DRAFT BANKRUPTCY PROCEDURE DRAFT St. John's Law School, Fall Semester, Monday, 5:40-6:40 PM, Eastern Time August 31 - November 30
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1 DRAFT BANKRUPTCY PROCEDURE DRAFT St. John's Law School, Fall Semester, 2015 BANK 3040 / CRN Professor Ahern Monday, 5:40-6:40 PM, Eastern Time August 31 - November 30 SYLLABUS AND ASSIGNMENTS Introduction and Scope of Course This course is to be taught through a live, online web interface. The course will be taught in 13 classes, of two hours each (780 total minutes). There will be one 10- minute break, except during the class scheduled October 26. Bankruptcy Procedure will explore the rules and policies that provide the procedural foundation for administration of bankruptcy cases by the federal courts. These rules and policies are primarily found in the Federal Rules of Bankruptcy Procedure (referred to here as the "Rules," but they also apply the Rules of Civil Procedure in some settings). The substantive foundation for the Rules is the Bankruptcy Code, Title 11 of the United States Code (referred to here as the "Code," but important jurisdictional issues are also addressed in Title 28). In this course, you will be presented with a variety of issues, ranging from how to commence a bankruptcy case to how to appeal from decisions of a bankruptcy or district court. This course will give you the opportunity to master those issues and to understand concepts that are fundamental to bankruptcy practice. Prerequisites Each student in the Bankruptcy Procedure course must: (1) have taken Civil Procedure as a prerequisite; and (2) (a) have taken a basic bankruptcy course as a prerequisite; or (b) be enrolled simultaneously in Professor Coco's Consumer Bankruptcy as a corequisite. Attendance and Participation The course web interface will automatically record each student's entry into and departure from each class. Each of the students' various schools sets a maximum number of absences for their students. Those attendance standards will be monitored and further enforced through the participation standards.
2 I will be asking questions and conducting polls during class and each student's responses will be recorded. Participation in the classes will be enforced by monitoring responses to polling questions. Failing to respond to two or more polling questions in a given class will be treated as an absence for that class. I do not intend to adjudicate "excused absences." An absence for major surgery will be treated the same way as an absence to attend a party: Students are allowed absences to use however you like. I should send out a test question at the beginning of each class, so if a student has a techological problem that prevents him/her from responding to polling questions, it can be resolved before it becomes a potential absence. There will be a technologically-proficient teaching assistant sitting in on each class. Text, Statutory Supplement and Related Material There are two required books for each class: 1. Ahern & MacLean, Bankruptcy Procedure Manual: Federal Rules of Bankruptcy Procedure Annotated, West's Bankruptcy Series (Softbound, Thomson Reuters 2015), SVC # (There is not currently an ISBN number for the book, but I am told that one is in the process of being assigned and, in the meantime, the SVC number should work.) 2. Bankruptcy Code and Rules, 2015 Compact Edition (Softbound, Thomson Reuters 2015), ISBN # (This is required because I expect the exam to be an "open Code" exam, in which students will only be allowed to use the Compact Edition, annotated any way they see fit.) You will be expected to study the statute as citations appear in the assigned material. We will spend a great deal of class time parsing the rules and the statute, so you should always have these materials at hand. Both of the required books are new this year. There was an earlier version of the Procedure Manual employed last Fall, but it has been substantially updated, especially in the area of bankruptcy appeals. There is also be a supplemental study guide to general bankruptcy law, in which I will assign readings primarily for the benefit of the J.D. candidates in the class. It is not required but experience indicates that those students may find it helpful: 3. Nickles & Epstein, Black Letter Outline on Bankruptcy and Related Law, 2d (Softbound, West Academic 2006), ISBN-13 # I will provide additional materials and may assign recent cases from Westlaw. 2
3 This course will not focus on the substantive provisions in the Bankruptcy Code or the procedures applied to civil actions by the Federal Rules of Civil Procedure, but both are incorporated into bankruptcy procedure. You will be expected to have a good working knowledge of basic bankruptcy law and federal civil procedure. Communication by and Related Issues I can be reached by at LAhern@BrownAhern.com. I am glad to receive questions from members of the class by . When you ask a question, however, please tell me also what you think the answer is. If you are correct, I can respond more efficiently, and if you are mistaken, I may better understand where you need help. I may choose to reply by repeating the question in class rather than responding in writing. I may also send answers to questions of general interest by to the entire class. Because of the difficulty of providing information fairly to the entire class on the eve of the examination, we will observe an "blackout" beginning on an announced date at least 36 hours before the exam. If the exam is to be taken by class members at different times, the blackout will begin before anyone takes the exam. Recording Policy Individual students are not permitted to audio or video tape classes. A recording of the entire class will be available for your review online. Assignments The table below gives you a preliminary list of the rules assigned in the text during the semester, along with some questions that you may anticipate. All rules assigned in this syllabus should be read together with the accompanying Advisory Committees' commentary, any incorporated civil rules and all annotations in the Procedure Manual. As we proceed, I may add or omit certain material in the text and I may postpone discussion of other material. I will also assign supplemental material, including recent case law and problems, for some classes. You should carefully read, analyze and be prepared to discuss all of the assigned rules, text, cases, problems and other supplemental material in class. Date Topics Rules Introduction to Administration and Litigation in Bankruptcy Cases, Including General Rules Governing the Application of Rules to Proceedings and Matters Class 1 August , , 9017 and Rules 1001, , 9017 and provide a several fundamental rules that will help put the remainder of the course material in perspective. Supplement Pages: 57-60, 14-55,
4 Date Topics Rules Class 2 September 14 Scope and Limitations of Bankruptcy Jurisdiction, Including Jury Trials 9015 and Appendix Continuing to lay the foundation for the course, we will study the difficult but important subject of bankruptcy jurisdiction. These issues are governed largely by Articles I and III of the U.S. Constitution, providing for establishment of courts. They are also addressed by 28 U.S.C and implicate the right to a jury trial in bankruptcy, which is the subject of Rule Supplement Pages: Class 3 September 21 Part VII of the Rules: Adversary Proceedings , , 7012, 7041, 7052, 7054, 7056, 7062, 7065, 7070 and 7087 We will not repeat much of what you should know from a general course in federal civil procedure. However, Rules , , 7012, 7041, 7052, 7054, 7056, 7062, 7065, 7070 and 7087 reveal some differences in bankruptcy litigation. Class 4 September 28 Voluntary and Involuntary Commencement of the Bankruptcy Case , , 1013 and 2001 Rules , , 1013 and 2001 provide procedures for filing of a case in bankruptcy, both voluntarily by the debtor and involuntarily by creditors, and the initial steps necessary to put the estate into the hands of a fiduciary. Supplement Pages: , Class 5 October 5 Contested Involuntary Cases and Adversary Proceedings 1014, , 5011, 7001, 7012, 7019, 7087 and Rules 1014, , 5011, 7001, 7012, 7019, 7087 and provide a set of baseline rules governing the commencement of an "adversary proceeding" and the process of determining the merits of a contested involuntary petition and other issues in the case. Supplement Pages: Class 6 October 12 Notices, Forms and Appearances Rules provide rules for calculation of time in bankruptcy (which often moves faster than civil proceedings), promulgation of forms and representation of parties. Supplement Pages: Preview pp This material will be important for the classes starting October 16 and you should start reading it now. 4
5 Date Topics Rules Class 7 October 19 Notices and Examinations Rules govern the amount of notice required in bankruptcy (which, as in the calculation of time, often is shorter than in civil proceedings) and the process of conducting examinations outside the discovery rules (applied to adversary proceedings and contested matters). Class 8 October 26 Ethics and Professionalism in Bankruptcy Practice, Including Professional Responsibility for Pleadings and Employment and Compensation of Professionals 1008, 9005, 9011, and Rules 1008, 9005 and 9011 impose responsibility for sufficiency and accuracy in bankruptcy pleadings and provide some consideration for "harmless error." Rules and govern the process by which an attorney or a "professional person" is retained by the estate or a fiduciary in the case and compensated for services. Class 9 November 2 The Automatic Stay and Other Issues Arising Early in the Case; Duties of the Debtor and Exemptions Rules provide a procedural framework for protecting some of the parties' substantive rights, especially under sections and 522 of the Code. Those sections provide substantive rules governing the automatic stay and the critical functions of using and exempting property and borrowing money. Several procedural rules are also built into the Code itself, because they were deemed by Congress to be critically important to case administration. The treatment of a single-asset real estate case in bankruptcy is introduced by Rule 4001 and also relates to small business cases. Supplement Pages: Class 10 November 9 Claims and Liens; Conversion of a Case to Chapter , 3007 and 1019 Rules and 3007 provide the basic framework for filing and resolving the claims of creditors, including those asserting liens on property of the estate. Rule 1019 governs the "conversion" of a reorganization case to a liquidation case under Chapter 7. Supplement Pages: , Class 11 November 16 Discharge, Dischargeability and Reaffirmation Rules provide procedures for granting or denying the debtor a discharge, in whole or in part, and for the reaffirmation of debts. Supplement Pages: Class 12 November 23 Appeals 2020, and 8011 Rules 2020, and 8011 provide several critical rules governing appeals of rulings in bankruptcy cases, as well as review of U.S. Trustee actions, such as appointment of committees. 5
6 Date Topics Rules Class 13 November 30 Completion and Review During this session, we will cover any issues remaining from earlier classes and review material covered in the course. Please send me questions by , at least 24 hours before this class. The review will focus primarily on areas in which you tell me you have questions. Caution Regarding Dollar Amounts Some of the dollar limitations mentioned in the Black Letter Outline, such as the minimum aggregate claims that must be held by the petitioners filing an involuntary bankruptcy petition, have been changed since the date of its publication. On April 1, 2013, an increase took effect in the numerous dollar amounts in the Bankruptcy Code that are subject to adjustment every three years. See 11 U.S.C. 104(b)(1), which provides for the automatic adjustment every three years beginning April 1, 1998, with the adjustment to reflect the change in the Consumer Price Index for Urban Consumers. These increases have significance in many aspects of bankruptcy procedure. I will hand out a chart of the increases, in order of section numbers in the Code, with a brief description of the subject 6
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