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February 2010 Archives

NDNY: Class-action claim was pre-petition asset

In re: Borchert (NDNY Chap. 7 Bk 04-65653 (Hon. Diane Davis; decision Jan. 8, 2010):The issue in this case was whether a class-action settlement was a prepetition or postpetition asset. The debtor filed bankruptcy August 6, 2004, seven months after he started taking the drug Vioxx. Two months later he had a heart attack. The bankruptcy case was originally closed as a no-asset case, but was reopened with a trusty found out about a class-action settlement in Vioxx disputes. The most significant case on this issue was a Supreme Court decision Segal v. Rochelle, 382 U.S. 375, 380 (1966), which looked to what extent was the claim "rooted in the prebankruptcy past". The debtor's position was that the heart attack was postpetition; the trustee noted that a majority of the time the debtor is used to the drug was pre-petition. The court sided with the trustee as 7/10th of the time. The debtor took the drug was prepetition.

Exigent circumstances permitting filing of petition without credit counseling

In re Giambrone; Bk 06-03862 (Judge Bucki; Decision March 29, 2007)Pursuant to Bankruptcy Code section 109(h) (3) (A) Exigent circumstances permitting filing of petition without credit counseling. Debtor contacted attorney on 12/5/06 with impending 12/7/06 foreclosure sale. Credit counseling was unavailable for 5 days. Chapter 13 Petition filed on December 6, 2006 @ 7:38 p.m. requesting waiver on exigent circumstances. Debtors obtain counseling on December 11 and file Certificate on December 15, before the January 4 return date on the motion. Court notes conflict in decisions variously finding an impending foreclosure sale to be such an exigent circumstance and others indicating that foreclosure process provides considerable notice to homeowners and allows no excuse for procrastination. Court reviews definitions of "exigent" and finds that "urgency" carries no connotation relating to causation. Statute does not require an absence of culpability of the debtor. Waiver granted.

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