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Bankruptcy Shake Up Deeper than Reform Act

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    Bankruptcy Shake Up Deeper than Reform Act

    While doing some research on another topic, I stumbled acrossed an old article from 2001. I've pulled an interesting excerpt and posted it below:

    Consider what happened to Judge Conrad, who served in Vermont and New York bankruptcy court from 1986 through last summer. Unlike most federal jurists, bankruptcy judges like Conrad are not appointed by the president and do not serve for life. Instead, under the Bankruptcy Reform Act of 1978, the nation's 12 circuits of the U.S. Courts of Appeals appoint bankruptcy judges for each state under their jurisdictions. Vermont falls under the Second Circuit, which also covers eastern New York and Connecticut. Bankruptcy judges serve 14-year terms; they are routinely reappointed by a majority vote of the same appellate court after a brief period of "public comment."

    Conrad, in short, had every reason to expect he'd keep his job for another term. But in June of last year, Conrad arrived in his chambers to learn that the Second Circuit Court of Appeals had unexpectedly voted to deny him reappointment.

    Judges of the Second Circuit refused to elaborate upon their one-line rejection announcement (bankruptcy court appoints are routinely kept secret). But two key facts seem relevant. First, Conrad had issued a string of rulings hostile to Vermont banks and other influential financial-service interests. Nationally, he is among the most visible and blunt critics of any bankruptcy reforms that would make it harder for poor and middle-class consumers to find relief.

    Meanwhile the Second Circuit -- at the time of his appointment 14 years ago still dominated by liberal judges serving since the 1960s and 1970s -- is today in the hands of Reagan-Bush judges, and presided over by Chief Judge Ralph Winter, like Jones and Ginsburg a prominent law-and-economics conservative.

    There is also the question of politics. In Vermont legal circles, conjecture about Conrad's eviction from the bench focused immediately upon whether the Second Circuit had been influenced by any of the legion of corporate and banking officials at whom Conrad had sometimes taken aim. In the courtroom, he was known for a populist impatience with the prerogatives of corporate power; He once threatened to send federal marshals after the CEO of Sears for failing to appear in his Rutland, Vt., courtroom, and in another case compared leading Vermont bankers to Times Square shell-gamers. He has criticized federal banking regulators for permitting abusive debt collection practices, and slammed the IRS for trying to collect a bankrupt citizen's taxes in defiance of a court order.

    Whatever the reasons for Conrad's ouster, it speaks volumes about the politics of bankruptcy. First, during the "public comment" period prior to Conrad's firing, it turns out, Merchants Bank, Vermont's largest financial institution, had actively solicited letters to the Second Circuit from prominent Vermont banking attorneys critical of Conrad, according to Vermont attorneys who have litigated against the bank. Chief Judge Winter named a partner in a Vermont law firm that provides that same bank's legal counsel to chair the "merit selection" committee to recommend Conrad's replacement. And, in December, the Second Circuit announced its choice to replace Judge Conrad: the former in-house counsel to another large bank, this one in New York. If nothing else, the fate of Vermont's sole bankruptcy judge is a parable for how the financial-service industry can promote its interests even amid the supposed insulation of the judicial system.

    Conrad is not the only federal bankruptcy judge to fall victim to this growing rift in bankruptcy philosophy. Last year at least one other respected, relatively progressive bankruptcy judge, John Pearson of Kansas, was passed over for renomination, while two other bankruptcy judges reportedly came close to losing their jobs. "This is a completely new slate of judges. It's a different universe on bankruptcy," one veteran bankruptcy attorney said to me recently.

    From this website:

    http://www.democraticunderground.com...mID35/160.html

    While I'm not much on extreme wings, either right or left, it seems that the proponants of the BK Reform worked behind the scenes to get all their ducks in a row before the legislation became law. All the way down to getting rid of District Judges who were known to be sympathetic to consumers.

    Kind of a "leave no stone unturned" philosophy working there.
    Filed Ch 7 - 09/06
    Discharged - 12/2006
    Officially Declared No Asset - 03/2007
    Closed - 04/2007

    I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

    Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

    #2
    Yes, leave no stone unturned, does work in this case.

    Yes judges have guidlines, just like Trustees and US Trustees do....

    When they (all) step over the line (mine did) they are reported.... they all have bosses too.....

    Some have been disbarred, others replaced at the request of complaints of the large banks.......

    The judge is told to be fair to both parties..... the US Trustee keeps an eye on the Trustee and tells him - "get their assets"......

    Everybody has a boss down the line - yet sometimes they do FORGET............. Can some of them be bought? - probably if the truth was known... Remember they are all members of the "good ole boys club".........

    Everyone of them has a job to do - guidelines to follow - BUT HOW THEY DO THAT JOB - depends on what type of man they really are..............
    Minny

    "It's amazing the paths that our feet sometimes follow in life".

    My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.

    Comment


      #3
      I read that article and I thought how clever they all were. Before the Bush administration even moved on legislation, they got BK District Judges in place that are not debtor friendly. Judges who had ruled in favor of Banks and Lenders in the past, rather than judges who had upheld consumer's rights.

      Talk about having all your ducks in a row! As long as what they do is within the law, you can be screwed royally because the Judges tend toward leniency to the companies with the Big Bucks rather than the little guy.

      The new BK Law has essentially created a tax payer funded/financed legal system where Chase, and BOA, and MBNA, etc. (insert lender name here) reap all the profits.
      Filed Ch 7 - 09/06
      Discharged - 12/2006
      Officially Declared No Asset - 03/2007
      Closed - 04/2007

      I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation.

      Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

      Comment

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