ABI Bankruptcy Blog Exchange » Georgia Bankruptcy Blog

Georgia Bankruptcy Blog (10)

Georgia School Superindendent Kathy Cox Wins $1 Million On "Are You Smarter Than A 5th Grader?"

Posted: September 6th, 2008, 11:14am PDT

... and the remaining Clayton County School Board members need some of those fifth graders to help them figure out how to hold a meeting.
Eighth Circuit Says Bankruptcy Lawyers Can Advise Clients To Run Up Pre-Bankruptcy Debt

Posted: September 5th, 2008, 8:14am PDT

In Milavetz, Gallop & Milavetz, P.A. v. U.S., --- F.3d ----, 2008 WL 4068448 (8th Cir. September 4, 2008) (click here for .pdf), the Eighth Circuit struck down the part of the Bankruptcy Code that prohibits lawyers from telling their clients they cannot incur more debt before filing a petition.

The code section at issue is 11 U.S.C. § 526(a)(4), which provides as follows:

(a) A debt relief agency shall not–
. . .
(4) advise an assisted person or prospective assisted person to
incur more debt in contemplation of such person filing a case
under this title or to pay an attorney or bankruptcy petition
preparer fee or charge for services performed as part of preparing
for or representing a debtor in a case under this title.

The Court held this as prohibiting free speech under the U.S. Constitution -

Nonetheless, § 526(a)(4), as written, does not allow attorneys falling within the definition of debt relief agencies to advise assisted persons (or prospective assisted persons)—i.e. clients (or prospective clients) meeting the definition of assisted person—to incur such debt. Thus, § 526(a)(4) is not narrowly tailored nor narrowly and necessarily limited to prevent only that speech which the government has an interest in restricting. Therefore, we hold that §526(a)(4) is substantially overbroad, and unconstitutional as applied to attorneys who provide bankruptcy assistance to assisted persons, as those terms are defined in the Code.

The Court, however, did hold that bankruptcy attorneys are "debt relief agencies" under the Code and had to disclose it.

Because attorneys were not specifically excluded from the definition of debt relief agencies, we hold that attorneys that provide "bankruptcy assistance" to "assisted persons" are "debt relief agencies" as that term is defined by the Code. Interpreting the definition of "debt relief agency" to exclude bankruptcy attorneys would be contrary to Congress's intent. ...

Section 528 requires debt relief agencies to disclose: "'We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.' or a substantially similar statement," in all of their bankruptcy-related advertising materials directed to the general public. 11 U.S.C. §§ 528(a)(4), (b)(2). The requirement does not prevent those attorneys meeting the definition of debt relief agencies "from conveying information to the public; it . . . only require[s] them to provide somewhat more information than they might otherwise be inclined to present." Zauderer, 471 U.S. at 650. Moreover, if any of these attorneys are concerned that the required disclosures will confuse the public, we note that nothing in the Code prevents them from identifying themselves in their advertisements as both attorneys and debt relief agencies. Olsen, 350 B.R. at 920. Simply put, attorneys that provide bankruptcy assistance to assisted persons are debt relief agencies under the Code, and the disclosure requirements of § 528 only require those attorneys to disclose factually correct statements on their advertising.12 This does not violate the First Amendment. ...

The challenged sections of § 528 only require debt relief agencies to include a disclosure on certain advertisements. Although less intrusive means may be conceivable to prevent deceptive advertising, § 528's disclosure requirements are reasonably related to the government's interest in protecting consumer debtors from deceptive advertising, and thus the section passes constitutional muster.

See the Wall Street Journal Law Blog and Wall Street Journal article for further discussion.
Atlanta Bankruptcy Lawyer Hayden Kepner Debates Neal Boortz On Fair Tax

Posted: September 5th, 2008, 7:54am PDT

Hayden Kepner, a bankruptcy partner at Scroggins & Williamson, recently participated in a roundtable debate over the Fair Tax. The debate was moderated by CNN's Rick Sanchez, and included Neal Boortz, John Linder, and others.

You can access the video of the debate, which aired on CNN, by clicking here.
Order For Relief Apparently To Be Entered In Ply-Mart's Involuntary Case; Case Will Be Converted To Chapter 7

Posted: August 30th, 2008, 9:13am PDT

According to pleadings, the Bankruptcy Court apparently held that an Order for Relief would be entered in the Ply-Mart's Involuntary case (see prior post) and the case would be converted to a case under Chapter 7. The Chapter 11 involuntary petition was filed and signed by Dixie Plywood Company of Atlanta, JB Hunt Transport, Inc., and Primesource Building Products, Inc..

Le Jardin, Upscale South Fulton Development Controlled By Brian Jordan, Files Chapter 11

Posted: August 30th, 2008, 8:06am PDT

As we get closer to foreclosure day next week, the Chapter 11 filings are coming in. Friday, Chapter 11 petitions were filed by the Le Jardin community developer. The principal in Le Jardin and related entities, an upscale development located in South Fulton along Highway 92, Campbellton-Fairburn Highway, is former Braves player Brian Jordan. The filing comes after a Chapter 11 filing by Jordan's business partner, Stephen Macauley (as noted in this post).

The following related entities are part of this new filing:

08-77019	11	Le Jardin, LLC	Filed: 08/29/2008
08-77022	11	BOJ Homes at Twin Lakes, LLC	Filed: 08/29/2008
08-77024	11	BOJ Twin Lakes Investments, LLC	Filed: 08/29/2008
08-77025	11	BOJ Reserve Investments, LLC	Filed: 08/29/2008
08-77027	11	Retail at Le Jardin, LLC	Filed: 08/29/2008

The filings were apparently to stay foreclosure proceedings by Fairfield Financial Services, Inc., which describes itself as a hard money lender. Fairfield's foreclosure notices indicates it is owed in excess of $30 million.

Alpharetta Based Integrity Bank Fails, Is Bought By Regions

Posted: August 30th, 2008, 7:55am PDT

From the Atlanta Business Chronicle, Integrity Bank Fails, Bought By Regions Financial:

Integrity Bank's skyrocket run as the fastest-growing bank in Georgia history, fueled by housing construction, has ended in failure.

Birmingham, Ala.-based Regions Financial Corp. (NYSE: RF) late Friday acquired the deposits for the Alpharetta, Ga.-based community bank in the 10th bank U.S. bank failure this year, according to a late Friday press release from the Federal Deposit Insurance Corp. Integrity Bank operates five branches in metro Atlanta, primarily in the city's affluent north suburbs....

Regions Financial is also buying $34.4 million in cash and other assets from the failed bank. The FDIC estimates the cost to liquidate bad assets it assumes from Integrity Bank will be $250 million to $350 million.

See also, Linginfelter Makes Mark With Integrity Acquisition.
Clayton County Schools Lose Accreditation -- Expect Home Values To Slide Accordingly

Posted: August 28th, 2008, 10:18am PDT

The news is just in. Not surprisingly, Clayton County schools have lost accreditation according to this AJC article (see prior post). This follows a Judge slamming four members of the Clayton County School Board for violating Georgia’s Open Meetings act and the state ethics code (update: Gov. purdue has removed these four members). Expect home values to fall as families rush to move to neighboring counties.

The 50,000-student school system is the first in the nation to lose accreditation since 1969, the Southern Association of Colleges and Schools announced today. The ruling confirms the worst fears of Clayton’s 271,000 residents...

No accreditation means students will have a tougher time getting into some colleges and universities. They may also have difficulty obtaining scholarships. Qualifying Clayton students will still be able to get their HOPE scholarships. Earlier this year, Gov. Sonny Perdue signed a bill allowing graduates of unaccredited schools to get HOPE. Without accreditation, Clayton will also lose pre-kindergarten funding and some teacher benefits. The county also expects more students to flee. About 2,000 students have already left, superintendent John Thompson said.
Judge Paul Bonapfel's Chambers Broken Into and Ransacked ... By A Racoon

Posted: August 25th, 2008, 4:23pm PDT

Apparently the Bankruptcy Court in Atlanta is not as secure as we thought. According to an article in the Atlanta Journal-Constitution, there was a break-in -

“My theory is, because he had a mask on, he got through security,” said Judge Paul W. Bonapfel, a federal bankruptcy judge who reported the crime last week. When he got to work, Bonapfel discovered that a marauder had broken in to his 14th-floor office and eaten nearly half an apple.

But the raccoon goofed: it left a trail of tracks across a stack of federal memos. The judge called in his staff and others to solicit their opinions. Their verdict: Procyon lotor, a raccoon, had busted in. ... In the days following the apple caper, jurists and their staff reported other misdemeanors — chocolate chip cookies stolen from a 10th-floor desk; a purloined sandwich on the 9th; a packet of dried soup stolen from the 23rd floor.

[The GSA] hired a firm that specializes in catching wildlife that has gone astray. Its employees slipped a wire trap in the ceiling over the offices assigned to Judge Mary Grace Diehl — a veritable raccoon highway, based on reports. Workers baited the trap with tuna, closed the tiles, and advised the judges to wait. In addition to being blind, justice can be slow. Their wait ended Monday when Jean Sloan, Diehl’s judicial assistant, heard a chirping overhead. “I thought, ‘Maybe there’s a dove up there,’” Sloan said. Then, she thought again, and called for help....

GSA workers theorize Russell wriggled into the heating system from outside, then climbed pipes and ventilation ducts to commit crimes in the southeastern corner of the building. Nearby construction may have driven the creature to seek quieter digs, they think...

“We don’t have jurisdiction over raccoons,” said Bonapfel. “We leave that to the executive branch.”
Judge Paul Bonapfel's Chambers Broken Into and Ransacked ... By A Raccoon

Posted: August 25th, 2008, 4:23pm PDT

Apparently the Bankruptcy Court in Atlanta is not as secure as we thought. According to an article in the Atlanta Journal-Constitution, there was a break-in -

“My theory is, because he had a mask on, he got through security,” said Judge Paul W. Bonapfel, a federal bankruptcy judge who reported the crime last week. When he got to work, Bonapfel discovered that a marauder had broken in to his 14th-floor office and eaten nearly half an apple.

But the raccoon goofed: it left a trail of tracks across a stack of federal memos. The judge called in his staff and others to solicit their opinions. Their verdict: Procyon lotor, a raccoon, had busted in. ... In the days following the apple caper, jurists and their staff reported other misdemeanors — chocolate chip cookies stolen from a 10th-floor desk; a purloined sandwich on the 9th; a packet of dried soup stolen from the 23rd floor.

[The GSA] hired a firm that specializes in catching wildlife that has gone astray. Its employees slipped a wire trap in the ceiling over the offices assigned to Judge Mary Grace Diehl — a veritable raccoon highway, based on reports. Workers baited the trap with tuna, closed the tiles, and advised the judges to wait. In addition to being blind, justice can be slow. Their wait ended Monday when Jean Sloan, Diehl’s judicial assistant, heard a chirping overhead. “I thought, ‘Maybe there’s a dove up there,’” Sloan said. Then, she thought again, and called for help....

GSA workers theorize Russell wriggled into the heating system from outside, then climbed pipes and ventilation ducts to commit crimes in the southeastern corner of the building. Nearby construction may have driven the creature to seek quieter digs, they think...

“We don’t have jurisdiction over raccoons,” said Bonapfel. “We leave that to the executive branch.”
Article Discusses Builders Seeking Counseling To Cope With Housing And Real Estate Slump

Posted: August 25th, 2008, 8:01am PDT

Tom Opdyke of the Atlanta Journal Constitution has an article in today's paper entitled Therapists Helping Builders Cope During Housing Slump (reg. may be required). As the title implies, Tom discusses builders who have sought counseling to deal with the stress arising from the business. I have represented a significant number of builders and developers over the years, in bankruptyc and other cases, and can testfy about the level of stress they go through.

"It’s a need we never addressed before," said David Ellis, executive vice president of the Greater Atlanta Home Builders Association, which earlier this year began telling its 3,300 members help was available if they wanted it. "It’s a different time, and we’re trying to be responsive to our members’ needs."...

Measuring vacant available real estate is easier than gauging builder turbulence. Smaller companies simply fold. Larger ones may seek bankruptcy protection, but there is no data on builder bankruptcies. Lawyer Scott Riddle, who tracks local Chapter 11 filings on his blog, sees the mounting evidence of the slow housing market and credit crunch. I think there has been a significant increase in builder bankruptcies," Riddle said...

Charlie Cummins, a counselor and executive coach, is among those trying to get there before the tragedies occur. "We talk with people about the changing industry and how they manage its effect on them and their family," said Cummins, a counselor and executive coach who has worked with the Greater Atlanta Home Builders Association.

Tony Perry, who sought bankruptcy protection in December for his Oakwood Homes, thinks talking about the embarrassment and feelings of loss can kickoff the rebound. "The fastest way to get back is to get some emotional help," said Perry, a self-described "recovering builder." .. "You can’t feel much worse than this," he said of his bankruptcy and of having to move his family to a smaller home. "You can say it’s just business, but it didn’t feel like just business to me."

The firm’s practice focuses on bankruptcy and litigation. Scott has represented Chapter 11 debtors, creditors, trustees and other interested parties in bankruptcy cases and bankruptcy litigation. For more information, click here.

← Bankruptcy Reader SC Bankruptcy Blog →

Feeds

Georgia Bankruptcy Blog (10)

Posted: September 6th, 2008, 11:14am PDT

Posted: September 5th, 2008, 8:14am PDT

Posted: September 5th, 2008, 7:54am PDT

Posted: August 30th, 2008, 9:13am PDT

Posted: August 30th, 2008, 8:06am PDT

Posted: August 30th, 2008, 7:55am PDT

Posted: August 28th, 2008, 10:18am PDT

Posted: August 25th, 2008, 4:23pm PDT

Posted: August 25th, 2008, 4:23pm PDT

Posted: August 25th, 2008, 8:01am PDT