By Henry E. Hildebrand, III, Chairman Legislative and Legal Affairs Committee
The Residential Capital (‘Res Cap’) bankruptcy pending in the Southern District of New York, could have had a significant impact on the administration of chapter 13 cases involving claims filed by GMAC Mortgage, ditech, Homecomings, or any of the other Res Cap debtors in the consolidated chapter 11 case.
On behalf of the NACTT and at the direction of the NACTT board, Chapter 13 Trustee Henry E. Hildebrand, III was in contact the Res Cap debtors’ counsel. The NACTT, after consulting with several other groups affected by the filing, considered raising an objection to the first day orders becoming final unless the final first day orders were broad enough to cover trustees’ administra-tion of the Res Cap debtors’ claims in chapter 13 cases. After a brief negotiation, the Res Cap Debtors proposed a modified order that the NACTT felt would cover the NACTT’s concerns.
The National Association of Consumer Bankruptcy Attorneys, also actively involved in the discussions with the Res Cap Debtors, filed a formal objection, concerned with the ability to collect attorneys’ fees in disputes with the Res Cap Debtors.
Negotiations between NACBA representative Henry Sommer, the UST and the NACTT resulted in the attached order that amends the relevant first day orders. As you can see, the order covers the trustees’ concerns in paragraph 15. Generally, this order allows free administration of claims filed by the Res Cap Debtors in chapter 13 cases around the country, consideration of setoffs against the claims, fees in connection with the claims, but will not permit independent class action recoveries or monetary judgments for violations of state consumer protection laws, etc. Relief from the stay in the New York court could be available to pursue those claims if desired.
Mr. Hildebrand graduated from Vanderbilt University and received his J.D. from the National Law Center of George Washington University. He is a fellow of the American College of Bankruptcy and serves on its Education Committee. He is Board Certified in consumer bankruptcy law by the American Board of Certification. He is Chairman of the Legislative and Legal Affairs Committee for the National Association of Chapter 13 Trustees (NACTT). In addition, he is on the Board of Directors for the NACTT Academy for Consumer Bankruptcy Education, Inc.
Mr. Hildebrand has served as case notes author for The Quarterly, a newsletter dealing with consumer bankruptcy issues and Chapter 13 practice in particular, since 1991. He is a regular contributor to the American Bankruptcy Institute Journal. He is an adjunct faculty member for the Nashville School of Law and St. Johns University School of Law.