Revisions to Local Bankruptcy Rules ("LBRs") of the U.S. Bankruptcy Court for the Central District of California

This e-alert provides analysis concerning revisions to the Local Bankruptcy Rules ("LBR's") of the United States Bankruptcy Court for the Central District of California. The new LBRs became effective on January 3, 2011. The newly amended LBRs and a redline against the old rules can be viewed by clicking here.

Also, at the end of this e-alert, please be sure to read the letter informing you that the Centralized Insolvency Operation office for the Internal Revenue Service changed effective January 1, 2011.

Revised Local Bankruptcy Rules:

LBR 1010-1.  Involuntary Petitions.

Revisions to LBR 1010-1 now expressly permit the Court to dismiss an involuntary petition sua sponte if the petitioner fails to prepare a Summons and Notice of Status Conference on a court-mandated form for submission to the clerk for issuance.

Prior to the revision, there was no express requirement of preparing the Summons and Notice of Status Conference on a court mandated form for submission to the clerk's office.

LBR 3015(w)(3).  Chapter 13 Cases. Motions and Applications Filed on Notice of Opportunity to Request a Hearing; Response Filed.

LBR 3015(w)(3)(A) applies if a person files a response to a trustee's motion to dismiss a case or modify a confirmed plan in a chapter 13 case. The revision provides that any person prior to filing a response to a trustee's motion to dismiss a case or modify a confirmed plan, must first obtain a hearing date. The hearing date must be the court's next available chapter 13 calendar date that provides the trustee with at least 7 days notice, but not be more than 30 days after the response is filed. The revised rule also explicitly requires the caption of the response to include the date, time and location of the hearing. The Court may grant the trustee's motion without a hearing if such hearing is not timely set.

Prior to the revision, the burden was on the trustee to set for a hearing for a motion to dismiss the case or modify a confirmed plan -- if a response to the motion had been timely filed.

LBR 3015(w)(3)(B) applies when a chapter 13 trustee serves any comments on a debtor's application for supplement fees. The rule now requires a chapter 13 debtor to lodge a proposed order, a copy of the motion/application and the trustee's comments with the judge's copy. Prior LBR 3015(w)(3)(C) dealing with a chapter 13 debtor's application for supplemental fees has been incorporated into LBR 3015(w)(3)(B) as described above.

LBR 5005-2(d).  Judge's Copy.

The revised rule provides that any judge's copy that is either filed or lodged with the court must be accompanied by a NEF or LOU (Lodged Order Upload) receipt. Previously, the judge's copy required an NEF receipt only. The rule now explicitly requires a proof of service indicating the method of the service of the judge's copy. Finally, the revised rule provides that there may be exceptions to serving a judge's copy which can be found in the Court manual.

LBR 7004-1(a).  Issuance and Service of Summons and Notice of Status Conference.

LBR 70014(a) relates to adversary proceedings and identifies two court mandated forms. In connection with a summons and notice of status conference, the attorney or party must for the execution by the clerk use the Court's mandated form "F 7004-1.SUMMONS" for adversary proceedings or "F 1010-1.1.SUMMONS" for involuntary petitions.

LBR 7056-1(b)(1).  Summary Judgment: Motion and Supporting Documents.

New LBR 7056-1(b)(1) enlarges the notice period on motions for summary judgment or partial summary adjudication by providing parties with at least 42, instead of 36, days' notice before the hearing on the motion.

LBR 9009-1.  Forms.

New LBR 9009-1(b) and 9009-1(c) provide "court-mandated forms" are both court-approved and designated as "mandatory." The revised rule explicitly states that the exact language from the court approved form must be used (including in orders and judgments). No modifications to any court-approved forms are permitted unless the modified language is in a separate attachment so that the suggestions for modification of the court- approved language is obvious. Previously, the rules against modifying such language only applied to court mandated forms. No the rule extends to court approved forms.

LBR 9013-1(o)(2).  Matters that May Not be Determined Upon Notice of Opportunity to Request Hearing.

Revised LBR 9013(o)(2)(M) provides that motions to value and avoid junior liens ("LAM" motions) in chapter 11, 12 and 13 cases, may no longer be granted without a hearing. Previously, these motions could be granted without a hearing if a notice of opportunity for a hearing was filed and no response was received pursuant to LBR 9013-1(o)(1)

LBR 9013-1(o)(4).  Motions and Matters Not Requiring a Hearing: Response and Request for Hearing Filed.

If a party responds and requests a hearing on a motion that could have otherwise been determined without a hearing under LBR 9013-1(o)(1), the moving party now has 14 days from the service of the response to schedule a hearing on that motion. Previously, the moving party had 21 instead of 14 days to schedule such a hearing.

Change In Addresses And Contact For Internal Revenue Service

Effective January 1, 2011, the addresses for the Centralized Insolvency Operation of the Internal Revenue Service has changed. Please note the new addresses (one for regular mail and one for overnight mail) for service purposes as well for listing I.R.S. in bankruptcy schedules. Please note that the facsimile transmission number for I.R.S. has changed as well. Click here to read a copy of the letter detailing these changes.

Allan H. Ickowitz is Co-Chair of Nossaman's Financial Services and Bankruptcy Practice Group and specializes in the bankruptcy, creditors' rights and workout areas including commercial, real estate and related litigation. He has over 30 years of experience in insolvency matters involving financing transactions, real estate, energy, utility, transportation, communications, healthcare, environmental manufacturing, environmental, and other transactions. He can be reached at aickowitz@nossaman.com or 213.612.7849.