KSB

Minutes from the September 24, 2012 Meeting

Minutes of the Bench Bar Committee
Topeka Courtroom 210
September 24, 2012

 Click here for a PDF Copy of the Minutes

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 Minutes of the Bench Bar Committee
Topeka Courtroom 210
September 24, 2012


Members Present: Emily B. Metzger, Committee Chair

Hon. Janice M. Karlin, Judges Representative
Lee W. Hendricks
Jay D. Befort, US Trustee Representative
Gary E. Hinck
Robert L. Baer, Chapter 7 Trustee
David P. Eron
Paul D. Post
Jan Hamilton
Dana M. Milby
Eric L. Johnson

Court Staff Present: Hugh Zavadil, Clerk’s Representative

The meeting was called to order at 10:10 a.m. Emily Metzger welcomed the Committee. Emily
explained that the minutes from the March 21, 2012 had been approved via electronic mail. New
members of the Committee were welcomed and introduced.

Agenda Items

1.
A draft revision to D. Kan. LBR 7054.1 had been previously circulated via email for
comment. The Committee voted unanimously to recommend adoption of the proposed
revision, which eliminates subsection (c) of the Rule.
2.
The group considered a series of proposed revisions to the Chapter 13 Form Plan. The
first proposal1 dealt with post-confirmation foreclosures. Paul Post noted that currently
debtor’s counsel must file a Motion to Modify the Plan (to clarify that the deficiency, if
any, should be discharged) when real property surrendered pursuant to the plan is
foreclosed (See Form Plan ¶ 8). Jan Hamilton noted some of the competing interests that
drive this proposal. After an extended discussion, it was decided that this situation would
1

“If during the pendency of this case, a mortgage loan holder obtains relief from
stay and forecloses its mortgage loan on the collateral resulting in sale of the collateral at
sheriff's sale, any remaining debt owed on such mortgage loan will be treated as general,
unsecured debt and discharged upon completion of the case.” OR “If during the
pendency of this case, the holder of a secured claim obtains relief from stay and forecloses its
lien on the collateral resulting in sale of the collateral, any remaining debt owed on such claim
will be treated as general, unsecured claim and discharged upon completion of this case. In
order to participate in any distribution to unsecured creditors, the holder of the claim must amend
its claim within __ days of the sale of collateral.”


be better addressed in a modified plan (and/or in the language of any Order Granting Stay
Relief), and the proposed language was not adopted.

3.
Next, Paul introduced a discussion to amend paragraph 3(b) of the form plan to include
explicit designation of case closing fees. This is to clarify, especially in cases where a
debtor has paid counsel all fees up front, that the attorney has already been paid for end
of case work. The proposal received unanimous support; it only adds one line to the
plan. Hugh was directed to make the change to the form plan documents and to draft a
Standing Order to adopt the revisions.
4.
The next proposed revision to the Form Plan would strip the lien of any creditor who
refuses to take property abandoned by the Plan.2 The consensus of the group was that
such a provision would not conform to existing case law, and that it is not provided by
the Code.
5.
Three different revisions to paragraph 8 were discussed.3 After extended discussion, the
following redline language was adopted, and the other changes were rejected:
RELIEF FROM STAY REGARDING PROPERTY TO BE SURRENDERED: On
Plan confirmation, any creditor may repossess, foreclose upon, sell or obtain possession
of the property the Plan proposes to surrender without obtaining stay relief. This
provision does not prevent the earlier termination of the stay under operation of law or
court order. Nothing contained in this section operates to permit in personam relief,
modify any applicable co-Debtor stay or to abrogate Debtor’s rights and remedies under
non-bankruptcy law. The trustee shall not make distributions on account of any secured
claim in this class.

New Business/Non-Agenda Discussions

6.
After a brief discussion of Employer Pay Orders, Judge Karlin suggested that anyone
having problems should collect several examples, send them to the Divisional Deputy In
2 “Any secured creditor listed who does not retrieve property to be surrendered under the
plan within ninety (90) days after confirmation, creditor will be deemed to have abandoned their
lien to the property and the confirmation order will constitute a release of lien. Debtor will be
authorized to dispose of the property without further claim of the creditor. “

3 Three parts were considered: 1) “This provision does not permit in personam relief of
any kind against the Debtor; 2) The surrender of assets under this provision shall constitute full
satisfaction of the claim secured by such collateral, unless within ___ days after confirmation,
the claim holder shall submit a claim for any deficiency balance; and 3) If the holder of a claim
secured by property to be surrendered under the plan fails to take possession of its collateral with
__ days after confirmation, the claim holder shall be deemed to have abandoned its lien. Debtor
may thereafter submit an appropriate order stating that such lien has been abandoned.”


Charge of the pertinent Clerk’s office, and, if necessary, meet with Clerk’s office staff to
discuss how to solve whatever problem exists.

7.
Jan Hamilton noted that a direct bill payment system for trustee payments is being
developed in Topeka.4 Other Chapter 13 Trustees are considering similar functionality.
8.
Judge Karlin discussed the proposed District Court Rule regarding Limited Scope
Representation. Judge Berger will serve on a committee to do further work on this
proposed rule. Dave Eron volunteered to represent the Bankruptcy Bench Bar committee
on that committee.
9.
The Topeka docket changes were discussed. It was the consensus that the changes were
effectively reducing the length of the dockets.
10.
Jan Hamilton requested video evidence presentation demonstrations at each of the
respective bar groups. Hugh will try to arrange these sessions. He also noted that anyone
wishing to use the video evidence presentation system can call the local Clerk’s office to
arrange training.
11.
Eric Johnson suggested a local rule to handle noticing Rule 2004 Examinations. Judge
Karlin suggested that Eric draft a possible revision and circulate it via email. The
committee can then vote via email whether to adopt the proposal. To get it in the next
edition of the published local rules, it would need to be adopted by November 14, 2012.
12.
The conduit payment Standing Order 11-3 was discussed. It is working well. It has
forced debtors to address early in the Chapter 13 process whether they can actually afford
the house. Despite higher trustee fees, the process does allow debtors to save on late
payment fees, etc.
The meeting was adjourned at 11:46 a.m.

4 After the meeting, Mr. Hamilton supplied the following web address for the bill pay
service he is considering: https://www.tfsbillpay.com.



Minutes from the June 27, 2011 Meeting

Members Present:    Emily B. Metzger, Committee Chair
            Hon. Janice M. Karlin, Judges Representative
            Hon. Robert E. Nugent, Chief Judge
            Hon. Robert D. Berger, Judge
            Hon. Dale L. Somers, Judge
            Lee Hendricks
            Jay Befort, US Trustee Representative
            Richard C. Wallace
            Larry G. Michel
            William Wells
            Jan Hamilton
            David Eron (telephone attendance)
           
Guest(s) Present:    Laurie Williams, Wichita Chapter 13 Standing Trustee
            William Griffin, Kansas City Chapter 13 Standing Trustee
            Paul Post, New Member
            Robert Baer, Chapter 7 Trustee

Court Staff Present:    Hugh Zavadil, Clerk’s Representative

Members Absent:    Linda Parks, Chapter 7 Trustee
            Gabrielle Beam

The meeting was called to order at 10:01 a.m.  Emily Metzger welcomed the Committee.  After brief introductions, Judge Karlin presented Richard Wallace and Larry Michel, outgoing members of the Committee,  Certificates of Appreciation from the judges. Judge Karlin also introduced Paul Post, one of the new members of the Committee.


1.    Dave Eron introduced a discussion regarding panel trustee Motions to Compel.  Several different situations were described.  First, in Wichita it sometimes occurs that Motions to Compel production are filed prior to any communication with debtor’s counsel.  Sometimes the Motions to Compel are filed by the trustee after debtor’s counsel has contacted the trustee and let him/her know that the materials were being gathered.  Finally, some panel trustees are filing Motions to Compel Production far in advance of the actual trigger event (e.g. a Motion to produce tax returns months before the return is due under federal and state taxing laws) and compliance becomes problematic for debtors’ counsel. Mr. Eron suggested that the Committee should consider recommending a Local Rule that would require panel trustees to “meet and confer” prior to filing these Motions to Compel.
        Robert Baer appeared on behalf of the Chapter 7 panel trustees.  He argued that the rule revision recommended by Eron was unnecessary.  He also suggested that the proposed rule would be inconsistent with other requirements.  He suggested that such a rule would unnecessarily delay discharges and case closings.  Requests for information are often not met, even after informal attempts (at the 341 and afterwards) to obtain the information.  Most trustees contact debtor’s counsel either orally or in writing to request items before Motions to Compel are filed.  Finally, much of the information sought via these Motions to Compel is required to be produced by the debtor under the Code, and oftentimes very early in the case.  Given time constraints, the Chapter 7 panel trustee has little flexibility in the matter.  If administration is to be completed in a timely fashion, documents must be produced in a timely fashion.

        After considerable discussion, Emily suggested that David Eron, if he desires  further committee consideration of this issue, draft a concrete proposal for the  Committee's consideration.  Emily requested that Jay Befort, and any Trustees he deems appropriate, be consulted in the process.  Emily also said that she would be happy to work with David and Jay on this, if requested. 

2.    Dave Eron introduced a general discussion regarding the rules pertaining to Withdrawals by Creditors’ Counsel.  Dave argued that the current rules impose a difficult burden on those attorneys who represent creditors for a single, relatively simple matter in a case, who then wish to stop receiving notices in that case once that single matter is resolved.  After a brief discussion, it was decided that Judge Karlin would contact the Bankruptcy Judges listserv to see how other jurisdictions handle the issue.  Judge Karlin will report back regarding the inquiry.  Dave agreed to draft a proposed local rule to be circulated to the committee after receiving input from other bankruptcy judges.  (Note: After a full discussion, the judges of this Court have decided not to ask the District Court for an exception to its D. Kan. LBR 83.5.5 for creditors' counsel.  This is, of course, without prejudice to anyone raising this issue in the future for additional consideration.)

3.    Dave Eron introduced the issue of signature requirements on electronically filed documents.  He noted that there are some wide variations in what attorneys collect and preserve to comply with signature requirements in Local Rules.  Judge Nugent noted that Local Rules require attorneys to maintain a paper copy of the (originally signed) petition and schedules.  This requirement exists for evidentiary purposes in case the originals are needed for a fraud or perjury prosecution.  As to retention of proof that an attorney has consented to having his or her /s appended to a pleading, it was noted that a variety of techniques are available.  After discussion, the group concluded that no Local Rule revision was necessary to address this situation.

4.    Laurie Williams, Jan Hamilton and Bill Griffin attended the meeting to discuss the form Chapter 13 Plan with the group, specifically the plan adopted March 1, 2011 by Standing Order 10-2.  Judge Karlin had requested, at the trustee’s invitation, that comments be solicited from the bar regarding the form plan, and whether (after operating under the required plan for approximately 4 months) changes were needed.  Speaking for the Chapter 13 Trustees, Laurie indicated the trustees recommended only minor revisions to the plan (or, “we stand by our plan”), and separately addressed each inquiry or comment made to the existing plan.  Many of the issues identified by the Bar are training issues.  Laurie indicated that in her experience, there have been fewer objections to confirmation because of implementation of the form Plan.  Jan noted that his staff appreciates being able to easily find plan provision provisions.

    It was mentioned that when the monthly payments (in paragraph 1) are entered, along with the number of months, the current plan requires multiplying everything and entering the total.  It was recommended that the "total" column be configured to do the math for you.  All three Chapter 13 Trustees noted that the fields in question were able to accommodate text as well as numbers.  Particularly for below median debtors, there are circumstances where attorneys may wish to preface the number of payments with “approximately” or “estimated” (when the exact amount of claims will impact the commitment period).  For this reason, all three Chapter 13 Trustees recommended not changing the form Plan to automatically calculate totals.

    The committee and the Chapter 13 Trustees reviewed and discussed a number of additional proposed changes to the form Plan.  It was decided that Laurie Williams would oversee having the proposed changes made and circulate a copy of the revised form Plan to the Committee for review by the Bench Bar Committee members, and ultimate recommendation to the judges.

5.    On December 1, 2011, absent some action by Congress, some new and amended Federal Rules of Bankruptcy Procedure become effective.  In a preliminary review of these rules it was noted that there may be some conflicts between the new rules and D. Kan. Bk. S.O. 09-2.  A variety of proposed amendments to D. Kan. Bk. S.O. 09-2 were discussed by the group.  The Chapter 13 Trustees were asked to prepare a redline/strikethru version of D. Kan. Bk. S.O. 09-2 to highlight proposed changes required by these new and amended rules.

6.    The group discussed D. Kan. L.B.R. 9004.1 and the corresponding font size restrictions.  After a brief discussion it was moved by Jan Hamilton and seconded by Larry Michels to increase the font size specified in the rule from 10 to 12 points.  The motion was passed unanimously.  (Note: Click here for a redline/strikethru version of D. Kan., L.B.R. 9004.1 )

7.    Judge Karlin then explained a recent revision to D. Kan. Rule 54.1(a)(2). The Rule requires the party seeking costs to file a memorandum in support of its costs.  After a brief discussion, it was noted that the District Court rule applies to the Bankruptcy Court but that no further clarification was necessary in the Bankruptcy Court local rules.

8.    Judge Karlin next explained a situation she has experienced where debtors are seemingly able to financially afford to reaffirm a debt, but counsel refuses to sign the reaffirmation agreement.  This requires the court treat debtor as de facto pro se, requiring debtors to appear and the court to give the admonitions typically provided by debtors’ counsel.  Sometimes, the debtors must travel considerable distances to make the (seemingly unnecessary) appearance.  Judge Karlin asked attorney members of the committee about blanket refusals to sign reaffirmation agreements.  The group discussed the matter but came to no resolution of the issue.

9.    Jay Befort presented a proposed Standing Order regarding payment of bank fees by Chapter 7 trustees.  After a brief explanation of the proposed Standing Order (required because banks are now refusing to give interest-free accounts to panel trustees), the group recommended adoption of the Standing Order. (Note: On June 30, 2011 the judges signed D. Kan. Bk. S.O. 11-1)

10.    Hugh noted that the Tenth Circuit has approved the rule revisions from last term.

The meeting was adjourned at 1:52 p.m.

Minutes from the March 21, 2012 Meeting

Members Present:    Emily B. Metzger, Committee Chair
            Hon. Janice M. Karlin, Judges Representative
            Hon. Dale L. Somers, Judge
            Lee W. Hendricks
            Joyce G. Owen, US Trustee Representative
            William A. Wells
            Linda S. Parks, Chapter 7 Trustee
            David P. Eron
            Paul D. Post
            
Court Staff Present:    Hugh Zavadil, Clerk’s Representative

Members Absent:    Jan Hamilton
            Dana M. Milby
            Gabrielle A. Beam

The meeting was called to order at 10:05 a.m. Emily Metzger welcomed the Committee.  Emily explained that the minutes from the June 27, 2011 had been approved via electronic mail.  She also noted that there were a couple unresolved issues carried over from the June 27, 2011 meeting.  

First, Dave Eron had introduced a discussion regarding panel trustee Motions to Compel.  Dave met with Jay Befort of the U.S. Trustee’s office and together they concluded that no Local Rule could be crafted that would address the competing interests expressed at the June 27, 2011 Bench-Bar Committee Meeting.  Dave also reported on some informal polling among practitioners in the Bankruptcy Bar regarding Withdrawals by Creditors’ Counsel.  Dave agreed to draft a proposed local rule to be circulated to the committee to see if he could persuade the judges such a rule would be workable.

1. Judge Karlin explained a situation that has recently arisen in relation to new  Fed. R. Bankr. P. 3002.1.  The Rule, which became effective December 1, 2011, requires the Chapter 13 Trustee to file a Notice of Final Cure Payment with the Court. It then requires the secured creditor to respond whether the loan is, in fact, current. Sometimes creditors do not respond. Jan Hamilton asked the Court to consider a Rule or Standing Order to address the situation. Instead, the Judges have informally agreed to a procedural change to address the situation. The proposed solution would have the Trustees file a Notice of Final Cure Payment with a Motion to Deem the Mortgage Current if the creditor fails to respond. After a brief discussion the consensus of the group was that the proposed procedural change should satisfactorily address the problem. Judge Karlin will circulate the proposed Notice/Motion once it is final, so the Bench-Bar Committee can review it.
2. Hugh explained proposed revisions to D. Kan. LBR 1007.2. The revisions simply update the Rule to conform to contemporary technology and correct a typographical error in the existing rule. The Committee unanimously approved the proposed revisions. A copy of the revision, which will be recommended to the Judges for approval, is attached to these Minutes.  (Note: Click here for a redline/strikethru version of D. Kan., L.B.R. 1007.2 )
3. Lee Hendricks indicated he had been asked to again present to the Committee the possibility of developing a “short form” Chapter 13 Form Plan.  Although the Committee had fully considered that possibility at the last meeting, the Committee again fully considered that option, and unanimously concluded that the existing Form Plan allows the flexibility to designate which paragraphs do not apply and that any “short form” would likely result in no significant advantage to the existing Form Plan. The group also noted that the current Form Plan has been and will continue to be reviewed in light of Rule changes and does a good job of balancing the needs of practitioners within the District.
4. On the same topic, Judge Karlin noted that she has begun to see at least one lawyer retype the form plan, eliminating some of the formatting that makes the various sections easy to find, etc., and that she strongly discourages the “retyping” of the form plan.

    First, Judge Karlin asked the Committee’s opinion on presumptive attorney fees in Chapter 7 and 13 cases. She wanted to know, at least for the Topeka bar, if the fees she set a few years back are still reasonable in light of the fact the fees were set several years ago. She also asked if any increase in their cost of doing business appears to be recouped by savings in time gained from 6 years’ experience practicing under BAPCPA?  The consensus of the group is that the presumptive fees as currently established seem reasonable. This is partly based on the fact that if an attorney needs additional fees he/she can file a motion documenting why the standard “no look” fee is not satisfactory.  

    Judge Karlin also asked the group to comment on the performance (and consistency of operation) of the three divisional office of the Clerk of the Bankruptcy Court.  Members of the Committee were unanimous in expressing positive experiences with all three divisional offices.

    Next, Judge Karlin asked the group if anyone had concerns related to Stern v Marshall?  During the ensuing discussion, Judge Somers noted that these issues are sometimes not raised early enough in the proceeding.

    Judge Karlin asked for input on how to structure large Chapter 13 dockets to minimize time for low volume attorneys. Dave Eron mentioned that the same topic had been discussed at a recent Wichita Bankruptcy Council luncheon. At that time it was suggested that the docket be called in reverse order (i.e., newest cases first, oldest cases last). After a brief discussion Judge Karlin decided it might be best to appoint an ad hoc committee consisting of her, Lee Hendricks and Paul Post (as members of the Bench Bar Committee), Jan Hamilton, and possibly one other attorney, to review procedures in Topeka.

    Finally, Judge Karlin inquired about the recent pattern of the Internal Revenue Service (IRS) amending claims after the trustee or debtor files an objection to an IRS claim, without responding to the objection, itself.  The amended claims are apparently intended to the resolve the matter noted in the objection to claim. She noted this also occurs with KDOR. Emily Metzger observed that the U.S. Attorney’s office does not always receive notice of objections to  IRS claims; the notices often just go to the Philadelphia site. She also suggested that attorneys need to contact U.S. Attorney Staff so they can work directly with IRS. Emily will also discuss the matter with IRS Regional Counsel.
                
The meeting was adjourned at 11:45 a.m.

Minutes May 18, 2010 Bench-Bar Meeting