• Delaware Bankruptcy Court Issues Revised Local Rules
  • February 8, 2017 | Author: Thomas M. Horan
  • Law Firm: Shaw Fishman Glantz & Towbin LLC - Wilmington Office
  • Effective February 1, 2017, the United States Bankruptcy Court for the District of Delaware has propounded revised local rules. The main area of revision is the addition of a new Local Rule 9029-2, which incorporates a newly-adopted Part X, governing cross-border matters. The purpose of Part X, which includes fourteen new guidelines, is to “enhanc[e] coordination and cooperation among courts under whose supervision such proceedings are being conducted.” A number of the local rules also have been revised to make familiar provisions applicable to chapter 11 cases equally applicable in chapter 15 cases. Del Bankr. L.R. 1002-1(c), 2002-1(b) and (h), 4001-1(b), 7004-2, 9013-1(m), 9029-3. In 2016, 179 chapter 15 cases were filed in the United States. 52 of these were filed in Delaware, up from 22 in 2014, 12 in 2014, and 31 in 2013. These revisions therefore provide welcome guidance and improved procedures for the conduct of chapter 15 cases on Delaware’s busy docket.

    Local Rule 2002-1 includes a helpful revision that requires a noticing and claims agent to make available on its website complete copies of filed proofs of claims, including any attachments. Del. Bankr. L.R. 2002-1(f)(viii). In the past, frequently only the first page of a proof of claim was publicly available from a claims agent website.

    Another revision, which puts in rule form a common practice, requires that when a party files a revised plan or disclosure statement, it includes a redline or blackline showing changes from the last filed version. Del. Bankr. L.R. 3016-1.

    In chapter 13 cases, where a plan includes “nonstandard provisions,” the plan is required to disclose those provisions in the first paragraph of the plan. Del. Bankr. L.R. 3023-1(b)(1). Examples of such provisions are:

    (1) Debtor is self-employed and operating a business and therefore has additional duties and reporting requirements including timely submission of tax returns and employee tax withholdings; (2) Debtor holds a personal injury, worker’s compensation, or social security claim and debtor’s duty to report and disclose; (3) Debtor’s current or future intent to sell or refinance real estate, court approval required and if sold or refinanced how liens and mortgage arrears claims will be addressed; (4) Debtor to seek a mortgage modification and pending any modification whether ongoing payments will continue; (5) Plan includes the cramdown of a secured vehicle claim and specific provisions as to lien and title release; (6) Plan includes avoidance of junior liens on real estate, adversary to be filed, and treatment if any as to the unsecured claim of an avoided lienholder; (7) Provision as to the treatment of claims and any unsecured deficiency of creditors where collateral is surrendered under the plan; (8) Any matter relating to a domestic support obligation, divorce, or property division; or (9) Plan seeks to avoid a lien pursuant to 11 U.S.C. § 522(f). Id.