bankruptcy & creditors’ remedies - fall 2016

BK F16 SYL V01.DOCX 7/27/2016 PAGE 1

Bankruptcy & Creditors’ Remedies - Fall 2016

Law 715 Monday & Wednesday 7:45-9:00PMRoom assignments at MyUB

Professor Charles [email protected]

(v):410 837 4623 (f):410 837 4492

Office Hours - Suite 1014Monday 5:00 – 7:30

Wednesday 4:00 – 7:30

The Fine PrintCatalog Description: Bankruptcy, with emphasis on consumer bankruptcy issues; common law compositions; assignments for the

benefit of creditors; fraudulent conveyances; receivers; supplementary proceedings; and the enforcement of judgments.Recommended: Contracts I & II, Property.

Student Learning Outcomes: (1) Understand the operation and policy behind the statutes discussed in class. (2) Identifythe specific statutory language at issue in problems and cases. (3) Understand and be able to apply approaches toconstruction of statutes. (4) Understand the holdings and reasoning of cases. (5) Understand the public policy issuesrelevant to bankruptcy and debtor creditor law.

Course Expectations: ABA Standards for Law Schools establish guidelines for the amount of work students should expect tocomplete for each credit earned. Students should expect approximately one hour of classroom instruction and two hours of out-of-class work for each credit earned in a class.

Class Preparation, Participation, and Professionalism: You are expected to complete all reading assignments beforeclass, be ready to summarize problems, have a proposed solution for problems (explaining the relevant statutorylanguage that) or explain why you are unable to do so, be able to summarize cases and explain the holdings,participate consistently in class discussion demonstrating that you have read and reflected on the issues raised in theassignment, respect the views of other students

Class Cancellation: If the instructor cancels a class, notice will be sent via email and posted on the classroom door. If there isinclement weather, students should visit the UB web site or call the UB Snow Closing Line (410) 837-4201. If the University isopen, presume that classes are running on the normal schedule.

Academic Integrity: Students are obligated to refrain from acts that they know or, under the circumstances, have reasonto know will impair the academic integrity of the University and/or Law School. Violations of academic integrityinclude, but are not limited to: cheating, plagiarism, misuse of materials, inappropriate communication about exams,use of unauthorized materials and technology, misrepresentation of any academic matter, including attendance, andimpeding the Honor Code process. The Law School Honor Code and information about the process is athttp://law.ubalt.edu/academics/policiesandprocedures/honor_code/

Title IX Sexual Misconduct and Nondiscrimination Policy: UB’s Sexual Misconduct and Nondiscrimination policy iscompliant with Federal laws prohibiting discrimination. Title IX requires that faculty, student employees and staffmembers report to the university any known, learned or rumored incidents of sex discrimination, including sexualharassment, sexual misconduct, stalking on the basis of sex, dating/intimate partner violence or sexual exploitationand/or related experiences or incidents. Policies and procedures related to Title IX and UB’s nondiscriminationpolicies can be found at: http://www.ubalt.edu/titleix

Disability Policy: If you have a documented disability requiring an academic accommodation, contact Leslie Metzger,Director of Student Services, at 410-837-5623 or [email protected].

Attendance: Class attendance is a primary obligation of each student. The right to continued enrollment in the course andto take the examination is conditioned upon a satisfactory record of attendance. A student who exceeds the maximumallowed absences (5 class sessions for this class) may be compelled to withdraw from the course, or barred from sittingfor the final exam. Students who are forced to withdraw for exceeding the allowed absences may receive a grade of FA(failure due to excessive absence). This policy is consistent with ABA Standards for Law Schools.

Use of electronic devices during class: Please do not use electronic devices for any reason other than taking or readingnotes or accessing class materials Violators will not be allowed to bring electronic devices to class.


Required ReadingWarren & Westbrook, 2013 Supplement of The Law of Debtors and CreditorsBankruptcy Code – 2016 editionMaryland Law Supplement (to be distributed at the first class and available on TWEN)Case Supplement (to be distributed at the first class and available on TWEN)All additional statutes, additional problems, cases and other course materials are available on TWEN

Grading PolicyPer Cent ofFinal Grade

Final Exam Completely Open Book & Open Notes - Essay 80 -100 %

ClassParticipation

Please give me a note prior to class if you are unprepared to discussthe material assigned for that class.

0 - 15%

AdditionalAssignments.

I may give announced or unannounced quizzes regarding theday’s assignment. I may give homework assignments regardingthe operation of some statute sections. These may be voluntaryor required.Note: There are a number of questions labeled “Exercises.” Theyare primarily designed to guide you through specific sections andwords in the statute. Sometimes I will ask you to submoit youranswers to those questions in advance of class. However, Iexpect that you will be able to demonstrate in class that you havemade a good faith effort to complete these exercises.

0-15%

Lateness Each time (above two) arriving after class begins 2% off

Cell phones Each time a cell phone or pager goes off audibly during class 2% off


Note: I will distribute a hard copy of this syllabus on the first day of class, along with the hardcopies of the cases and statutes you will need for the course. It may also include some revisions.Please contact me if there is any questions about the assignment for the first week.

Abbreviations Used in This SyllabusWW: pages in Warren & Westbrook 2013 SupplementPages without attribution are for Warren & WestbrookPS or Problem Set: problem sets in Warren & Westbrook.CJP: Maryland Courts & Judicial ProceedingsCL Maryland Commercial Law

MD Rule or Rule (with no attribution):MD Court RulesBC: Bankruptcy CodeSections without attribution:the Bankruptcy Code.Other references are to cases in the Case Supplement ormaterials that are on TWEN

.

NOTE: If at any time you notice a mistake or ambiguity in any of these assignments please notify meas soon as possible by phone or email or in person.

Topic Section of Materials Attached8/22 1/11 Overview & Article 9 I & II8/24 1/13 Property of the Estate III A8/29 1/20 Special Problems III B & C8/31 1/25 Judicial Liens: Real Property IV A9/7 1/27 Judicial Liens: Personal Property IV B9/12 2/1 Garnishments

Multiple JurisdictionsIV C & D

9/14 2/3 Prejudgment Remedies IV E9/19 2/8 Lis Pendens, Statutory Liens IV F & G9/21 2/10 Exemptions V A & B9/26 1/15

Lien Avoidance V C9/28 2/1710/3 2/22 Automatic Stay VI10/5 2/24

Fraudulent Conveyances VII10/10 2/2910/12 3/2 Claims & Distributions VIII10/17 3/7 Discharge IX10/19 3/9 Reaffirmation / Redemption /Ride

ThruX

10/24 3/21Abuse & The Means Test XI

10/26 3/2310/31 3/28

Chapter 13 – Secured ClaimsXII

11/2 3/3011/7 4/411/12 4/6 Chapter 13 – Unsecured Claims XIII11/14 4/1111/19 4/13 Chapter 13 - Discharge XIV11/21 4/18 Trustee’s Lien Avoidance XV A & B11/23 4/20 XV C11/28 4/25 Bankruptcy Jurisdiction XVI


Basic Concepts of Debtor Creditor lawOverview of the Course

1. This course deals with the issue of how a person (remember that includescorporations) that is owed money can get that money from the debtor. There are threemain avenues toward that goal:

a) Extralegal: (Note: not “illegal.”) Convince the debtor to pay. There arelegal limitations on the techniques that may be used to achieve this. Each state andthe federal government have debt collection statutes and there are common law tortremedies. We don’t discuss them in this class. But essentially creditors shouldn’tlie, harass, or threaten or engage in violence. These limitations, of course, take alot of the fun out of collecting debts.b) Legal:

(1)Obtain an interest in the debtor’s property; sell that property, and take thedebt out of the proceeds of that sale. This can be done in two ways:

(a) Voluntary: Obtain a security interest in some of thedebtor’s property. This is largely governed by Article Nine of theUniform Commercial Code as enacted in each state.(b) Involuntary: Get a judgment against the debtor. Thenobtain a lien on the debtor’s property. Enlist the state to seize andsell the property subject to that lien.

c) Bankruptcy (either voluntary or involuntary).2. There are two main issues that will come up in our discussion throughout thecourse:

a) How does a creditor get an interest in the Debtor’s property?b) How are conflicts among creditors resolved?

Security Interests Under Article Nine of the UCCWhy study this1. There is a course that covers this area of the law in great detail. But the SecuredCreditor is also an extremely important player in the material we cover in this course. Soour goal is just to understand the basics of Article Nine to understand the interaction ofthe Secured Creditor and the statutes we cover.2. Essentially this is also an overview of those two basic concepts involved in thiscourse:

a) How does a creditor get an interest in the Debtor’s property?b) How are conflicts among creditors resolved?

Reading1. W&W: 44-492. Read through the following sections of Title Nine of the Maryland CommercialLaw: 9-102(74), (75); 9-203; 9-308; 9-309; 9-317(a); 9-322; 9-516

Problem for class discussion1. We will discuss the following facts in class in order to understand

a) How a lender gets a security interest in property. The security interestallows the lender on default to seize and sell the debtor’s property.b) How conflicts among a few types of secured parties are resolved.


Basic DocumentsThis questions in this part involve the following documents:

#1 PromissoryNote

#2 SecurityAgreement

#3 Financing Statement

I promise to pay to theorder of Ed Norton, $100on April 1, 2012.

Ralph KramdenFebruary 1, 2012

I hereby grant to EdNorton a security interest inmy Magic Can Openers ascollateral to secure theperformance of my obligationto pay Ed Norton $100.

Ralph KramdenFebruary 1, 2012

Basic FactsRalph Kramden had an idea for a new business venture

involving the sale of a product called the “Miracle Kitchen Tool”However, Ralph was afraid that his wife would not approve. Sowithout telling her, he took $100 out their piggy bank to purchasea thousand of the tools. He then became afraid that his wife woulddiscover the money was missing before he would be able toreplenish the piggy bank with the profits from the venture. So heasked his friend Norton to loan him $100 so that Ralph couldreplace the money in the family Piggy Bank.

These facts are based onhttps://www.youtube.com/watch?v=xPq_lgtidbQ

Property of the EstateOverview1. When a person files for Chapter 7 Bankruptcy, an “estate” is created. See §541.The trustee has the job of assembling, protecting, and selling that property. Please notethat the Code refers to “interests of the debtor in property.” This is language that isabsolutely crucial. We should never speak of the “debtor’s property” but rather the“debtor’s interest in property.”2. Reading

a) WW 61-64b) BC § 541 (a) & (b)c) PS 3: 3.1


3. Various Interests in Property.Do you remember Tenants By The Entireties, Tenants in Common and Joint Tenants from property class?Refresh your recollection before class.

Table ASpouse A & Spouse B own property worth $100,000 as Tenants By Entirety1/1 A files for Bankruptcy2/1 A dies B Dies6/1 Trustee sells estate interest in property7/1 B dies A DiesResult for Estate and Q

Albert and Betty own property worth $100,000 as Tenants In Common1/1 Albert files for Bankruptcy2/1 Albert dies Betty dies6/1 Trustee sells estate interest in property7/1 Albert dies Betty diesResult for Estate and Q

Alice and Brian own property worth $100,000 as Joint Tenants1/1 Alice files for bankruptcy2/1 Alice dies Brian Dies6/1 Trustee sells estate interest in property

Severanceoccurs whenpetition filed

Severance does notoccur untilproperty sold

Result for Estate and Q4. Additional Problems

a) Dorrit’s only property is Marshalacre which he owns free and clear ofliens. Marshalacre is worth $100,000. If Dorrit files for Bankruptcy what will bethe property of the estate and what will be the value of the estate. In this and in allsubsequent problems ignore any possibility of exemptions.b) Assume the above facts except that:

(1)Dorrit owns the property as a tenant by the entirety with her spouse.(2)Dorrit owns the property as tenant in common with her daughter Amy.(3)Dorrit owns the property as joint tenant with her daughter Fanny

c) Suppose in the above examples, Spouse, Amy or Fanny died shortly beforeDorrit filed her Bankruptcy petition.d) Suppose in the above examples, Spouse, Amy, or Fanny died shortly afterDorrit filed her Bankruptcy petition.e) Dorrit’s only property is his 1946 Marshal automobile worth $100,000.On March 1, 2010, Dorrit borrowed $50,000 from First London Bank & Distrust(FIRSTBANK) and gave FIRSTBANK a security interest in the Marshal. Thesecurity interest was properly perfected. If Dorrit filed for Bankruptcy on March 15,2012 what is the property of the estate and what is the value of the estate? Base youranswer on §541(a).f) Assume the above facts plus the following additional facts: On March 10,2010, Dorrit borrowed $25,000 from SECONDBANK and gave SECONDBANK asecurity interest in the Marshal. The security interest was properly perfected. If Dorritfiled for Bankruptcy on March 15, 2012, what will be the property of the estate and


what will be the value of the estate. To what will each party be entitled? Base youranswer on both the UCC and §541(a).g ) Assume that the loan from FIRSTBANK was for $120,000. If Dorrit filesfor Bankruptcy what will be the property of the estate and what will be the value ofthe estate?

Allocation of Property1. WW: 65-682. On March 1, Robert Cratchet, a charming but impecunious law teacher, filed forbankruptcy. On April 1 he won the $1,000 Teaching Excellence Award tor the schoolyear. Who gets the $1,000?

Limitations on Transfers1. 68-722. §541(c)3. PS 3: 3.24. Harrell. v. Phoenix Suns5. Problem:

Fanny Fan filed a Chapter 7 Bankruptcy on May 30, 2011. At the time of the filing, Fan was theholder of season tickets for the 2011–2012 game season of the Mississippi Mushers hockey team. Forthese tickets and an accompanying parking pass, Fan promised, pre-petition, to pay $2,000.00 by a downpayment, followed by seven monthly installments of $100. The “Terms and Conditions regardingMushers’ Tickets” as printed on the reverse of the ticket invoice provide, in pertinent part that:

1. Any Mushers ticket purchased under this invoice is a revocable license which may be withdrawn andadmission to any Mushers game refused at any time, in the sole discretion of the Mushers upon refundingthe purchase price printed on the face of the ticket less any discount the purchaser may have received.2. Resale or attempted resale of any Mushers ticket at a price higher than that printed thereon, includingtax, is grounds for seizure or cancellation without refund or other compensation.5. The Mushers acceptance of payment for season tickets from any individual or entity who is not theaccount holder for such season tickets does not grant rights to such tickets to such individual or entity.6. Season ticket holders have no right to transfer the seat locations designated by their tickets to anyperson or entity, whether by a request to transfer the account into another name, or by an attempt totransfer the seat locations by sale, gift, transfer by will or trust, property settlement, transfer to creditors orany other means. Therefore, any attempt to sell or otherwise transfer season ticket privileges may result inthe cancellation of all season ticket privileges. Upon any court order directing the distribution of seasontickets to a person or entity not listed as the season ticket holder, whether in bankruptcy or otherwise, willresult in the Mushers’ right immediately to withdraw the license represented by the tickets, including anyseason ticket renewal privileges, upon refund by the Mushers of all amounts paid for games that have notyet been played.

The Mushers will, however, generally recognize two exceptions to the above prohibition. First, theMushers will allow an individual season ticket holder to request transfer of season ticket privileges tomembers of the season ticket holder's immediate family. Second, if the season ticket holder is abusiness, it may request a change in the name of the contact person for its account

Can the Trustee sell Fan's season ticket rights by internet auction?


Judgment Creditors & Judicial LiensJudgment Liens on Real Property1. A creditor must get a lien on property in order to have the right to have theproperty sold and use the proceeds to satisfy the judgment. The first step is to get ajudgment against the debtor. It then depends upon whether the property is real propertyor personal property.2. McCartney v. Frost3. Read CJP 11-4024. Problem:

a) FACTS: Creditor sued Debtor on March 1, 2012 in the Circuit Court ofBaltimore County. The trial ended on April 2, 2012. On April 15, 2012 the judgefound the Debtor liable to Creditor for $10,000. On May 3, 2012 the clerk recordedand indexed the judgment. On June 1, 2012, Creditor recorded the judgment in theland records.b) Using 11-402

(1)When did the judgment lien arise?(2)What is deemed to be the effective date of the judgment lien

5. Dorrit’s only property is Marshalacre, in Baltimore County, which he owns freeand clear of liens. Marshalacre is worth $100,000. On March 10, 2010, Clenman obtaineda judgment against Dorrit in the Baltimore County Circuit Court for $50,000. If Dorrit filesfor Bankruptcy on March 30, what will be the property of the estate and what will be thevalue of the estate. Use CJP §11-402.6. Assume the facts above except that on March 12, 2010, Dickens got a judgmentagainst Dorrit for $60,000 in the Baltimore County Circuit Court. Dorrit filed forBankruptcy on March 15. What will be the property of the estate and what will be thevalue of the estate. To how much will Clenman and Dickens be entitled?7. Firstbank has a mortgage on Marshalacre for a $40,000 debt. SubsequentlyDickens gets a judgment against Dorrit for $20,000 in the Baltimore County Circuit Court.What will be the property of the estate and what will be the value of the estate. To howmuch will Firstbank and Dickens be entitled?8. Owen owns Landacre in Baltimore County worth $50,000. On January 1, 2012Judith obtained a judgment against Owen for $20,000 in the Baltimore County CircuitCourt. On March 15, 2012, Owen sold Landacre to Purdue for $50,000. To what is eachparty entitled?9. Justin Fine owned a house in Baltimore city worth $100,000. On April 1, 2009,DragonInc obtains a judgment against Fine for $200,000 in the Baltimore City CircuitCourt. On June1, 2009, Fine spent $50,000 to build an addition onto his house whichincreased the value to$150,000.10. Sandy and Pat are co-owners of a large farm in Baltimore city, Maryland. StevenMean obtains a judgment for $50,000 against Sandy in the Baltimore City Circuit court onJuly 5, 2011. On August 5, Sandy died. To what is Mean entitled, depending uponwhether Sandy and Pat owned the property as

a) Tenants by the entirety?b) Tenants in common?c) Joint tenants?

11. In the above problem, suppose that instead of the judgment, Sandy filed forBankruptcy on July 5, 2011.


12. Carol Chance owns a house in Baltimore County worth $100,000. On January 1,2011 Chance granted LUCKBANK a mortgage on the property to secure an $80,000 loan.The mortgage carries an interest rate of 12% per year (i.e., 1% per month –$8,000 permonth). On January 2, 2011 Fran Fate obtained a judgment against Chance for $200,000in the Baltimore County Circuit Court., Assume that Chance makes no payments. Tohow much are Chance, Fate and LUCKBANK entitled if the property is sold (for $100,000)on

a) February 1, 2011?b) March 1, 2011?c) April 1, 2011?d) January 1, 2012e) September 1, 2013

13. Assume the facts of the above problem except that Chance files a Bankruptcypetition on February 1, 2011. To how much is each party entitled if the property is soldon the date above (except for 2/1/2011)?

Execution Liens on Personal Property1. Statutes

a) CL §§ 2-403, 9-317, 9-324b) CJP § 11-403c) MD RULES 2641 ,2-642,2-643,3-641, 3-642,3-643d) WW: Pages 45-51

2. Problemsa) Debtor has a computer worth $10,000. Determine how much each partyshould obtain upon a sale for $10,000.

Exercise 1Date SECNARIO 1 SCENARIO 2 SCENATIO 3

January 1 A obtains Judgment for$7,000

B obtains Judgment for$8,000

A obtains Judgment for$7,000

February 1 B obtains Judgment for$8,000

A obtains Judgment for$7,000

A obtains writ of executionfrom court

March 1 A obtains writ of executionfrom court

A obtains writ of executionfrom court

A delivers writ to sheriff

April 2 B obtains writ of executionfrom court.

B obtains writ of executionfrom court.

B obtains Judgment for$8,000

May 1 A delivers writ to sheriff B delivers writ to sheriff B obtains writ of executionfrom court.

June 1 B delivers writ to sheriff A delivers writ to sheriff B delivers writ to sheriffJuly 1 Sheriff levies on the

computer on B’s writ.Sheriff levies on thecomputer on A’s writ.

Sheriff levies on thecomputer on B’s writ.

August 1 Sheriff levies on thecomputer on A’s writ.

Sheriff levies on thecomputer on B’s writ.

Sheriff levies on thecomputer on A’s writ.

A getsB gets

b) As creditor, what action would you instruct the sheriff to take to effect alevy upon:

(1)The animals for sale by Debtor Pet Shop(2)The dental equipment of Dr. Debtor (most of which is built-in)(3)Bernie Madoff’s prison blog [more facts]


c) C wins a judgment against the D Lumber Yard. C gets a writ of executionagainst D's property and has the sheriff levy on D's electric saw. Before the sheriffactually seizes the saw, D sells it to P. What are the rights of the parties? §2-403.d) Which lien has priority? §9-317(a) (2)

Exercise 2Date SECNARIO 4 SCENARIO 5 SCENATIO 6

January 1 S obtains a security intereston D’s printing press

J obtains a judgment againstD

J obtains a judgment againstD

March 1 The security interest isperfected.

S obtains a security intereston D’s printing press

S obtains a security intereston D’s printing press

May 1 J obtains a judgment againstD.

The security interest isperfected

J has the sheriff levy on theproperty.

July 1 J has the sheriff levy on theproperty.

J has the sheriff levy on theproperty.

The security interest isperfected

Who haspriority?

Garnishment1. WW: 51-552. RULE 3-6453. Flat Iron Mac Associates v. Foley4. Aesop Andreas had his checking account at Mythic State Bank (MSB). As ofFebruary 1, 2012 the account was overdrawn by $10. Consider the following facts.

2/1/2012 Bugs Finance Company (BFC) obtained a $3,000 judgment against AesopAndreas

2/2/2012 Leonardo Finance Company (LFC) obtained a $3,000 judgment against Andreas2/3/2012 Andreas had written and delivered a $500 check to the telephone company.2/5/2012 MSB was served with a writ of garnishment regarding LFC’s judgment2/7/2012 MSB was served with a writ of garnishment regarding BFC’s judgment2/10/2012 The bank paid the telephone company check.2/8/2012 On February 8, Andreas deposited $5,000 in the account2/11/2012 Andreas deposited $200 in the account.2/15/2012 MSB answered the garnishment writs.2/17/2012 Andreas's employer made an automatic electronic deposit to Andreas’ account

of his weekly wages of $3002/19/2012 The court held a hearing regarding both garnishments.2/20/2012 Andreas deposited $100 in the account.2/21/2012 The court issued its judgment.2/24/2012 Andreas's employer made an automatic electronic deposit to Andreas’ account

of his weekly wages of $300

Multiple Jurisdictions1. Maryland judgments

a) Here is the rule in Maryland.(1)CIRCUIT COURT JUDGMENTS: A judgment creates a lien on all thedebtor’s land in the county in which the judgment.(2)DISTRICT COURT (Except Baltimore City): A judgment lien arises onlyafter the judgment is recorded in the district court.(3)BALTIMORE CITY: A judgment creates a lien on all the debtor’s land inBaltimore city.


(4)OTHER COUNTIES: A judgment from one county creates a judgmentlien only after the judgment is recorded in the Circuit Court of the county inwhich the land is.

b) Multiglomerate, Inc. owns the Multiglomerate Building in Towson inBaltimore County, Maryland. The building is worth $20,000.

(1)O n March 15, 2012 the following plaintiffs obtained the followingjudgments against Multiglomerate.

(a) MegaBank obtained a $50,000 judgment in the Baltimore,City Circuit Court.(b) Widow Wilkins obtained a $4.86 judgment in BaltimoreCounty District Court.

(2) On November 1, 2012 Multiglomerate files a Chapter 7 Bankruptcypetition.(3)Questions

(a) What will be property of the estate?(b) To how much will each party be entitled?(c) What could each party have done to improve its position?(d) Suppose Widow Wilkins had obtained the judgment in theBaltimore County Circuit Court.

2. Foreign State & Foreign Country Judgments:a) Vocabulary

(1)What is the difference between “full faith and credit” and “comity?”(2)Where can the requirement of “full faith and credit” be found?(3)To what courts must the Maryland courts give full faith and credit?(4)To what courts may the Maryland courts extend comity?

b) What must the following parties do to obtain debtor’s property inMaryland?

(1) Maryland Courts & Judicial Proceedings §11-801, et. seq. Charlie Cheeseobtained a $60,000 judgment in the Wisconsin District Court.(2)28 U.S.C. §§ 1962, 1963. Fred Fed obtained a $500,000 judgment in theFederal District Court in New Jersey. 28 U.S.C. §§ 1962, 1963

c) Iraq Middle Market Development Foundation v. Harmoosh.d) Extrinsic & Intrinsic Fraud and Collateral attack

(1)Generally, a judgment or decree rendered by a court having jurisdictionover the parties and subject matter must be challenged by direct appeal andcannot be attacked collaterally. A party may, however, assail a voidjudgment at any time, by direct or collateral attack. Although a judgmentobtained by "extrinsic fraud" is void and, therefore, subject to direct orcollateral attack, a judgment obtained by "intrinsic fraud" is merely voidableand can be challenged only by direct appeal or by a direct attack in anindependent proceeding.

(a) ‘Extrinsic fraud' consists of 'conduct which prevents a fairsubmission of the controversy to the court(b) Intrinsic fraud includes means of obscuring facts presentedbefore the court and whose truth or falsity as to the issues beinglitigated are passed upon by the trier of fact.

(2)Iraq Middle Market Development Foundation v. Harmoosh. (Reread discussionof extrinsic and intrinsic fraud.)


(3)Are the following intrinsic or extrinsic fraud?(a) Bully sued Buller (his employee) for cheating with regardto pay. Buller won the suit but Bully had excellent grounds forappeal. However Buller intimidated Bully with threats of violence.As a result Bully decided not to appeal.(b) Lyin Ted sued Crooked Hillary for cheating him (Ted). Inthe trial Ted committed perjury. As a result Ted obtained ajudgment against Hillary(c) Richard sold Payton a painting by the Renaissance artistRontavello. However the Loser museum claimed the paintingbelonged to it. In a trial Payton introduced into evidence adocument demonstrating an owner of the painting had sold it toRichard before allegedly selling it to the Loser. As a result Paytonwon the law suit. The Loser subsequently discovered that thedocument was a forgery.

e) In 1975 Hastings borrowed $10,000 while in Belgium fromSPROUTBANK at 120% interest (a legal rate in Belgium).In 2012,SPROUTBANK sued Hastings. Assume the statute of limitation on a loan inBelgium is 40 years. SPROUTBANK obtained a $400,000 judgment in theappropriate court in Belgium. Hastings had returned to the US in 1985. Pursuantto Belgian law, SPROUTBANK mailed a summons to Hastings at Hasting’s office inTowson. The court rendered a default judgment against Hastings.

(1) Can SPROUTBANK enforce the judgment in Maryland? MarylandCourts & Judicial Proceedings §10-701, et. seq.(2) In the Maryland statute would the result be different without section 10-704(c).

f) Rupert Murdoch obtained a $1,000,000 libel judgment in the appropriatecourt in London England. This suit resulted from statements Manuel Multi, theCEO of Multiglomerate, made while visiting in England. He stated that RupertMurdoch had surreptitiously placed listening device in one of the fillings of his(Multi’s) teeth. Murdoch sued Multiglomerate in England for libel under Englishlaw after Multi had returned to the United States. Pursuant to English law,Murdoch mailed a summons to Multiglomerate at Multiglomerate’s office inTowson. The court rendered a default judgment against Multiglomerate.

(1)Can Murdoch enforce the judgment in Maryland? Maryland Courts &Judicial Proceedings §10-701, et. seq.(2)In the Maryland statute would the result be different without section 10-704(c).

Prejudgment Attachments1. CJP §§3-303, 3-3042. Ephraim Frisch operated a dry cleaning shop at 1420 North Charles Street,Baltimore, MD. On September 1, 2010, Frisch and Martha Onslo entered into an oralagreement whereby Onslo would remodel a portion of Frisch's building. The agreementprovided that Frisch would pay Onslo $5.00 per hour for all work done plus 115% of thecost of materials installed. Onslo kept no written record of hours spent and has lost somereceipts for materials installed but claims to have installed $200 in fixtures and to havespent two 8-hour days doing the work. On February 1, 2011, Onslo mailed Frisch a bill.On March 1, Onslo called the store but was informed the phone was disconnected. Onslowent to visit the store but it was closed with a note on the door stating "pick up dry


cleaning at Dairy Queen on corner." Onslo returned the next day and found the samesituation. Onslo went to Frisch's home but no one answered the doorbell and there was nocar in the driveway. Onslo returned to the store the next day but found the same sign.Onslo went to the Dairy Queen. The woman on duty said she didn't know where Frischwas but that she thought Frisch was in Florida

a) Can Onslo obtain a prejudgment attachment?b) Suppose Onslo's lawyer filed the necessary papers to obtain aprejudgment attachment of the equipment in Frisch's store. Frisch, although hedisputes the debt, immediately pays. He is unable to carry on his business withoutuse of the equipment and feels he cannot afford a lawyer to resist. What are therights and liabilities of the parties?

3. At all relevant times, the only nonexempt property owned by D is Greenacre,which is worth $4,000, and miscellaneous personal property worth $3,000. Assume therule for priority in prejudgment attachments is the same as for execution liens.

1/10 X sues D Corp. for $5,000.X obtains a writ of attachment that is directed to the sheriff.

1/13 Y sues D for $6,000.Y also obtains a writ of attachment, which is delivered to the sheriff.

1/14 Y instructs the sheriff to levy on Greenacre, which the sheriff does1/16 The sheriff levies on Greenacre pursuant to X's writ of attachment.4/15 X obtains a $5,000 judgment against D.4/18 Y obtains a $6,000 judgment against D.

a) Whose judgment will be satisfied first: X's or Y's?b) Suppose D files for Bankruptcy on 4/02c) Suppose D files for Bankruptcy on 4/16d) Suppose D files for Bankruptcy on 4/30

4. The rule for priorities involving prejudgment attachments can be expressed eitherof two ways which reach the same result:

a) The lien of the prejudgment attachment relates back to the date the datethat the sheriff levys on the propertyb) When the sheriff levys on the property that creates an inchoate lien whichbecomes choate when the plaintiff gets a judgment against the defendant.c) Using the above two statements and applying them to the problemcomplete this exercise.

Exercise 3Alternative descriptions of prejudgment Attachment

Alternative1

1. Y’s lien on the property was inchoate on2. Y’s lien became choate on3. X’s lien on the property was inchoate on4. X’s lien became choate on5. Therefore the oldest lien is6. Therefore, the lien with priority is

Alternative2

1. Y’s lien on the property relates back to2. X’s lien on the property relates back to3. X’s lien on the property was inchoate on5. Therefore the oldest lien is6. Therefore, the lien with priority is

5.


6. On February 2, C sues D for $2,000, obtains a writ of attachment, and causes thesheriff to levy on D's horse, Fido. On March 3, B, who does not know of the attachmentline, buys Fido from D for $3,000 without asking to see the horse. On April 4, C obtains a$2,000 judgment against D. Who has greater rights to Fido: creditor C or buyer B?7. Ed Eaton has come to you with the facts listed below. He wants to satisfy hisjudgment by executing on the property. What are the priorities of the various parties to theproperty? What additional information needed?

4/10/12 Harriet and Wilber Jones own property as tenants by the entirety in Baltimore County.

1/10/13 Charles Cole obtained a judgment in a contract action against Harriet Jones inthe Baltimore County Circuit Court.

2/10/13 Donna Drake sued both Harriet and Wilber Jones, claiming that they (the Joneses)defrauded her (Donna) of $20,000 in the sale of vacationland in Arizona.

2/20/13 Donna obtained a prejudgment attachment of the Jones' land in Baltimore County.

3/10/13 Ed Eaton obtained a judgment against the Joneses in a tort action in theBaltimore County Circuit Court.

4/10/13 Harriet Jones became depressed by her legal troubles and decided to throw in thetowel. She settled with Drake and confessed judgment in the Baltimore CountyCircuit Court. Wilber has proved feistier; So, Drake is still pursuing him.

Lis Pendens1. 12-1022. Weston Builders & Developers, Inc. v.. McberryConsidering the following facts who has priority to the property?

January 1 In a business transaction, A gave B a note promising to payB $10,000 and a mortgage on A's property calledDownsland.

February 14 A discovers that B engaged in fraudMarch 3 A sues B to rescind the note and mortgage.April 4, B forecloses and sells Downsland to X.May 5, A gets a judgment against B.

Statutory Liens1. CL §§ 9-333, 16-301, 16-3022. Simon has given First Bank a security interest in his collection ofphotographs by Mark Lens. On June 18, 2011, Simon noticed that the frameswere cracked on two of the photographs, "The Carrot Tree" and "The NoodleHarvest." Simon took them to Art's Repair Shop. Simon picked up "The CarrotTree" when it was ready. When the time came to pick-up "The NoodleHarvest," Simon was unable to pay the bill and Art refused to surrender thephotograph. Simon also defaults in his loan to First Bank. Who has priority tothe photographs? What argument would you make if you were First Bank as toboth photographs?

EXEMPTIONSExemption Statutes1. CJP § 11-5042. 11 USCA 522(b), (d)3. WW: 83-107


4. Debtor and Spouse live in Xlandia. Xlandia has the same rules regarding tenancyby the entirety as Maryland has. The exemption law of Xlandia reads as follows:

§101 Exemptions From Execution: A judgment debtor may exempt any property withan aggregate value of no more than $25,000.

a) Debtor and spouse own LuxAcre as tenants by the entirety. Its value is$100,000. Debtor(s) file bankruptcy. In the chart below indicate how muchdebtor(s) will be able to exempt.

Table BDebtor and Spouse filejointly

Only Debtor files

Debtors decide to use State Xexemptions.Debtors decide to use Bankruptcy[§552(d)] exemptions.b) Debtor’s only property is $30,000 home and a car worth $10,000 (both ofwhich he owns free and clear of any liens). Using §522(b), what choices doesDebtor have with regard to exemptions.

5. PS 4: 4.1, 4.2, 4.3 [Use Texas, Wyoming & Maryland statutes]6. Kelly v Montgomery County

Exemption Planning1. 113-1302. PS 5: 5.1, 5.2, 5.3 (Be sure to note if any facts are missing or ambiguous.

Lien Avoidance1. 106-092. In order to understand 522(f) consider the following:

a) 522(f) (1) (A)(1)Assume the State permits the debtor to exempt $5,000 in animals.(2)Leash owns Bark, a 3-year-old German Pointer. Bark is worth $4,000.(3)Growl obtained a judgment against Leash for $3,000. Growl obtained awrit of execution and had the sheriff levy on Bark

Exercise 41 If Leash had not obtained a lien on Bark, how much could Leash have exempted of Bark? $2 As a result of the lien

a. How much of the value of Bark will Leash be able to keep? $b. How much of the value of Bark will be in the estate. $c. How much of the value of Bark will Growl get $d. How much less will Leash get than if there had been no lien on Bark? $.e By how much does the lien impair Leash’s exemption? $

b) 522(1(B)(1)Would the answer change if instead of an execution lien on Bark Growlhad obtained a security interest in Bark when Growl lent $3,000 to Bark? Ifso, how?(2)Would the answer change if Leash had bought Bark from Growl andGrowl had taken a security interest in Bark for $3,000.

3. PS 4: 4.4


4. Fill in the following exercises using §522(f) to determine the amount of the lienthat may be avoided

Exercise 5A B C D E F G

Type Of Lien PMSI Non- purchase money, non-possessorysecurity interest.

Execution Lien

1 Property Furniture Furniture Furniture Furniture Auto Furniture Auto2 Value $4,000 $4,000 $4,000 $8,000 10,000 $800 10,0003 Potential Exemption $2,000 $2,000 $2,000 $2,000 $5,000 $5,000 $5,0004 Debt $8,000 $8,000 $5,000 $8,000 $12,000 $12,000 $12,0005 Secured Claim6 Unsecured Claim7 Amount Of

Exemption ImpairedBy Lien

8 Can Debtor AvoidLien?

If yes:9 Amount Of Lien

That Debtor CanAvoid

10 Resulting SecuredClaim

11 Resulting UnsecuredClaim

a) SKIP THIS EXERCISE Use 522(f) (2) formula to determine that amountof each linen that can be avoided.

Exercise 6(1) (2) (3) (4) (5) (6) (7) (8)

Lien Type Amount (i) lien (ii) otherliens

(iii) exempt TOTAL TOTAL -VALUE

AVOID?

H 1st Mortgage $50,0002nd Judgment $5,000

I 1st Mortgage $75,0002nd Judgment $20,000

J1st Mortgage $70,0002nd Judgment $ 7,0003rd Judgment $50,000

K1st Mortgage $75,0002nd Judgment $25,0003rd Mortgage $25,000


Automatic Stay1. 11 USC §§362(a), (b), (c) (1) & (2), (k), (l), (m) (n), 3662. 72-783. Problem Set 3:3.4, 3.5, 3.6

Fraudulent ConveyancesState Law - Reading1. CL, Title 15, Subtitle 22. Uniform Fraudulent Transactions Act

State Law - Problems1. Answer questions with regard to the Uniform Fraudulent Transfer Act and theMaryland Uniform Fraudulent Conveyance Act.2. Adrienne Leiske is insolvent. She owes $50,000 to Family Finance. In order toraise money so she can make her rent payments and eat, she sells her grand piano.Although the piano is valued at $40,000, she runs a want ad asking $20,000. Whenoffered $15,000, Adrienne accepts. Can Family Finance successfully claim a fraudulentconveyance? See UFTA §§4, 5, 8.3. Bonney O'Hare is insolvent, and she feels the tightening web of creditors. Shedecides to sell her coin collection to her cousin, Susan Mallow. Although the collectionwould bring $75,000 if she sold it to a dealer, Bonney sells it to Susan for $5,000 so that"it will stay in the family." Bonney also knows that Susan has no real interest in thecollection and will undoubtedly be willing to sell it back when Bonney's financialtroubles are over. The day after her conveyance to Susan, Bonney uses her AmericanExpress card to purchase $25,000 in new furnishings. Can American Expresssuccessfully claim a fraudulent conveyance? See UFTA §§4, 5.4. Ginsberg owns Howlacre, land in Baltimore County valued at $100,000. Afraidthat his creditors will seize the property, Ginsburg gives his friend Chantilly Om amortgage in the property allegedly stating that it is for a $100,000 debt. There was nosuch debt.5. Ginsberg owns Howlacre, land in Baltimore County valued at $100,000. He isafraid that his creditors will seize the property. Therefore when Chantilly Om sues himfor $100,000 in Baltimore County Circuit Court, Ginsberg does not contest the law suitand Om obtains judgment. In fact, Ginsburg owed Om nothing.6. Jeremiah Stoke owns a homestead free and clear worth $200,000. His other assetstotal $55,000; his debts, all unsecured, total $75,000. He knows that under stateexemption law his homestead is safe from his creditors. He has made a mess of his ownaffairs, but his favorite son has just married, and Jeremiah would like to do just one thingright. So he conveys the homestead to his son as a gift and settles down to await thebattles with his creditors over his debts. Can Jeremiah's current creditors reach thehomestead conveyed to the son? See UFTA §§1, 2, 5.7. S. R. Wilson is insolvent. His chief creditor is Lo-Cost Credit Union, to which heowes $100,000. Wilson sells his mobile home, valued at approximately $160,000, to hisneighbor Sam for $80,000 cash. Sam moves into the home, cleans it up, spends $10,000for repairs, and enhances the value of the mobile home by 20 percent. Lo-Costsuccessfully claims that the conveyance was fraudulent. What can Lo-Cost recover fromSam? See UFTA §8.8. Mr. and Mrs. Young are members of the Crystal Evangelical Free Church. Theyare active in their church, attending services regularly with their children, serving as


officers, and contributing their time. They tithe regularly, following the biblicalinjunction to contribute 10 percent of their income to the church. Last year, their churchcontributions totaled $13,450, all made while the Youngs were legally insolvent. Theyhave filed for Chapter 7, and their trustee has asked the church to return the contributions.You represent the church; what do you advise?9. On January 15, 2010 Ernie Doe borrowed $40,000 from his mother in law.Debtor had read an advertisement stating that he could purchase live vinellas, the animalwhose fur is used to make vinyl clothing with the hopes of raising the animals in hisbasement. January 15, 2011 Doe paid his mother in law back. Can Tony Toussaint, acreditor of Doe’s, set aside the payment as a fraudulent conveyance?10. Could the sale described in McCartney v. Frost be set aside as a fraudulentconveyance?

The Shelter Principle –Use UFTA §8 and UFCA §15-209(a) to solve the following problems.1. Careless was having trouble paying his bills. One of his creditors was Pester.Careless decided to hold a yard sale to raise some money to pay off some of his creditors.At the yard sale, Careless sold a box of paintings that he had found in his house when hehad moved in. He sold the box to Lucky for $50. Lucky had planned to use the paintingsas wallpaper.

Discuss Pester’s rights against Lucky2. Lucky’s friend Buddy told Lucky that one of the paintings (a picture of an oldman sitting in a chair) might actually be a painting called “Daddy” by the famous artistWhisper. Buddy offered to buy “Daddy” for its true value. The two went on JunkJourney, a television show and told the story of how Lucky bought the painting for only$50 from Careless. The expert on Junk Journey told them that the painting was indeed byWhisper and was worth $20,000. As agreed, Buddy bought Daddy from Lucky for$20,000.

Discuss Pester’s rights against Buddy.3. Buddy then sold the painting to Sheldon for $20,000. Sheldon had no knowledgeof any of the events described above.

Discuss Pester’s rights against Sheldon.4. Sheldon sold the painting to Marie. Marie had seen the episode of Junk Journeyand she actually knew Careless. So Marie knew all of the facts described above. Marieconvinced Sheldon that the painting was of less value given the problems with the chainof title. She bought the painting for $10,000.

Discuss Pester’s rights against Marie.

Bankruptcy Law1. 11 U.S.C. §5482. What result if Adrienne Leiske sold her piano, and then files for Bankruptcy?


Claims & DistributionsBasic Bankruptcy Math

Remember when you learned about per cents and how to figure out what one amount is a percent of another amount. If you still have your 5th grade notes from that day, go back and refreshyour recollection. Then you can do the following exercises. If you went to law school becauseyou couldn’t do arithmetic, maybe there is still time to transfer to art school.

Exercise 7 - PercentagesWhat percent is the amount in column B of the amount in Column A? This calculation isimportant since if the Debtor has the amount of assets in column B and owes creditors theamount in Column A, the debtor’s creditor’s will get the percent (in column C) of their claims.

ADebts

BAssets

C% of Debts

$100 $50$100 $25

$50 $50$50 $25$50 $20$77 $60

$1025 $30How much is the per cent in Column D of the amount in column E. This computation isrequired since if the debtor has a debt of the amount in column D. Creditor will get the percentof the amount in column E

DAmount of debt

EPer Cent creditor gets

FAmount Creditor gets

$100 50% $$30 10% $$65 8% $


Exercise 8 –Using per cents in bankruptcy

Here is the property and debts of our Debtor.ASSETS LIABILITIES

Home $ 50,000 Bank 1 - Unsecured Claim $ 190,000Truck 50,000 Master Card -Unsecured Loan 10,000

Bank 2 - Perfected Security Interest in Truck 50,000

1. What is the value of the estate’s interest in the property of the estate?2. What is the total Unsecured claims3. The value of the property of the estate is what per cent of the unsecured claims?4. Therefore each creditor will be paid what percent of their unsecured claim?5. How much will Bank 1 be paid for its unsecured claim?6. How much will Master card be paid for their unsecured claim?7. How much will Bank 2 receive?Assume that the Bank 2 claim is unsecured. Therefore Bank 2 will have an unsecured claim?8. What is the value of the estate’s interest in the property of the estate?9. What is the total Unsecured claims10. The value of the property of the estate is what per cent of the unsecured claims?11. Therefore each creditor will be paid what percent of their unsecured claim?12. How much will Bank 1 be paid for its unsecured claim?13. How much will Master card be paid for their unsecured claim?14. How much will Bank 2 receive?

Allowed Claims1. Pages 141-1642. Owen has borrowed $5,000 from Lenny. Owen has given Lenny a securityinterest in his robot which Owen calls Myron. Owen has filed a Chapter 7 bankruptcy.Assume Owen’s unsecured claims will be paid at a rate of 10% in the bankruptcydistribution. Using ONLY §506(a) (1), complete the following chart.

Exercise 9

Value OfMyron

(A)Lenny’sAllowedSecured Claim

(B)

Lenny’s AllowedUnsecured Claim

(C)Amount Lenny WillReceive For TheUnsecured Claim

(D)Amount Lenny WillReceive For TheSecured Claim

(1) $1,000(2) 4,000(3) 6,000(4) 7,000


3. Owen has borrowed $5,000 from Lenny at 120% interest. Owen has given Lennya security interest in his robot which Owen calls Myron. Owen files a Chapter 7bankruptcy on 2/15/2011. Assume Owen’s unsecured claims will be paid at a rate of 10%in the bankruptcy distribution. Myron is worth $5000, using ONLY §506 and, §502(a)(2,) complete the following exercise.

Exercise 10

Date Event

(E)Lenny’s AllowedSecured Claim

(F)Lenny’s

Unsecured Claim1/1/2011 $500 interest accrues2/1/2011 $500 interest accrues

(5) 2/15/2011 BANKRUPTCY(6) 3/1/2011 $500 interest accrues(7) 4/1/2011 $500 interest accrues(8) 5/1/2011 $500 interest accrues(9) 6//1/2011 $600 Lenny’s lawyer’s work.

4. Debtor filed bankruptcy on July 1, 2011. Using section 502 indicate the amount ofthe allowed unsecured claim.

Exercise 11 (G)(10) Debtor borrowed $1,000 from A, Debtor’s brother. On 1/1/2011. The contract

provides for no interest.(11) Debtor fulfilled contract with B to murder C for $10,000.(12) Debtor borrowed $5,000 from E on January 1, 2010. The contract provides for

interest at the rate of 10% per month. Assume that means $500 per month.(13) Debtor bought a Timex computer from F for $500 on 1/1/2000 and has not yet

paid for the computer.

Distribution Priorities1. 1672. How much will each creditor get in a Chapter 7 Bankruptcy filed on 2/16/2011?Use §§ 507 & 726.

Exercise 12 (H) (I)The Bankruptcy estate has this amount for distribution forallowed unsecured claims. → $1,060 $2,000

( 14) The trustee has had expensesprotecting the property of the estate.

$1,000

(15) The debtor did not pay worker W1for work done on 2/1/2011.

$100

(16) The debtor did not pay worker W2for work done on 2/15/2011

$200

(17) The debtor did not pay worker W3for work done on 2/1/2009

$1,000

(18) The debtor has not paid his bill tothe Shop & Shop grocery story forgroceries bought on 3/1/2009

$400


3. Mel Splitson and his former wife Robin More were divorced. As part of thesettlement Splitson was ordered to pay More $400,000 in alimony in 4 yearly paymentsof $100,000. Shortly after the divorce Splitson filed for Bankruptcy. Assume that besidesMore, Splitson has unsecured creditors owed $20,000. Splitson’s unsecured nonexemptassets include a yacht and a car. The car is worth $2,000.

a) The Bankruptcy code (prior to fairly recent amendments) had thefollowing list of priorities.

(1)First priority: Administrative Expenses(2)Second priority: Domestic Support Obligations

b) Complete the following exercise.

Exercise 13

Value ofYacht

Value ofcar

Trustee’s expenses toprotect and sell Trustee’s

priorityclaim.

Amountavailable for2nd priority

(More’s) claim

Amount available fornonpriority unsecured

creditorsYacht Car$450K 2,000 $2,500 $200 $ $ $$400K 2,000 $1,000K $100 $ $ $$400K 2,000 $2,000K $500 $ $ $$400K 2,000 $2,500 $500 $ $ $

c) But as you know, §507 now has a more complicated list of priorities. Inthe following Exercise apply §507(a) (1) & (2)

Exercise 14

Value ofYacht

Trustee’sexpenses toprotect and sell

Am

ount More receives

as a priority claimant

According to

§507(a)(1)(A)

Balance of estate left

over

Am

ount of admin

expense

Is there enough to payadm

in?

How

much m

ust betaken out of

supportpaym

entaccordingto

§507(a)(1)(B)

How

much does support

claimant get

How

much is the

Trustee’spriority

claim?

How

much is available

for unsecured

Valueof car

Yacht

Car

$450K 2,000 $2,500 $200 $ $ $ $ $ $ $ $$400K 2,000 $1K $100 $ $ $ $ $ $ $ $$400K 2,000 $2K $500 $ $ $ $ $ $ $ $$400K 2,000 $2,500 $500 $ $ $ $ $ $ $ $


4. Computing income tax priority using §507(a) (8)The whole point of this exercise is to help you read and understand the language of § 507(a) (8).Use the table below to determine whether the taxes for a particular year of employment are priorityclaims depending on the date the petition was filed. See the sample column. Always assume that thefinal date for paying taxes for each calendar year’s employment is April 15 of the following year

(8) Eighth, allowed unsecured claims of governmental units, only to the extent that such claims are for--(A) a tax on or measured by income or gross receipts for a -(i) for which a return, if required, is last due, including extensions, after three years before the date of the filing of the

petition;Exercise 15Sample (A) (B) (C) (D) (E) (F) (G) (H) (J)) (J) (K)

1Debtor FiledBankruptcy on

3/15/2000 3/15/2014 5/15/2013 3/15

/209

5/15

/200

9

2

Year of employment

1999

2005

2009

2013

2014

2015

2000

2008

2010

2014

2005

2005

3 What is the end of thecalendar year for the yearin row 2?

12/31/1999

(A)taxable yearending on orbefore the date ofthe filing of thepetition-

4 Is the date of row3before row1?

YES

5 What is 3 years beforethe date of the filing ofthe petition?

3/15/1997

6 When is the return lastdue for the year ofemployment (i.e., year inrow 2)

4/15/2000

(i)a return, ifrequired, is lastdue, includingextensions, afterthree yearsbefore the date ofthe filing of thepetition;

7 Is row 6 after row5? yes

8 Are both rows 4 & 7answered Yes?

yes

9 Based on your answer inrow8 are the taxes forthat year eligible forpriority?

yes

5. PS 7:


Discharge1. 169-198

a) Samantha was insolvent. On January 1, she maxed out her credit card,purchasing all sorts luxury items. However, all of those items would probably beexempt. On January 2, Samantha filed for Chapter 7 bankruptcy. BankruptcyJudge Craft believes that Samantha should be denied discharge. However,Bankruptcy section 523(a) (2) contained only the following. Can she deny thedischarge based on this section?

(2) for money, property, services, or an extension, renewal, or refinancing of credit,to the extent obtained by—(A) false pretenses, a false representation, or actual fraud, other than a statementrespecting the debtor's or an insider's financial condition;

2. PS: 8: 8.1, 8.2, 8.3, 8.4, 8.53a) In Problem 8.1

(1)Be sure to answer all three questions.(2) Suppose Mr. Loyman had been a successful physician until a year prior tofiling the bankruptcy? Are there additional facts necessary and why?

b) Problem 8.5 In addition to the charges listed in the problem, the Lujansobtained cash advances from FirstBank MasterCard ($600) and SecondBank Visa($500). Instead of the question in the problem answer the following questions:

(1)Prior to the charges indicated in the second paragraph of the problemMaria was told that she would get her old job back and that her income wouldbe increased. Would the credit card debts be nondischargeable under §523(a)(2) (A)? §523(a) (2) (B)?(2)Prior to the charges indicated in the second paragraph of the problemMaria developed a serious physical disability and was told she would not beable to work for several years. At the same time Reynaldo lost his job.Would the credit card debts be dischargeable under §523(a) (2) (A)? §523(a)(2) (B)?(3)When applying for her credit cards Renaldo gave the followinginformation. Would any of the items be grounds for nondischargeabilityunder §523(a) (2) (a)? §523(s) (2) (B)

(a) He was a professional dancer when in fact he was aprostitute/(b) He was President of the United States.(c) He earned $400,000 a year when in fact he earned only$40,000 a year.(d) He promised to repay the debts according to the terms ofthe credit plan. In fact he was crossing his fingers when signingthe agreement. He never intended to pay back any of the money heborrowed.

3. Discuss whether the following student loans are dischargeable.a) Ed has a student loan debt of $24,000. Ed has an undergraduate degree inphysics and a graduate degree in science education. He is unemployed, suffers frompost-traumatic stress disorder resulting from his service in Iraq, and has a daughterfrom a prior marriage he is required to support. Ed’s wife makes $12,000 a year buthe claims he cannot rely on that income for support since the marriage is troubled.Ed received $220 a month from the Veterans Administration for a 30% disability


due to the post-traumatic stress disorder. Ed’s psychiatrist testified that Ed mightimprove within a year. Discuss whether Ed’s student loan is dischargeableb) Sheila has student loans of approximately $69,000 incurred to financemedical school tuition. Sheila is married with 2 children, aged 2 and 4 years old.Since dismissal from medical school for academic failure, Sheila has worked in asmall town as a chimney sweep, a bartender, a satellite dish salesperson, with anaverage income of only $2,000 per year. Sheila received a disability check from thegovernment for a psoriasis problem that developed while she was in the Army.Currently she operates a tire business which is losing money and is pessimistic asto whether there would be any substantial increase in her income in the near future.Sheila’s husband works for the police department earning approximately $7,000 ayear and the family is in good health.

4. Clara filed for Chapter 7 Bankruptcy and received her discharge. None of hercreditors objected to her discharge. Several months later, the following creditors askedthe court to deny her discharge for the following debts. What result? (Indicate wheremore facts are needed and why.) See §523(c).

a) Edubank for(1)Student loans.(2)Credit card debts

b) Dr. Needle for medical treatment.c) Clara’s ex-husband for

(1)Unpaid alimony(2) Property settlement payments.

d) Maryland for(1) Unpaid taxes.(2)Parking fines

e) Myron Meek for injuries suffered when Clara(1) Hit him over the head with a Whiskey bottle.(2)Accidentally ran over him in the parking lot of the bar

f) Clara’s son for using money in his trust fund to pay for her clothes.5. Simon works for the United States Good People Administration, an agency of theFederal Government. Simon filed a Chapter 7 Bankruptcy petition. After receiving hisdischarge, Simon was called into the office of Director Nice and told that Rush Limbaughhad complained that many of the employees of the Good People Administration were notgood at all and had, in fact, filed Bankruptcy to stiff their creditors. Director Nice firedSimon. Can he do that? §5256. PS 9.6

Reaffirmation/Redemption/Ridethrough1. Problem Set 9: 9.1, 9.2, 9.3, 9.4,2. Ridethrough Problems

a) For the following problems use:(1)§ 362(h),(2)365(a), (b);(3)521(a) (2) & (6), (d) & (i).

b) For the following questions consider Debtors A & B:(1)Debtor A has a 1960 Edsel valued at $25,000. Debtor owes FIRSTBANK$30,000 on the Edsel. Debtor is not behind on payments. The PromissoryNote contains the following language


I promise to pay$500 per month.If I don’t pay you can keep the car.

(2)Debtor B filed for Bankruptcy. Debtor has a banjo valued at $80,000.Debtor owes SECONDBANK $40,000 on the Banjo. Debtor is not behindon payments. The promissory note contains the following language.

I promise to pay$500 per month.If I don’t pay you can keep the car.If I file Bankruptcy that is a default.

c) What options do Debtors A, B, FIRSTBANK, & SECONDBANK have?(1)Can Debtors cannot avoid under 522(f)(2)Can Debtors can redeem?(3) Can Debtors reaffirm?(4)Can Debtors just keep the property and continue making payments?(5) Can Debtors repossesses the property?(6) Can Debtors assume the contracts under 365?(7)Suppose the parties do nothing prior to A & B receiving discharges. ThenA & B begin to fall behind in their payments. What options will the creditorshave? Suppose B accidentally leaves the banjo in A’s car and the car issubsequently destroyed in a fire?

d) PS 9: 9.5

Abuse & Means Test1. 273-2992. Go to the web sites referred to in the text for Income and Expense standards3. PS 12:12.1, 12.2, 12.3, 12.5 Means Test Calculations4. Exercise 16

Determining whether there is a presumption of abuse

Section 707 (2) (A)(i) In considering under paragraph (1) whether the granting of relief would be an abuse of the provisions of this chapter, the court shallpresume abuse exists ifthe debtor’s current monthly income reduced by the amounts determined under clauses (ii), (iii), and (iv), and multiplied by 60is not less than the lesser of—

(I) 25 percent of the debtor’s nonpriority unsecured claims in the case, or $7,475, whichever is greater; or(II) $12,475.

Step 2:Figure outthe surplus?

Step 1:707(b)(2)(A)(i)(I):

Which is greater? 25% of claims or $7475?

Step 3:Which is less, $12,475or the 707(b)(s)(A)(i)(I)amount?

Step Four:Is Surplus greater than Step 3? If sothere is a presumption of abuse.

Unsecured 25 % of secured Which is greater?12,47612,474

7,4767474

Chapter 13 Plan – Secured Claims1. 223-2352. PS: 10 – 10.1, 10.23. 235-2404. PS: 10-10.45. 240-246


6. PS 10: 10.5, 10.67. Bank of America V. Caulkett8. Why do you suppose three justices refused to support the Court’s footnote?9. Caulkett bought his home in June 2006 for $249,500, financing 100 percent of thepurchase price with a first mortgage of $199,600 (80%) and a second mortgage of$49,900 (20%). At the time of his bankruptcy filing in 2013, his home was worth$98,000. The outstanding balances on his first and second mortgages were $183,264 and$47,855, respectively, for a total of $231,119. Thus, the balance on his first mortgagealone was almost twice the value of the home (187%), and the two mortgages had acombined loan-to-value ratio of 235.8%. One must expect that Caulkett would beunwilling or unable to pay more than twice the value of his home in order to keep it. Thehouse, therefore, will likely be sold by the first mortgagee, perhaps in a foreclosureproceeding. Under state law, Bank of America will receive nothing in such a sale and itslien will be terminated. Given that Bank of American had nothing to gain from itsmortgage, why did it pursue this case all the way to the Supreme Court?10. As the Court acknowledged, its opinion in Dewsnup has been heavily criticized.To begin with, its statutory methodology was deeply flawed because the Court read eachof the three statutory words—“allowed,” “secured” and “claim”—separately, ultimatelyinterpreting the subsection to apply to any claim that is supported by some amount ofcollateral. That gave the phrase a different meaning in § 506(d) than it carries in § 506(a).The Court bolstered this interpretation with policy arguments that do not hold up underscrutiny.

a) First, the Dewsnup Court believed its interpretation was necessary in orderto protect a creditor’s right to any post-petition appreciation in the value of theproperty. The Court failed to realize, however, that Chapter 7 cases move rapidlyenough that appreciation is seldom seen. Furthermore, any increase that does occuris fully captured by valuation as of the time the debtor pays off the creditor’sinterest, thereby satisfying the lien.b) Second, Dewsnup erroneously believed that the maxim “liens pass throughbankruptcy unaffected” provides a correct statement of the law. In fact, numerousprovisions of the Bankruptcy Code may affect liens, and they survive bankruptcyunaffected only if none of those bankruptcy powers come into play.c) Third, the Dewsnup Court misread its own precedents regarding thetreatment of liens in bankruptcy. The Court read Louisville Joint Stock Land Bankv. Radford to suggest that stripping a lien down to its supporting value raisesconstitutional concerns. It failed to note a line of later cases to the contrary, at leastone of which specifically asserted that a bankruptcy statute permitting the debtor topurchase encumbered property by paying its current value does not violate themortgagee’s constitutionally-protected rights: “Safeguards were provided to protectthe rights of secured creditors, throughout the proceedings, to the extent of thevalue of the property. * * * There is no constitutional claim of the creditor to morethan that.” Wright v. Union Central Life Ins. Cod) Finally, Dewsnup failed to recognize that the drafters of the 1978Bankruptcy Code adopted a statutory structure under which secured creditors areassured the value of their collateral, but not in rem rights to that specific piece ofproperty.e) Given these flaws in the controlling precedent, why was the Courtunwilling to overrule Dewsnup in the course of deciding Caulkett? Could it nothave done so, despite respondents’ effort to distinguish Dewsnup rather than attack


that case head-on? (Perhaps it helps here to know that respondents’ amici did askthe Court to do just that.) And why did respondents not call for overrulingDewsnup?

11. Although Dewsnup dealt with § 506(a)—a provision applicable to cases under allchapters of the Code—later cases have agreed that the holding is limited to Chapter 7.

Chapter 13 Plan – Unsecured Claims1. 249-253; 263-2692. PS 11: 11.1 11.2 11.3, 11.53. 253-263, 299-3014. PS 11: 11.4, PS 1: 12.4

Chapter 13 – Discharge1. Clara filed for Chapter 13 Bankruptcy. Here plan was confirmed. None of hercreditors objected to her discharge. Several months later, the following creditors askedthe court to deny her discharge for the following debts. What result? (Indicate wheremore facts are needed and why.) See §§ 523(c), 1328

a) Edubank for(1)Student loans.(2)Credit card debts

b) Dr. Needle for medical treatment.c) Clara’s ex-husband for

(1)Unpaid alimony(2) Property settlement payments.

d) Maryland for(1) Unpaid taxes.(2)Parking fines

e) Myron Meek for injuries suffered when Clara(1) Hit him over the head with a Whiskey bottle.(2)Accidentally ran over him in the parking lot of the bar

f) Clara’s son for using money in his trust fund to pay for her clothes.

Trustee’s Avoiding Powers§ 544(a)1. Reshaping the Estate2. Suppose Larry Lean is owed $400 by Oscar Owen. Lean has a properly perfectedsecurity interest in Owen’s LadderAll brand utility ladder that is worth $300. Assumethat in a Chapter 7 bankruptcy all of Owen’s unsecured claims are paid 10 cents on thedollar.

a) Given the above facts what is the amount of Lean’s unsecured and securedclaims.b) How much should Lean receive for the unsecured and secured claims?

3. Suppose that Lean had failed to file the financing statement and that, therefore,the security interest is unperfected.

a) Can the trustee using 544(a) avoid Lean’s lien on the LadderAll?b) What would then be the amount of Lean’s unsecured and secured claims?c) How much should Lean receive for the unsecured and secured claims?


§544(b) and §5481. All parties live and events take place in Maryland. Boris filed a chapter 7bankruptcy petition on September 1, 2009.2. On January 1, 2008, Dudley obtained a judgment against Boris for $1,000. OnFebruary 1, 2007, Boris gave his daughter Natasha his (Boris’) a gold watch becauseBoris wanted to prevent Dudley from having the sheriff seize the property to satisfy ajudgment.

a) What is “applicable law” referred to in §544(b) (1)?b) Under the ‘applicable law’ is there a creditor that has an unsecured claim?c) Who is that creditor?d) Has the statute of limitations expired on that creditor’s claim?e) Does that creditor have the right to avoid the transfer under the applicablelaw?f) Under §544(b) (1), may the trustee avoid the transfer?g) Under §548, may the trustee avoid the transfer?h) If the transfer of the watch had been on January 1, 2008, may the trusteeavoid the transfer under §548.

3. On January 1, 2008, Dudley obtained a judgment against Boris for $1,000. OnAugust 9, 2008, Boris gave his daughter Natasha his (Boris’) gold watch. On January 1,2009, Boris paid Dudley back. Because of the payment, Boris had no creditors. Then, onFebruary 1, 2009, Boris borrowed $10,000 from Rocky. Boris was unable to pay Rockyback.

a) May the trustee avoid the transfer of the gold watch under §544(b).b) May the trustee use §548 to avoid the transfer of Boris to Natasha.

4. On January 1, 2008, Dudley obtained a judgment against Boris for $1,000. OnAugust 9, 2008, Boris gave his daughter Natasha his (Boris’) gold watch because Boriswanted to prevent Dudley from having the sheriff seize the property to satisfy thejudgment. However, On January 1, 2009, Boris was able to pay Dudley back. Becauseof the payment, Boris had no creditors. On February 1, 2009, Boris borrowed $10,000from Rocky. Boris was unable to pay Rocky back.

a) Could the trustee avoid the transfer under §544(b)?b) Could the trustee avoid the transfer under §548?

5. Assume Bernard Madoff made a sizable contribution to the Madoff Foundationto Support Incarcerated Financiers, protected by §501(c) (3), shortly before filing abankruptcy petition.

a) Could the trustee avoid the donation under §544(b)?b) Could the trustee avoid the donation under §548?

Preferences1. Basics of 547

This is designed to walk you through §547, the preference provision of the Bankruptcy Code.Essentially, this provision attempts to reverse a particular type of conveyance that may not be fraudulentin terms of the UFTA, but that also defeats the purpose of Bankruptcy by favoring some creditors aboveothers. The basic scenario is this: Debtor owes many debts and knows he will be in the bankruptcy.Therefore, he pays off some creditors before filing.

For example, if Debtor owes creditors $1,000,000 and has $10,000 in assets, each creditor willget paid 10% of their claim. One of Debtor’s creditors is Knuckles Kaboon. Debtor owes Kaboon$5,000. Fearing what might happen to him if he does not pay Kaboon in full, Debtor pays Kaboon infull $5,000. If Debtor hadn’t done this Kaboon, would have obtained only $500 in the bankruptcydistribution. However, Kaboon got $5,000. In addition, there is now only $5,000 in assets for the other


creditors with claims of $995,000. Thus, now each creditor will get only about 5% of their claims. Itdoesn’t seem fair that Kaboon gets so much more (percentage wise) than the other creditors.

Therefore, bankruptcy law considers that payment a preference. Kaboon has to give the moneyback, get in line like everybody else, and get his measly 10%. Section 547 of the code provides for theavoidance of preferences. Below are the relevant provisions of §547 with notes indicating theapplication of the facts.

§ 547. Preferences(b) Except as provided in subsections (c) and (i) of thissection, the trustee may avoid any transfer of aninterest of the debtor in property--

Giving Kaboon the money was a transfer ofproperty.

(1) to or for the benefit of a creditor; It was to the benefit of Kaboon(2) for or on account of an antecedent debt owed

by the debtor before such transfer was made;It was on account of an antecedent debt. Kaboonwas owed the money before the transfer was made.

(3) made while the debtor was insolvent; [see presumption in §547(f)](4) made--

(A) on or within 90 days before the date of thefiling of the petition; or

This transfer was made within 90 days.

B) between ninety days and one year beforethe date of the filing of the petition, if suchcreditor at the time of such transfer was aninsider; and

(5) that enables such creditor to receive morethan such creditor would receive if--

This transfer enabled Kaboon to receive $500.

(A) the case were a case under chapter 7 of thistitle;

.

(B) the transfer had not been made; and(C) such creditor received payment of such

debt to the extent provided by the provisions ofthis title.

In a Chapter 7 case, Kaboon would have received$500. Therefore, the transfer enabled Kaboon toreceive more than he would have received in theChapter 7 distribution.


2. Exercises on §547(b)Exercise 17

a) Debtor filed a Bankruptcy petition on June 1. On that day, Debtor hadthe following debts and property.

Nonexempt Property DebtsCash $100,000 Bank A $10,000

Store B 40,000Neighbor N 50,000Florist F $100,000

ALTERNATIVE IOn May 1, Debtor pays Neighbor $50,000What percent of their claims would each creditor have received if the transfer had notbeen made?

%

Therefore, how much would Neighbor have received if the transfer had not been made? $As a result of the transfer, how much will Neighbor receive? (i.e., combine the amountNeighbor received before bankruptcy and the amount Neighbor will receive afterbankruptcy)

$

As a result of the transfer, did Neighbor receive more that he would have received hadthe transfer not been made?

ALTERNATIVE IIOn May 1, Debtor pays Neighbor $30,000 of Neighbor’s claim. Debtor now only owes Neighbor $20,000What percent of their claims would each creditor have received if the transfer had not beenmade?

%


$



Exercise 18Debtor filed a Bankruptcy petition on June 1. On that day, Debtor had the following debts and property

Nonexempt Property DebtsHousehold Goods $ 40,000 Bank A $ 10,000 A has a security interest in BMWStamp Collection $ 10,000 Store B $ 40,000BMW $ 30,000 Neighbor N $ 50,000 N has a security interest in the stamp collectionLog Cabin $ 10,000 Florist F $ 100,000Cash 10 $10,000

.Bank A’s secured claim is $ Bank A’ unsecured claim is $N’s secured claim is $ N’s unsecured claim is $

ALTERNATIVE III:On May 1, Debtor pays Neighbor $10,000What percent of their unsecured claims would each creditor have received if the transfer hadnot been made?

%


$


ALTERNATIVE IV:On May 1, Debtor pays Bank A $10,000 of A’s claim

What percent of their unsecured claims would each creditor have received if the transfer hadnot been made?

%

How much would A receive if no transfer was made? $

After the transfer was made, what percentage of each remaining unsecured claim wouldbe paid?

%

As a result of the transfer, how much will A receive? (i.e., combine the amount Areceived before bankruptcy and the amount A will receive after bankruptcy)

$

As a result of the transfer, did A receive more that he would have received had thetransfer not been made?: ALTERNATIVE V: On May 1, Debtor grants F a security interest in his Household Goods. Note the definitionof transferWhat percent of their unsecured claims would each creditor have received if the transfer hadnot been made?How much would F receive if no transfer was made?After the transfer was made, what percentage of each remaining unsecured claim wouldbe paid?As a result of the transfer, how much will F receive? (i.e., combine the amount Freceived before bankruptcy and the amount F will receive after bankruptcy)As a result of the transfer, did F receive more that he would have received had thetransfer not been made?


3. . Problems involving §547 (c) (1), (2), (7), (8), (9)a) Debtor purchases heating oil from Carbona. Carbona’s invoices state thatbills must be paid within 5 days of delivery. Unfortunately Debtor has been unableto pay the heating bills promptly and has paid each bill for the last 5 months 28days after delivery. Can the trustee recover the payments to Carbona aspreferences?

Delivery Amount Payment11/01/09 $1,000 11/28/0912/01/09 $600 12/28/091/01/09 $400 1/28/092/01/09 $400 2/28/093/01/09 $8003/15/09 Bankruptcy Petition Filed

b) Debtor went to Lawyer and engaged her services to file his bankruptcypetition, agreeing to pay her $800 for handling his case. She insisted on payment upfront, and he told her he could borrow that amount from his brother and have it inher hands the next day. That same day the two of them sat in her office and filledout the schedules using the computer program she had devised for this purpose,though he was missing certain records that he had failed to bring with him. Thenext day he brought in those records, along with a check for $800, and she finishedfilling out his schedules. The petition was filed later that afternoon, immediatelyafter she had cashed his check. On learning this, the trustee in bankruptcy wantedAngelina to cough up the $800, on the theory that she had received a preference. Isthe trustee right?c) Suppose a week before filing the petition Debtor paid his ex-wife theamount he owed on their divorce court order.

JurisdictionOverview

Subsections (a) and (b) of 28 U.S.C. § 1334 govern the basic grant of jurisdiction in bankruptcy cases:(a) Except as provided in subsection (b) of this section, the district courts shall have original and exclusive

jurisdiction of all cases under title 11.(b) Except as provided in subsection (e)(2) and notwith standing any Act of Congress that confers exclusive

jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusivejurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.

The apparent contradiction in these subsections (one providing that jurisdiction is exclusive and the other that itis not) is explained by understanding the distinction between "cases" and "proceedings" in bankruptcy. The "case" is theentire bankruptcy that adjudicates the whole financial relationship between a debtor and all of its creditors. A "proceeding"is a subset of a case—a civil dispute that deals with particular legal issues and often involves the debtor and only anindividual creditor. Each bankruptcy "case" may involve many "proceedings."

"Note that the grant of jurisdiction is to district courts and not to bankruptcy courts. Bankruptcy courts originatedas an administrative branch of district courts, governed by "referees." Bankruptcy judges today are Article I judges;they do not have the life tenure and protection from diminution in salary that is enjoyed by Article III judges, such asthose appointed to the district and appellate courts.

This distinction was critical in Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50,102 S.Ct. 2858, 73 L.Ed.2d 598 (1982), in which a debtor-in-possession brought suit in bankruptcy court for breach of aprepetition contract. The defendant asserted that the bankruptcy court lacked jurisdiction and that Congress could notauthorize the bankruptcy court to hear such cases. The Supreme Court agreed, holding that the Constitution does not


allow bankruptcy judges, who lack life tenure, to hear and determine cases such as the one at bar. The suit was neitherdirectly related to the bankruptcy proceeding, nor a case in which a third party was suing the bankruptcy estate.

For practical purposes, Marathon voided bankruptcy court jurisdiction under the 1978 Bankruptcy Code. Congresshad to amend the Code to revive the bankruptcy courts' power to hear bankruptcy cases. Simply making bankruptcyjudges Article III judges—the easiest solution—was not a politically viable option. Congress, therefore, solved theMarathon dilemma by granting jurisdiction to the Article III judges of the district courts rather than to bankruptcy courts.Congress then provided, in 28 U.S.C. § 157(a), that district courts can delegate jurisdiction to the bankruptcy courts in"cases under" the Bankruptcy Code and in "proceedings arising under * * * or arising in or related to" the Code.

Subsection 157(b)(l) permits a bankruptcy judge to "hear and determine * * * all core proceedings arising undertitle 11, or arising in a case under title 11." Subsection 157(b)(2) provides a nonexclusive list of "core proceedings."The proceedings in the list, such as allowance of claims and objections to discharge, are ones that invoke substantialrights under the Code or can only arise in conjunction with a bankruptcy case. In other words, a core proceeding is"inextricably linked" to the bankruptcy case.

If a proceeding is "noncore," a bankruptcy judge may "hear and determine" it only if the parties consent. 28U.S.C. § 157(c)(2). Otherwise, the bankruptcy judge may "hear" the matter, but cannot "determine" it; the bankruptcyjudge must submit proposed findings of fact and conclusions of law to the district judge, who may enter those findingsand conclusions "after consideration." The district judge must make a de novo review upon the record, or, if additionalevidence is submitted, of any part of the bankruptcy judge's findings of fact or conclusions of law to which a partyobjected in accordance with Bankruptcy Rule 9033. The district judge may accept, reject, or modify the proposed findingsof fact or conclusions of law, receive further evidence, or recommit the matter to the bankruptcy judge withinstructions.

Congress determined that neither the district court nor the bankruptcy court should handle state law causes ofaction that are related to a bankruptcy case but that do not arise under title 11. Accordingly, 28 U.S.C. § 1334(c)(2)provides that a party to a proceeding based on a state law claim or cause of action may move the district court to abstainfrom hearing the proceeding if an action is commenced and can be timely adjudicated in an appropriate state forum.Section 1334(c) has been interpreted as a "clear congressional policy * * * to give state law claimants a right to haveclaims heard in state court." Piombo Corp. v. Castlerock Properties (In re Castlerock Properties), 781 F.2d 159, 163 (9thCir. 1986).

Wood v. Wood


Interest Rate Table

MONTHS YEARS

1 2 4 5 6 1 2 3 5 10 15 20 30APR

2% $100.17 50.13 25.10 20.10 16.76 8.42 4.25 2.86 1.75 0.92 0.64 0.37

3% $100.25 50.19 25.16 20.15 16.81 8.47 4.30 2.91 1.80 0.97 0.69 0.425% $100.42 50.31 25.26 20.25 16.91 8.56 4.39 3.00 1.89 1.06 0.79 0.546% $100.50 50.38 25.31 20.30 16.96 8.61 4.43 3.04 1.93 1.11 0.84 0.607% $100.58 50.44 25.37 20.35 17.01 8.65 4.48 3.09 1.98 1.16 0.90 0.678% $100.67 50.50 25.42 20.40 17.06 8.70 4.52 3.13 2.03 1.21 0.96 .84 0.739% $100.75 50.56 25.47 20.45 17.11 8.75 4.57 3.18 2.08 1.27 1.01 .90 0.80

9.59 1.3 .94 .8510% $100.83 50.63 25.52 20.50 17.16 8.79 4.61 3.23 2.12 1.32 1.07 .97 0.8811% $100.92 50.69 25.58 20.55 17.21 8.84 4.66 3.27 2.17 1.38 1.14 0.9512% $101.00 50.75 25.63 20.60 17.25 8.88 4.71 3.32 2.22 1.43 1.20 1.0313% $101.08 50.81 25.68 20.65 17.30 8.93 4.75 3.37 2.28 1.49 1.27 1.1114% $101.17 50.88 25.73 20.71 17.35 8.98 4.80 3.42 2.33 1.55 1.33 1.1815% $101.25 50.94 25.79 20.76 17.40 9.03 4.85 3.47 2.38 1.61 1.40 1.2620% $101.67 51.25 26.05 21.01 17.65 9.26 5.09 3.72 2.65 1.93 1.76 1.6725% $102.08 51.57 26.32 21.27 17.90 9.50 5.34 3.98 2.94 2.27 2.14 2.0830% $102.50 51.88 26.58 21.52 18.15 9.75 5.59 4.25 3.24 2.64 2.53 2.5048% $104.00 53.02 27.55 22.46 19.08 10.66 6.56 5.29 4.42 4.04 4.00 4.00

cshafer

Rectangle