000 coupled with a threat by counsel during settlement negotiations, subjecting counsel to compensatory damages for emotional distress, fees, costs, and punitive damages.  Judge Specie also expressed skepticism that that counsel truly believed that submission of the substitution order was a ministerial act, given that no ruling on the motion in the state court had been made as of the filing of the case, rather that the state court judge had to deliberate and exercise judicial discretion post-filing as to the motion.  Judge Specie rejected the case cited by 4 Dakota, Shakhrani v Escala3 given that in that case the court announced a ruling from the bench prior to the bankruptcy filing, and counsel had submitted the order after receiving notice that the bankruptcy had been dismissed, and before receiving notice that such case had been reinstated.  While a ministerial act is an exception to the automatic stay, many courts have held that entry of a written order, even if it mirrors a prepetition oral ruling from the bench, is not ministerial because it still requires some degree of judicial discretion.4   The court reserved ruling as to the damages to be awarded.1 In re Sanders, Case No. 8:20-bk-02731-RCT, 2020 Bankr. LEXIS 2840, 2020 WL 6020347 at *1 (Bankr. M.D. Fla. 15 Sept. 2020).↩2 In re Lyubarsky, 615 B.R. 924, 928 (Bankr. S.D. Fla. 2020).↩3 Shakhrani v. Escala, Case No 05-cv-4746(PGS), 2006 U.S. Dist. LEXIS 57294, 2006 WL 2376746 (D.N.J. 16 Aug 2006).↩4 See, e.g., In re Fontaine, 603 B.R. 94, 107 (Bankr. D.N.M. 2019) (state court's entry of foreclosure judgment postpetition based on a prepetition ruling was not ministerial where judge had to review debtor's objection to the form of the judgment); GemCap Lending I, LLC v. Bateman (In re Naturescape Holding Grp. Int'l, Inc.), Case No. 16-00982, 2018 Bankr. LEXIS 3062, 2018 WL 5099706, at *14 n.85 (Bankr. D. Haw. Oct. 2, 2018) (disagreed with a state court's ruling that entry of an order was post-petition was ministerial because "a judge is always free to enter a written order that varies from the oral ruling."); Corbett v. Kiraz (In re Kiraz), Case No. 11-35743-tmb7, Adv. No. 11-03294-tmb, 2012 Bankr. LEXIS 1595, 2012 WL 1120379, at *2 (Bankr. D. Or. Apr. 3, 2012) (written final judgment entered post-petition was not a ministerial act because "the trial court judge retained the discretion to alter his oral ruling in any way he saw fit.").↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com

After Bankruptcy: Please Don’t Go Right Out and Don’t Co-Sign for a Car Got an email last week that made me sad.  Cherry filed Chapter 7 bankruptcy back in 2017.  She recently went to buy a car and ended up getting financed by Santander at 21%. After she did that, she asked why is her […] The post After Bankruptcy: Please Don’t Go Out and Co-Sign for a Car by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

Provided below is a link to an article at ABC discussing the shortage of Yellow Cabs in Manhattan. https://abc7ny.com/taxi-shortage-cab-delta-variant-covid/10930021/

There are some injuries and medical conditions that will limit a person’s ability to work. If you suffer from a medical impairment that makes it impossible to return to work, you might qualify for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI). To be eligible for disability benefits under either program, you must […] The post Does a Doctor Have to Fill Our Disability Paperwork in Pennsylvania? appeared first on .

Going through a divorce is often a difficult and stressful process. Marriages collapse for various reasons, including financial problems. It is not uncommon for a divorce to leave both spouses in economic ruin. One of the main reasons for filing for bankruptcy is divorce. That begs the question, “is it better to file for bankruptcy […] The post Should You File for Bankruptcy Before a Divorce? appeared first on .

 My close friend and colleague Barbara Barron passed away in her sleep on Wednesday August 3, 2021. I first met her on a case in 1988. I got to know her well from bar activities around 2000, and then when I joined Barron & Newburger, P.C. in 2003. Here is a look at her life and some of her most notable achievements. Legal Career In 1974, Barbara was working as a young MBA for Texas Instruments in Dallas. When her mentor left the company, she realized that she qualified for in-state tuition at the University of Texas School of Law. Tuition was absurdly cheap back then, perhaps $500.00 per year. After graduation, she went to work for the Texas Attorney General’s office.  At the AG’s office, she had many appearances before the Fifth Circuit Court of Appeals representing the state in habeas corpus proceedings. Some of these included Harryman v. Estelle, 616 F.2d 870 (5th Cir. 1980) and Blasingame v. Estelle,  604 F.2d 893 (5thCir. 1979).  She also represented state agencies such as the Comptroller of Public Accounts, who would become creditors in her later bankruptcy career. In the early 1980s, she entered private practice and formed her own firm. Women were not fully accepted into the legal profession at this time, so her decision to open a practice was a bold one.  In 1983, she hired a recent law school graduate named Manny Newburger giving rise to the firm that would ultimately become Barron & Newburger, P.C. Two early cases which brought her attention were Briarcliff Utilities and Steve Scott. In the Briarcliff case, she was appointed Chapter 11 Trustee for a water utility near Spicewood, Texas. One of the customers of the utility who did not pay his bill was Willie Nelson. Ms. Barron sued the music legend twice. Eventually she was able to pay all the creditors with interest and return money to the company’s owner. The Steve Scott case arose during the real estate collapse of the late 1980s and early 1990s in Texas. Mr. Scott owned an office building on Barton Springs Road in Austin. A savings & loan, which later was taken over by the Resolution Trust Corporation (“RTC”), attempted to foreclose upon the building. However, the building sat on two lots, only one of which was covered by the deed of trust. Ms. Barron filed a Chapter 11 case for Mr. Scott and sued the RTC alleging that the government entity was wrongfully using the half of the building not covered by the deed of trust. The RTC claimed that the court lacked jurisdiction over it and that its power to avoid unwritten agreements overrode the failure of the deed of trust to describe the full property. After the bankruptcy court authored an opinion finding that it did have jurisdiction, Scott v. Resolution Trust Corporation, 157 B.R. 297 (Bankr. W.D. Tex. 1993), the parties reached a settlement. Under the settlement, Mr. Scott was able to re-purchase his building on favorable terms and the prior opinion was withdrawn.  Although the opinion was formally withdrawn and cannot be accessed online, it can still be found in older copies of the Bankruptcy Reporter printed before the opinion was withdrawn. In another one of her cases, her bankruptcy estate came to own a large quantity of wine. She obtained the necessary permits from the State of Texas to allow the wine to be sold out of the vault of a failed bank, giving rise to the Wine Vault. The novelty of the arrangement made for a successful sale. As the firm became Barron & Newburger, Manny Newburger recognized that the Fair Debt Collection Practices Act was going to become a major source of litigation. He and Ms. Barron authored a book on the Fair Debt Collection Practice Laws of the United States. Once, when an older attorney was attempting to lecture Ms. Barron about the FDCPA, she asked him to look on his bookshelf and see if he had a certain book. Sure enough, the attorney had a copy of the book co-authored by Ms. Barron. Throughout her career, Ms. Barron was an active member of the Commercial Law League of America and worked on many amicus briefs filed on behalf of the League. One of these was Heintz v. Jenkins, 514 U.S. 291 (1995), an early case interpreting the FDCPA. Ms. Barron and I worked together on Reed v. City of Arlington, 650 F.3d 571 (5th Cir. 2011)(en banc). In that case, a panel of the Fifth Circuit had ruled that a trustee was bound by a debtor’s fraudulent failure to disclose an asset. We filed an amicus brief on behalf of the CLLA and all members of the court, except for the members of the original panel, agreed that the trustee was not bound by the debtor’s concealment of assets.  We also worked together on In re Woerner, 783 F.3d 266 (5th Cir. 2015)(en banc) in which the full Fifth Circuit overruled an eighteen year old precedent which had held that an attorney’s ability to get paid in a failed Chapter 11 case depended on whether the attorney was successful. The en banc Court ruled that the proper test was whether the attorney’s actions were reasonable at the time. Throughout her career, Barbara had a special interest in representing restaurants in bankruptcy and represented many well-known dining establishments.Education and Charitable Work Barbara Barron was also very involved in continuing legal education. She spoke at many courses, including a series of Ten Commandments lectures aimed at helping creditors maximize their recovery and avoid pitfalls in bankruptcy cases. She created innovative courses for the State Bar of Texas on Bankruptcy Mediation and Forensic Finance.  Ms. Barron was the co-recipient of the Constant Gardener Award from Advocacy, Inc. for her representation of a hearing-impaired debtor who stood to lose her claims under the Americans with Disabilities Act. Ms. Barron was active in charitable activities as well. She once helped a high school student put on a concert to raise money for the Health Alliance for Austin Musicians. She helped to get several musicians from the Antone’s Records label to perform at the benefit. She also organized and executed a benefit to raise money to buy an ambulance in Israel for American Friends of Magen David Adom, the Israeli equivalent of the Red Cross. She was named the 2013 Volunteer of the Year by Jewish Family Services of Austin and served on the board of the local YMCA for many years. She developed the Patient Partners program for Jewish Family Services of Austin. She was instrumental in establishing the Debt Counseling Clinic to assist the Legal Aid Society of Central Texas, and she organized the Insolvency Support Group in Austin — one of the first groups of its kind in the United States.Personal Life In her personal life, she enjoyed trips to New York to watch Broadway shows. She was a supporter of the Austin Film Festival and Austin Jewish Film Festival. Her home was full of books, both serious and popular. She had recently finished Lisa Scottolini’s latest book before her death. Dim sum and bagels were two of her favorite meals for Sunday brunch. Barbara continued to work until the end and was last in the office two days before she passed away. She will be missed.  

A Million Dollar Mistake: Personal Injury and Bankruptcy Under Virginia law, the bankruptcy court cannot take away a personal injury claim.  Injured in a car accident? Hurt in the hospital? Anyone in Virginia can file bankruptcy and still keep those claims. Steven Ramsdell, one of the top bankruptcy lawyers here, is desperately trying to save […] The post A Million Dollar Mistake: Personal Injury and Bankruptcy by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

There are two government programs available to help disabled individuals, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Both programs are administered by the Social Security Administration (SSA). While both share similar requirements when determining if an applicant has an eligible medical condition, they are drastically different in their financial requirements. SSDI is […] The post How Much Disability Will I Get If I Never Worked? appeared first on .

If you have been injured or suffer from a medical impairment that limits your ability to work, you might rely on disability benefits to pay your monthly bills. If you have been receiving disability or are applying for benefits, you might wonder if your monthly payments are taxable. The Social Security Administration (SSA) offers Pennsylvanians […] The post Is a Disability Check Considered Income By the IRS in Pennsylvania appeared first on .

The amount of Social Security Disability benefits you could receive depends on the program. There are two separate programs administered by the Social Security Administration (SSA): Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI). SSDI is designed for people who have paid into the Social Security Fund through their payroll or self-employment taxes. […] The post How Much Money Can You Get on Disability in Pennsylvania? appeared first on .