Proposed Bankruptcy Rule and Official Form Changes
The Judicial Conference Advisory Committees on Appellate, Bankruptcy, Civil, and Criminal Rules have proposed amendments to their respective rules and forms and have requested that the proposals be circulated to the bench, bar, and public for comment. The public comment period closes on Tuesday, February 17, 2015, at 11:59 p.m. Procedures for submitting comments and information regarding public hearings on the proposed changes, as well as the text of the proposed changes to the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and the Official Forms, are available at http://www.uscourts.gov/RulesAndPolicies/rules/proposed-amendments.aspx.
The proposed changes to the Bankruptcy Rules and the Official Forms of particular pertinence in commercial bankruptcy cases include the following:
Bankruptcy Rule 1012 would be restored (as amended) to provide that the debtor or any party-in-interest may contest a petition for recognition of a foreign proceeding under chapter 15 of the Bankruptcy Code, and if the "entity responding to the petition is a corporation, then the entity shall file a corporate ownership statement containing the information described in Rule 7007.1 with its first appearance, pleading, motion, response, or other request addressed to the court."
Bankruptcy Rule 2002 would be amended to: (i) direct the court to schedule and hold a hearing on a chapter 15 petition for recognition "promptly"; and (ii) allow the court to combine a hearing on the petition with a request for provisional relief and to convene the combined hearing with a notice period shorter than the 21-day period required by Rule 2002.
Official Form 401 would be created for a petition for recognition of a foreign proceeding under chapter 15. Interestingly, the Official Form (question 12) does not mandate in all cases that the foreign debtor have assets, a place of business, or causes of action in the U.S. as a basis for venue in a particular district (in accordance with the Second Circuit Court of Appeals’ ruling in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), 737 F.3d 238 (2d Cir. 2013)), providing as an alternative that "venue is consistent with the interests of justice and the convenience of the parties, having regard to the relief sought by the foreign representative."
Bankruptcy Rule 3002 (Filing of Proof of Claim or Interest) would be amended to provide, among other things, that "[a] lien that secures a claim against the debtor is not void due only to the failure of any entity to file a proof of claim." The Committee Note explains as follows:
Subdivision (a) is amended to clarify that a creditor, including a secured creditor, must file a proof of claim in order to have an allowed claim. The amendment also clarifies, in accordance with § 506(d), that the failure of a secured creditor to file a proof of claim does not render the creditor’s lien void. The inclusion of language from § 506(d) is not intended to effect any change of law with respect to claims subject to setoff under § 553. The amendment preserves the existing exceptions to this rule under Rules 1019(3), 3003, 3004, and 3005.
Bankruptcy Rule 3007(a) (Objections to Claims) would be amended to specify the manner in which a claim objection and notice thereof must be served.
Bankruptcy Rule 3012 (Valuation of Security) would be retitled "Determining the Amount of Secured and Priority Claims" and amended to provide, among other things, that, upon the request of a party-in-interest and after appropriate notice, the court may determine the amount of a secured claim under section 506(a) of the Bankruptcy Code or the amount of a claim entitled to priority under section 507 of the Bankruptcy Code.
Subsection (f) of Bankruptcy Rule 9006 (Computing and Extending Time; Time for Motion Papers) would be amended to remove service by electronic means under Fed. R. Civ. P. 5(b)(2)(E) from the modes of service that allow three added days to act after being served.
Bankruptcy Rule 9009 would be amended to provide, among other things, that "[t]he Official Forms prescribed by the Judicial Conference of the United States shall be used without alteration, except as otherwise provided in these rules, in a particular Official Form, or in the national instructions for a particular Official Form."
The substantial amendment, reconfiguration, or addition of numerous Official Forms is also included as part of the Forms Modernization Project to make them easier to read and understand, including:
The addition of Official Form 201, entitled "Voluntary Petition for Non-Individuals Filing for Bankruptcy," to replace Official Form 1 (Voluntary Petition) and the creation of Official Form 201A, entitled "Attachment to Voluntary Petition for Non-Individuals Filing for Bankruptcy Under Chapter 11," to replace Exhibit A.
The addition of Official Form 202, entitled "Declaration Under Penalty of Perjury for Non-Individual Debtors," to replace Official Form 2 (Declaration Under Penalty of Perjury on Behalf of a Corporation or Partnership) and the section of Official Form 6 Declaration (Declaration Concerning Debtor’s Schedules) containing a corporation’s or partnership’s declaration.
The addition of Official Form 204, entitled "Chapter 11 or Chapter 9 Cases: List of Creditors Who Have the 20 Largest Unsecured Claims and Are Not Insiders," to replace Official Form 4 (List of Creditors Holding 20 Largest Unsecured Claims) for non-individual debtors.
The addition of Official Form 205, entitled "Involuntary Petition Against a Non-Individual," to replace Official Form 5 (Involuntary Petition) for non-individual debtors.
The addition of Official Form 206Sum, entitled "Summary of Assets and Liabilities for Non-Individuals," to replace Official Form 6 (Summary of Schedules and Statistical Summary of Certain Liability and Related Data).
The addition of Official Form 206A/B, entitled "Schedule A/B: Assets—Real and Personal Property," which consolidates information about a non-individual debtor’s real and personal property into a single form and replaces Official Form 6A (Real Property) and Official Form 6B (Personal Property), in cases of non-individual debtors.
The addition of Official Form 206D, entitled "Schedule D: Creditors Who Hold Claims Secured by Property," to replace Official Form 6D (Creditors Holding Secured Claims) for non-individual debtors.
The addition of Official Form 206E/F, entitled "Schedule E/F: Creditors Who Hold Unsecured Claims," to combine Official Form 6E (Schedule E—Creditors Holding Unsecured Priority Claims) and Official Form 6F (Schedule F—Creditors Holding Unsecured Nonpriority Claims) for non-individual debtors.
The addition of Official Form 206G, entitled "Schedule G: Executory Contracts and Unexpired Leases," to replace Official Form 6G (Executory Contracts and Unexpired Leases) for non-individual debtors.
The addition of Official Form 207, entitled "Statement of Financial Affairs for Non-Individuals Filing for Bankruptcy," to replace Official Form 7 (Statement of Financial Affairs) for non-individual debtors.
The addition of Official Form 312, entitled "Order and Notice for Hearing on Disclosure Statement," to replace Official Form 12 (Order and Notice for Hearing on Disclosure Statement).
The addition of Official Form 313, entitled "Order Approving Disclosure Statement and Fixing Time for Filing Acceptances or Rejections of Plan, Combined with Notice Thereof," to replace Official Form 13 (Order Approving Disclosure Statement and Fixing Time for Filing Acceptances or Rejections of Plan, Combined with Notice Thereof).
The addition of Official Form 314, entitled "Ballot for Accepting or Rejecting Plan of Reorganization," to replace Official Form 14 (Ballot for Accepting or Rejecting Plan).
The addition of Official Form 315, entitled "Order Confirming Plan," to replace Official Form 15 (Order Confirming Plan).
The addition of Official Form 410, entitled "Proof of Claim," which replaces and substantially reorganizes Official Form 10 (Proof of Claim).