Web prepared, posted and Copyright © January 29, 1999, by the American Bankruptcy Institute.
Introductions are in order to the new attorney co-chair of the Unsecured Trade Creditors' Committee, Judy D. Thompson. Judy succeeds Joe Bodoff, who was the attorney co-chair of the committee for the past five years. She will serve with Sandra Schirmang of Kraft Foods, who has served as the credit manager co-chair of the committee for the past several years. Judy is a partner in the North Carolina law firm of Poyner & Spruill LLP. She is located in the firm's Charlotte, N.C. office and from that venue chairs the firm's Bankruptcy and Creditors' Rights practice group. A long-time active ABI member, Judy currently serves on ABI's Board of Directors as well as its Executive Committee. Judy is also a contributing editor to the ABI Journal and chairs the Annual ABI Southeast Bankruptcy Workshop, which this year included a pilot program called the Creditors Forum. This innovative program provided educational seminars designed for workout officers and credit managers. Originally from St. Augustine, Fla., Judy attended undergraduate and graduate school at the University of Florida and Florida State University, respectively, and studied law at the University of Houston in Texas. Prior to attending law school, she spent 13 years in the long-term health care industry until 1985, when she enrolled in law school in order to fulfill her life-long dream of becoming a lawyer. Judy brings to the committee a wealth of experience and knowledge. She is a creditor's lawyer in every sense of the word; not only is her practice focused upon representing creditors in bankruptcies and workouts, she also devotes a significant amount of time to advising her clients and helping them develop procedures and systems to ensure protection in the event that a customer fails to pay or files bankruptcy. Judy's proactive approach to effective creditor representation serves her clients well and keeps her in high demand as a speaker for various creditor groups throughout the country. She spoke most recently in September at the NACM Pacific Northwest Credit Conference on the subject of how creditors selling to sole proprietors who file chapter 13 bankruptcy can aggressively protect their position in the business chapter 13 case. With Judy's appointment, the committee remains well-poised to serve the needs of its members, the members of the ABI, and future members as well. Welcome, Judy!
By: Ingrid Warren The Second Circuit recently held that a creditor's failure to identify itself as a collecting party in a communication with a consumer violated the Fair Debt Collection Practices Act. In this case, an affiliate of Citicorp attempted to obtain payment of a consumer credit card debt owed to Citicorp from an individual by sending her a letter signed by a "debtor assistance agent." In the letter, Citicorp was not identified as the sender. Instead, the debtor assistance agent suggested the consumer pay a substantial portion of the debt to Citicorp to protect her credit. The consumer later sued Citicorp, alleging the correspondence violated the Fair Debt Collection Practices Act. The Second Circuit agreed with the consumer and held that the letter violated the Fair Debt Collection Practices Act because, although it was actually sent by an affiliate of Citicorp, the letter appeared to be sent by another company. In fact, the letter appeared to have been sent by a third party which was attempting to help the consumer. In determining that Citicorp violated the Fair Debt Collective Practices Act, the Second Circuit applied the "least sophisticated consumer standard" and concluded that an unsophisticated consumer could easily have been misled by the letter and thought that a third party was attempting to work out the debt on her behalf. The opinion creates a requirement that creditors take particular care when sending letters to consumers, to make certain that such correspondence obviously identifies the sender as a creditor and the correspondence as a collection request from the creditor. The opinion can be found at MaGuire v. Citicorp Retail Services Inc., No. 97-7755, 1998 WL 350596 (2nd Cir. July 1, 1998).
By: Judy Thompson Thirty-five bankruptcy and credit professionals attended our committee meeting at the ABI Winter Leadership Conference in December. Highlights are as follows: Publications—Committee Newsletter. Lynnette Warman reported on matters pertinent to the delay in the last publication of the committee newsletter. We will soon be on a regular publication schedule designed to put a copy in your hands as follows:
Wanted. Writers to prepare articles and identify topics that you would like to see in the newsletter. If you have suggestions for topics or would like to volunteer to write an article, please contact Lynnette Warman of Jenkens & Gilchrist. Reclamation Task Force. Bruce Nathan of Kreindler & Relkin PC, New York, reported on progress made by the Reclamation Task Force and indicated that he expects two products from the Task Force's work. The first is an article in the ABI Law Review on global reclamation programs that will (1) explain the various strategies for handling reclamation claims that have occurred in large cases, and (2) show the various alternative ways the claims have been processed. Mr. Nathan is at work on the second item—a small handbook on reclamation similar to the handbook on unsecured creditors' committees that this committee produced a few years ago. Credit/Sales Documentation. David Wheeler of Holmes & Thomson, Charleston, S.C., who presented a program on this topic at our April meeting in Washington, indicated that he has revised and expanded the materials credit managers can use to obtain credit information on new accounts and to document sales transactions. You may obtain a copy of these by contacting him at (843) 724-1327, or e-mailing him at dwheeler@htlp.com. Program. Steve Berman of Morse, Berman and Gomez in Tampa, Fla., presented a program titled "Reclamation: How to Prove Your Goods Are Still There!" Steve reviewed the requirements for reclamation and provided an excellent summary of the case law in the areas of the reclamation demand, identification of goods, insolvency, possession of goods at time demand is received, floating liens and burden of proof. If you would like a copy of this five-page summary, please contact Steve Berman at (813) 301-1000, or e-mail him at sberman@mbgpa.com. Creditor Participation. Although the committee meeting was very well attended, there were few credit professionals present at the Winter Leadership Conference, and therefore few at our committee meeting. There was a discussion of how greater involvement by the credit professionals in ABI activities can be stimulated. An ad-hoc task force comprised of Tom Grace of Liddell Sapp in Dallas, Roseanne Matzat of Hahn & Hessen in New York, Lynnette Warman and David Wheeler was formed to identify issues and specific actions that the ABI and our committee can take to increase the involvement of our credit manager members. Judy Thompson outlined the prototype program included in ABI's Southeast Bankruptcy Workshop in 1998. That program expanded the traditional continuing education offerings that are aimed primarily at attorneys and included a creditors' "overlay" program, specifically aimed at non-attorneys, that addressed issues facing consumer and business creditors. That overlay program will be continued at the 1999 ABI Southeast Bankruptcy Workshop, August 4-7, at the Ritz Carlton on Amelia Island, Fla. ABI Publications. The committee needs authors to write articles of interest to unsecured trade creditors for various ABI publications. The ABI Journal includes the "Last in Line" column, and the ABI web site, ABI World, regularly contains "Cracking
the Code" articles. Our committee is responsible for providing substantive articles for both of these publications. Who wants to write? What about an attorney/credit manager duo? Let's promote our committee by becoming more active!
By: Geoffrey Berman The News & Views newsletter has regularly advised members of the Unsecured Trade Creditor Committee of the status of the General Assignment Task Force's projects. The task force was formed for two purposes: (1) to create a manual describing the process used in assignments for the benefit of creditors, and (2) to evaluate possible model statutes for uniform rules concerning the assignment for benefit of creditors. The task force is now rapidly approaching the completion of its projects, and the final versions will ultimately be submitted to the ABI for approval and printing. It is anticipated that the manual will be printed and released prior to the upcoming ABI Annual Spring Meeting in Washington in April. Anyone interested in commenting on the work to date and participating in the final review of the projects should contact me, without delay, to be included in that process. I can be reached at Development Specialists Inc., 333 South Grand Avenue, Suite 2010, Los Angeles, CA, 90071, or (213) 617-2717. My e-mail address is gberman.dsi@worldnet.att.net. Additionally, because these projects are concluding, and the work being done by the Reclamation Task Force is well underway, members of the UTC Committee should consider new areas of interest for projects that can be discussed at the April meeting. Your continued involvement in our committee is its strength and the reason for our committee's many accomplishments.
The UTC Committee will meet at the following upcoming 1999 conferences:
Other Conferences to Note: May 16-19: 103rd NACM National Credit Conference, San Francisco, Calif. Call Lynnette Warman at (214) 855-4792 for more information. |