CACB — First Amended - Adoption of Interim Bankruptcy Rules Re: SBRA

Source: https://www.cacb.uscourts.gov/sites/cacb/files/documents/general-orders/SBRA%20GO%2020-01_Amended.pdf

Sparse pages use OCR; original PDF remains authoritative.

1 2 3 FEB 14 2020 4 5 6 7 UNITED STATES BANKRUPTCY COURT 8 CENTRAL DISTRICT OF CALIFORNIA 9 10 In Re: ) FIRST AMENDED 11 ) GENERAL ORDER 20-01 ADOPTION OF INTERIM ) 12 BANKRUPTCY RULES RE: SBRA ) ) 13 ) 14 15 16 On August 23, 2019, the Small Business Reorganization Act of 2019 (the SBRA) was 17 enacted into law. The SBRA makes many substantive and procedural changes to the 18 Bankruptcy Code and requires changes to the Federal Rules of Bankruptcy Procedure to 19 implement those changes. However, the February 19, 2020 effective date of the SBRA 20 occurs long before the Bankruptcy Rules can be amended under the three-year process 21 required by the Rules Enabling Act. Accordingly, the Advisory Committee on Bankruptcy 22 Rules (the Advisory Committee) drafted, published for comment, and subsequently 23 approved interim bankruptcy rules (the Interim Rules) for distribution to the courts. The 24 Committee on Rules of Practice and Procedure approved the Interim Rules, and the Judicial 25 Conference authorized distribution of the Interim Rules to courts for adoption locally to 26 facilitate uniform implementation of the changes mandated by the SBRA. 27 28 - 1 - GENERAL ORDER 20-01

1 NOW THEREFORE, pursuant to 28 U.S.C. § 2071, Rule 83 of the Federal Rules of 2 Civil Procedure, and Rule 9029 of the Federal Rules of Bankruptcy Procedure, the attached 3 Interim Rules, as set forth in Attachment A, are adopted in their entirety to be effective 4 February 19, 2020. For chapter 11 cases filed under Subchapter V, all claims – except by 5 governmental units – must be filed within 70 days after the date of the order for relief. 6 Governmental units’ claims for chapter 11 cases filed under Subchapter V must be filed 7 within 180 days after the date of the order for relief. For cases and proceedings not governed 8 by the SBRA, the Federal Rules of Bankruptcy Procedure and the Local Rules of this Court, 9 other than the Interim Rules, shall apply. 10 11 The Interim Rules shall remain in effect until further order of the Court. 12 13 IT IS SO ORDERED. 14 15 Date: February 14, 2020 16 17 Maureen A. Tighe Chief Judge, United States Bankruptcy Court 18 19 20 21 22 23 24 25 26 27 28 - 2 - GENERAL ORDER 20-01

INTERIM AMENDMENTS TO THE FEDERAL RULES OF BANKRUPTCY PROCEDURE1

1 Rule 1007. Lists, Schedules, Statements, and Other

2 Documents; Time Limits

3 * * * * *

4 (b) SCHEDULES, STATEMENTS, AND OTHER

5 DOCUMENTS REQUIRED.

6 * * * * *

7 (5) An individual debtor in a chapter 11 case

8 (unless under subchapter V) shall file a statement of

9 current monthly income, prepared as prescribed by

10 the appropriate Official Form.

11 * * * * *

1 These interim bankruptcy rules (the Interim Rules) have been

prepared by the Advisory Committee on Bankruptcy Rules and approved by the Judicial Conference of the United States to be adopted as local rules by the Bankruptcy Courts to implement the procedural and substantive changes to the Bankruptcy Code made by the Small Business Reorganization Act of 2019. The Interim Rules will be withdrawn after similar amendments can made to the Rules of Bankruptcy Procedure under the normal Rules Enabling Act process.

2 INTERIM RULES OF BANKRUPTCY PROCEDURE

12 (h) INTERESTS ACQUIRED OR ARISING

13 AFTER PETITION. If, as provided by § 541(a)(5) of the

14 Code, the debtor acquires or becomes entitled to acquire any

15 interest in property, the debtor shall within 14 days after the

16 information comes to the debtor’s knowledge or within such

17 further time the court may allow, file a supplemental

18 schedule in the chapter 7 liquidation case, chapter 11

19 reorganization case, chapter 12 family farmer’s debt

20 adjustment case, or chapter 13 individual debt adjustment

21 case. If any of the property required to be reported under

22 this subdivision is claimed by the debtor as exempt, the

23 debtor shall claim the exemptions in the supplemental

24 schedule. This duty to file a supplemental schedule

25 continues even after the case is closed, except for property

26 acquired after an order is entered:

27 (1) confirming a chapter 11 plan (other than one

28 confirmed under § 1191(b)); or

INTERIM RULES OF BANKRUPTCY PROCEDURE 3

29 (2) discharging the debtor in a chapter 12 case, a

30 chapter 13 case, or a case under subchapter V of

31 chapter 11 in which the plan is confirmed under

32 § 1191(b).

33 * * * * *

4 INTERIM RULES OF BANKRUPTCY PROCEDURE

1 Rule 1020. Chapter 11 Reorganization Case for Small

2 Business Debtors

3 (a) SMALL BUSINESS DEBTOR

4 DESIGNATION. In a voluntary chapter 11 case, the debtor

5 shall state in the petition whether the debtor is a small

6 business debtor and, if so, whether the debtor elects to have

7 subchapter V of chapter 11 apply. In an involuntary chapter

8 11 case, the debtor shall file within 14 days after entry of the

9 order for relief a statement as to whether the debtor is a small

10 business debtor and, if so, whether the debtor elects to have

11 subchapter V of chapter 11 apply. The status of the case as

12 a small business case or a case under subchapter V of chapter

13 11 shall be in accordance with the debtor’s statement under

14 this subdivision, unless and until the court enters an order

15 finding that the debtor’s statement is incorrect.

16 (b) OBJECTING TO DESIGNATION. The United

17 States trustee or a party in interest may file an objection to

18 the debtor’s statement under subdivision (a) no later than 30

INTERIM RULES OF BANKRUPTCY PROCEDURE 5

19 days after the conclusion of the meeting of creditors held

20 under § 341(a) of the Code, or within 30 days after any

21 amendment to the statement, whichever is later.

22 (c) PROCEDURE FOR OBJECTION OR

23 DETERMINATION. Any objection or request for a

24 determination under this rule shall be governed by Rule 9014

25 and served on: the debtor; the debtor’s attorney; the United

26 States trustee; the trustee; the creditors included on the list

27 filed under Rule 1007(d) or, if a committee has been

28 appointed under § 1102(a)(3), the committee or its

29 authorized agent and any other entity as the court directs.

6 INTERIM RULES OF BANKRUPTCY PROCEDURE

1 Rule 2009. Trustees for Estates When Joint

2 Administration Ordered

3 (a) ELECTION OF SINGLE TRUSTEE FOR

4 ESTATES BEING JOINTLY ADMINISTERED. If the

5 court orders a joint administration of two or more estates

6 under Rule 1015(b), creditors may elect a single trustee for

7 the estates being jointly administered, unless the case is

8 under subchapter V of chapter 7 or subchapter V of chapter

9 11 of the Code.

10 (b) RIGHT OF CREDITORS TO ELECT

11 SEPARATE TRUSTEE. Notwithstanding entry of an order

12 for joint administration under Rule 1015(b), the creditors of

13 any debtor may elect a separate trustee for the estate of the

14 debtor as provided in § 702 of the Code, unless the case is

15 under subchapter V of chapter 7 or subchapter V of chapter

16 11.

17 (c) APPOINTMENT OF TRUSTEES FOR

18 ESTATES BEING JOINTLY ADMINISTERED.

INTERIM RULES OF BANKRUPTCY PROCEDURE 7

19 * * * * *

20 (2) Chapter 11 Reorganization Cases. If the

21 appointment of a trustee is ordered or is required by

22 the Code, the United States trustee may appoint one

23 or more trustees for estates being jointly

24 administered in chapter 11 cases.

25 * * * * *

8 INTERIM RULES OF BANKRUPTCY PROCEDURE

1 Rule 2012. Substitution of Trustee or Successor

2 Trustee; Accounting

3 (a) TRUSTEE. If a trustee is appointed in a chapter

4 11 case (other than under subchapter V), or the debtor is

5 removed as debtor in possession in a chapter 12 case or in a

6 case under subchapter V of chapter 11, the trustee is

7 substituted automatically for the debtor in possession as a

8 party in any pending action, proceeding, or matter.

9 * * * * *

INTERIM RULES OF BANKRUPTCY PROCEDURE 9

1 Rule 2015. Duty to Keep Records, Make Reports, and

2 Give Notice of Case or Change of Status

3 (a) TRUSTEE OR DEBTOR IN POSSESSION. A

4 trustee or debtor in possession shall:

5 (1) in a chapter 7 liquidation case and, if the

6 court directs, in a chapter 11 reorganization case

7 (other than under subchapter V), file and transmit to

8 the United States trustee a complete inventory of the

9 property of the debtor within 30 days after qualifying

10 as a trustee or debtor in possession, unless such an

11 inventory has already been filed;

12 (2) keep a record of receipts and the

13 disposition of money and property received;

14 (3) file the reports and summaries required by

15 § 704(a)(8) of the Code, which shall include a

16 statement, if payments are made to employees, of the

17 amounts of deductions for all taxes required to be

10 INTERIM RULES OF BANKRUPTCY PROCEDURE

18 withheld or paid for and in behalf of employees and

19 the place where these amounts are deposited;

20 (4) as soon as possible after the

21 commencement of the case, give notice of the case to

22 every entity known to be holding money or property

23 subject to withdrawal or order of the debtor,

24 including every bank, savings or building and loan

25 association, public utility company, and landlord

26 with whom the debtor has a deposit, and to every

27 insurance company which has issued a policy having

28 a cash surrender value payable to the debtor, except

29 that notice need not be given to any entity who has

30 knowledge or has previously been notified of the

31 case;

32 (5) in a chapter 11 reorganization case (other

33 than under subchapter V), on or before the last day

34 of the month after each calendar quarter during

35 which there is a duty to pay fees under 28 U.S.C.

INTERIM RULES OF BANKRUPTCY PROCEDURE 11

36 § 1930(a)(6), file and transmit to the United States

37 trustee a statement of any disbursements made

38 during that quarter and of any fees payable under 28

39 U.S.C. § 1930(a)(6) for that quarter; and

40 (6) in a chapter 11 small business case, unless

41 the court, for cause, sets another reporting interval,

42 file and transmit to the United States trustee for each

43 calendar month after the order for relief, on the

44 appropriate Official Form, the report required by

45 § 308. If the order for relief is within the first 15 days

46 of a calendar month, a report shall be filed for the

47 portion of the month that follows the order for relief.

48 If the order for relief is after the 15th day of a

49 calendar month, the period for the remainder of the

50 month shall be included in the report for the next

51 calendar month. Each report shall be filed no later

52 than 21 days after the last day of the calendar month

53 following the month covered by the report. The

12 INTERIM RULES OF BANKRUPTCY PROCEDURE

54 obligation to file reports under this subparagraph

55 terminates on the effective date of the plan, or

56 conversion or dismissal of the case.

57 (b) TRUSTEE, DEBTOR IN POSSESSION, AND

58 DEBTOR IN A CASE UNDER SUBCHAPTER V OF

59 CHAPTER 11. In a case under subchapter V of chapter 11,

60 the debtor in possession shall perform the duties prescribed

61 in (a)(2)–(4) and, if the court directs, shall file and transmit

62 to the United States trustee a complete inventory of the

63 debtor’s property within the time fixed by the court. If the

64 debtor is removed as debtor in possession, the trustee shall

65 perform the duties of the debtor in possession prescribed in

66 this subdivision (b). The debtor shall perform the duties

67 prescribed in (a)(6).

68 (c) CHAPTER 12 TRUSTEE AND DEBTOR IN

69 POSSESSION. In a chapter 12 family farmer’s debt

70 adjustment case, the debtor in possession shall perform the

71 duties prescribed in clauses (2)–(4) of subdivision (a) of this

INTERIM RULES OF BANKRUPTCY PROCEDURE 13

72 rule and, if the court directs, shall file and transmit to the

73 United States trustee a complete inventory of the property of

74 the debtor within the time fixed by the court. If the debtor is

75 removed as debtor in possession, the trustee shall perform

76 the duties of the debtor in possession prescribed in this

77 subdivision (c).

78 (d) CHAPTER 13 TRUSTEE AND

79 DEBTOR.

80 (1) Business Cases. In a chapter 13

81 individual’s debt adjustment case, when the debtor is

82 engaged in business, the debtor shall perform the

83 duties prescribed by clauses (2)–(4) of subdivision

84 (a) of this rule and, if the court directs, shall file and

85 transmit to the United States trustee a complete

86 inventory of the property of the debtor within the

87 time fixed by the court.

88 (2) Nonbusiness Cases. In a chapter 13

89 individual’s debt adjustment case, when the debtor is

14 INTERIM RULES OF BANKRUPTCY PROCEDURE

90 not engaged in business, the trustee shall perform the

91 duties prescribed by clause (2) of subdivision (a) of

92 this rule.

93 (e) FOREIGN REPRESENTATIVE. In a case in

94 which the court has granted recognition of a foreign

95 proceeding under chapter 15, the foreign representative shall

96 file any notice required under § 1518 of the Code within 14

97 days after the date when the representative becomes aware

98 of the subsequent information.

99 (f) TRANSMISSION OF REPORTS. In a chapter

100 11 case the court may direct that copies or summaries of

101 annual reports and copies or summaries of other reports shall

102 be mailed to the creditors, equity security holders, and

103 indenture trustees. The court may also direct the publication

104 of summaries of any such reports. A copy of every report or

105 summary mailed or published pursuant to this subdivision

106 shall be transmitted to the United States trustee.

INTERIM RULES OF BANKRUPTCY PROCEDURE 15

1 Rule 3010. Small Dividends and Payments in Cases

2 Under Chapter 7, Subchapter V of Chapter 11, Chapter

3 12, and Chapter 13

4 * * * * *

5 (b) CASES UNDER SUBCHAPTER V OF

6 CHAPTER 11, CHAPTER 12, AND CHAPTER 13. In a

7 case under subchapter V of chapter 11, chapter 12, or chapter

8 13, no payment in an amount less than $15 shall be

9 distributed by the trustee to any creditor unless authorized

10 by local rule or order of the court. Funds not distributed

11 because of this subdivision shall accumulate and shall be

12 paid whenever the accumulation aggregates $15. Any funds

13 remaining shall be distributed with the final payment.

16 INTERIM RULES OF BANKRUPTCY PROCEDURE

1 Rule 3011. Unclaimed Funds in Cases Under Chapter 7,

2 Subchapter V of Chapter 11, Chapter 12, and Chapter

3 13

4 The trustee shall file a list of all known names and

5 addresses of the entities and the amounts which they are

6 entitled to be paid from remaining property of the estate that

7 is paid into court pursuant to § 347(a) of the Code.

INTERIM RULES OF BANKRUPTCY PROCEDURE 17

1 Rule 3014. Election Under § 1111(b) by Secured

2 Creditor in Chapter 9 Municipality or Chapter 11

3 Reorganization Case

4 An election of application of § 1111(b)(2) of the

5 Code by a class of secured creditors in a chapter 9 or 11 case

6 may be made at any time prior to the conclusion of the

7 hearing on the disclosure statement or within such later time

8 as the court may fix. If the disclosure statement is

9 conditionally approved pursuant to Rule 3017.1, and a final

10 hearing on the disclosure statement is not held, the election

11 of application of § 1111(b)(2) may be made not later than the

12 date fixed pursuant to Rule 3017.1(a)(2) or another date the

13 court may fix. In a case under subchapter V of chapter 11 in

14 which § 1125 of the Code does not apply, the election may

15 be made not later than a date the court may fix. The election

16 shall be in writing and signed unless made at the hearing on

17 the disclosure statement. The election, if made by the

18 INTERIM RULES OF BANKRUPTCY PROCEDURE

18 majorities required by § 1111(b)(1)(A)(i), shall be binding

19 on all members of the class with respect to the plan.

INTERIM RULES OF BANKRUPTCY PROCEDURE 19

1 Rule 3016. Filing of Plan and Disclosure Statement in a

2 Chapter 9 Municipality or Chapter 11 Reorganization

3 Case

4 (a) IDENTIFICATION OF PLAN. Every proposed

5 plan and any modification thereof shall be dated and, in a

6 chapter 11 case, identified with the name of the entity or

7 entities submitting or filing it.

8 (b) DISCLOSURE STATEMENT. In a chapter 9 or

9 11 case, a disclosure statement, if required under § 1125 of

10 the Code, or evidence showing compliance with § 1126(b)

11 shall be filed with the plan or within a time fixed by the

12 court, unless the plan is intended to provide adequate

13 information under § 1125(f)(1). If the plan is intended to

14 provide adequate information under § 1125(f)(1), it shall be

15 so designated, and Rule 3017.1 shall apply as if the plan is a

16 disclosure statement.

17 * * * * *

20 INTERIM RULES OF BANKRUPTCY PROCEDURE

18 (d) STANDARD FORM SMALL BUSINESS

19 DISCLOSURE STATEMENT AND PLAN. In a small

20 business case or a case under subchapter V of chapter 11, the

21 court may approve a disclosure statement and may confirm

22 a plan that conform substantially to the appropriate Official

23 Forms or other standard forms approved by the court.

INTERIM RULES OF BANKRUPTCY PROCEDURE 21

1 Rule 3017.1. Court Consideration of Disclosure

2 Statement in a Small Business Case or in a Case Under

3 Subchapter V of Chapter 11

4 (a) CONDITIONAL APPROVAL OF

5 DISCLOSURE STATEMENT. In a small business case or

6 in a case under subchapter V of chapter 11 in which the court

7 has ordered that § 1125 applies, the court may, on

8 application of the plan proponent or on its own initiative,

9 conditionally approve a disclosure statement filed in

10 accordance with Rule 3016. On or before conditional

11 approval of the disclosure statement, the court shall:

12 (1) fix a time within which the holders of claims and

13 interests may accept or reject the plan;

14 (2) fix a time for filing objections to the disclosure

15 statement;

16 (3) fix a date for the hearing on final approval of the

17 disclosure statement to be held if a timely objection

18 is filed; and

22 INTERIM RULES OF BANKRUPTCY PROCEDURE

19 (4) fix a date for the hearing on confirmation.

20 * * * * *

INTERIM RULES OF BANKRUPTCY PROCEDURE 23

1 Rule 3017.2. Fixing of Dates by the Court in Subchapter

2 V Cases in Which There Is No Disclosure Statement

3 In a case under subchapter V of chapter 11 in which

4 § 1125 does not apply, the court shall:

5 (a) fix a time within which the holders of claims

6 and interests may accept or reject the plan;

7 (b) fix a date on which an equity security holder

8 or creditor whose claim is based on a security must

9 be the holder of record of the security in order to be

10 eligible to accept or reject the plan;

11 (c) fix a date for the hearing on confirmation; and

12 (d) fix a date for transmission of the plan, notice

13 of the time within which the holders of claims and

14 interests may accept or reject the plan, and notice of

15 the date for the hearing on confirmation.

24 INTERIM RULES OF BANKRUPTCY PROCEDURE

1 Rule 3018. Acceptance or Rejection of Plan in a Chapter

2 9 Municipality or a Chapter 11 Reorganization Case

3 (a) ENTITIES ENTITLED TO ACCEPT OR

4 REJECT PLAN; TIME FOR ACCEPTANCE OR

5 REJECTION. A plan may be accepted or rejected in

6 accordance with § 1126 of the Code within the time fixed by

7 the court pursuant to Rule 3017, 3017.1, or 3017.2. Subject

8 to subdivision (b) of this rule, an equity security holder or

9 creditor whose claim is based on a security of record shall

10 not be entitled to accept or reject a plan unless the equity

11 security holder or creditor is the holder of record of the

12 security on the date the order approving the disclosure

13 statement is entered or on another date fixed by the court

14 under Rule 3017.2, or fixed for cause after notice and a

15 hearing. For cause shown, the court after notice and hearing

16 may permit a creditor or equity security holder to change or

17 withdraw an acceptance or rejection. Notwithstanding

18 objection to a claim or interest, the court after notice and

INTERIM RULES OF BANKRUPTCY PROCEDURE 25

19 hearing may temporarily allow the claim or interest in an

20 amount which the court deems proper for the purpose of

21 accepting or rejecting a plan.

22 * * * * *

26 INTERIM RULES OF BANKRUPTCY PROCEDURE

1 Rule 3019. Modification of Accepted Plan in a Chapter

2 9 Municipality or a Chapter 11 Reorganization Case

3 * * * * *

4 (b) MODIFICATION OF PLAN AFTER

5 CONFIRMATION IN INDIVIDUAL DEBTOR CASE. If

6 the debtor is an individual, a request to modify the plan under

7 § 1127(e) of the Code is governed by Rule 9014. The request

8 shall identify the proponent and shall be filed together with

9 the proposed modification. The clerk, or some other person

10 as the court may direct, shall give the debtor, the trustee, and

11 all creditors not less than 21 days’ notice by mail of the time

12 fixed to file objections and, if an objection is filed, the

13 hearing to consider the proposed modification, unless the

14 court orders otherwise with respect to creditors who are not

15 affected by the proposed modification. A copy of the notice

16 shall be transmitted to the United States trustee, together

17 with a copy of the proposed modification. Any objection to

18 the proposed modification shall be filed and served on the

INTERIM RULES OF BANKRUPTCY PROCEDURE 27

19 debtor, the proponent of the modification, the trustee, and

20 any other entity designated by the court, and shall be

21 transmitted to the United States trustee.

22 (c) MODIFICATION OF PLAN AFTER

23 CONFIRMATION IN A SUBCHAPTER V CASE. In a

24 case under subchapter V of chapter 11, a request to modify

25 the plan under § 1193(b) or (c) of the Code is governed by

26 Rule 9014, and the provisions of this Rule 3019(b) apply.