Friday, June 29, 2007
Former Spouse's Attorney Fee Dischargeable
(pre-BAPCPA) In reviewing the recent decision of In re Ensenat, Case No. 06-15979 (Isicoff J.)(Bankr. S.D. Fla. May 24, 2007), one is reminded how fact specific may be the determination of the extent of a Florida homestead exemption under Article X, Section 4(a)(1) of the Florida Constitution. The case involved a parcel of real property with two buildings. The first building was the debtors' home and the second building was a partially detached unit that was occupied by the debtors' niece, her son, and her boyfriend. The partially detached unit, which had its own kitchen and utility meters, was attached to the main house by a covered patio. The Court found that there was no payment of rent, but that the boyfriend paid their separate water and electric bill, mowed the lawn, and made various contributions, including the buying of groceries.
Friday, June 15, 2007
Rights to OJ Simpson Book in Miami Bankruptcy Case
Its being reported in the national media that a Miami bankruptcy judge Friday awarded Ron Goldman's family the rights to O.J. Simpson's canceled book, "If I Did It," which the Goldmans want to rename "Confessions of a Double Murderer."
U.S. Bankruptcy Judge A. Jay Cristol ruled that Lorraine Brooke Associates, which owned the rights to the book, can be considered as belonging to the former football star. The company is run by Simpson's daughter, Arnelle.
O.J. Simpson's book contract with HarperCollins, and a money trail showing $630,000 transferred from the publisher to LBA and then to Simpson for his expenses, confirm his connection to the company, Cristol said.
LBA was "clearly accomplished to perpetuate a fraud," Cristol said.
Kendrick Whittle, the attorney for Simpson's daughter, said he had not decided yet if he would appeal. Arnelle Simpson attended the hearing but did not speak with reporters afterward.
Whittle said Cristol's ruling set a "scary" precedent: "What if she opens another business tomorrow? Are the Goldmans allowed to pursue that, too? Where do they stop?"
O.J. Simpson has maintained his innocence since his 1995 acquittal in the killings; a civil jury later found him liable.
In the book, Simpson explains how he might have committed the slayings. HarperCollins had planned to publish it, but canceled the deal with Simpson after public outrage.
The book's rights now pass to an independent trustee, Drew Dillworth, who will decide what to do with them, Battista said. A manuscript of the book was given to the trustee Friday, Whittle said.
Dillworth's attorney, Brian Rich, said they will now attempt to try to sell the rights to everything pertaining to the book and the HarperCollins contract "so that there will be funds to pay creditors of LBA, including the Goldmans."
Rich said there have been expressions of interest in buying the rights, but would not say who they were from.
Arnelle Simpson testified in a deposition Wednesday that the book was her idea, Battista said at Friday's hearing.
"LBA was to baby-sit _ her words _ baby-sit the book to make sure everything would go smoothly," Battista said.
Arnelle Simpson had sought to reorganize her company, which would have allowed her to maintain temporary control over the book's rights.
___
Associated Press writer Lisa Orkin Emmanuel contributed to this re
U.S. Bankruptcy Judge A. Jay Cristol ruled that Lorraine Brooke Associates, which owned the rights to the book, can be considered as belonging to the former football star. The company is run by Simpson's daughter, Arnelle.
O.J. Simpson's book contract with HarperCollins, and a money trail showing $630,000 transferred from the publisher to LBA and then to Simpson for his expenses, confirm his connection to the company, Cristol said.
LBA was "clearly accomplished to perpetuate a fraud," Cristol said.
Kendrick Whittle, the attorney for Simpson's daughter, said he had not decided yet if he would appeal. Arnelle Simpson attended the hearing but did not speak with reporters afterward.
Whittle said Cristol's ruling set a "scary" precedent: "What if she opens another business tomorrow? Are the Goldmans allowed to pursue that, too? Where do they stop?"
O.J. Simpson has maintained his innocence since his 1995 acquittal in the killings; a civil jury later found him liable.
In the book, Simpson explains how he might have committed the slayings. HarperCollins had planned to publish it, but canceled the deal with Simpson after public outrage.
The book's rights now pass to an independent trustee, Drew Dillworth, who will decide what to do with them, Battista said. A manuscript of the book was given to the trustee Friday, Whittle said.
Dillworth's attorney, Brian Rich, said they will now attempt to try to sell the rights to everything pertaining to the book and the HarperCollins contract "so that there will be funds to pay creditors of LBA, including the Goldmans."
Rich said there have been expressions of interest in buying the rights, but would not say who they were from.
Arnelle Simpson testified in a deposition Wednesday that the book was her idea, Battista said at Friday's hearing.
"LBA was to baby-sit _ her words _ baby-sit the book to make sure everything would go smoothly," Battista said.
Arnelle Simpson had sought to reorganize her company, which would have allowed her to maintain temporary control over the book's rights.
___
Associated Press writer Lisa Orkin Emmanuel contributed to this re
Sunday, June 10, 2007
What, Me Worry?
The uninitiated might have thought that Deutsche Bank was facing a huge financial loss in the current subprime mortgage meltdown as its name is quite ubiquitous as a plaintiff in so many of the mortgage foreclosures in South Florida. In fact, the Miami Review reports that Deutsche Bank has filed over 2,100 foreclosure actions in South Florida year to date (mid-2007) in an attempt to pursue $507 million in mortgage loans. Deutsche Bank's foreclosures represent about 17% of pending foreclosures.
One need not cry for Deutsche Bank and the many other banks who are similar players. It is reported that Deutsche Bank is merely the trustee or custodian of the mortgage loans and most have been securitized and sold on the bond market to investors. It is the investors who face the losses.
Deutsche Bank has apparently found another way to profit from the subprime mortgage meltdown. The Financial Times recently reported that Deutsche Bank's fixed income desk entered into short positions in late 2006 in the ABX index which is a derivative based on high-risk mortgages and home equity loans. The ABX index represents a basket of credit default swaps on high-risk mortgages and home equity loans and provides a type of insurance against default of a specific security. By doing so, the bank bet that the US mortgage market would weaken. Upon the subprime mortgage market correction and near collapse in March, 2007, Deutche Bank profited handsomely. In contrast to some of its peers, the German bank reported record first-quarter earnings in this sector.
One need not cry for Deutsche Bank and the many other banks who are similar players. It is reported that Deutsche Bank is merely the trustee or custodian of the mortgage loans and most have been securitized and sold on the bond market to investors. It is the investors who face the losses.
Deutsche Bank has apparently found another way to profit from the subprime mortgage meltdown. The Financial Times recently reported that Deutsche Bank's fixed income desk entered into short positions in late 2006 in the ABX index which is a derivative based on high-risk mortgages and home equity loans. The ABX index represents a basket of credit default swaps on high-risk mortgages and home equity loans and provides a type of insurance against default of a specific security. By doing so, the bank bet that the US mortgage market would weaken. Upon the subprime mortgage market correction and near collapse in March, 2007, Deutche Bank profited handsomely. In contrast to some of its peers, the German bank reported record first-quarter earnings in this sector.
Wednesday, June 6, 2007
Saturday, June 2, 2007
Non-Rented Partially Detached Unit Held Part of Exempt Homestead
In reviewing the recent decision of In re Ensenat, 2007 WL 2029332 (Bkrtcy.S.D.Fla. May 24, 2007)(Isicoff, J.), one is reminded how fact specific may be the determination of the extent of a Florida homestead exemption under Article X, Section 4(a)(1) of the Florida Constitution. The case involved a parcel of real property with two buildings. The first building was the debtors' home and the second building was a partially detached unit that was occupied by the debtors' niece, her son, and her boyfriend. The partially detached unit, which had its own kitchen and utility meters, was attached to the main house by a covered patio. The Court found that there was no payment of rent, but that the boyfriend paid their separate water and electric bill, mowed the lawn, and made various contributions, including the buying of groceries.
The Chapter 7 trustee argued that the second building was not part of the Debtors' "residence" and that the Debtors' niece (actually "half-niece") was not a member of the Debtors' "family." Article X, Section 4(a)(1) limits the homestead exemption to that of the residence of the owner or his family.
The Court stated that a separate structure on what is otherwise homestead property is not disqualified merely because it is a separate structure. The Court cited a 1917 Florida Supreme Court decision that observed that the homestead exemption would "doubtless include outhouses, barns, wagon houses, wood or coal sheds, chicken houses, fences, etc. as were appurtenant and subsidiary to and used in connection with the residence as conveniences and auxiliaries." Armour & Co. v. Hulvey, 74 So. 212 (Fla. 1917). Such improvements would be protected as "improvements" to the homestead. The Court also cited another decision that held that the homestead included a garage and overhead apartment used for storage and laundry. White v. Posick, 150 So. 2d 263, 265 (Fla. 2d DCA 1963).
The Court observed that "to the extent court have found abandonment or waiver of the homestead exemption in a separate structure it was because the homeowner at some time used that portion of the property to generate income." But the Court further noted that if the business purpose ceases, the homestead status may be regained.
After noting that Florida law recognizes "families-at-law" and "families-in-fact", the Court held that it was not clear whether or not the niece, son, and boyfriend qualified as the Debtors' "family" under the Article X Section 4(a)(1) of Florida Constitution. But the Court concluded that whether are not these persons qualified as the Debtors' "family", the debtors were entitled to claim the entire parcel as exempt homestead as the second structure was not used for a business purpose.
One might query how the holding may have been different had the court found the boyfriend's payment of the electric bill, mowing of the lawn, and various contributions, including the buying of groceries to be a form of constructive rent. Apparently this would have rendered the second structure to be considered as used for a business business and therefore non-exempt.
One may also note that the Trustee had initially argued that the two structures constituted a duplex, but at trial acknowledged that they were actually two separate structures joined by a roofed patio. Perhaps, the Court's decision would have been the same even if the two structures constituted a duplex as long as the second unit was not rented out. The majority of the bankruptcy courts in Florida would not allow an exemption for a side of a duplex that is rented out. In re Bornstein, 335 B.R. 462 (Bkrtcy. M.D. Fla. 2005, In re Dudeney, 159 B.R. 1003 (Bankr.S.D.Fla. 1993).
The Chapter 7 trustee argued that the second building was not part of the Debtors' "residence" and that the Debtors' niece (actually "half-niece") was not a member of the Debtors' "family." Article X, Section 4(a)(1) limits the homestead exemption to that of the residence of the owner or his family.
The Court stated that a separate structure on what is otherwise homestead property is not disqualified merely because it is a separate structure. The Court cited a 1917 Florida Supreme Court decision that observed that the homestead exemption would "doubtless include outhouses, barns, wagon houses, wood or coal sheds, chicken houses, fences, etc. as were appurtenant and subsidiary to and used in connection with the residence as conveniences and auxiliaries." Armour & Co. v. Hulvey, 74 So. 212 (Fla. 1917). Such improvements would be protected as "improvements" to the homestead. The Court also cited another decision that held that the homestead included a garage and overhead apartment used for storage and laundry. White v. Posick, 150 So. 2d 263, 265 (Fla. 2d DCA 1963).
The Court observed that "to the extent court have found abandonment or waiver of the homestead exemption in a separate structure it was because the homeowner at some time used that portion of the property to generate income." But the Court further noted that if the business purpose ceases, the homestead status may be regained.
After noting that Florida law recognizes "families-at-law" and "families-in-fact", the Court held that it was not clear whether or not the niece, son, and boyfriend qualified as the Debtors' "family" under the Article X Section 4(a)(1) of Florida Constitution. But the Court concluded that whether are not these persons qualified as the Debtors' "family", the debtors were entitled to claim the entire parcel as exempt homestead as the second structure was not used for a business purpose.
One might query how the holding may have been different had the court found the boyfriend's payment of the electric bill, mowing of the lawn, and various contributions, including the buying of groceries to be a form of constructive rent. Apparently this would have rendered the second structure to be considered as used for a business business and therefore non-exempt.
One may also note that the Trustee had initially argued that the two structures constituted a duplex, but at trial acknowledged that they were actually two separate structures joined by a roofed patio. Perhaps, the Court's decision would have been the same even if the two structures constituted a duplex as long as the second unit was not rented out. The majority of the bankruptcy courts in Florida would not allow an exemption for a side of a duplex that is rented out. In re Bornstein, 335 B.R. 462 (Bkrtcy. M.D. Fla. 2005, In re Dudeney, 159 B.R. 1003 (Bankr.S.D.Fla. 1993).
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