By Richard E. Weltman

New York State’s highest court recently agreed to consider whether New York City's effort to limit law firms’ ability to collect debts violates the state's exclusive power to regulate attorney conduct.

The Court of Appeals will take up two certified questions from the United States Court of Appeals for the Second Circuit, which ruled that the case — in which Eric Berman PC and Lacy Katzen LLP contest the legality of Local Law 15 — raises unresolved and significant issues about the scope of New York State’s exclusive authority to regulate attorney activities. Berman v. City of New York, 2014 WL 5463299 (Oct. 29, 2014).

By Michael L. Moskowitz

A long journey has finally come to an end for Mary Veronica Santiago-Monteverde (“Debtor”), an elderly widow, who has resided in a Manhattan rent-stabilized apartment for more than 40 years. We have reported previously on Debtor’s opposition to her chapter 7 trustee’s efforts to sell her rent-stabilized lease to her landlord as a so-called asset of the bankruptcy estate.   

We have previously reported on an Eleventh Circuit case entitled Bank of America, N.A. v. David Lamar Sinkfield (No. 13-700), in which the Supreme Court denied Bank of America’s petition for certiorari regarding whether section 506(d) of the Bankruptcy Code allows a debtor to remove or strip-off a wholly unsecured—or “underwater”—mortgage lien in chapter 7 bankruptcy. See the original article here.

We have reported several times in connection with the chapter 7 case of Mary Veronica Santiago-Monteverde (“Debtor”), an elderly widow, who has resided in a rent-stabilized apartment in New York City since the 1970s. To see the prior articles click here.

By Michael L. Moskowitz

The New York Supreme Court Appellate Division for the Second Department recently clarified that New York’s CPLR§ 3408, which requires parties in a residential foreclosure action to participate in a settlement conference, was not applicable where the mortgage collateralized a personal guaranty of a commercial loan to a corporation. Independence Bank v. Valentine, 113 A.D. 3d 62 (2d. Dept 2013).  

By Michael L. Moskowitz

On September 17, 2014, the New York state court administrators announced stricter rules for creditors seeking judgments against consumers in debt collection lawsuits. Applicable only to debt incurred in connection with consumer credit transactions,[1] the new rules are specifically intended to prohibit creditors from collecting a debt: (i) that a consumer has already paid off, (ii) that was not incurred by that particular consumer; and (iii) where the six-year statute of limitations has expired.

A logistics and warehousing company came to Weltman & Moskowitz, LLP, a New York and New Jersey business litigation law firm, because it believed it was wrongfully named as a defendant in a multi-party federal lawsuit commenced in the Southern District of New York by the insurer subrogee of the consignor. Insurer alleged that our client had acted as a freight forwarder and bailee with respect to certain cargo damaged by Superstorm Sandy in October 2012.

Weltman & Moskowitz, LLP is proud to announce the selection of its founding partners, Richard E. Weltman and Michael L. Moskowitz, as Super Lawyers for 2014. This honor is a product of a rigorous investigative process by the publishers of Law and Politics.  Attorneys are selected based on professional accomplishments, licenses and certificates, peer recognition and personal achievements. The final published list represents no more than 5% of the lawyers in each state. 

On August 11, Michael Moskowitz was part of the winning foursome at a golf outing that helped raise more than $10,500 for the state’s Credit Union Political Action Committee (CUPAC). The Catskill-Hudson, Westchester-Rockland and Metropolitan Chapters held the event. Nearly 80 golfers participated in the tournament.

By Richard E. Weltman

In its recent decision, Hart v. Southern Heritage Bank, 2014 WL 1663029 (6th Cir. April 28, 2014), the Sixth Circuit Court of Appeals determined that the United States Supreme Court’s seminal holding in Stern v. Marshall, 131 S. Ct. 2594 (2011) does not preclude a bankruptcy court from issuing final judgments in non-dischargeability challenges under section 523(a)(2)(B) of the Bankruptcy Code.

New York’s Office of Court Administration recently announced relief for lenders and homeowners frustrated by high case volume delays affecting mandatory foreclosure settlement conferences in certain courts. Litigants will soon enjoy immediate and direct access to judges at these conferences in Kings, Queens, Nassau and Suffolk counties, the four counties with the highest foreclosure case volumes in the state.

By Richard E. Weltman

Responding to what he termed a “continuing stream of complaints,” New York’s Chief Judge Jonathan Lippman on May 1 announced that New York courts are proposing new rules to crack down on the filing of so-called “zombie debts,” insufficiently documented claims for default judgments against consumer debtors.

Judge Lippman wants creditors seeking to collect the debts—some of which may have been sold and resold by third-party credit buyers—to prove the obligations are actually outstanding and owed by those named in collection actions before New York courts will enforce them on behalf of creditors.

By: Michael L. Moskowitz

Less than three months ago, we reported on a case in which the Supreme Court heard oral argument concerning whether or not inherited IRA accounts constitute retirement funds. See previous article (Supreme Court to Decide Dispute Regarding Inherited IRAs in Bankruptcy) here. On June 12, 2014, in a unanimous decision, the Supreme Court, in Clark v. Rameker, 13-299, ruled that inherited IRAs are not retirement funds within the meaning of the Bankruptcy Code.

We recently reported on whether a bankruptcy debtor’s rent-stabilized lease constitutes an exempt asset in the form of a “local public assistance benefit” under New York Debtor and Creditor Law. The case is presently under consideration before the New York Court of Appeals.

Weltman & Moskowitz began following the case in October, when we reported on the chapter 7 trustee’s efforts to sell the rent-stabilized lease of Mary Veronica Santiago-Monteverde (“Debtor”), a 79-year-old widow. Many readers have been following the debtor’s opposition to the chapter 7 trustee’s efforts to sell the debtor’s interest in her rent-stabilized lease to the landlord as an asset of the bankruptcy estate.

The United States Supreme Court recently denied a creditor’s petition for certiorari in an Eleventh Circuit case entitled Bank of America, N.A. v. David Lamar Sinkfield (No. 13-700). The issue concerns whether section 506(d) of the Bankruptcy Code allows a debtor to remove or strip-off a wholly unsecured—or “underwater”—mortgage lien in chapter 7 bankruptcy.

The United States Judicial Conference recently approved changes to the federal court miscellaneous fee schedules, including certain bankruptcy filing fees.

As of  Sunday, June 1, 2014, the filing fees for most bankruptcy matters will rise. These fees are collected from both debtors and creditors accessing the federal bankruptcy courts, whether in person or online.

By Richard E. Weltman

Most businesses across New York and New Jersey are owned and managed by a small number of shareholders or members. These closely held companies very often fail to employ even minimal corporate governance formalities like those found in their publicly traded counterparts.

By Michael L. Moskowitz

Last October we reported on the travails of Mary Veronica Santiago (“Debtor”), a 79-year-old widow embroiled in a dispute with her chapter 7 bankruptcy trustee John Pereira. The issue is whether the “value” in her New York City rent-stabilized lease can be considered an exempt asset protected from sale in a bankruptcy case. At stake is the Debtor’s ability to continue to reside in her apartment free of creditor claims. Given the many thousand rent protected tenants, this is where public policy and federal bankruptcy law intersect. To see the prior article click here.

New York’s highest court recently announced that account holders do not have a private right of action to sue banks for alleged violations of the Exempt Income Protection Act (“EIPA”). Cruz v. TD Bank, 2013, NY Slip. Op. 07762 (November 21, 2013). EIPA exempts certain Social Security, veterans, disability and unemployment benefits from creditor restraining orders and requires banks to inform affected account holders of their right to obtain exemptions from collection.

News Release Update  

MICHAEL MOSKOWITZ PARTICIPATES IN THE PLAINVIEW-OLD BETHPAGE JFK HIGH SCHOOL’S 26^th ANNUAL MOOT COURT COMPETITION, HELD ON APRIL 3, 2014.

Media Contact:    Michael L. Moskowitz  212.684.7800

E-mail:   mlm@weltmosk.com or rew@weltmosk.com

For Immediate Release

NEW YORK, NY – On April 3, 2014, Michael L. Moskowitz, a founding member of Weltman & Moskowitz, LLP, participated as one of the judges in the Plainview-Old Bethpage John F. Kennedy High School’s 26th Annual Marvin Hazan Moot Court Competition.

On March 24, 2014, the United States Supreme Court heard oral arguments in the matter of Clark v. Rameker (In re Clark). The court appeared to be divided over reconciling the plain language of the Bankruptcy Code with what could be considered a windfall for the debtor. Clark involves the dispute over whether creditors can reach a debtor’s non-spousal inherited individual retirement account (“IRA”) in bankruptcy.

The Bankruptcy Code allows debtors to claim certain property as exempt by utilizing exemptions under state law or those specifically provided in the Bankruptcy Code.[1] Sections 522(b)(3)(C) and (d)(12)[2] allow debtors to exempt retirement funds, even where the state has opted out of the federal exemptions.

In a major change, the Consumer Financial Protection Bureau (“CFPB”) will soon require financial mortgage lenders to offer borrowers a greater disclosure at loan closings. The new disclosures replace existing Truth-In-Lending Statements, HUD-1 Settlement Statements and Good Faith Estimate disclosures.

In 2005, after 12 years of Congressional wrangling, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”).

The avowed purpose of BAPCPA was to reduce abusive filings by limiting consumer debtor’s access to chapter 7 relief. The financial service industry argued the change was needed to curb consumers’ “profligate spending” and perceived lax bankruptcy rules. By reducing access to chapter 7, lenders suggested that they would see increased distribution from those new chapter 13 cases due to limitations placed upon chapter 7 flowing from the so-called “means test.”

The U.S. Court of Appeals for the Second Circuit recently held that creditors may be liable under the false name exception to the Fair Debt Collection Practices Act (“FDCPA”) if they falsely represent to debtors they retained a third-party collection agent, when in fact the agent made no “bona fide” effort to collect.

Attached is a wonderful reference guide published by the City Bar Justice Center titled Understanding Reaffirmation Agreements. A reaffirmation agreement is a contract between a debtor and creditor wherein the debtor agrees the creditor’s debt will survive the bankruptcy discharge. The authority for entry into a reaffirmation agreement can be found in 11 U.S.C. §524(c). Debtors and creditors alike are typically barraged with misinformation regarding when reaffirmation agreements are appropriate.

Not every debt is entitled to be forgiven in bankruptcy. In a recent Northern District of New York bankruptcy decision, Chief Bankruptcy Judge Robert Littlefield Jr. held that a woman’s $3.75 million default judgment against her mother for negligent infliction of emotional distress would be excepted from discharge in her mother’s subsequent bankruptcy case. In re Irene Chaffee (Chaffee v. Chaffee), No. 07-90171 (Bankr. N.D.N.Y. September 3, 2013).

Michael Moskowitz will be a featured speaker at the New York State Bar Association’s Annual Meeting on January 29, 2014. Mr. Moskowitz’s panel, one of  three to be presented by the Young Lawyers Section, will focus on consumer and corporate bankruptcy issues.  insert excerpt info here.

By Michael L. Moskowitz

Having represented numerous defendants in Ponzi-scheme adversary proceedings in the Second Circuit (New York), Weltman & Moskowitz closely follows the case law arising out of the massive Ponzi-scheme run by the now infamous Bernie Madoff. Uncovered in 2008, the resulting Madoff bankruptcies spawned dozens of decisions by the Bankruptcy Court, District Court and Second Circuit.