Judge Yaroslavsky's opinion of our Ch. 13 Form Plan
Posted: Thu May 20, 2004 8:12 am
There is the right to vary from the terms of the form plan, as long as
the attorney signs a declaration attesting to the changes. The Plan
that I use is not the form plan, but rather a variant, upon which I
attest to each change. This allows me to further modify the plan as
cases, such as that below dictate.
Lou Esbin
Sent: Wednesday, May 19, 2004 10:38 PM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] Judge Yaroslavsky's opinion of our Ch. 13 Form Plan
Here's an interesting excerpt (concurrence) by Yaroslavsky, J. sitting
on the BAP in the recent decision in Cohen vs. Tran. It makes
important points about one of the many improprieties of our form Ch. 13
plan:
CONCUR: JAROSLOVSKY, Bankruptcy Judge, concurring:
I agree completely with my brethren that In re Nash is still good law
and is
controlling in this case. I write separately only to express my concern
over the
Trustee's argument that Tran's conduct amounted to a fraud on the court.
The
record reflects that Tran's rights under the Bankruptcy Code were
considerably
curtailed by procedures set forth in the court's local rules, and that
what the
Trustee calls "fraud" was nothing more than working within those
procedures to
exercise rights that were Tran's under the Code to begin with.
As the Trustee pointed out during argument, the form of plan used by
Tran was
mandatory pursuant to local rules. Indeed, each page of the plan states:
"This
form is mandatory by Order of the United States Bankruptcy Court for the
Central
District of California." Setting aside questions as to the legitimacy of
any
court-mandated form, n9 the form in this case crossed over the line from
facilitating Chapter 13 administration [*22] to dictating Chapter 13
terms.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n9 Section 1325(a) of the Bankruptcy Code provides that the court
shall
confirm a Chapter 13 plan if six conditions are met. Being on a
court-approved
form is not one of the conditions.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
Part VIII of the mandatory plan provides:
REVESTMENT OF PROPERTY
Property of the estate shall not revest in the debtor until such
time
as a discharge is granted or the case is dismissed. Revestment
shall
be subject to all liens and encumbrances in existence when the case
was filed, except those liens avoided by court order or
extinguished
by operation of law. In the event the case is converted to a case
under chapter 7, 11, or 12 of the Bankruptcy Code, the property of
the
estate shall vest in accordance with applicable law. After
confirmation of the plan, the chapter 13 trustee shall have no
further
authority or fiduciary duty regarding the use, sale, or refinance
of
property of the estate, except to respond to any motion for
proposed
use, sale, or refinance as required by the [*23] Chapter 13
General
Order of this court. Prior to any discharge or dismissal, the
debtor
must seek approval of the court to purchase, sell, or refinance
real
property. (Emphasis added)
The mandatory plan does not give a debtor any other choice regarding
revesting,
even though 1322(b) of the Bankruptcy Code provides that a plan may
"provide
for the vesting of property of the estate, on confirmation or at a later
time,
in the debtor or in any other entity . . . ."
The Trustee argues that Tran could have sought variance from the
terms of the
mandatory plan and did not do so. However, given the practical realities
of plan
confirmation Tran had little choice except to adopt the dictated
language of the
mandatory plan even though under the Bankruptcy Code he had a right to
provide
that his home revested in him on confirmation. Had he been completely
free to
exercise his rights under the Bankruptcy Code from the beginning, he
would not
have needed the consent of the Trustee or the court to refinance his
home, nor
would the Trustee have any rights to the proceeds.
I believe that the bankruptcy court in this case understood that Tran
had
little practical ability to deviate from [*24] the language of the
mandatory
plan and therefore did not commit fraud when he dismissed his case after
obtaining the refinancing order. Tran was merely working as best he
could within
a restrictive system to obtain those rights which were granted to him by
Congress in the Bankruptcy Code. I therefore fully concur in affirming
the
decision of the bankruptcy court that Tran is entitled to the proceeds
of his
refinance.
_____
Yahoo! Groups Links
* To visit your group on the web, go to:
http://groups.yahoo.com/group/cdcbaa/
* To unsubscribe from this group, send an email to:
cdcbaa-unsubscribe@yahoogroups.com
The post was migrated from Yahoo.