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					                           United States Bankruptcy Court, District of Rhode Island
Volume 9, Issue 1

                               ON THE DOCKET
January, February,
March 2008                 Inner Workings: News and Advice
                           by Susan M. Thurston, Clerk of Court


                                    Welcome to the first 2008       district of Rhode Island. In fact,
                           issue of our classic newsletter On the   Judge Votolato is currently the
                           Docket. As usual, we have lots of        longest serving active duty bank-
Inside this issue:         news to report on happenings at the      ruptcy judge in the entire country.
                           U. S. Bankruptcy Court since last        Judge Votolato has handled thou-
                           fall. First, many of you surely no-      sands of interesting cases during his
                           ticed our new Court Technology Spe-      judgeship here, in addition to his
                           cialist, Mr. Samuel Nogueras, who        work throughout the last four dec-
 Inner Workings      1-2
                           commenced employment at the Court        ades helping to educate the bar and
                           on January 7, 2008. Sam is an ex-        public on bankruptcy and other le-
 Team Coach          3     perienced audio system specialist and    gal topics. This spring, in recogni-
                           has seamlessly transitioned to his       tion of his outstanding contributions
 Chambers            4     new role as the Court’s digital court    to law related education in Rhode
 Personnel Update          recorder operator and sound system       Island,      Judge Votolato was
                           expert. As the amount of technology      awarded the 2008 Giannini Award
 Recent Court        5-6
 Decisions                 in the courtroom has grown over the      by the Rhode Island Legal/
                           years, it is a tremendous advantage to   Educational Partnership.       Please
                           have someone with Sam’s expertise        join me in congratulating Judge
                           and knowledge running the automa-        Votolato on his impressive forty
                           tion equipment during court proceed-     year contribution to the federal
                           ings. Soon Sam will also be respon-      bankruptcy sys-
                           sible for managing the videoconfer-      tem in the dis-
                           encing component, which is nearly        trict of Rhode
                           ready for prime-time.                    Island!

                                   2008 also marks the 40th an-            The start
                           niversary of Bankruptcy Judge Ar-        of the year – January 1, 2008 –
                           thur N. Votolato’s continuous service
                                                                                     (Continued on page 2)
                           as the sole bankruptcy judge for the
         ON THE DOCKET
Page 2

 (Inner Workings Cont’d from pg. 1)   which went into effect on Febru-      Those of you who practice be-
                                      ary 15, 2008, and a second update     fore the Department of Labor
 marked the debut of the Court’s      to the Means Test forms, effective    may well come before Judge
 new and improved website to          March 3, 2008. Detailed infor-        Calianos in the near future!
 the public. The site has been        mation on these changes is posted     Please join me in extending our
 reorganized to better locate         on the main page of the website       heartfelt congratulations to Jon
 critical bankruptcy information,     under News and Announcements.         on his professional success. As
 has a much cleaner look and                                                you can imagine, after all these
                                              Lastly, I would like to an-
 provides easier navigation                                                 years with the Court, both Cindy
                                      nounce the upcoming departure of
 through the use of hovering                                                and Jon will be sorely missed by
                                      two long time employees of the
 menu buttons. We have also                                                 their court colleagues and the
                                      Court – Cindy Cory, Courtroom
 added certain content in the                                               public they have so honorably
                                      Deputy and Jonathan Calianos,
 Spanish language as this need                                              served.
                                      Career Law Clerk. Cindy will be
 has grown considerably since
                                      retiring on June 1, 2008 after al-
 BAPCPA.         Also, we have
                                      most 37 years of service with the
 added an extensive Self Help/
                                      federal government. If you see
 Pro Se section to answer fre-
                                      Cindy in the courtroom between
 quently asked questions and to
                                      now and June 1, please join me in
 provide detailed information on
                                      congratulating her on her amazing
 the procedural requirements for
                                      service to the federal judiciary
 different chapter filings.   As
                                      and wish her a well deserved re-
 usual, we strongly welcome
                                      tirement! Jonathan, on the other
 your comments and sugges-
                                      hand, will be transferring to the
 tions. A Pro Se survey to col-
                                      Executive Branch on May 9,
 lect your feedback has been
                                      2008, to begin service as an Ad-
 added to the homepage Please
                                      ministrative Law Judge for the
 visit the main page to complete
                                      Department of Labor in Boston.
 the on-line survey.    Other re-
                                      Jon has served as Judge Voto-
 cent changes include three
                                      lato’s distinguished Career Law
 amendments to our local rules
                                      Clerk for the past fifteen years.




                CONGRATULATIONS AND BEST WISHES TO JON AND CINDY!
          Volume 9, Issue 1
                                                                                                         Page 3


Team Coach
by Lucinda Cory, Courtroom Deputy
        It’s been a little over a   new party. Many filers seem         easy: always choose the initiating
year since the implementation       reluctant to add another party      motion/document.      For example,
of Mandatory Electronic Case        when they see this screen -         when filing a motion to continue a
Filing. We now have nearly          thinking that they’ve done          confirmation hearing, link your mo-
100% of the bankruptcy bar e-       something wrong.       Simply       tion to continue to the plan, not the
filing. Congratulations to all of   leave the “association” boxes       hearing notice.
you on your continued success       unchecked and click into the
                                                                        REMINDERS:
with the electronic filing sys-     next screen.
tem! Still, new members of the                                          A large number attorneys and credi-
                                    Choosing the right event is im-
e-filing community must take                                            tors are now making use of the No-
                                    portant. The “Motion” and
some time getting used to the                                           tice of Appearance (text only) event
                                    “Other” categories are popu-
system. This column seeks to                                            which allows an entry of appearance
                                    lated with many events from
help neophytes (and veterans)                                           without a pdf form. Electronic no-
                                    which to choose. Do not try to
navigate through the events                                             tices go to the parties and attorneys
                                    use ‘document’ when you are
with ease and comfort.                                                  in the case so a certificate of service
                                    filing schedules, payment ad-
                                                                        is not necessary on this particular
The questions most commonly         vices, or a means test. Many
                                                                        event. This event is a time-saver for
faced by ECF users are those        events have special functions,
                                                                        e-filers.
involving choosing party filers,    e.g. payment advices, which are
event codes and associating the     private entries and cannot be       Remember those deadlines! Finan-
filing to the appropriate docu-     seen by PACER users who are         cial Management Certificates must
ment (“linking”).                   not parties to a case.              be filed within 45 days after the first
                                                                        meeting of creditors in order to not
When filing a jointly-signed        Some have deadlines, linking
                                                                        hold up a debtor(s) discharge. All
pleading with a party who has       screens, and occasional ques-
                                                                        P.3 and P.4 Declarations are due 15
not previously appeared in a        tions to be answered. By trying
                                                                        days after the underlying document
case, the ECF user will find        to use ‘document’ or an inap-
                                                                        is e-filed. A checklist for each case
that the second signatory is not    propriate event, the proper
                                                                        might be a way to ensure that all
in the “pick list”. The new         deadlines and linkages may not
                                                                        necessary paperwork, declarations
party must then be added. Us-       be available. If in doubt, please
                                                                        and certificates have been timely
ing the function ADD CRE-           check out our list of events lo-
                                                                        filed.
ATE NEW PARTY will allow            cated on our website under CM/
you to add the joint filer - but    ECF Info -> User Manual ->
please remember the system          Events & Flowcharts.
will ask you to create the attor-
                                    The rule of thumb for linking is
ney/client relationship with the
On The Docket
Page 4


                       Are you an attorney who would like to brush up on your efiling skills?
                       Do you have new support staff or existing support staff who could
                       benefit from ECF training? Our court conducts ECF Training Classes
                       every month. We welcome you to take advantage of this training op-
                       portunity either for yourself and/or your support staff. Please contact
                       Jennifer Davis at 626-3110 for more information or email her at jenni-
                       fer_l_davis@rib.uscourts.gov. We look forward to seeing you again!




   Chambers Personnel Update
   by Leah Waterman, Judicial Assistant

             Chambers would          sweet events, we are sad to see      18, although he will be visiting
  like to make two announce-         him leave, but delighted and         Chambers during the next few
  ments. First, as many of you       wish him well in the next phase      weeks to begin the process of
  are aware, Jonathan Calianos,      of his career. The good news is      assuming his new duties with
  who has been Judge Votolato’s      that the Department of Labor         the Court. Please join us in
  Career Law Clerk for the past      ALJs use our courtroom for           Welcoming Jeffrey Dana to
  15 years, will be leaving the      hearings on a regular basis, so      U.S. Bankruptcy Court!
  Bankruptcy Court at the begin-     Judge Calianos will be coming
                                                                             Jonathan, Jeff and I would
  ning of May. Jonathan has          back to visit often in the future.
                                                                          also like to take this opportunity
  been appointed an Adminis-         Congratulations, Jonathan!
                                                                          to acknowledge Judge Voto-
  trative Law Judge for the
                                         We are also very pleased to      lato’s upcoming anniversary of
  U.S. Department of Labor in
                                     announce that after an extensive     40 years on the bankruptcy
  Boston. Needless to say it is
                                     search, Jeffrey Dana, Esq., has      bench. Best Wishes, Judge!
  with mixed feelings that we
                                     been appointed as Judge Voto-
  say goodbye to Jonathan – it
                                     lato’s Law Clerk. Many of us
  has been a terrific experience
                                     are familiar with Jeff as he has
  to work with him, get to know
                                     practiced law at Rhode Island
  him personally and watch he
                                     Legal Services for many years.
  and his wife, Catherine, raise
                                     His familiarity with bankruptcy
  three beautiful children. We
                                     law and our ECF system, as
  applaud Jonathan’s achieve-
                                     well as his fluency in Spanish,
  ment in earning one of the
                                     are an added bonus! Jeff will
  highest scores on the ALJ Ex-
                                     officially begin work on April
  amination. As with all bitter-
         ON THE DOCKET
Page 5


 Recent Court Decisions
 by Jonathan C. Calianos, Esq., Law Clerk

 Here is a short digest of some noteworthy opinions       cipals of the debtor paid a retainer of $25,000 to
 from the Court. As always, the full text of Court        the debtor’s attorney. During the bankruptcy,
 opinions is available at our website                     counsel did not draw down on the retainer but
 www.rib.uscourts.gov                                     sought to return the retainer to the principals and
                                                          seek 100% of its compensation from the estate.
 Is the Court required to approve stipulations
                                                          The Court denied the request to return the deposit
 between debtors and creditors regarding as-
                                                          which would have diminished the pool of assets
 sumption of leases under 11 U.S.C. § 365(p)(2)?
                                                          available for distribution to unsecured creditors
        The Case: In Re Garbett, BK No. 07-               under the Chapter 11 Plan. The Court also ques-
 10404 (Bankr. D.R.I. June 11, 2007)                      tioned whether counsel to the DIP had a conflict of
                                                          interest. The debtor’s attorney argued that DIP
         Short Answer: NO.
                                                          counsel has no fiduciary duty to the bankruptcy
         The debtor attempted to assume two auto-         estate because he cannot simultaneously represent
 mobile leases under Section 365(p)(2) and the            both the interests of the DIP and the estate, as such
 creditor specifically asked the Court to approve the     interests are inherently in conflict. The Court re-
 stipulations as it did not want to run afoul of the      viewed Section 1107(a) and disagreed, holding
 reaffirmation provisions set forth in Section 524 of     that counsel for the DIP does owe a fiduciary duty
 the Code. While the Court found that it was not          to the estate. In so holding, the court followed the
 required to approve lease assumptions under Sec-         path forged by the overwhelming majority of
 tion 365(p)(2), it also held that the specific agree-    courts that have considered this issue.
 ments in question went too far by requiring the
                                                          Can a debtor include language in his or her
 debtor to waive his discharge as part of the as-
                                                          Chapter 13 Plan that requires a mortgagee to
 sumption. As such, the Court denied the stipula-
                                                          file a detailed fee application if it is seeking re-
 tions, finding them to be incomplete attempts at
                                                          imbursement of attorney’s fees and costs from
 reaffirmation.
                                                          the debtor or property of the estate for services
 Does Counsel to the debtor in possession owe a           rendered from the date of filing through confir-
 fiduciary duty to the bankruptcy estate?                 mation?

        The Case: In Re Hardman’s Hotel of                       The Case: In re Mihok, BK. No. 06-10062
 Smithfield, Inc., BK No. 05-15700 (Bankr. D.R.I.                      and In re Trigo, 06-10589
 August 6, 2007).                                                      (Bankr.D.R.I. March 14, 2007)

         Short Answer: YES

         Prior to filing the Chapter 11 petition, prin-                                    (Continued on page 6)
         ON THE DOCKET
Page 6


 Inside Story Headline
 (Recent Court Decisions Cont’d from pg. 5)


         Short Answer: YES– but the secured              the creditor may be required to bear the expense
 creditor will not actually be required to file a fee
                                                         of preparing the application, plus the fees and
 application until the debtor challenges the claim
                                                         costs of the debtor incurred in successfully chal-
 of the creditor.
                                                         lenging the request, all depending on the facts
         These cases were consolidated for pur-          and circumstance of the particular case.”
 poses of the Court’s decision because the Chapter
                                                         For purposes of determining substantial
 13 plans contained similar provisions requiring
                                                         abuse under 11 U.S.C. §707(b)(3), will the
 the secured creditor to file detailed fee applica-
                                                         Court consider voluntary contributions made
 tions if it was seeking reimbursement of attorney
                                                         to a debtor’s 401K plan or mandatory repay-
 fees or costs from the debtor or property of the
                                                         ments on an outstanding 401K loan?
 bankruptcy estate that accrued from the date of
 filing through and including confirmation. The                The Case: In re Mokri, BK No. 06-
 secured creditor objected, arguing that it would be     11073(Bankr. D.R.I. April 27, 2007)
 unduly burdensome and costly to produce fee ap-
                                                                 Short Answer: Assuming no other facts
 plications in all Chapter 13 cases. The creditor
                                                         are relevant, the Court will not count 401k con-
 also contended that the provision impermissibly
                                                         tributions or loan repayments as disposable in-
 modified the terms of their note and mortgage, in
                                                         come for determining substantial abuse under
 violation of § 1322(b)(2). The Court disagreed,
                                                         Section 707(b)(3).
 finding the plan provisions to be acceptable be-
 cause the funds used to pay mortgagee’s attorney                In this case, the Court was presented with
 fees and costs were property of the bankruptcy          the narrow question of whether voluntary 401k
 estate and that triggered the fee application proc-     contributions or mandatory 401k loan repay-
 ess. The Court did make the following caveat            ments would be considered disposable income
 however: “Where the debtor does not challenge           for purposes of determining substantial abuse
 the amount sought, the creditor is not required to      under Section 707(b). The Court found that be-
 prepare and file an application, and the creditor is    cause both of these 401k expenditures would not
 not entitled to compensation for doing so. ... If the   be considered disposable income available to pay
 debtor does request that an application be filed,       creditors in a Chap-
 the creditor will be allowed a reasonable fee for       ter 13 proceeding
 preparing the application, provided the request is      they should not be
 not materially different, i.e., not a lot higher than   counted for deter-
 the amount allowed. ... If there is a material dif-     mining substantial
 ference between the request and the award, then         abuse.