48HrBooks Template 5.5x8.5

BANKRUPTCY LAW

AND PRACTICE

A Casebook Designed to

Train Lawyers for the

Practice of Bankruptcy Law

__________

Gregory Germain

Professor of Law

Syracuse University College of Law

CALI eLangdell Press 2016

i

About the Author

Gregory Germain is a professor at Syracuse University College of Law where he teaches courses in Contracts, Commercial Transactions, Corporations, Taxation and of course Bankruptcy Law. He also runs a pro bono bankruptcy program for first year law students, and a bankruptcy clinic for upper division students. The clinic represents indigent individuals in bankruptcy cases.

Professor Germain received his JD Degree Magna Cum Laude from the University of California Hastings College of Law, practiced law for 15 years in Los Angeles and San Francisco, and then obtained his LLM in Tax from the University of Florida. Following tax school, he worked as an attorney advisor for the Honorable Renato Beghe of the United States Tax Court before beginning his teaching career at Syracuse University College of Law.

Notices

This is the first edition of this casebook, updated June 2016. Visit http://elangdell.cali.org/ for the latest version and for revision history.

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Forward

This book is intended for a three credit law school course covering the fundamentals of bankruptcy law and practice. Students should recognize that this is a Code class, and that the starting place for solving most bankruptcy problems is the Bankruptcy Code itself. Students should read the materials and work through the problems by direct reference to the provisions of the Bankruptcy Code. Bankruptcy lawyers simply must be comfortable with the Code in order to be effective.

The book contains many cases interpreting the Bankruptcy Code. The cases have been stripped to the essentials to minimize reading. Most cross-citations have been deleted. Issues discussed in the cases that are not relevant to the point for which the case is included in the materials have been stricken. Bolding has been added to important language the students should focus on. The practitioner, of course, should always read full cases and not rely on the edited versions in this book or on headnotes or other secondary sources. This book contains the bones of the case, with flesh left only where essential to understanding the courts reasoning on the particular issue of relevance to the material in the book.

Much of the learning will come through working with the problems. Many students have developed the bad practice of reading the questions without trying to solve them. Dont do that. You need to try to solve the problems by reading and working through the statute. The best way to learn and be comfortable with using the statutory language is to work through the statute to solve the problems.

Some of the problems contain case references. I do not expect my students to read the cases that are merely cited in the problems, and not reprinted in the book. I discuss some of these cases with the class when covering the problems. Students interested in the problems are always free to read the cases for greater understanding, as time permits.

Table of Contents

About the AuthoriNoticesiiForwardivChapter 1: A World without Bankruptcy11.1.A Wee Bit of History11.2.Enforcing Claims11.3.The Self-Help System for Collecting Unsecured Claims21.4.Practice Problems: Fair Debt Collection Practices Act (FDCPA)21.5.The Judicial System for Collecting Unsecured Claims: Obtaining and Enforcing a Judgment31.6.Provisional Remedies.41.7.CASES: The Sheriffs Duty to Enforce Writs51.7.1.1.DAVID J. VITALE v. HOTEL CALIFORNIA, INC., 184 N.J. Super 512, 446 A.2d 880 (1982)51.8.Property Garnishments91.9.Wage Garnishments91.10.State Wage Garnishment Exemptions101.11.Exceptions to Wage Garnishment Limits101.12.Practice Problems: Calculating Wage Garnishment Limits111.13.State Law Execution Exemptions111.14.Practice Problems: Enforcement of Judgments111.15.Other Federal and State Exemptions121.16.Federal Tax Collection121.17.State Law Avoiding Powers131.18.Practice Problems: Fraudulent Transfers131.19.The Race to the Courthouse and the Concept of Bankruptcy14Chapter 2: Secured Claims162.1.Liens and Priority162.2.Attachment of Consensual Liens162.3.Attachment of Consensual Liens on Real Property.172.4.Attachment of Consensual Liens on Personal Property172.5.Attachment of Judicial Liens182.6.Attachment of Statutory Liens.192.7.The Concept of Perfecting Liens202.8.Perfection of Consensual Personal Property Liens202.9.Priority of Consensual Liens.212.10.Practice Problems: UCC Article 9.232.11.Purchase Money Security Interests242.12.Practice Problems: Purchase Money Security Interests242.13.Perfection and Priority of Real Property Liens242.14.Practice Problems: Real Estate Priority262.15.Foreclosing the Right of Redemption262.16.Cases on Enforcement of Liens282.16.1.1.CHAPA v. TRACIERS & ASSOCIATES, 267 S.W.3d 386 (Ct. App. Tex. 2008)282.16.1.2.JORDAN v. CITIZENS & SOUTHERN NATL BANK OF SOUTH CAROLINA, 278 S.C. 449 (1982)302.16.1.3.CHERNO v. BANK OF BABYLON, 54 Misc.2d 277 (NY 1967)312.16.1.4.BIG THREE MOTORS, INC., v. RUTHERFORD, 432 So.2d 483 (Ala. 1983)322.16.1.5.WALTER KOUBA v. EAST JOLIET BANK, 135 Ill. App. 3d 264 (1985)342.17.Practice Problems: Enforcement of Liens and Claims37Chapter 3: The Bankruptcy System393.1.Purposes of Bankruptcy393.2.Structure of the Bankruptcy Code403.3.Jurisdiction and Venue of Bankruptcy Cases413.4.Cases on the Constitutional Limits of Bankruptcy Jurisdiction423.4.1.1.NORTHERN PIPELINE CO. v. MARATHON PIPE LINE CO., 458 U.S. 50 (1982)423.5.The Aftermath of Northern Pipeline463.6.Cases on the Constitutional Limits of Bankruptcy Jurisdiction after Marathon463.6.1.1.STERN v. MARSHALL, 564 U.S. 2, 131 S. Ct. 2594 (2011)463.6.1.2.WELLNESS INTERNATIONAL NETWORK, LTD., v. SHARF, 135 S. Ct. 1932 (2015)533.7.Practice Problems: Bankruptcy Court Jurisdiction573.8.Venue of Bankruptcy Cases583.9.Cases on Bankruptcy Venue593.9.1.1.IN ENRON CORP., 274 B.R. 327 (2002)593.10.Practice Problems: Filing Voluntary Petitions623.11.Voluntary Bankruptcy Petitions633.12.Involuntary Bankruptcy Petitions653.13.Practice Problems Involuntary Petitions653.14.Dismissal of Properly Filed Bankruptcy Petitions for Cause.663.15.Bad Faith Dismissals after the 2005 Amendments673.16.Dismissal of Cases Properly Filed under Other Chapters683.17.Cases on Bad Faith Dismissals683.17.1.1.IN RE JOHNS-MANVILLE CORPORATION, 36 B.R. 727 (Bankr. S.D.N.Y. 1984)683.17.1.2.IN RE SQL CARBON, 200 F.3d 154 (3d Cir. 1999)723.18.Voluntary and Involuntary Conversion and Dismissal.753.19.Dismissal of Consumer Chapter 7 Cases for Abuse The Means Test763.20.Practice Problems: Dismissa