Thyroff: Another Remedy for Destruction or Concealment of Electronic Records
by Warren E. Agin
Swiggart & Agin, LLC; Boston
Anyone who has served as a trustee in a chapter 7 or 11 bankruptcy case has encountered the business debtor whose records are “missing.” Usually, the debtor’s officers testify that they maintained the records, but just somehow won’t turn them over. The records just don’t show up. Or, the officers turn over computers or QuickBooks files and it is pretty obvious that the files are incomplete. These records are, of course, property of the bankruptcy estate under 11 U.S.C. §541(a). My standard protocol is to file a motion to compel turnover. Sometimes that works, and sometimes it does not. Concealment of the records is a criminal act under 28 U.S.C. §152, but as a practical matter, referring a case to the U.S. Attorney’s Office for criminal prosecution does not always bear results – at least not ones that benefit the bankruptcy estate. This is especially true when the case, or the conduct involved, is relatively minor.
Is Divorce Deceitful in Bankruptcy?
by Colin T. Darke
Boston
The best way to get a bad law repealed is to enforce it strictly.
-Abraham Lincoln
Prior to and since its enactment, bankruptcy judges and legal commentators have criticized the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Some judges criticize BAPCPA through articles and lectures, while others heed Lincoln’s advice and strictly construe BAPCPA’s language to harsh conclusions.
One of BAPCPA’s popular provisions was Bankruptcy Code §522(p), which closed the “millionaires’ loophole.” This new homestead cap limits the debtor’s homestead exemption when the debtor chooses to use exemptions governed by state law, or if his or her state has opted out of the federal bankruptcy exemption scheme. Specifically, BAPCPA added language that put a $125,000 cap on the debtor’s allowed homestead exemption with respect to a home the debtor bought within 1,215 days prior to filing for bankruptcy protection. This provision does not apply if the debtor’s new home was purchased with funds from the sale of the debtor’s previous home in the same state.
Trustee Moves for Contempt against Pearlman’s Former Counsel
by Elizabeth Bohn
Jorden Burt LLP; Miami
In the continuing fraud and bankruptcy saga of former music promoter Lou Pearlman, the appointed chapter 11 trustee recently filed an emergency motion against his former lawyer charging her with conduct “intended and designed to obstruct, frustrate, impede, delay and prevent the trustee and creditors of the bankruptcy estate” from pursuing their investigation of the debtor's financial condition and identifying and locating “hundreds of millions of dollars” alleged to have been fraudulently obtained by Pearlman and entities he controls from creditors.
2007 Winter Leadership Conference Committee Agenda
The Commercial Fraud Task Force and Bankruptcy Litigation Committee will join forces at ABI’s 2007 Winter Leadership Conference at the Westin Mission Hills Resort & Spa in Rancho Mirage, Calif. on Friday, Dec. 7, from 9:30 - 11:30 am, to present "Gotcha! Replacing Management for Fraud and Other Evil Deeds."
Under §1104, an evidentiary burden must be met to oust management on issues of fraud, dishonesty, incompetence or gross mismanagement. Most frauds go unnoticed in private companies, and public companies have not exactly been fast to eliminate members of the debtor’s rat pack. Attend this session and obtain the information you need to expose the “Seven Deadly Sins” and win the appointment of trustee or examiner. This will be followed by “20 Questions for Management of the Debtor at the 341 When Fraud and Other Evil Deeds Are Suspected.”
Panel:
Deirdre A. Martini – CIT Group Inc.; New York
Cyrus Noshir Pardiwala – PricewaterhouseCoopers LLP; New York
Hon. Barry Russell – U.S. Bankruptcy Court (C.D. Calif.); Los Angeles
Jordon W. Siev - Anderson, Kill & Olick; New York
Brian C. Walsh – Bryan Cave LLP; St. Louis