ADVISORY COMMITTEE ON BANKRUPTCY RULES
The following members were present at the meeting:
District Judge Adrian G. Duplantier, Chairman
District Judge Eduardo C. Robreno
District Judge Bernice B. Donald
District Judge Robert W. Gettleman
Bankruptcy Judge Robert J. Kressel
Bankruptcy Judge Donald E. Cordova
Bankruptcy Judge A. Jay Cristol
Bankruptcy Judge A. Thomas Small
Kenneth N. Klee, Esquire
Gerald K. Smith, Esquire
Henry J. Sommer, Esquire
Professor Charles J. Tabb
R. Neal Batson, Esquire
Leonard M. Rosen, Esquire
J. Christopher Kohn, Esquire, United States
Department of Justice
Professor Alan N. Resnick, Reporter
District Judge Alicemarie H. Stotler, Chair of the Committee on Rules of Practice and Procedure
("Standing Committee"), and Professor Daniel R. Coquillette, Reporter to the Standing
Committee, also attended. Alan W. Perry, Esquire, liaison to this Committee from the Standing
Committee, was unable to attend due to illness. Brady C. Williamson, Esquire, the chairman of
the National Bankruptcy Review Commission, had planned to attend but was unable to do so
because of bad weather at his home in Madison, Wisconsin. Bankruptcy Judge George R.
Hodges, a member of the Committee on the Administration of the Bankruptcy System, attended
the meeting as a representative of that committee.
The following additional persons attended the meeting: Joseph G. Patchan, Director,
Executive Office for United States Trustees; Richard G. Heltzel, Clerk, United States Bankruptcy
Court for the Eastern District of California; Patricia S. Channon and James H. Wannamaker, III,
Bankruptcy Judges Division, Administrative Office of the United States Courts ("Administrative
Office"); Mark D. Shapiro, Rules Committee Support Office, Administrative Office; and
Elizabeth C. Wiggins and Robert Niemic, Federal Judicial Center ("FJC"). Brenda K. Argoe,
Clerk, United States Bankruptcy Court for the District of South Carolina, attended part of the
The following summary of matters discussed at the meeting should be read in conjunction
with the various memoranda and other written materials referred to, all of which are on file in the
office of Peter G. McCabe, Assistant Director of the Administrative Office and Secretary of the
Standing Committee. Votes and other action taken by the Advisory Committee and assignments
by the Chairman appear in bold.
The Chairman introduced the guests in attendance and the newly-appointed members and
welcomed them to the meeting. The Committee approved a resolution of commendation and
appreciation for the work of its former chairman, Bankruptcy Judge Paul Mannes.
Mr. Klee suggested that the last paragraph on page 22 of the minutes of the September
1996 meeting be revised to reflect that the amendments discussed there should conform to the
language used in the drafts. The Committee approved the minutes, as revised, on Judge
The Committee discussed the extent to which the minutes should go beyond recording the
Committee's formal actions and attempt to capture the Committee's deliberative process. The
Reporter and several members indicated that the practice of including highlights from the
Committee's discussions has been extremely useful.
The Chairman reported that the next meeting is scheduled for September 11 - 12, 1997, at
the Williamsburg Lodge in Williamsburg, Virginia. The chairman suggested that the Spring
1998 meeting be held at the Winrock International Conference Center in Arkansas on March 26 -
27, 1998. The Committee agreed. Mr. Heltzel offered to look into the possibility of holding
the Fall 1998 meeting at the Ahwahnee Lodge hotel in Yosemite National Park in September or
early October. Because of the difficulty in getting rooms at the hotel, he suggested that a "back-up" site also be selected. The Committee accepted his suggestions. The Chairman and Ms.
Channon will make preliminary inquiries with Mr. Heltzel's assistance.
The Chairman announced the appointment of the following circuit liaisons:
First Circuit Mr. Klee
Second Circuit Mr. Rosen
Third Circuit Judge Robreno
Fourth Circuit Judge Small
Fifth Circuit Judge Duplantier
Sixth Circuit Judge Donald
Seventh Circuit Judge Gettleman
Eighth Circuit Judge Kressel
Ninth Circuit Mr. Smith
Tenth Circuit Judge Cordova
Eleventh Circuit Judge Cristol
D.C. Circuit Mr. Sommer
Federal Circuit Professor Tabb
The Chairman explained the duties of the liaisons and stated that they should contact the
members of the Judicial Conference of the United States from their circuits as necessary to
inform them about important or controversial matters.
The Chairman and Professor Resnick reported on the January 1997 meeting of the
Standing Committee. Although no action items from this Committee were before the Standing
Committee, the Chairman and the Reporter informed the Standing Committee of the status of
this Committee's proposed amendments to the Official Bankruptcy Forms ("Official Forms"),
the Litigation Subcommittee's work on revising Rules 9013 and 9014, proposed amendments to
Rules 2004 and 2014, and proposed amendments to 14 other rules which the Committee
approved in substance earlier.
The Reporter stated that Circuit Judge Frank H. Easterbrook has been appointed chairman
of the Standing Committee's new Subcommittee on Technology. The Chairman named Judge
Cristol and Mr. Heltzel to serve as this Committee's liaisons to the new subcommittee. The
Reporter stated that District Judge Morey L. Sear, the former chairman of this Committee, has
been appointed to the Standing Committee.
Amendments to Official Bankruptcy Forms. Mr. Sommer, the chairman of the Forms
Subcommittee, stated that the subcommittee met in Washington on February 28, 1997, to
consider the comments received in response to the publication of the proposed amendments to
the Official Forms. Mr. Sommer presented the Reporter's summary of the comments and the
Subcommittee's recommendation on each comment and copies of the published amendments
marked with additional changes recommended by the Subcommittee. The Committee agreed to
consider the proposed amendments and comments utilizing the "consent calendar" format
recommended by the Reporter in his memorandum of March 3, 1997.
Form 1, Voluntary Petition. Ms. Channon presented the Subcommittee's additional
changes on Form 1 as reformatted by Frederick D. Rogovy, Esquire, of New Hope Software, Inc.
Mr. Klee suggested changing the phrase "check any applicable box" in the "Type of Debtor"
section on page 1 to "check all boxes that apply", which he stated would be less ambiguous. The
Committee agreed to make the change there and anywhere else on the amended forms
where more than one box could be checked. The Committee agreed to correct the citation
to 11 U.S.C. § 110 at the bottom of Page 2. The Committee discussed how to make citations
to the Bankruptcy Code on the forms easier for lay people to understand. The Committee
determined not to change the present method of citation.
The Reporter and Ms. Wiggins discussed the proposal by Professor Karen Gross to divide
the lowest statistical categories for number of creditors, estimated assets, and estimated liabilities
in order to capture information on very small, individual debtor cases. The professor indicated
that those cases might be managed differently or administered outside of the bankruptcy system.
The Reporter stated that every few years social scientists and other researchers ask the
Committee to add boxes to collect data that would be useful in their research, but that the
Committee has always declined because that is not the function of the form. Ms. Channon said
the information on estimated assets and liabilities is used by the Administrative Office to
determine the appropriate number of judgeships for each district.
The Administrative Office is conducting a Study on Future Bankruptcy Data Needs. Ms.
Channon said Frank Szczebak, the chief of the Bankruptcy Judges Division, has suggested that
the question of whether to collect data on very small cases be left to the review of data collection.
Ms. Channon said the last time the form was revised the number of boxes and the labels to be
used on them were left to the discretion of the Administrative Office. Changing the boxes would
require revising the commercial software used to prepare the form, the software used by the
clerks to enter case opening data, and the software used by the Administrative Office to compile
statistics. The Chairman suggested referring the matter to the Administrative Office. The
Committee agreed to refer the matter.
Mr. Klee suggested inserting the word "Bankruptcy" in the third line of Exhibit A. The
Reporter suggested enclosing the phrase "Including debts listed in 2.c., below" in parentheses,
moving it to the right of "Total debts", and making the letter "I" lower case. The Committee
accepted the suggestions.
Form 3, Application and Order to pay Filing Fee in Installments. Mr. Sommer said it is
not entirely clear whether Rule 1006 prohibits petition preparers from being paid prior to the
payment of the filing fee. As a result, the last sentence of the Certification and Signature of Non-Attorney Bankruptcy Petition Preparer was drafted to prohibit only future payments before the
filing fee is paid. The Reporter said he was concerned that, if the other interpretation of the rule
prevailed, petition preparers might collect fees from debtors without telling them that the
payments would disqualify them from paying the filing fees in installments. The Committee
declined to change the proposed form.
Form 8, Individual Debtor's Statement of Intention. Mr. Sommer said the revised form
was drafted in an effort to avoid taking a position on interpreting the statute. Judge Donald noted
that the word "petitioner" in the certification should be "petition." Mr. Klee stated that the
statutory references in section 2.b. should include the phrase "11 U.S.C." The Committee
accepted the corrections. Professor Tabb suggested changing the phrase "Check any applicable
statement." to "Check all statements that apply." The Reporter stated that the change might be
substantive. The Committee declined to make the change. Judge Small asked whether a
fourth statement should be added for debtors who don't intend to claim the property as exempt,
redeem it, or reaffirm the debt. Mr. Sommer said doing so would adopt a particular
interpretation of the statute. The Committee declined to make the change.
Form 9, Notice of Bankruptcy Case, Meeting of Creditors, & Deadlines. Judge Kressel
suggested adding the chapter number to the top line of each notice. The Committee agreed.
The Committee discussed the suggestion by Andrea E. Celli, Esquire, the chapter 13 trustee in
Albany, New York, to revise the title to refer to the "Meeting of Creditors and Examination of
Debtor." Mr. Sommer said "Meeting of Creditors" is a statutory term and adequate. The
Committee declined to make the change. Judge Small said several chapter 13 trustees had
suggested adding a statement to Form 9I that the chapter 13 trustee does not give legal advice.
Mr. Sommer said the change would discourage calls to the trustees, who have a statutory duty to
advise, other than on legal matters, and to assist the debtor.
The Committee considered the comments by the Bankruptcy Noticing Users Group and
others that the revised meeting of creditors notice would significantly increase the cost of
bankruptcy noticing and concluded that the increased costs are outweighed by the benefits of the
proposed amendments. The increased cost of mailing a second sheet of paper will be incurred
only in asset cases in which the proof of claim form is mailed with the notice. These are
predominately chapter 13 cases in which the court could delegate noticing to the standing trustee.
Judge Cristol stated that several clerks had expressed concern about the additional cost of
increasing the meeting of creditors notice to two pages in order to include "Explanations," which
paraphrase the law, on the back of the form. Mr. Sommer said the form had included
explanations for years, and that several clerks had asked for better instructions and information
for the parties in plain English. He stated that making this information more complete and easily
understandable would result in savings by reducing the number of calls to the clerk's office.
Mr. Sommer noted that the Judiciary imposes a $30 administrative fee that must be paid by a
debtor commencing a chapter 7 or chapter 13 case. The fee is intended to cover the cost of
noticing and is more than sufficient to cover the cost increases resulting from the proposed
amendments to the forms. Mr. Heltzel stated that the matter is a policy one which should not be
decided on a monetary basis. He said his personal belief is that the change is worth the extra
The Reporter stated that the chapter 11 forms had been revised to incorporate a new
description of the discharge. He said the description in Forms 9F and 9F Alt. includes the
phrase "except as provided in the plan," which should be added to the description in Forms 9E
and 9E Alt. The Committee agreed to include the phrase.
Mr. Patchan stated that the chapter 11 forms try to explain the nature of chapter 11 and
suggested that the chapter 7 forms should refer to it as the liquidation chapter. Mr. Sommer said
the Subcommittee considered the idea but believed it would be misleading in no asset cases in
which there is no liquidation. Mr. Klee noted the extra period and misalignment of "p.m.." on
Form 9B. The Committee agreed to correct the two typographical errors. Mr. Klee stated
that page 1 of Form 9I should refer to the "chapter 13 trustee," not the "bankruptcy trustee" to
avoid any confusion with a chapter 7 trustee. Judge Kressel said the Bankruptcy Code refers to
the "trustee." The Committee declined to make the change.
Marcy J.K. Tiffany, the U.S. trustee in the Central District of California, suggested
adding the following to the notice: "BANKRUPTCY FRAUD OR ABUSE: Any Questions or
information relating to bankruptcy fraud or abuse may be addressed to the United States Trustee
at (insert address of relevant region)." Mr. Patchan stated that he was reluctant to recommend
the change because of the possibility of unintended consequences. He added that criminal
referrals can go directly to the U.S. attorney. The Committee declined to add the statement.
Form 10, Proof of Claim. Mr. Sommer said the Subcommittee originally planned only to
prepare instructions for the back of the form. As the project progressed, the Subcommittee also
made changes to the front of the form. Judge Stotler asked if the changes to the proposed
amendment since its publication for comment were based on the comments received or were
suggested by members of the Committee. Mr. Sommer said most of the changes were from the
comments. The Reporter said the Committee received nine letters on the form and, as a result,
the Subcommittee completely rewrote several boxes on the form.
After the Committee discussed setoffs, the Subcommittee proposed revising Box 5,
Secured Claim, by adding the phrase "(including a right of setoff)" and the definition of a
secured claim on the back of the form by adding "(has a right of setoff)". The Subcommittee
also recommended adding the sentence "If all or part of your claim is secured or entitled to
priority, also complete Item 5. or 6., below." to box 4. The Committee agreed to the changes.
Form 14, Ballot for Accepting or Rejecting a Plan. The Committee did not make any
changes to the proposed amendments.
Form 17, Notice of Appeal Under 28 U.S.C. § 158(a) or (b) from a Judgment, Order, or
Decree of a Bankruptcy Court. Judge Kressel stated that the form tells the appellant how to elect
to have the appeal heard by the district court. He said the form should not give advice to one
party but not the other. In response, the Subcommittee prepared alternative drafts of a sentence
to be added to the final paragraph. The Committee chose the following language: "Any other
party may elect, within the time provided in 28 U.S.C. § 158(c), to have the appeal heard by the
district court." Mr. Klee stated that the title of the form and second line of the text should refer
to the "bankruptcy judge," not the "bankruptcy court," in order to be consistent with the statute.
The Reporter said the change would be consistent with Rule 8001. The Committee agreed to
make the change.
Form 18, Discharge of Debtor. Judge Cristol said printing the explanation of the
discharge on the back of the form will increase mailing costs. The Committee discussed whether
the phrase "or will decide" should be set off by commas in subdivision "g" on the back of the
form. The Committee decided not to use commas in the subdivision.
Form 20A, Notice of Motion or Objection; Form 20B, Notice of Objection to Claim.
Judge Kressel suggested deleting the phrase "The Committee anticipates that" from the
beginning of the second paragraph of the Committee Note. The Committee agreed to delete
the phrase. Mr. Heltzel said that the notices should state that "Responses must be filed as
formal legal pleadings." Mr. Sommer said he was not sure that the Bankruptcy Rules have such
a requirement. Mr. Klee said the two forms are inconsistent in the use of the words "lawyer" and
"attorney." Mr. Sommer suggested using the word "attorney" throughout the two forms. The
Committee accepted Mr. Sommer's suggestion. Judge Cristol stated that the notices should
state that the original response, not a copy, should be filed with the court. In order to do that, the
Subcommittee redrafted three paragraphs of each form. The Committee approved the revised
The Committee approved the forms package, as revised, without objection and
directed that it be submitted to the Standing Committee for approval at its June meeting.
Effective Date. Ms. Channon reported that she had surveyed private vendors and judicial
personnel about the time needed to update their computer software in order to implement the
proposed changes in the Official Forms. She said representatives of the private vendors, NIBS,
BANCAP, and the Administrative Office's Statistics Division indicated that they could make the
changes within 90 days. The only dissenter was the project manager for the Bankruptcy Noticing
Center (BNC). Because the BNC contractor customizes notices for each court, the project
manager said that, although some or most courts could be ready by January 1, 1998, March 1,
1998, would be a more realistic implementation date.
The Subcommittee recommended an effective date of January 1, 1998, if the amended Official Bankruptcy Forms are approved by the Judicial Conference at its September meeting. The Committee discussed the desirability of an overlap period during which both the old and new forms could be used. The Chairman suggested that the Committee recommend that the amended forms be effective for all purposes on March 1, 1998, and that they could be used on a permissive basis as soon as they are approved by the Judicial Conference. The Committee accepted his proposal.
Litigation Subcommittee. Mr. Klee stated that the Litigation Subcommittee began its
work as a result of the FJC's survey of the bench and bar concerning the Bankruptcy Rules. He
said the survey found that the rules generally function well but that changes were needed in a few
areas, including litigation. He said the Part VII rules work well in adversary proceedings, but
that the application of the rules is very fuzzy in contested matters. Mr. Klee said the litigation
world may be divided into three parts: adversary proceedings governed by the Part VII rules;
administrative proceedings under Rule 9014; and administrative motions, which the
Subcommittee proposes calling "applications," under Rule 9013. Additionally, motions within
adversary proceedings and motions within motions are a separate matter.
Rule 7001. The Litigation Subcommittee recommended one change in the Part VII rules
-- amending Rule 7001(7) to permit injunctive relief in a plan or order confirming a plan. Mr.
Klee said it is a common practice to include an injunction in a chapter 11 plan or confirmation
order despite the requirement in Rule 7001 that equitable relief be obtained by filing an
Mr. Sommer said the Committee Note should state that the amendment is not intended to
broaden the substantive law. The Committee agreed to include a statement in the Committee
Note that the amendment is limited to circumstances in which an injunction is permitted by
substantive law. The Reporter stated that a party could be "blind-sided" if an injunction were
included in the confirmation order without adequate notice in the plan. Mr. Rosen moved to
approve the proposed amendment after inserting the word "for" after "provided," deleting the
bracketed language "or an order confirming a plan," and revising the Committee Note. The
motion carried without dissent.
Rule 1007. The Litigation Subcommittee recommended that requests to extend the time
to file schedules and statements be left to local discretion rather than being subject to either Rule
9013 or Rule 9014, as revised. The Committee discussed whether to require notice to the trustee
and the U.S. trustee. The Reporter said current practice permits extensions to be granted
informally, often in open court without notice. Mr. Sommer said requiring notice would avoid
the waste of time when the U.S. trustee files a motion to dismiss for failure to file schedules and
statements which is moot because the court has extended the time. Other committee members
said the U.S. trustee is unlikely to file the motion to dismiss on the first day after the original
deadline. A motion to approve the proposed amendment carried without dissent. The
Reporter stated that the proposed amendment to Rule 7001 could go to the Standing Committee
for consideration at its June meeting but that the proposed amendment to Rule 1007 is dependent
on the revision of Rule 9013 and should be submitted along with that amendment. The
Mr. Patchan asked that approval of the proposed amendment to Rule 1007 be
reconsidered. He suggested that an extension without notice or a hearing be limited to the initial
extension or to a limited time. He cited recent testimony concerning "dead on arrival" chapter 11
cases in which delay is the debtor's chief goal. Judge Robreno stated that the testimony was
directed to extension of the exclusivity period. A motion to reconsider failed on a 4-4 vote.
Rule 1006. The Litigation Subcommittee recommended that requests to pay the filing fee
in installments also be excepted from the requirements of Rules 9013 and 9014, as revised. Mr.
Sommer stated that the rule should not require a hearing on approval of the request, although that
is done in some courts. In her comments on the proposed amendment of Form 3, Chief
Bankruptcy Judge Geraldine Mund had suggested that Rule 1006 be amended to bar the debtor
from paying a bankruptcy petition preparer, and then requesting to pay the filing fee in
installments. The Reporter stated that changes to Rule 1006 should be considered along with the
revision of Rules 9013 and 9014. The Committee agreed to defer the matter.
Rule 9013. Mr. Klee said the Litigation Subcommittee recommended amending Rule
9013 to provide a routine, perfunctory process for obtaining court approval, without advance
notice, of certain types of orders which are likely to be nonsubstantive and noncontroversial. A
request for such an order would be called an "application." Mr. Klee briefly reviewed the 14
matters set out in Rule 9013(a).
Judge Robreno asked if a party that receives notice of the entry of a Rule 9013 order
could contest the order. The Reporter stated that the amendment was intended to provide for
"quasi ex parte" orders that could be entered immediately and challenged later. The judge asked
whether this point should be addressed in the Committee Note. The Reporter said that, when he
drafted the Committee Note, he was reluctant to include more than a general statement that the
entry of such an order does not preclude a party from seeking appropriate relief. The Chairman
stated that the note should state that the order could be challenged after the fact. The Reporter
agreed to draft such a statement. Judge Cordova asked about the meaning of the word
"notice" as used in lines 46 and 54. The Reporter said it meant that a copy of the application, the
papers filed with it, and the proposed order must be served. The Committee agreed to
substitute "service" for "notice" in the two lines.
Judge Cordova asked why the Subcommittee called a request for an order under Rule
9013 an "application." Mr. Klee said the term "ex parte" carries bad connotations in bankruptcy
and calling the requests "motions" could lead to confusion with motions filed within an
application, contested matter, or adversary proceeding. Judge Kressel said he liked bringing
back the term "application" because it has connotations for attorneys and implies a simplified
process. Judge Robreno asked if the term "application" is used in the Bankruptcy Rules in other
contexts. The Reporter stated that certain rules provide for an application, such as an application
for compensation, an application to pay the filing fee in installments, and an application for
service on an insured depository institution by first class mail.
Judge Robreno asked whether the list of applications in Rule 9013 is exclusive. Mr. Klee
stated that the rule only covers the applications listed. The Reporter said the proposed
amendment to Rule 9014 would cover all other requests for an order except motions in an
adversary proceeding and the specific "carve outs" in Rules 9013 and 9014. Professor Tabb
expressed concern that the "default" rule is Rule 9014, which is more complicated than Rule
9013. He said Rule 9013 might eventually include as many as 62 exceptions to Rule 9014. The
Reporter said he had tried to list all of the matters to be governed by Rule 9014 and had gotten to
almost 100 matters before he quit. Mr. Klee said the Subcommittee decided to err on the side of
more notice and a more formal process by making Rule 9014 the "default" rule.
Mr. Sommer said the more uniform procedure set out in Rule 9013 is a good idea and that
Rule 9014 is probably the best that could be done in devising a national, uniform motion practice
for other types of proceedings. It would be better, however, he said, to leave these proceedings
to local rules. Mr. Smith said he thought Rule 9014 is a great start to giving some sense of
uniformity to bankruptcy practice nationally in place of the 4,000 pages of local bankruptcy rules
printed by one publisher. Judge Robreno asked if it would be possible to approve the proposed
amendment to Rule 9013 and allow other proceedings to be governed by the existing rules. The
Reporter said deleting existing Rule 9013 would leave no provision for the motions it governs.
Mr. Klee said the Committee could keep existing Rules 9013 and 9014 and do a new rule for
applications. Judge Donald said the Committee should try for a national rule before falling back
on local rules. Mr. Klee asked for a show of hands on the general approach of adversary
proceedings for lawsuits, Rule 9013 for applications or ex parte motions, and Rule 9014 for more
elaborate motion proceedings, with certain "carve outs." By a vote of 9-4, the Committee
favored this approach.
Mr. Klee reviewed the subdivisions of Rule 9013(a). There were no objections to
subdivisions (a)(1), (a)(2), (a)(5), (a)(9), (a)(10), (a)(12), and (a)(14). Mr. Klee said subdivision
(a)(3) includes only conversions under 11 U.S.C. §§ 706(a) and 1112(a) because they are not
automatic, as are conversions under 11 U.S.C. §§ 1208(a) and 1307(a). The Committee
discussed whether dismissals by the debtor under 11 U.S.C. §§ 1208(b) and 1307(b) should be
moved to Rule 9014. The Reporter said the draft tries to avoid taking a position on whether a
debtor in chapter 12 or chapter 13 has an absolute right to dismiss. The Committee voted 8-4 to
leave the provision in Rule 9013. Judge Cristol stated, with respect to subdivision (a)(6), that
the statute requires that notice of a Rule 7004(h)(2) motion for service by first class mail must be
served by certified mail. The Committee agreed to delete subdivision (a)(6). The Committee
discussed whether court approval of the election of a chapter 11 trustee should be governed by
Rule 9013(a)(7), with parties disputing the election having to seek relief after entry of the order.
It was stated that disputed elections are likely to be extremely unusual. The Committee agreed
to leave the provision in Rule 9013.
Professor Tabb asked the basis for selecting the eight types of matters excluded from
subdivision (a)(8). Mr. Klee said they could be high profile, controversial matters. The Reporter
said the subdivision does not mirror Rule 9006(b)(3) because the two provisions are based on
different concepts. The Reporter agreed to draft a separate provision for setting the time to file
claims under Rule 3003(c). The Committee agreed to add a provision to Rule 9013(a) for
limiting notice under Rule 2002(i). Subdivision (a)(11) depends on the revision of Rule 2004.
Mr. Heltzel asked whether subdivision (a)(13) would require notice of the routine, sua sponte
closing of a chapter 7 or chapter 13 case. The Chairman said the provision was not intended to
apply unless a party files a request for closing or the entry of a final decree. The Committee
agreed to delete subdivision (a)(13).
The Committee agreed to delete the phrase "under § 105(d)" from line 37 and refer
subdivision (b) to the Style Subcommittee. The Committee agreed to change the word
"served" to "made" on line 54. Mr. Sommer moved to delete the provision for electronic
service in lines 55 - 59. Mr. Heltzel said he generally favored the concept of electronic service,
but that it should be done across the board. Mr. Klee said providing for electronic service in
Rules 9013 and 9014 would be across the board. The motion failed on a vote of 6-7. There
were no further comments on subdivisions (a), (b), (c), and (d).
Mr. Heltzel said that Rule 9013(e) would create a whole new category of work for the
clerk of court in serving Rule 9013 orders. Mr. Klee said service of the order is important
because the predicate for the proposed rule is that parties can seek relief from a Rule 9013 order
after its entry. The Reporter suggested revising Rule 9013(e) to require service by the applicant
and to delete the reference to Rule 9022. A motion to do so carried with three dissenting
votes. Judge Cristol moved to approve the Subcommittee's proposed amendments to Rule 9013,
as revised. The motion carried without objection.
Rule 9014. The Reporter said the draft of Rule 9014 provides for "administrative
motions" because so many other rules refer to "motions." Judge Robreno said the draft rule is an
attempt to micromanage thousands of cases in dozens of jurisdictions. He suggested setting out
general principles in a national rule and letting local rules supply the specifics. Judge Cristol
said the 25-day notice of the preliminary hearing required by Rule 9014(c) would be unrealistic
in many circumstances. Professor Tabb said the best thing about the proposed rule is its
uniformity. The Reporter stated that, viewed as motion practice, Rule 9014 looks like a national
rule micromanaging local practice. Viewed as administrative proceedings, a category of
litigation closer to adversary proceedings and civil litigation in the district court, however, he
said, Rule 9014 does no more micromanaging than the adversary proceeding rules or the Civil
Rules. For instance, an objection to a $1 million claim is an administrative proceeding under
Mr. Kohn said the 10-day period for discovery in subdivision (i)(C) provides an
unrealistic time for discovery on a disputed $1 million claim. Instead, he said, the rule should
provide a 30-day period for discovery which could be shortened. The Chairman said the rule was
drafted for routine matters and that the attorneys in a $1 million case could ask for more time.
Several Committee members questioned the determination required by subdivision (j)(1) of
whether there is a genuine issue as to any material fact and, if not, whether any party is entitled
to relief as a matter of law. Mr. Rosen questioned whether the status conference should be held
earlier to avoid wasted effort. Judge Kressel said so many of these matters go by default or
stipulation that preparation for an early status conference would outweigh any savings.
Several Committee members said they liked the basic idea of the proposed rule but
questioned whether the two-step process in subdivision (h) could be simplified by making the
initial hearing an evidentiary one. Mr. Smith moved to permit the court to order an evidentiary
hearing on its motion or on the motion of a party with notice to the parties. The motion carried
with three dissenting votes. The Reporter is to draft the new language. Judge Cordova
questioned the title of the rule, "Administrative Proceedings." The Reporter said the rule would
create a new class of litigation which is a hybrid between motion practice and a civil action. The
Committee agreed to retain the title. Professor Tabb moved to strike subdivision (b)(1) and
insert "be in writing and" at the end of line 22. The motion carried. The Committee also
agreed to strike the references to oral motions in subdivisions (b)(3), (b)(4), (b)(5), and
The Committee discussed the provision for relief from procedural requirements in
subdivision (o). The Chairman said the court is restricted to waiving the requirements in a
particular case, rather than opting out of the rule across the board. With one dissenting vote,
the Committee agreed to retain the provision. Mr. Heltzel said the court files should not be
cluttered with proposed orders. Judge Kressel said requiring the movant to prepare a proposed
order makes the movant focus on exactly what relief is wanted. The Chairman said it also lets
the respondent know what will happen if there is no response. The Committee declined to
change the provision.
The Committee discussed whether there should be an exception to the list of supporting
documents in subdivision (b)(5) for consent motions. The Reporter said the list of possible
respondents in subdivision (c)(1) is long enough that the movant is unlikely to have consents
from all of them before filing. Judge Cordova moved to delete line 39. Judge Kressel said
requiring a memorandum of law forces the movant to inform himself. The Reporter said line 27
requires that the movant state with particularity the grounds for the relief sought. The motion to
delete carried on a vote of 9-2. The Committee also agreed to delete the requirement for a
memorandum of law in line 111.
Judge Cristol moved to strike subdivision (c)(1)(B). Several Committee members
expressed concern that the provision would require a burdensome title search. The motion
carried with one dissenting vote. Professor Tabb asked whether the Reporter would review
other rules to identify provisions which are redundant or inconsistent. The Reporter stated that
he plans to review all of the rules. The Committee agreed to substitute "any" for "the" at the
end of line 82. The Committee discussed whether the 25-day notice period in subdivision (c)(1)
should be folded into other rules. The Reporter stated that, unlike Rule 9013 notices, Rule 2002
notices are notices to all parties.
Mr. Smith asked whether obtaining expedited relief concerning a truckload of fresh fish
would come under reduced notice in subdivision (f) or relief from procedural requirements in
subdivision (o)? The Reporter said it would normally fall under subdivision (f), but that (o)
could be used if needed. Mr. Sommer said the fish might require interim relief under subdivision
(g), and that it might be better to incorporate the standard for granting a temporary restraining
order instead of using the proposed language. In response to a question about the two-day notice
period for motions to reduce time, Mr. Batson said it was included in subdivision (f) in order to
prevent one of the parties from being "blind-sided."
After considering other business Friday morning, the Committee resumed its discussion
of the reduction of time under Rule 9014(f). The Reporter said the requirement for a separate
motion and two days notice of the hearing were included to counter fears of attorney abuse in the
reduction of time. Mr. Smith said the subdivision represents micromanaging. He moved to
strike the rest of the subdivision after the word "Rule" on line 138. The Reporter said the entire
subdivision could be deleted, leaving the reduction of time in administrative proceedings to be
governed by Rule 9006(c). Mr. Smith agreed to the change. The motion carried without
Judge Gettleman moved to strike the existing language of subdivision (e) and substitute a
provision that an affidavit shall conform to the requirements of Rule 56, Fed. R. Civ. P. The
motion carried with one dissent. Mr. Sommer moved to strike the phrase "in a pretrial order"
in line 194. The Committee agreed to the change. Mr. Sommer said the 10-day discovery
period in subdivision (I)(1)(C) may not be necessary because the first hearing isn't an evidentiary
hearing if discovery is ongoing. Judge Gettleman suggested requiring automatic disclosures but
not a Rule 26(f), Fed. R. Civ. P. meeting. The Chairman said some of this is covered by the
attachments required at the time of filing. Mr. Sommer said the subcommittee believes truncated
discovery is sufficient because the vast majority of these expedited matters are settled.
Judge Cristol moved to include the bracketed language on lines 222 - 227. The Reporter
suggested striking the words "appear and" on line 226 so that the courts could conduct these
conferences by telephone. Mr. Heltzel said his court has a local rule which states that the word
"appear" includes appearing by telephone. Judge Kressel suggested leaving the matter to the
courts. The Committee approved Judge Cristol's motion. Professor Tabb suggested that
subdivision (j)(2) incorporate the provisions of Rule 16(c), Fed. R. Civ. P. rather than listing
what may be done at a status conference. The Reporter said the list was included in order to
avoid incorporating the provision for referring matters to a magistrate judge. The Reporter
agreed to review whether other exclusions are needed and whether there could be a cross-reference to Rule 16(c).
The Reporter said there is a special provision in subdivision (j)(3) for relief from the
automatic stay because the court must hold at least a preliminary hearing within 30 days. Judge
Kressel suggested deleting motions for relief from the automatic stay from subdivision (j)(3).
Judge Small favored including stay motions in the subdivision and telling the parties that the
court will take testimony at the first hearing. In response to a question by Judge Cristol about the
continuation of the stay conditioned on payments by the debtor, the Reporter said the rule does
not provide for conditional relief because the statute requires a finding on whether the debtor has
a reasonable likelihood of prevailing at the final hearing, not on whether the debtor can pay.
Professor Tabb moved to include the bracketed references to stay motions, to delete the
word "shall" in line 244, and to include the word "may" in line 244. The Committee approved
the motion. It was moved to delete the word "trial" in lines 206, 242, and 243 and to substitute
the word "hearing" in lines 242 and 243 as more appropriate for an administrative proceeding.
The Committee approved the motion. Mr. Sommer moved to delete line 242 and the first
three words of line 243. The Committee approved the motion.
Judge Robreno asked about the provision in subdivision (k) that Rule 43(e), Fed. R. Civ.
P., which permits testimony by affidavit in motion proceedings, does not apply in administrative
proceedings under proposed Rule 9014. The Reporter said Rule 43(e) applies only to motions
and that administrative proceedings should be decided on the trial rule, which requires witnesses
to testify in open court, not the motion rule. Mr. Sommer said the exclusion may be overly broad
because it could apply to motions within administrative proceedings. The Reporter suggested
limiting the exclusion to evidentiary hearings. The Committee deferred the matter to the
Reporter, who is to draft limiting language. Professor Tabb stated that Rule 9022 requires
service of notice of the entry of an order while subdivision (l) requires service of a copy of the
order. The Committee agreed that subdivision (l) should track the language of Rule 9022.
Mr. Heltzel suggested providing that the notice may be served by such other person as the court
may direct. The Committee accepted the Reporter's suggestion to defer the matter to a
The Reporter stated that subdivision (m) is redundant of Rule 9034 but instructive. Judge
Kressel moved to strike subdivision (m) and the related portion of the Committee Note. The
motion carried with two dissents. Mr. Patchan stated that some of these proceedings are quite
significant and that the Committee Note should refer to the requirement in Rule 9034 for
transmission to the U.S. trustee. The Committee agreed to include the reference in the
Committee Note. Professor Tabb and Mr. Sommer asked the Reporter to review the application
of particular Part VII rules to administrative proceedings in subdivision (n). Mr. Kohn stated that
the reference to the necessity for expeditious relief in line 267 was too narrow. The Committee
agreed to delete line 267.
Judge Donald moved to approve the proposed amendments to Rule 9014, as revised, in
principle, and to refer the draft to the Reporter for further refinement. In light of the sentiment
for going forward and the great deal of work by the Subcommittee, Judge Robreno stated that it
gave him great pause to stand on the other side. As an alternative, he suggested striking
subdivision (b) and providing that no relief shall be granted under the rule unless the party
against whom relief is sought has received notice, had an opportunity to take discovery and
present evidence, and has been afforded an opportunity to cross-examine witnesses. Several
Committee members said they favored publishing the proposed amendment for comment but
questioned whether national uniformity in motion practice is better than existing local rules. The
motion to approve the proposed amendments carried without dissent.
Style Subcommittee. The Reporter presented the report of the Style Subcommittee
which reviewed proposed amendments to 14 rules approved at the September 1995, March 1996,
and September 1996 meetings, subject to review by the Subcommittee. The Subcommittee
recommended a number of "global changes" including the use of the word "under" instead of
"pursuant to," the phrase "no later than" instead of "not later than," the words "after" and
"before" in place of "following" and "prior to." In addition, the phrase "of the Code" is used
only the first time a Bankruptcy Code section appears in a rule. The Style Subcommittee revised
each new 10-day stay provision with respect to certain court orders so that it stays the relevant
court order, rather than the particular conduct of a party.
The Reporter suggested striking the phrase "a contested matter" on page 7 so that the Committee Note would apply regardless of how Rule 9014 is titled. The Committee agreed to make the change. Judge Kressel said substituting the word "is" for "shall be" on line 2 of Rule 3020, line 7 of Rule 4001, line 4 of Rule 6004, and line 4 of Rule 6006 would make the meaning clearer. The Committee agreed to make the change. Mr. Sommer asked why the proposed amendment to Rule 1017(b)(1) refers only to dismissals of chapter 7 and chapter 13 cases. The Committee agreed to strike the phrase "under § 707(a)(2) or § 1307(c)(2)" on lines 18 - 19.
The Committee approved the proposed stylistic changes, as revised. The Reporter said the
proposed amendments will be presented to the Standing Committee at its June 1997 meeting
with a request for publication.
Service of Process in a Foreign Country. The Reporter stated that amendments to Civil
Rule 4 and Bankruptcy Rule 7004 in recent years had inadvertently extended to service in a
foreign country, by cross references, the requirement for service of a summons in an adversary
proceeding within 10 days of its issuance. The Reporter proposed amending Rule 7004(e) to
provide that the 10-day limit does not apply if the summons is served in a foreign country. The
Committee approved the proposed amendment and agreed to include it in the package of
amendments to be presented to the Standing Committee in June 1997.
Adjustment of Dollar Amounts. Mr. Sommer stated that it might be desirable to
provide for the automatic adjustment of the dollar amounts in the Bankruptcy Rules for inflation.
In particular, he said, the $500 figure in Rule 2002(a)(6) should be increased to $1,000 because
attorney fees are almost always higher than $500. The Committee discussed whether the $500
threshold applies to a single fee application, the aggregate of all fee applications in a particular
case by a professional, or all of the fee applications in the case on for hearing at the same time.
The Committee agreed to defer the matter to the September meeting.
Notice to Governmental Agencies. At its meeting in March 1995, the Committee
considered proposals submitted by Mr. Kohn relating to problems that the federal government
has been experiencing with notices in bankruptcy cases, and also discussed proposed
amendments to Rule 6007 designed to give the Environmental Protection Agency notice of a
contemplated abandonment of property. Although the Committee expressed concerns, it did not
adopt any of the proposals at the March 1995 meeting. Instead, the chairman, Judge Paul
Mannes, asked Mr. Kohn to prepare a revised proposal for the Committee to consider. In
response, at the March 1997 meeting, Mr. Kohn submitted six proposals, and the Reporter
drafted an alternative suggestion for amending Rules 1007, 2002, and 5003. In addition, David
B. Foltz, Jr., a Houston attorney, proposed a new Official Bankruptcy Form entitled
"Environmental Statement" and several rules amendments on disclosure and notice to
governmental units relating to environmental matters.
Mr. Kohn said his first proposal is intended to address two problems: identifying the
specific government agency with a claim and, if the agency has identified a specific address for
notices, using that address for mailing notices. He said his proposal, which included
amendments to Rules 1007, 2002, and 5003, would benefit both the government and the debtor
by avoiding disruptive last-minute claims or no government claim at all. The Reporter stated
that the proposal had been expanded from the federal government to all governments, state
federal, and foreign, since the 1995 meeting. Mr. Kohn said he saw no problem with extending
the use of the registry to be maintained by the clerk under the proposed amendment of Rule 5003
to large, institutional creditors.
The Committee discussed whether the debtor's failure to use a governmental agency's
address in the registry would make the debt nondischargeable. The Reporter stated that the
debtor is already responsible for giving the government reasonable notice, but that it might be
easier for the government to argue that the debt should be nondischargeable if the debtor failed to
use the address in the registry.
Mr. Sommer said he was most concerned about pro se debtors who owe taxes. He said
the schedules should be revised to include an instruction to use the addresses filed in the clerk's
office for government claims. The Reporter said such a change could be coordinated with the
rules amendments. Judge Kressel stated that the Reporter's draft amendment to Rule 2002(g)
would require the clerk to use the registry address even if the debtor uses the wrong address in
the matrix. Mr. Heltzel said its impracticable for the clerk to review the list of creditors in every
case and check state, federal, and local governmental agency addresses against the addresses in
the registry. Mr. Kohn said he believed page 4 of his proposal imposed the duty to use the
registry only on the debtor. The Reporter said he could revise his draft to make the use of the
registry address mandatory only for the debtor and only if known to the debtor.
The Committee discussed whether computer screening could be used to correct the
addresses for governmental agencies. Mr. Heltzel said his office uses a screening process for
electronic notice to the Internal Revenue Service. He stated that the process is practicable for a
few creditors with a limited number of possible addresses but that his office couldn't screen
dozens of addresses for hundreds of state, federal, and local agencies and possible spellings of
their names. He said his district covers 38 counties and that the debtor could have claims by
governmental agencies in other states, too.
Professor Tabb stated that he was concerned that private creditors would insist on the
same treatment as the government. The Committee discussed whether the public interest in
collecting government revenue and the debtor's personal, contractual relationship with
nongovernmental creditors are sufficient grounds for distinguishing between notice to
governmental and nongovernmental entities.
The Chairman suggested referring the matter to a subcommittee chaired by Judge Small
and including Judge Cristol, Mr. Kohn, Mr. Sommer, Mr. Heltzel, and Professor Tabb. Several
Committee members said the subcommittee should explore notice to both governmental and
private entities. Mr. Smith stated that the subcommittee should address the substantive issue of
the debtor's discharge. The Reporter said the proposal might be modified to require the debtor to
identify governmental agency creditors, to direct the establishment of a registry to be maintained
by the clerk, and to state that the debtor should use the addresses in the registry. If the debtor
doesn't use the registry, he said, the adequacy of the notice would depend on the common law.
The Committee agreed to refer the matter to the subcommittee, which is to report back at
the September meeting.
Rule 2004. The Reporter stated an FJC study disclosed that the bankruptcy bench is
divided between judges who consider Rule 2004 motions ex parte and those who consider such
motions on notice. The matter has been discussed at previous Committee meetings and was
referred to the Rule 2004 Subcommittee, which recommended requiring notice and a hearing
before a Rule 2004 motion is granted.
Judge Cordova said the proposed amendment gives the subject of the examination two
opportunities to object: once before entry of the order and once after the entry. Mr. Kohn
suggested the hybrid approach utilized in the Northern District of Iowa in which a Rule 2004
order can be entered ex parte if the parties agree in advance on the scope of the examination. Mr.
Batson said the parties are unlikely to come to such an agreement in New York or Atlanta. Judge
Small said the orders could be entered on an ex parte basis if there is sufficient time to object
before the examination. He said it is pointless to go through the advance notice process when
there will be no objections to 99 percent of the motions. Judge Kressel said he opposes ex parte
orders generally, even if they tend to be noncontroversial.
Judge Robreno said Rule 2004 examinations are intended to be fishing expeditions and
that vesting a party with that type of power without a hearing raises questions. Judge Cristol said
advance notice would require thousands of additional docket entries in his district. Mr. Patchan
said there have been abuses of the Rule 2004 process in some places, including attempts to use
the examinations in adversary proceedings. Mr. Heltzel said he has heard more and more
allegations of credit card companies using abusive tactics to harass pro se debtors. The
Committee discussed whether there should be special protections for pro se debtors or for third
parties ordered to undergo an examination.
The Committee agreed to send the matter back to the Rule 2004 Subcommittee. The
Committee also agreed not go forward with the separate amendment to Rule 2004(c)
approved in 1995 so that the two amendments could be submitted to the Standing
Committee with a request for publication at the same time.
Rule 2014. The Reporter said the proposed revision of Rule 2014 was prepared in
response to concerns about the disclosure requirements for employing professionals and because
the current rule may have become unworkable as both bankruptcy cases and law firms have
gotten bigger. He said the draft attempts to clarify the disclosure requirements and to add
procedures for the motion practice. The Reporter stated that the draft subdivision (b)(3) is taken
from the Bankruptcy Code's definition of "disinterestedness" but, in some circumstances, may
require less disclosure than the current Rule 2014. Judge Cordova stated that any rule must
comply with the statute. Mr. Smith said the rule could go beyond the statute.
Mr. Smith said the rule should require that the attorney disclose anything that affects the
quality of representation requested. The Reporter noted that the Committee has been asked in the
past for a "safe harbor" for disclosure. Instead, he said, the proposed amendment provides for
interim employment orders. Professor Tabb asked what standard would be applied in
considering interim employment motions. The Reporter said the proposed rule does not specify
the standard but that the judge would have the information in the motion for permanent
employment and the professional's verified statement.
Judge Stotler asked why the rule referred to employment by a trustee or committee while
the Committee Note referred to employment by a trustee, debtor in possession, or committee.
The Reporter stated that throughout the Bankruptcy Rules the word "trustee" includes debtors in
possession as well as trustees. The Chairman suggested that the time for filing a supplemental
statement under subdivision (f) be shortened to five days. Judge Cordova suggested referring the
proposed amendment back to the Rule 2014 Subcommittee with general approval of the
procedural aspects of the draft. The Committee agreed to the referral.
Subcommittee and Liaison Reports
Alternative Dispute Resolution Subcommittee. Professor Tabb said the Alternative
Dispute Resolution (ADR) Subcommittee recommended requesting that the FJC conduct a
national survey of the use of ADR in bankruptcy cases. He said the survey could identify good
ideas in local rules for new national rules and any particular problems such as, perhaps, ex parte
contacts or breaches of confidentiality that should be addressed by the rules. Mr. Niemic said the
survey would include all bankruptcy judges, a sample of attorneys, and attorney mediators in the
courts which have ADR programs.
Mr. Niemic said 24 bankruptcy courts have formal ADR procedures established by local
rules, general orders, or other means and that all of these courts have mediation programs. Nine
of the 24 courts also utilize other ADR procedures. He also discussed ADR initiatives by groups
within the American Bar Association and the American Bankruptcy Institute. The Committee
agreed to request that the FJC proceed with the survey.
Subcommittee on Technology. Judge Cristol said proposed technical standards for
electronic filing have been circulated for comment. He said February 14, 1997, was the deadline
for comments but that he has not yet seen the comments. Ms. Channon said she had hoped to
have copies of the executive summary of a draft report on the Electronic Case Files (ECF)
Project for the Committee, but that they were not available in time for the meeting. She said she
would make sure that any interested member of the Committee would receive a copy.
Mr. Sommer suggested that the Technology Subcommittee consider electronic service
before the Committee's next meeting. The Reporter asked if there was any reason for this
Committee's Technology Subcommittee to refrain from studying electronic service and the ECF
paper because the Standing Committee's Subcommittee on Technology is considering the same
matters. Judge Stotler said she encouraged every member of the Committee to consider the
paper because the more people considering these issues the better. The Committee agreed that
the Technology Subcommittee should study electronic service.
Subcommittee on Local Rules. The Chairman said he intends to leave the chair and
membership of the subcommittee vacant. Ms. Channon said she receives about three calls a
week about uniform local rule numbers, and that the renumbering appears to be progressing well.
Subcommittee on Forms. Ms. Channon said the revised Bankruptcy Forms Manual will
include, for the first time, the Official Bankruptcy Forms and instructions for their use. The
manual also will include Director's Forms and updated instructions from the 1988 version of the
publication. She said Committee members are welcome to read the draft manual and comment
on it. Professor Tabb expressed the Committee's gratitude to Mr. Sommer and Ms. Channon for
their yeoman's work on revising the Official Forms.
Subcommittee on Rule 2014 Disclosure Requirements. Mr. Smith stated that he hoped
that this Committee will try to draft rules on the conduct of attorneys in bankruptcy cases or at
least begin to focus on the issues. He said the threshold issue is whether the Committee has
authority to propose rules on matters such as when an attorney is qualified to represent the
debtor, trustee, creditors' committee, or equity security holders' committee; when an attorney
can represent multiple parties in bankruptcy; and how to apply state rules that would disqualify
The Chairman asked whether any of the advisory committees has ever undertaken to
write what amounts to a code of conduct for attorneys. Professor Coquillette said there have
been some national rules and a number of local rules. He stated that it is appropriate for this
Committee to undertake such a project. Mr. Sommer asked what the Standing Committee is
doing in this area. Professor Coquillette said it may draft a model local rule or pick narrow areas
and promulgate national rules. He said it would be helpful to have a model bankruptcy rule to
consider and to have this Committee's thoughts on whether a rule for the district courts should be
extended to the bankruptcy and appellate courts. The Chairman asked the Subcommittee to
expand its work to include consideration of Mr. Smith's suggestions.
Professor Coquillette requested that the chairman establish a mechanism for the Standing Committee's Subcommittee on Attorney Conduct to communicate with this Committee. The Chairman appointed Mr. Smith as a liaison.
Liaison to Advisory Committee on Civil Rules. The Chairman stated that he will serve
as this Committee's liaison with the Advisory Committee on Civil Rules in the future, but that
Judge Robreno will represent this Committee at the Civil Committee's next meeting.
James H. Wannamaker, III
Bankruptcy Judges Division