Second Annual Bankruptcy Conference October 3, 2019 Mission of - PowerPoint PPT Presentation

Second Annual Bankruptcy Conference October 3, 2019

Mission of the Court • To serve the public by providing fair and impartial justice through the prompt and efficient resolution of disputes— Remember Federal Rule of Bankruptcy Procedure 1001 • Implementing the Mission of the Court through the goals of: Accuracy, Consistency, Transparency • • Maintaining the Integrity of Docket • Applying/Enforcing/Implementing Rules and Procedures • Use of Technology

• Revised Chapter 13 process, including adoption and use of Local Form Chapter 13 Plan, Chapter 13 Forums • Local Rules of Bankruptcy Procedure for the United States Bankruptcy Court for District of Connecticut Bankruptcy Court The State of the Court • Local Rules Standing Committee Formed/Initial Meeting with Judges to discuss and propose possible amendments/changes/improvements to Local Rules • Improved Communications through Court Website

• New Clerk of Court, Pietro Cicolini • Courthouse Lunches with the Judges • Improved Docket Information by use of Virtual Orders, including Pretrial Orders, Scheduling The State of Orders, Decisions on pending matters the Court • Consistent method of communication with Court/Courtroom Deputies • CourtroomDeputy_Bridgeport@ctb.uscourts.gov • CourtroomDeputy_NewHaven@ctb.uscourts.gov • CourtroomDeputy_Hartford@ctb.uscourts.gov

• Courtroom Technology Next Steps to • Exhibits filed on Docket carry out Mission of • Attention to Local Rules and Court Procedures Court

• H.R. 3311: Small Business Reorganization Act of 2019 • Purpose : To address the difficulties small business chapter 11 cases continue to encounter difficulty in successfully Amendments reorganizing. A “Small Business Debtor” is defined as an entity with an aggregate of noncontingent liquidated secured and unsecured debt of not more than $2,725,625.00 to Chapter 11 • Principal features : (1) requiring the appointment of an individual to serve as the trustee, who would perform many of of the Code the same duties required of a chapter 12 trustee; (2) requiring such private trustee to monitor the debtor’s progress toward confirmation of a reorganization plan; and (3) authorizing the Effective court to confirm a plan over the objection of the debtor’s creditors, providing such plan does not discriminate unfairly, and is fair and equitable, with respect to each class of claims or 02/19/20 interests that is impaired under and has not accepted the plan. • The bill also includes two provisions, not limited to small business Chapter 11 cases, pertaining to preferential transfers . It specifies an additional criterion that a trustee must consider before commencing a preferential action (i.e., reasonable due diligence, venue).

• The amendments will be in a new subchapter of Chapter 11, Subchapter V: • § 1182 : United States trustee appoints a Standing Trustee (similar to Ch 12 Standing Trustee) largely to assist Debtors in complying with the Code. • § 1183 requires the appointment of a trustee to be appointed in Amendments a Chapter 11 case filed by a small business debtor, and the trustee will have the same duties as a chapter 12 trustee. to Chapter 11 Pursuant to § 1183, the trustee must participate in certain conferences and hearings concerning matters pertaining to the of the Code value of property subject to a lien, confirmation of a reorganization plan and its modification post‐confirmation, and the sale of property of the estate. Among other duties, the Effective trustee must ensure that the debtor commences making timely payments required under a confirmed plan. The trustee's 02/19/20 service terminates upon substantial consummation of the plan. • § 1184 sets forth the rights and powers of a subchapter V debtor in possession. • § 1185 provides that DIP status may be revoked after notice and a hearing if the Court finds fraud, dishonesty, incompetence, or gross mismanagement of affairs.

• § 1186 provides that property of the estate includes property acquired by the debtor after commencement of case but before the case closes or is converted. • § 1187 sets forth duties and reporting requirements, Amendments clarifies that the separate disclosure statement exemption applies unless the Court orders otherwise. to Chapter 11 • § 1188 provides a status conference must be held not less than 60 days from commencement of the case. No later of the Code than 14 days before the status conference, the debtor must file and serve on all parties a report that details Effective efforts to attain a consensual reorganization plan. • § 1189 specifies that only the debtor may file a 02/19/20 reorganization plan under subchapter 5, but the plan must be filed no later than 90 days after the case is commenced , unless the court extends the time for cause outside the debtor’s control.

• § 1190 requires that the reorganization plan include: • A brief history of the debtor’s business & operations Amendments • A liquidation analysis and projections • Plan must provide for submission of the to Chapter 11 debtor’s future earnings or income to the supervision and control of the of the Code trustee as necessary • Also allows the Debtor to modify the Effective rights of a claim holder where the claim is secured only by interest in real 02/19/20 property that is the principal residence of the debtor if the new value received from the granting of the interest was not used primarily to acquire the property, but rather for the small business.

• § 1191 authorizes the court to confirm a plan over the objection of the debtor’s creditors (providing the plan does not discriminate unfairly, is fair and equitable to impaired classes who reject the plan). Regarding a class of secured claims the plan must either 1) ensure the Amendments holders of the claims retain their liens and that they receive deferred cash payments 2) provide that the liens attach to the proceeds of any sale of property securing to Chapter 11 the claims, or 3) provide that the secured creditors receive the equivalent of their claims. of the Code • “disposable income”: income that is received by the debtor and that is not reasonably necessary to Effective be expended for: (1) maintenance or support of the debtor or a dependent of the debtor; (2) a domestic support obligations that first becomes 02/19/20 payable after the date of the filing of the case; or (3) the payment of expenditures necessary for the continuation, preservation, or operation of the business of the debtor. • the court must find that there is a reasonable likelihood that the debtor will be able to make plan payments and that the plan provides appropriate remedies to protect claim holders in the event of default.

• § 1192 requires the court to grant the debtor a discharge as soon as practicable Amendments after completion by the debtor of all to Chapter 11 payments due within the first three years of the plan, or such longer period not to of the Code exceed five years as the court may fix. Effective • § 1194 sets forth the criteria for modifying a plan pre‐ and post‐ 02/19/20 confirmation.

• Subsection (a) amends § 547(b) to require the trustee to determine whether to exercise such authority based on Amendments reasonable due diligence in the circumstances of the case and taking into to account a party’s knowable affirmative defenses. Preferences Section 547 • 28 U.S.C. § 1409(b) will increase the monetary limit to $25,000 from $13,650 to of Code file for preferential action in the district court for the district where the defendant resides.