Bankruptcy

15th Annual Bankruptcy Forum in Gatlinburg

The 15th Annual Tennessee Bar Association Bankruptcy Forum will take place April 27-29, 2018, at the Hilton Garden Inn in scenic Gatlinburg. This event offers 10 hours of CLE credit including 3 hours of ethics.
 
This high-quality program will begin on Friday with presentations on recent bankruptcy case developments in the Sixth Circuit and around the country. A faculty of prominent bankruptcy judges will be present, encouraging participants to analyze, discuss, and argue different approaches to relevant case studies.
 
Make plans to join us in this wonderful and relaxing setting for unique and informative presentations, while networking with attorneys of an associated practice. 
 
Speakers and producers include:
  • Joel Giddens, Wilson & Assoc PLLC, Memphis 
  • Lawrence Ahern III, Brown & Ahern, Nashville 
  • Paul Bonapfel, United States Bankruptcy Court - North District of GA, Atlanta 
  • James Croom, United States Bankruptcy Court for the Western District of Tennessee, Jackson
  • Laura Ketcham, Miller Martin PLLC, Chattanooga
  • Randal Mashburn, U.S. Bankruptcy Court, Middle District of Tennessee, Nashville
  • Michael McCormick, McCalla Raymer Leibert Pierce, LLC, Roswell
  • Shelley Rucker, U.S. Bankruptcy Courts for the Eastern District of TN, Chattanooga
  • Kara West, Chapter 13 Trustee, Chattanooga

For more information and to register for this event, click here.

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Memphis Landlord Trying to Save Shuttering Toys 'R' Us Location

A Memphis Toys R Us is among as many as 182 stores likely to close as part of its bankruptcy reorganization plan, but a local shopping center owner will try negotiating to keep it open. The beleaguered company announced its filing of Chapter 11 bankruptcy filing last September, acknowledging that it needed to revamp its long-term debt totaling more than $5 billion.
 
"I was a little surprised,'' Michael Lightman said of learning that the Toys R Us made the closure list. "I thought that store was doing just fine. I'm still trying to reach the right people at Toys R Us to find out more detail,'' he said.
 
The company noted that some closings may be avoided if it is able to negotiate more favorable lease terms. But most of the stores listed in the documents are expected to close as Toys R Us tries to reinvent itself as a leaner, smarter retailer. "The reinvention of our brands requires that we make tough decisions about our priorities and focus," Toys R Us chief executive Dave Brandon said in a letter posted on the company's website.
 
Toys R Us will shrink its store fleet by about 20 percent if all planned 182 stores are closed. Lightman's location is among two planned Tennessee closures for the company. Babies R Us on Nolensville Road in Nashville is also planned for closure. A complete list of closing stores can be found here.
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Director of Consumer Financial Protection Bureau Comes Under Fire After Closing Payday Lending Investigations

Mick Mulvany, director of the Consumer Financial Protection Bureau, has recently closed investigations of payday lending companies in Kansas and South Carolina, causing concerns that the Trump administration is taking a lax approach to regulations on this polemic industry.
 
The CFPB, formed in 2011 amidst the aftermath of the Great Recession, is tasked with making sure banks, lenders, and other financial companies treat citizens fairly. In a memo released by Mulvany, he announced a new direction for the bureau stating "We don't just work for the government, we work for the people. And that means everyone: those who use credit cards, and those who provide those cards; those who take loans, and those who make them; those who buy cars, and those who sell them. All of those people are part of what makes this country great. And all of them deserve to be treated fairly by their government. There is a reason that Lady Justice wears a blindfold and carries a balance, along with her sword."
 
The move has been met with consternation from critics who believe Mulvaney may have a conflict of interest due to receiving campaign contributions from a number of payday loan companies. Payday lenders gave $31,700 in 2015-16 federal campaign cycle contributions to Mulvaney, ranking him ninth among all congressional recipients from the sector, according to data analyzed by the Center for Responsive Politics. When asked whether the contributions influenced his position on the rule and could pose a conflict of interest, Mulvaney said, "I don't think so, because I am not in elected office anymore."
 
Tennessee, who is among 25 states the US have already passed serious legislation to regulate the functioning of payday loans, has most predatory lenders in the U.S. according to a recent report. The same report found people without 4-year college degrees, home renters, African-Americans, and those earning less than $40,000 a year are most likely to use a payday loan.
 
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Update on Opting Out of Use of National Form Plan in Tennessee

As most bankruptcy practitioners know, a number of changes to the Federal Rules of Bankruptcy Procedure come into effect on Dec. 1, 2017. Included in those changes is a requirement for debtors to begin using a national form chapter 13 plan, Official Form 113, unless a federal judicial district has adopted, after publication and an opportunity to comment, a plan for use in that district that satisfies certain conditions (a so-called “conforming” plan). Those conditions include that each paragraph be numbered and labeled in bold face type with a heading stating the general subject matter of the paragraph; that the plan include an initial paragraph for the debtor to indicate that the plan does or does not contain any nonstandard provision; limit the amount of a secured claim based on a valuation of the collateral for the claim, or avoid a security interest or lien.
 
A conforming plan also must contain separate, numbered paragraphs for curing and maintaining payments on a claim secured by the debtor’s principal residence, for paying domestic support obligations, for paying secured “910” automobile claims and for surrendering property that secures a claim along with a request that the automatic stay and co-debtor stay be terminated as to the property securing the claim. A conforming plan also must include a final paragraph for placement of any non-standard provisions, along with a statement that any non-standard provision placed elsewhere in the plan is void. See Fed. R. Bank. P. 3015.1.
 
All three of Tennessee’s federal districts have either opted out and are already using a conforming plan (Western and Middle Districts) or have published for comment and will be using a conforming plan (Eastern District). The Middle District of Tennessee plan went into effect on Dec. 1, 2016, with the Western District requiring use of its plan on July 1, 2017. The Eastern District published its plan on July 21, 2017, and the public comment period ended on Aug. 30, 2017. Each of the conforming plans, along with accompanying local bankruptcy rules, have been tailored to local preferences in practice, after input from the local bars. For example, the Western District plan continues the tradition of brevity by complying with requirements of Fed. R. Bank. P. 3015.1 in the space of two pages, whereas the Middle District plan and the Eastern District proposed plan appear to track Official Form 113 more closely in length and complexity.
 
Interestingly, of the 94 federal judicial districts, it appears that as few as 5 districts are not opting out by adopting a conforming plan, with one district (Northern District of Indiana) choosing to not adopt a conforming plan or to require use of Official Form 113 (their rationale appears to be that no proscribed form can be required of the debtor since, under the bankruptcy code, only a debtor can propose a chapter 13 plan). The idea for requiring use of a nationwide plan was to bring uniformity in chapter 13 bankruptcy practice. By Dec. 1, 2017, we will at least have uniformity within all of our Tennessee districts. 
 
Joel W. Giddens
Wilson & Associates
Attorneys at Law
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