Monday, August 23, 2021

The Confusing Application of Sec. 362(c)(2)(C) to Dischargeability Cases

The different sections of the Bankruptcy Code should all work together for a common purpose. Sometimes a situation arises which looks like a disconnect. I had this happen in a dischargeability case I am defending. The creditor filed an action under Section 523, based on a suit pending in another state, and asked to have the stay lifted to allow the case to go forward. While the motion was pending, the debtor received his general discharge. The court asked the parties to address the impact of Section 362(c)(2)(C), which states that the automatic stay for an individual in Chapter 7 terminates upon entry of the general discharge.  

Monday, August 09, 2021

In Remembrance of Barbara M. Barron

 My close friend and colleague Barbara Barron passed away in her sleep on Thursday August 5, 2021. I first met her on a case in 1988. I got to know her well from bar activities around 2000, and then when I joined Barron & Newburger, P.C. in 2003.

Here is a look at her life and some of her most notable achievements. 

Legal Career

In 1974, Barbara was working as a young MBA for Texas Instruments in Dallas. When her mentor left the company, she realized that she qualified for in-state tuition at the University of Texas School of Law. Tuition was absurdly cheap back then, perhaps $500.00 per year.

After graduation, she went to work for the Texas Attorney General’s office.  At the AG’s office, she had many appearances before the Fifth Circuit Court of Appeals representing the state in habeas corpus proceedings. Some of these included Harryman v. Estelle, 616 F.2d 870 (5th Cir. 1980) and Blasingame v. Estelle,  604 F.2d 893 (5th Cir. 1979).  She also represented state agencies such as the Comptroller of Public Accounts, who would become creditors in her later bankruptcy career.

In the early 1980s, she entered private practice and formed her own firm. Women were not fully accepted into the legal profession at this time, so her decision to open a practice was a bold one.  In 1983, she hired a recent law school graduate named Manny Newburger giving rise to the firm that would ultimately become Barron & Newburger, P.C. Two early cases which brought her attention were Briarcliff Utilities and Steve Scott.

In the Briarcliff case, she was appointed Chapter 11 Trustee for a water utility near Spicewood, Texas. One of the customers of the utility who did not pay his bill was Willie Nelson. Ms. Barron sued the music legend twice. Eventually she was able to pay all the creditors with interest and return money to the company’s owner.

The Steve Scott case arose during the real estate collapse of the late 1980s and early 1990s in Texas. Mr. Scott owned an office building on Barton Springs Road in Austin. A savings & loan, which later was taken over by the Resolution Trust Corporation (“RTC”), attempted to foreclose upon the building. However, the building sat on two lots, only one of which was covered by the deed of trust. Ms. Barron filed a Chapter 11 case for Mr. Scott and sued the RTC alleging that the government entity was wrongfully using the half of the building not covered by the deed of trust. The RTC claimed that the court lacked jurisdiction over it and that its power to avoid unwritten agreements overrode the failure of the deed of trust to describe the full property. After the bankruptcy court authored an opinion finding that it did have jurisdiction, Scott v. Resolution Trust Corporation, 157 B.R. 297 (Bankr. W.D. Tex. 1993), the parties reached a settlement. Under the settlement, Mr. Scott was able to re-purchase his building on favorable terms and the prior opinion was withdrawn.  Although the opinion was formally withdrawn and cannot be accessed online, it can still be found in older copies of the Bankruptcy Reporter printed before the opinion was withdrawn.

In another one of her cases, her bankruptcy estate came to own a large quantity of wine. She obtained the necessary permits from the State of Texas to allow the wine to be sold out of the vault of a failed bank, giving rise to the Wine Vault. The novelty of the arrangement made for a successful sale.

As the firm became Barron & Newburger, Manny Newburger recognized that the Fair Debt Collection Practices Act was going to become a major source of litigation. He and Ms. Barron authored a book on the Fair Debt Collection Practice Laws of the United States. Once, when an older attorney was attempting to lecture Ms. Barron about the FDCPA, she asked him to look on his bookshelf and see if he had a certain book. Sure enough, the attorney had a copy of the book co-authored by Ms. Barron.

Throughout her career, Ms. Barron was an active member of the Commercial Law League of America and worked on many amicus briefs filed on behalf of the League. One of these was Heintz v. Jenkins, 514 U.S. 291 (1995), an early case interpreting the FDCPA. Ms. Barron and I worked together on Reed v. City of Arlington, 650 F.3d 571 (5th Cir. 2011)(en banc). In that case, a panel of the Fifth Circuit had ruled that a trustee was bound by a debtor’s fraudulent failure to disclose an asset. We filed an amicus brief on behalf of the CLLA and all members of the court, except for the members of the original panel, agreed that the trustee was not bound by the debtor’s concealment of assets.  We also worked together on In re Woerner, 783 F.3d 266 (5th Cir. 2015)(en banc) in which the full Fifth Circuit overruled an eighteen year old precedent which had held that an attorney’s ability to get paid in a failed Chapter 11 case depended on whether the attorney was successful. The en banc Court ruled that the proper test was whether the attorney’s actions were reasonable at the time.

Throughout her career, Barbara had a special interest in representing restaurants in bankruptcy and represented many well-known dining establishments.

Education and Charitable Work

Barbara Barron was also very involved in continuing legal education. She spoke at many courses, including a series of Ten Commandments lectures aimed at helping creditors maximize their recovery and avoid pitfalls in bankruptcy cases. She created innovative courses for the State Bar of Texas on Bankruptcy Mediation and Forensic Finance.  Ms. Barron was the co-recipient of the Constant Gardener Award from Advocacy, Inc. for her representation of a hearing-impaired debtor who stood to lose her claims under the Americans with Disabilities Act.

Ms. Barron was active in charitable activities as well. She once helped a high school student put on a concert to raise money for the Health Alliance for Austin Musicians. She helped to get several musicians from the Antone’s Records label to perform at the benefit. She also organized and executed a benefit to raise money to buy an ambulance in Israel for American Friends of Magen David Adom, the Israeli equivalent of the Red Cross. She was named the 2013 Volunteer of the Year by Jewish Family Services of Austin and served on the board of the local YMCA for many years. She developed the Patient Partners program for Jewish Family Services of Austin. She was instrumental in establishing the Debt Counseling Clinic to assist the Legal Aid Society of Central Texas, and she organized the Insolvency Support Group in Austin — one of the first groups of its kind in the United States.

Personal Life

In her personal life, she enjoyed trips to New York to watch Broadway shows. She was a supporter of the Austin Film Festival and Austin Jewish Film Festival. Her home was full of books, both serious and popular. She had recently finished Lisa Scottolini’s latest book before her death. Dim sum and bagels were two of her favorite meals for Sunday brunch.

Barbara continued to work until the end and was last in the office two days before she passed away. She will be missed.