2021 Connecticut Bankruptcy Conference (ECB211014)

This session will provide attendees with up-to-date rules and procedures of the Connecticut Bankruptcy Court, including the creation of the Pro Bono Program, decisions of interest, and public outreach efforts. 

One in ten adult Americans have turned to the consumer bankruptcy system for help. For the past nearly forty years, the only systematic data collection about the people who file bankruptcy comes from the Consumer Bankruptcy Project (CBP), for which Professor Foohey, Professor Deborah Thorne, and Professor Robert Lawless serve as co-principal investigators. Professor Foohey will discuss their forthcoming article to be published in the Georgia Law Review, which uses CBP data from 2013 to 2019 to describe who is using the bankruptcy system, providing the first comprehensive overview of bankruptcy filers in thirty years. The article uses principal component analysis to leverage these data to identify distinct groups of people who file bankruptcy. This technique allows the co-principal investigators to situate the distinctions among filers’ financial and household situations within what bankruptcy laws and courts can and cannot provide. The article critiques the consumer bankruptcy system, based on the totality of people who have used it recently, to identify avenues for reforming bankruptcy and to underscore the broader economic, racial, and social issues that consumer bankruptcy filings highlight.

The rights of a debtor to deaccelerate, cure defaults, and maintain a mortgage is one of the most frequently used powers in chapter 13 in Connecticut. The bankruptcy code clearly provides these powers respecting a mortgage in default, but with Connecticut following title theory of security in real estate, and providing the opportunity for strict foreclosure, is that opportunity lost upon entry by a state court of a judgment of strict foreclosure? Does the result change if the judgment is subject to appeal? And what about a judgment of foreclosure by sale? After In re Canney the legislature tried to put its thumb in the dyke with CGS §49-15, but there are limits to its effect.

This presentation will explore the top ten issues impacting Subchapter V Bankruptcies by focusing on important distinctions between the Subchapter V rules and traditional Chapter 11 Bankruptcy. The panelists will then examine a hypothetical Subchapter V Bankruptcy case to highlight some issues raised by recent cases as well as identify issues that have yet to be fully defined by the courts. 

For Connecticut, recovery is not from the disruptions of COVID-19. Connecticut never recovered from the Great Recession. The state employment failed to come back to the previous level of 2008; the quality of jobs in Connecticut declined sharply; real output (gross state product) shrank for years before a modest recovery, but in February 2020 it remained well below its previous high. No state economy performed worse; Connecticut’s neighbor all enjoyed robust recovery after 2009 in both employment and real output. Compounding the malaise in the state’s economy has been a sharp contraction in Connecticut’s workforce and what appears to be a profound loss of jobs among Connecticut residents, many of whom had shifted their employment out of state after 2013. That is consistent with Connecticut having had the second highest mortgage delinquency rate nationally for several years. Connecticut may now face a significant loss of population.

Assuming or rejecting an automobile lease or lease of other personal property, or a lease of residential real estate whether as landlord or tenant, can be a critical part of the chapter 13 debtor’s rights and duties. With the statutory framework lacking clarity the practitioner must tread carefully to avoid termination of the debtor’s lease. Does chapter 13 also provide rights to cure defaults and arrears? When, if ever, can the debtor exercise his or her auto lease buyout option in monthly payments over the life of the chapter 13 plan?

Despite the challenges posed by the pandemic, Section 363 sales remain a vital tool for an effective reorganization and/or liquidation. This program will explore the ways in which the pandemic has changed the landscape for 363 sales – from initial marketing of an asset to the entry of a final order approving the sale. Panelists will also discuss recent examples of 363 sales within and outside of Connecticut, and the hurdles they overcame in getting the sale approved.

The past year and a half have highlighted the importance of using technology to keep our law firms and clients working. We also saw a corresponding rise in lawyer gaffes (meow!) and cyberattacks, as well as increasing regulation surrounding consumer data privacy. Case law, ethics opinions, and commentary to the ethics rules make it clear that all lawyers must “get smart” about the use of technology and the protection of digital client information from common mistakes and scams. This interactive panel will discuss some of the pitfalls surrounding law firm computing, e-mail, listservs, texting, videoconferencing, and remote working, and will present common cyber threat scenarios that law firms face and discuss how we should prepare for and respond to those scenarios, as required by certain rules of professional responsibility.