It’s that time of year again! The bankruptcy courts’ new rules, fees, and forms come into effect today. Just like news outlets this time of year summarize where you can find the best online deals, we thought we’d take the opportunity to review this year’s bankruptcy-related amendments. Consult your local listings bankruptcy rules, statutes and forms for more detail.
A number of amendments to the Federal Rules of Bankruptcy Procedure are effective as of today. The changes target various issues including petitions involving the same debtors filed in different courts, the time for serving a summons and complaint, bankruptcy appeals, and other miscellaneous matters including general pleadings, judgments, costs, new trials, and relief from a judgment or order. A full list of amendments and explanation of the rationale for the changes is available here.
Rule 1014(b) (Dismissal and Change of Venue)
Rule 1014(b) addresses the procedure when petitions involving the same or related debtors are filed in different courts. The current rule, upon motion, stays proceedings in later-filed cases and provides that the court in which the first-filed petition is pending may determine where the cases will proceed. The rule has led to uncertainty about whether the stay goes into effect immediately upon the filing of the second petition or only upon the filing of a motion to determine where the cases should proceed. The new rule states more clearly what event triggers the stay of proceedings in the subsequent courts – the proceedings in subsequently filed cases are stayed only upon order of the first court. Furthermore, an order is now required, which eliminates any uncertainty about whether a stay of the other proceedings is needed
Rule 7004(e) (Time for Service of Summons)
The amendment shortens the time during which service of a summons and complaint must be made from 14 days to 7 days after the issuance of the summons. The amendment was made because of a concern that the 14-day delay before service under the old rule limited the defendant’s time to answer, which, pursuant to Rule 7012, is calculated from the date the summons is issued, not the date it is served.
Rules 7008(b) and 7054 (Procedure for Seeking Attorneys’ Fees)
The amendments to these rules change the procedure for seeking attorneys’ fees in bankruptcy case, aligning the Bankruptcy Rules with the Federal Rules of Civil Procedure. Rule 7008(b), which currently addresses attorneys’ fees, is deleted, while Rule 7054 is amended to include the rules for seeking an award of attorney’s fees. The amendments were designed to eliminate the risk that an attorney might overlook the requirement in Rule 7008(b) to plead a request for attorneys’ fees as a claim in the complaint, answer, or other pleading.
Rules Governing Appeals – Rules 8001-8028 (Part VIII of the Bankruptcy Rules)
A number of amendments have been made to Part VIII of the Bankruptcy Rules. Part VIII of the Bankruptcy Rules governs appeals to district courts and bankruptcy appellate panels. According to the Judicial Conference, the amended rules are the product of a multi-year project to bring the bankruptcy appellate rules into closer alignment with the Federal Rules of Appellate Procedure and incorporate a presumption favoring the electronic transmission, filing, and service of court documents.
Rules Governing New Trials, Amendment of Judgments and Relief from Judgment or Order
Rule 8008 provides a procedure for the issuance of an indicative ruling when a bankruptcy court determines that, because of a pending appeal, the court lacks jurisdiction to grant a request for relief that the court concludes is meritorious or raises a substantial issue. Rule 9023 (governing new trials and amendment of judgments) and Rule 9024 (governing relief from a judgment or order) are amended to add references to the procedure in amended Rule 8008 addressing indicative rulings. These cross-references are intended to remind attorneys of the indicative rulings procedures for post-judgment motions.
It may be cyber Monday today; however, prices are up, not down, in the bankruptcy court.
Two new fees approved by the Judicial Conference of the United States at its September 2014 session take effect today.
Starting today, bankruptcy courts will assess a $25 fee to file a motion to make redactions to previously filed records in a bankruptcy case. In a related announcement, the Judicial Conference also clarified that no additional fees will be charged to reopen a closed bankruptcy case where the only purpose for the reopening is redaction. Currently, the reopening fee for a Chapter 11 case is $1167 (see item 11 of the Bankruptcy Court’s Miscellaneous Fee Schedule).
In addition, it will now cost $207 to bypass the district court and appeal a bankruptcy court ruling directly to the United States Court of Appeals. This represents a $50 increase over the $157 it would have cost yesterday.
A number of bankruptcy forms are also changing today. The following is a summary of the amendments:
- Official Forms 3A and 3B are revised to remove references to fee amounts.
- Official Forms 22A-1, 22A-1 Supp, 22A-2, 22B, 22C-1 and 22C-2 are revised to accommodate changes in the means test as a result of Supreme Court precedent and as part of the Bankruptcy Rules Advisory Committee’s ongoing Forms Modernization Project. As a result of these changes, Official Form 06 is also revised to update line number cross references to the revised means test forms.
- Official Forms 17A, 17B and 17C are new forms set to go into effect with the revised bankruptcy appellate rules.