Thursday, June 23, 2011

Tracking the Implementation of the Dodd-Frank Act

Robert J. Novak

The Dodd–Frank Wall Street Reform and Consumer Protection Act was enacted into law on July 21, 2010. Designed to become effective in stages, many of the Act’s provisions require regulatory implementation through various rulemakings and studies. The implementation process is complex and evolving, and tracking its status can be challenging for even those governmental and industry insiders who are actively involved in it. So how can bank directors and officers—those who are most impacted by the Act and who will be held responsible for understanding and adhering to it—follow along?

While there are many online resources available to bank directors and officers, one that we’ve found to be a good resource for following the latest developments concerning the implementation of the Act is the ABA’s “Dodd-Frank Tracker” website, available here. Three features of this website, in particular, are worth highlighting. First, the Dodd-Frank calendar. This calendar tracks (i) all relevant legislative and regulatory hearings and meetings, (ii) the deadlines to comment on proposed rules, and (iii) the various effective dates of the Act and the regulations implementing it. It also provides hyperlinks to the proposals at issue and other relevant information, for those interested in learning more. Second, the topical webpages. The ABA has organized much of the site’s content around discrete Dodd-Frank topics. This allows visitors to click on a specific topical link, such as Interchange Fees, and view a webpage containing posts related exclusively to that topic. Like the Dodd-Frank calendar, the topical webpages are all embedded with hyperlinks to further reading, which include, among other things, regulatory announcements and congressional statements concerning the topic. Finally, the topical subscriptions. Visitors can sign up to receive information via email, as it becomes available, on any one or more of the Dodd-Frank topics or even the Dodd-Frank Tracker as a whole. The benefits of this feature are obvious, especially to those whose time must be focused primarily on other things—like running a bank. Subscription links appear throughout the Dodd-Frank Tracker website.

Friday, June 17, 2011

The Jennings Strouss Foundation's Lastest Project

The Learning Garden
Spring 2011

The Jennings Strouss Foundation’s Spring 2011 project was “The Learning Garden.” Through this project, the JS Foundation focused on providing hands-on learning opportunities to students at Gateway School.¹

The “Learning Garden” project involved providing “gardening” materials for a 2nd grade class at Gateway. As part of an earth science unit, this class was learning about the different kinds of soil and the composition of soil. The class then studied rocks and minerals, and how the earth is a resource. In the last quarter, the class planned to study butterflies and their cycle. With assistance from parents and teachers, the class prepared a garden in a school courtyard and planted flowers to attract butterflies. This hands-on project was not only an important part of the learning process but also encourage parent participation.

The “Learning Garden” project raised funds to allow the JS Foundation to provide mulch, plant vitamins, and honeysuckle plants for the garden, and spades and gloves for the “gardeners.” The enthusiastic gardeners were anxiously awaiting butterflies in their new garden area.

Read one of the student letters

¹ Gateway School is a primary school in the Creighton School District, serving over 850 students in grades kindergarten through 8. Gateway has a 98 percent minority enrollment with 90 percent of the students on the free or reduced fee lunch program.

Legal Watch Series: Topic 8 - Social Media and the Workplace

Michael R. Palumbo


Introduction: This is the eighth article in a series of short informational pieces relating to one of the hottest topics in litigation over the past five years - electronic discovery. The purpose of these articles is to provide your business entity with some guidelines on how to most efficiently organize to deal with electronic discovery. The articles will continue to be emailed regularly over the next few months. If you are new to our distribution, or if you would like to view previous articles in this series relating to ESI, visit our website.

Facebook, My Space, LinkedIn, Plaxo, Twitter, Skype, YouTube, Blogs, name it; almost everyone is doing it. Social Networking that is.

A social networking site has been defined as a "web-based service...that allow[s] individuals to (1) construct a public or semi-public profile within a bounded system, (2) articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system." Boyd and Ellison, "Social Network Sites: Definition, History, and Scholarship," Journal of Computer Mediated Communication (2007).


Social networks can be a Pandora's box for an employer. Significant risks are presented by the very nature of social networking sites.

Following are some situations where social networking has caused embarrassment to an employer, drawn regulatory attention, or led to negative litigation consequences:

  • In 2010 and 2011, the National Labor Relations Board (NLRB) brought several complaints against businesses that disciplined employees for posting comments about the company on social networks (See discussion below);
  • In April 2009, a Wall Street Journal article reported that the SEC is monitoring corporate communications made via Twitter to ensure trading rules are not violated;
  • In April 2009, a Domino's Pizza employee posted an allegedly humorous video about how pizzas are made. The video included unhygienic and rude behavior, as well as employees mocking customers.
  • In October 2008, Virgin Airlines flight attendants posted disparaging remarks about the company's airplanes and customers.

A major concern to employers is the admissibility of information posted on social media sites being presented as evidence during litigation proceedings. The discoverability of this information does not require a technology savvy attorney; it is simply out there for the taking.

On the other hand, an employer may benefit from discovery of information posted to social networks, as exemplified in the Indiana Federal District Court case, EEOC v. Simply Storage Management, Inc., (S.D. Ind. May 11, 2010) involving a claim for emotional injury by an employee. The court allowed Simply Storage Management to obtain discovery from the plaintiff's Facebook and MySpace accounts, noting "it is reasonable to expect severe emotional or mental injury to manifest itself in some [social networking] content."

Another possible risk regarding social media is being caught in untruths. Last year, a Canadian who had taken a leave of absence from her job to battle depression, announced that her insurance provider, Manulife, had revoked her health benefits after discovering photos on her Facebook page depicting her attending a Chippendales show, celebrating a birthday and enjoying a day at the beach.

An example of this from the legal world is the situation where a lawyer was found to have committed an ethical violation and to have incurred the wrath of a judge by making a false statement about the supposed death of her father in order to obtain a continuance of a deadline. The tech savvy judge logged on to her Facebook page and determined that she was out and about socially instead of participating in funeral related activities. This can just as easily happen in your business. Surely, employers want to minimize these types of problems, but, the question is how to effectively do that.

Policy Considerations

As noted above, there has been a rash of cases involving the limits of an employer's ability to control employee interaction on social networks. Although many companies have implemented social-media policies prohibiting employees from posting disparaging comments or sharing confidential company information on the Internet, policies that totally prohibit such postings have been called into question.

One of the complaints filed by the NLRB was against a Connecticut ambulance service company that terminated an employee for violating its social-media policy that stated "Employees are prohibited from making disparaging, discriminatory, or defamatory comments when discussing the Company or the employee's superiors, co-workers and/or competitors." Specifically, the employee posted a negative comment about her supervisor (she called him a "17", a term for a psychiatric patient, and a "scumbag" among other things ) on her personal Facebook page and co-workers thereafter posted similar comments. The Company suspended, and eventually terminated, the employee because the postings violated the Company's Internet policies. The NLRB Complaint alleged that the Company implemented and enforced an overly broad policy concerning blogging and Internet posting because it prohibited employees from making disparaging remarks when discussing the company or supervisors, and prohibited employees from depicting the company in any way over the Internet without company permission. The NLRB contended that the policy was too broad in that it interfered with the recognized employee right to discuss the terms and conditions of employment with co-workers and others. There was a settlement of this matter in January 2011, resulting in the employer's modification of its social networking policy specifically relating to personal internet communications regarding work-related issues.

As similar situation arose in May of this year (2011) when the NLRB filed a complaint against a Chicago BMW dealership that allegedly unlawfully fired a sales person for Facebook comments critical of the employer. The salesperson posted photos and commentary critical that only hot dogs and bottled water were offered to customers at a promotional event. The Complaint was based on the same rationale as the Connecticut case, discussed above. This matter has not been resolved one way or the other.

On the other hand, in a matter arising out of Tucson, Arizona, an Arizona Daily Star reporter was terminated for inappropriate and unprofessional tweets. The newspaper did not have a social networking policy and, in fact, urged its reporters to use social media on the job. The reporter in question was terminated for purportedly unprofessional, sexually inappropriate and pro-violence tweets, including one where he referred to TV station reporter as "stupid." The reporter filed an unfair labor practice charge with the NLRB; however, the NLRB dismissed the charge. It concluded that, since the comments did not relate to the conditions of employment, the termination was lawful.

Policy Suggestions

More and more business are learning that social networking, used properly, can be an effective business tool. Businesses are also learning that imposing significant restrictions on the use of social media are, not only possibly illegal, but often counterproductive to a dynamic work place. Nevertheless, employers still need to exert some control over the use of social networks, especially where employees are presenting themselves as representatives of the company or are discussing company related affairs. What follows are some suggestions that have been offered by commentators in this field:

  • The policy should include a statement that the company believes social networking is an important form of communication.
  • The policy should make it clear that social networking activities are not to interfere with the employee's primary job responsibilities.
  • The policy should contain a non-exclusive list of social networking risks posed to the company. Specifically, since most social network sites contain identifying information, including work information, the policy should emphasize that postings are likely to reflect on the company and its image. The policy should impress upon the employee that they need to take responsibility for representing the company in a professional manner.
  • The policy should describe what activities are and are not permitted, and what type of permission is necessary. Specifically, the policy should prohibit social networking communications relating to confidential, sensitive or legal matters.
  • The policy should state who is covered by the policy's mandates.
  • The policy should walk the fine line between protecting the company and respecting the rights of employees to freedom of speech.
  • The policy should include a reminder of existing policies, particularly those related to harassment, discrimination, confidentiality, privacy and disclosure, and should discuss training and dissemination of policy information.
  • The policy should emphasize the use of good judgment and mandates the use of a "personal opinion only" disclaimer.
  • The policy should reference the company's code of ethics (i.e., do not disrespect employees, competitors, business partners, etc.).

If your company needs assistance in formulating a social networking policy, or would like to further discuss issues related to a social networking issues in the work place, please contact Valerie Walker, 602-262-5844.


In the next Legal Watch Series: Preparing for E-Discovery newsletter, we will be discussing the issue of an employee's expectation of privacy when using a company-issued computer, cell phone and/or pda.

About the Author
For more information or questions regarding E-Discovery and the Rules for Electronically Stored Information Management, contact Michael R. Palumbo.

Michael R. Palumbo focuses his practice on commercial and real estate litigation. Particular areas of experience include banking (UCC Articles 3 & 4) litigation; title insurance, escrow agent and Deed of Trust litigation; and quiet title, adverse possession, homeowners' associations and real estate agent disputes. He has participated in more than 50 trials in the Superior Courts of Arizona and District Court of Arizona, in most of which he was lead counsel. Mr. Palumbo can be reached at 602.262.5931 or

Thursday, June 16, 2011

Protecting Assets at Risk: Bankruptcy Options for Individual Investors and Other Business People

The Great Recession has taken a toll on many individual investors and business owners. Declining real estate and other asset values, combined with weak business revenues, have eroded wealth and financial stability, forcing the cancellation or postponement of projects no longer feasible in the current economic landscape. That is especially so for those who borrowed or guaranteed debt to finance their businesses and investments. As a result, many borrowers ("debtors"), who previously stood on solid ground financially, have found themselves burdened with debt they can no longer afford to service.

For debtors in this situation, there are various avenues of recourse. For example, rather than waiting for creditors to initiate collection actions, debtors can be proactive by contacting their creditors to negotiate arrangements to resolve their troubled debt. Such agreements may include requesting that the creditor discount the debt, extend the term for repayment, or reduce the interest rate. Before considering such requests, creditors will likely insist that the debtor provide updated financial information on which any concessions will be based. These negotiations are sometimes referred to as "workouts" or "out-of-court restructurings."

Such workout discussions may or may not be successful. Negotiations can stagnate, for example, where (i) a creditor is asking for more than the debtor believes is appropriate or can reasonably pay; (ii) the debtor has multiple creditors or troubled loans and is unable to reach an agreement with respect to all of them; or (iii) the debtor has better options under the Bankruptcy Code (the "Code").

Diplomatically presented, the possibility of bankruptcy protection often can provide debtors valuable leverage in workout discussions; and pragmatic creditors may prefer a non-bankruptcy resolution; however, coercive threats of bankruptcy also may doom such discussions and end them. Creditors consider themselves justly owed the debt and may quickly, and sometimes irrevocably, dig in their heels at what they perceive as heavy-handed threats of bankruptcy in order to avoid payment.

Creditors know that bankruptcy can prevent them from proceeding with collection activities, likely will involve additional out-of-pocket costs and expenses to them, and can enable debtors to reduce, stretch out, or otherwise limit the recovery on their claims. Thus, pragmatic creditors may prefer a non-bankruptcy resolution.

It is paramount at the workout stage for debtors to fully consider and understand their options under Chapters 7, 11, and 13 of the Code, including the advantages, costs and risks associated with each. Only then can they assess the type of relief most likely to accomplish desired objectives, and how much they may want to offer their creditors in order to avoid bankruptcy altogether.

Chapter 7

In 2005, Congress, urged by the credit industry, passed changes to bankruptcy law making it more difficult for individuals to file for liquidation under Chapter 7, channeling them instead toward debt repayment plans pursuant to Chapters 11 or 13. Those changes included a "means test" for determining a debtor's financial ability to repay a greater portion of his or her debts over time.

Interestingly, the means test applies to those with "primarily" consumer debt. The courts have interpreted "primarily" to mean more than half in aggregate dollar amount of all debts. (1) The means test does not apply to those with primarily business or investment-related debt. Such persons may still file for Chapter 7 relief, regardless of their current income levels.

Debtors who file for Chapter 7 relief do so primarily to become discharged from personal liability on their debts. They are required to disclose their assets and debts, and it is then up to a bankruptcy trustee to determine whether there are any assets that can be liquidated to generate a distribution to creditors. That, in turn, requires (i) an estimate of asset values and (ii) a careful analysis of whether, and to what extent, certain assets are "exempt," or protected from creditors' claims under applicable law. In this article, the non-exempt, unencumbered portion of the assets is referred to as "Assets at Risk."

Chapter 7 debtors may still need to service debt secured by assets abandoned by the trustee that the debtor wishes to retain, such as the mortgage on the family home or a car loan. Otherwise, Chapter 7 debtors generally are able to shed their debts and are not obligated to make future payments to the unsecured creditors to whom they were indebted prior to filing for Chapter 7 relief.

Assuming a debtor has primarily business or investment-related debt, why, then, would he or she voluntarily choose to file under Chapter 11 or 13?

Chapters 11 and 13

Perhaps the most common reason for debtors to choose Chapters 11 or 13 over Chapter 7 is to retain Assets at Risk - assets that would be sold by the bankruptcy trustee or otherwise lost in Chapter 7 liquidation. The Assets at Risk may be a business interest or asset essential to the debtor's livelihood, or a real estate investment that generates income or has strong potential for appreciation. Chapter 11 or 13 debtors can propose a plan calling for the retention of those or other assets; however, what must they do to keep them?

In exchange for retaining assets, the debtor's plan must, at a minimum, provide (i) restructured debt payments to secured creditors on the secured portion of their claims and (ii) payment to unsecured creditors of at least as much as they would receive in a Chapter 7 liquidation. The former calls for a valuation of the secured creditor's collateral, whereas the latter calls for an analysis of the liquidation value of the Assets at Risk. The higher the liquidation value, the more that must be paid to unsecured creditors under the plan.

Another reason some debtors may prefer Chapters 11 or 13 over Chapter 7 is to restructure the repayment terms of secured debt. There are restrictions on doing so, however, over the creditor's objection where the debt is secured by the debtor's primary residence. (2) Even so, Chapter 11 or 13 debtors still may strip off a junior lien on a primary residence that has a value less than the senior liens.(3) This cannot be done in Chapter 7 and, absent a non-bankruptcy workout, can only be done through a Chapter 11 or 13 plan.

While a decision to restructure under Chapters 11 or 13 may be the best way for a debtor to retain Assets at Risk and restructure secured debt, it should not be made lightly. Restructuring can involve significant risk and expense, legal and otherwise. It also imposes and requires the debtor to perform special duties, including those of reporting and disclosure, (4) and transactions outside the debtor's ordinary course of business will require advance bankruptcy court approval.

A bankruptcy filing also will put the debtor and the debtor's past dealings in what one of our bankruptcy judges has termed "a fishbowl." It will provide creditors a forum in which to conduct discovery and otherwise obtain information from the debtor, question financial arrangements with insiders and affiliates, question and possibly attack the propriety of pre-bankruptcy transactions (including those involving family members and other insiders), seek adequate protection of any interests in collateral, seek relief from the bankruptcy stay to foreclose liens, and seek the appointment of an examiner to investigate and oversee or a trustee to operate the debtor's affairs. A bankruptcy filing also may result in the debtor's loss of credit, including credit cards; impair the debtor's ability to borrow; and increase the cost of credit. It also could adversely affect the amount a prospective buyer is willing to pay for the debtor's assets. Finally, the legal fees for Chapter 13, and especially Chapter 11, bankruptcies can be significant; and one or more aggressive creditors can greatly increase them.

With proper lead time and preparation, experienced counsel can help debtors appreciate these risks, evaluate Assets at Risk and available exemptions, avoid potential hazards, and increase the chances of successfully confirming a plan. Further, just as a good coach prepares a game plan before the competition begins, good counsel can help debtors, whenever possible, compose their plans before they file. Debtors who do so are more likely to successfully confirm a plan of their liking - in less time and at a lower expense - than if they had waited until the eleventh hour.

Creditor Involvement in the Plan Confirmation Process

In both Chapters 11 and 13, a number of requirements must be met before a plan can be confirmed; and creditors can object to confirmation of the plan if those requirements are not met. Two of the most significant confirmation requirements for individuals are that (i) unsecured creditors receive at least as much as they would in a Chapter 7 liquidation; and, if an unsecured creditor objects) that (ii) the debtors distribute an amount not less than their projected disposable income for a specified term (discussed further below).

Unlike Chapter 13, Chapter 11 is a semi-democratic process in which creditors have the right to vote on the plan. Thus, while some creditors and "creditor classes" (voting groups of creditors) may vote against the plan, Chapter 11 requires that at least one non-insider creditor class (the rights of which have been impaired or altered by the plan) vote in favor of it before it can be confirmed. (5) This encourages deal-making as part of the plan confirmation process. For example, a creditor that initially opposes the plan might be persuaded to support it if changes are made to improve that creditor's treatment. Any such improved treatment must, however, apply as well to all other creditors of the same class and cannot unfairly discriminate against creditors in other classes. The creditor voting requirement can complicate and add to the cost of an individual Chapter 11 case.

Choosing Between Chapters 11 and 13

Given that Chapter 11 cases can involve more reporting, creditor involvement and legal fees, why, then, would a debtor choose Chapter 11 over 13?

Reasons may include:

  • Eligibility. Some debtors are not eligible for Chapter 13 relief, which requires the debtor to have "regular income" and that the debtor's debt fall below certain levels (currently, unsecured debts must total less than $360,475 and secured debts must total less than $1,081,400). (6) If either (i) the debtor does not have "regular income" or (ii) either debt level is exceeded, Chapter 13 relief is not available.
  • Restructuring secured debt beyond five years. Debtors who seek to restructure a secured debt (including stripping off the undersecured portion of a partially secured claim) for repayment over more than five years must do so in Chapter 11. Chapter 13 does not allow such restructurings beyond five years. Instead, a Chapter 13 plan must provide for distribution of an amount not less than the secured portion of the claim in the form of equal monthly payments over the life of the plan. (7) If the secured portion of the claim is substantial, it may not be feasible to fully repay it within five years. In such situations, Chapter 13 is not a viable option.
  • Pace. Chapter 13 requires that the debtor file a plan at the beginning of the case and has a prescribed pace. For example, Chapter 13 debtors typically must file their plans when they file their case or within fourteen days thereafter. (8) Chapter 11 debtors, by comparison, have more flexibility regarding the pace. They generally have the exclusive right to file a plan at any time within the first four months of the case (the "exclusivity period"). That period might be extended for cause; and even after it expires, a plan can still be proposed, although others can then propose one as well or seek to dismiss the case. (9) Debtors desiring more flexibility thus might prefer Chapter 11.

Although Chapter 11 debtors have more flexibility to "take their time" - a practice prevalent for years in the District of Arizona - that may no longer be a good strategy for individual debtors. First, various requirements have been added to guard against delay. Additionally, for debtors who are short on resources or otherwise concerned about costs, longer cases translate into more expensive cases. Moreover, a slower pace might give the debtor's adversaries more time to get up to speed and mount a stronger opposition to the plan. Finally, all other things being equal, bankruptcy judges tend to view debtors more favorably if they move promptly towards reorganization than if they do not. Therefore, absent special circumstances justifying a more deliberate approach, individual debtors often will be better served if they move swiftly to confirm a restructuring plan.

  • Trustee and Trustee Fees. In Chapter 13, a trustee is automatically appointed. The Chapter 13 trustee reviews the plan and makes recommendations to the court as to whether or not it should be confirmed or modified. The Chapter 13 trustee also receives the payments under a confirmed plan and distributes them to creditors. For these efforts, the Chapter 13 trustee receives a fee that can be as much as "10% of the payments made under the plan." (10)

    In Chapter 11, a trustee is not automatically appointed (11) and no such percentage-based fee is collected. Instead, the debtor typically continues "in possession." Chapter 11 debtors, however, must pay quarterly fees to the U.S. Trustee from the petition date through substantial consummation of the plan and entry of a final decree. The fees are based on the level of disbursements and currently are, for example, $325 per quarter in which quarterly disbursements total less than $15,000; and $650 per quarter in which they total $15,000-$75,000.

    In summary, the types of trustee fees charged in Chapter 11 and 13 cases are different; and total fees in either case will depend upon various factors, such as the total amount of plan payments and the length of the case. Debtors who intend to propose lower plan payments might have lower trustee fees under Chapter 13, while trustee fees might be a neutral factor for debtors who expect to process a Chapter 11 case quickly and make higher total plan payments.
  • Projected Disposable Income Requirement. If an unsecured creditor objects to the plan (and assuming that the plan does not call for its claim to be fully paid), Chapter 11 and 13 debtors each must meet different requirements with respect to their projected disposable income (PDI). Chapter 13 debtors must propose to pay all of their PDI received during the "applicable commitment period" - five years for those with above-median income - to their unsecured creditors. (12) Chapter 11 debtors, by comparison, must show that the value of all of their plan distributions is at least equal to their PDI for the longer of five years or the life of the plan. (13) Thus, Chapter 11 debtors may be able to satisfy this requirement if all of their plan payments - to both secured and unsecured creditors - equals or exceeds their PDI.

    PDI also is determined differently under Chapters 11 and 13. "Disposable income" is defined under both as the debtor's current monthly income (CMI) less amounts "reasonably necessary to be expended" for maintenance or support of the debtor and dependents, for domestic support obligations, for qualifying charitable contributions, and for business expenses. (14) CMI, in turn, is calculated by averaging the monthly income received by the debtor received from all sources (without regard to its taxability) during the six-month period preceding the commencement of the case. While this calculation presumptively determines CMI, it can be rebutted by evidence of a substantial change in the debtor's income at the time of plan confirmation. (15)

    In Chapter 13, however, the expense limitations of the "means test" standards (which are derived from expense guidelines of the Internal Revenue Service and may be much lower than the actual living expenses of many potential Chapter 11 debtors) apply in determining what expenses are "reasonably necessary" for debtors with above-median incomes. Although there is a split of authority on this issue, there is support for the proposition that Chapter 11 debtors are not limited by the IRS expense guidelines and that the reasonableness of their expenses instead must be judicially determined. (16) Arguably, then, there is more flexibility in determining PDI in Chapter 11 cases; and debtors with higher expenses might fare better in Chapter 11.

Concluding Comments

Bankruptcy, particularly reorganization, can be an expensive, time consuming process. It should not be undertaken lightly. Before filing for bankruptcy relief, debtors should define and prioritize objectives, such as whether to retain Assets at Risk, shed burdensome debt, reduce future debt service obligations, or obtain a fresh start. Debtors also should work closely with legal counsel to develop those objectives and evaluate the best options for accomplishing them, including the possibility of staying out of bankruptcy altogether by negotiating a non-bankruptcy workout.

Careful evaluation, preparation, and planning increase the chances for achieving the desired results in the most expeditious and least expensive manner, whether that means avoiding bankruptcy altogether or filing for the type of bankruptcy relief and seeking confirmation of the type of plan that best accomplishes it. That can only occur with ample lead time, which permits the gathering, assimilation, analysis and discussion of information, objectives and alternatives.

(1) E.g., In re Kelly, 841 F. 2d 908 (9th Cir. 1988); In re Mohr, 425 B.R. 457 (Bankr. S.D. Ohio 2010; In re Shelley, 231 B.R. 317 (Bankr. D. Neb. 1999); Waites v. Braley, 110 B.R. 211 (Bankr. E.D. Va. 1990).
(2) See Code §1322(b)(2) and §1123(b)(5).
(3) E.g., In re Zimmer, 313 F. 2d 1220 (9th Cir. 2002).
(4) That is particularly so for Chapter 11 debtors. For example, Chapter 11 debtors must file monthly operating reports listing their monthly receipts and disbursements (Bankruptcy Rule 2015.3); periodic entity reports disclosing information about entities in which they have a substantial or controlling interest (Bankruptcy Rule 2015.3); and disclosure statements containing adequate information from which creditors can make an informed judgment about the plan. (Code §1122).
(5) The precise manner in which creditors may be classified and ballots are tallied is outside the scope of this article.
(6) Code §109(e).
(7) Code §1325(a)(5)(B). Additionally, see, e.g., In re Barnes, 32 F.3d 405 (9th Cir. 1994)(holding that plan, which called for restructuring of the secured claim over nineteen years and only proposed to repay sixty percent of it over the five-year plan period, did not comply with Code §1325(a)(5)(B)(ii).
(8) Bankruptcy Rule 3015(b).
(9) Code §1121. By waiting beyond the exclusivity period, however, they risk the chance that a creditor or other party in interest might file a competing plan. Code §1121(c).
(10) 28 U.S.C. §586(e)(1)(B).
(11) In Chapter 11, a trustee may be appointed for cause, however, including fraud, dishonesty, incompetence, gross mismanagement or where such appointment is in the interest of creditors.
(12) Code §1325(b)(1).
(13) Code §1129(a)(15)(A).
(14) Code §1325(b)(2) and §1129(a)(15)(A).
(15) In re Lanning, 560 U.S. __ (2010).
(16) See In re Roedemeier, 374 B.R. 264 (Bankr. D. Kan. 2007); and Section D.2. of 2005 Committee Note to Official Bankruptcy Forms 22A, 22B, and 22C, reprinted in Norton Bankruptcy Law and Practice 2d, Bankruptcy Rules, at 1146 (Thomson/West 2006-2007 ed.) See also 7 Colliers on Bankruptcy ¶ 1129.03[15][a] (describing such a reading of Code § 1129(a)(15)(B) as "flawed." As stated by the Roedemeier court, "in calculating an individual Chapter 11 debtor's projected disposable income, §1129(a)(15)(B) must be read to allow a judicial determination of the expenses that are reasonably necessary for the support of the debtor and his or her dependents." In re Roedemeier, 374 B.R. at 272-73.

©2011 Jennings, Strouss & Salmon, PLC., Brian N. Spector. All rights reserved

Brian N. Spector
T: 602.262.5977
F: 602.495.2654

Mr. Spector's practice focuses on debt resolution, bankruptcy, and collection matters, including receiverships, foreclosures, fraudulent transfer litigation, provisional remedies, guaranty claims, and other actions involving the collection of secured and unsecured debt. In the bankruptcy context, Mr. Spector has represented secured creditors, individual and business debtors, asset purchasers, landlords, and franchisors. He also has served as a Chapter 11 trustee and lead counsel for numerous unsecured creditors committees. Mr. Spector is a past Chair of the State Bar Bankruptcy Section and the Jennings Strouss Business Restructuring and Reorganization Section. He has served as a Judge Pro Tem for the Maricopa County Superior Court since 2005. Mr. Spector earned a J.D. from the University of Arizona College of Law and a B.A. from Stanford University. Since 2005, he has been included in The Best Lawyers in America© in the category of Bankruptcy and Creditor-Debtor Rights Law. Mr. Spector has also been listed, since 2007, in Southwest Super Lawyers Magazine for Bankruptcy & Creditor/Debtor Rights.

Thursday, June 9, 2011

Robert J. Novak Named the Incoming President of the Board of Directors of The Crossroads, Inc.

PHOENIX, Ariz. (June 9, 2011) – Jennings, Strouss & Salmon, PLC, a leading Phoenix-based law firm, announced that Robert J. Novak has been named the incoming President of the Board of Directors of The Crossroads, Inc.

Crossroads, Inc. is a non-profit charitable organization established in 1960. It provides transitional living programs for recovering adults who express a willingness and desire to learn a new way of life. Crossroads residents develop the skills and self-esteem to transition back into society as productive individuals. Crossroads has evolved a powerful, non-medical recovery discipline that significantly increases a person’s chances of recovery.

“I have had the opportunity to be involved with Crossroads for several years. The help and assistance they have provided to countless individuals, their families, businesses and the community is truly amazing.”

Novak is a Member at Jennings, Strouss & Salmon. He has been in practice since 1971 and has extensive experience representing clients in sophisticated financial transactions. He has represented savings & loans, banks in corporate governance, restructuring, sale, merger, and debtors and special creditor interests in large and complex bankruptcy proceedings. He also represents clients in restructuring of problem loans and real estate projects, as well as the sale, purchase and financing of all types of improved and unimproved real estate. He currently resides in Paradise Valley with his wife and son.