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Federal Regulators Seize IndyMac Bank

The real estate market is obviously not going to wait for Congress to act.  It is making decisions on its own as to what banks and companies will survive the real estate meltdown.

According to CNNMoney, in what in what is likely to be the most expensive bank failure ever, troubled mortgage lender IndyMac Bank was taken over by federal regulators.  The operations of the Pasadena, Calif.-based bank were shut down by the Office of Thrift Supervision and transferred to the Federal Deposit Insurance Corp.

The clean up of this bank is expected to costs the Deposit Insurance Fund between $4 billion and $8 billion, and worse still it is expected that 10,000 IndyMac customers could lose as much as $500 million in uninsured deposits.

IndyMac, with assets of $32.01 billion and deposits of $19.06 billion, is the fifth bank to fail this year. Between 2005 and 2007, only three banks failed.  IndyMac marks the largest bank collapse since 1984, when Continental Illinois.

Most media is reporting extensively on what will happen to depositors in the bank.  The bigger question it seems is what does this do to already pressed mortgage borrowers (debtors).  As these troubled mortgage loans are sold off the collections activities against the borrowers are likely to become more aggressive.  This will undoubtedly have a big impact on bankruptcy filings and bankruptcy based litigation.

J. Brian Allen - Northeast Texas Bankruptcy Lawyer

There is a new blog on the block concerning consumer bankruptcy issues in Northeast Texas.

Many of you already know him, but if not welcome J. Brian Allen and his new blow Northeast Texas Bankruptcy Lawyer.  You can view it by CLICKING HERE.

Brian has a good deal of experience in both this legal and geographic area.  And, his blog already has a good deal of vital and interesting content.

One interesting thing, Brian Allen has included a page that lists politicians, famous people and celebrities that have filed bankruptcy. This is vitally important for those in need of bankruptcy protection to know that they are not alone.

In this day and age of bankruptcy marketing if you do ignore the Internet you do it at your own peril.  A blog not only offers you an opportunity to reach people directly, but it can be the hub of all of your network and relationship marketing activities.

Brian sought the help of Grant and Clay Griffiths over at G2WebMedia to set up his bankruptcy blog. Grant Griffiths is one of the pioneers of blog based marketing.  His Kansas Family Law Blog drew 100,000 plus views it first year out of the gate.  He understands what it takes to make a practice blog an effective marketing tool.

(Brian Allen pictured at his new blog going live)

The Housing Market Could Totally Collapse

According to Fortune nearly half of all of the country's outstanding home loan debt is owned by or guaranteed by either Fannie Mae or Freddie Mac.  $5 trillion dollars worth of mortgages, and these two government-sponsored enterprises are in serious financial shape and could fail.

The problems with the two agencies are already causing a loss of confidence with investors, and it is making housing loans harder to come by.

The two companies are hybrids or sort.  Fannie Mae was created by Congress in 1938 and Freddie Mac was created by Congress in 1970.  The mandate for both is to maintain a market for mortgages by buying loans from banks, repackaging them as bonds, and selling those securities to investors with a guarantee that they will be paid. This makes lending more tempting for banks because Fannie and Freddie take on risks like missed payments, defaults and swings in interest rates.  However, the companies are also publicly traded, with the usual mandate of trying to maximize profits for shareholders.  Their efforts involves risk, and as quasi-government programs there is an implicit guarantee that the feds wouldn't let them fail.  As a result, the market and rating agencies have always treated these two as bulletproof.

Each company has borrowed billions directly from the United States Treasury.  Because of the government involvement they have had  a AAA credit rating and could borrow at low rates, which is a benefit they need in order to loan money.  As a result, they have piled on risks without a capital cushion to cover it.  It has not help that like Enron and other companies Fannie Mae has been found to have overstated its earnings and Freddie Mac has been found to have overstated its profits.  Their stock value has recently fallen by 47%.

The question is if these two giants start to founder, how much will it cost the government to bail them out, and whether they are bailed out or not, how much of the surrounding economy will the two take with them if they fail.

It is interesting to talk about and speculate about these issues, but the truth of the matter is that these events would impact real people.  It will undoubtedly lead to more ordinary people needing to file bankruptcy to save their homes.  If the companies sell off debt or obligations, it will lead to harsher collection activity.  This will undoubtedly lead to automatic stay and discharge injunction violations.  So, it is a very real problem.

You Have Gotta Love The Mortgage Lender Implode-O-Meter

It is sad really.  Millions of Americans are losing their homes.  Most of these loses are simply unjust because borrowers were enticed into programs that have harmed them.  The lenders should have known better.  I would contend that they did know better, they thought they could just pawn the loses off on others.  Well, at least one website is gleefully tallying the number of these outrageous lenders that have run into trouble themselves.

As reported byThe New York Times newspaper, The Mortgage Lender Implode-O-Meter has become so recognized that at the recent Mortgage Bankers Association conference, a speaker addressed how to stay off the website.  “No one wants to be number 266,” said Jim Reichbach, a vice chairman and leader of Deloitte’s banking and securities team. “This is a death toll that is equivalent to the casualty ticker of the Vietnam War.”

When you see so many honest people that have been duped in a way that has cost them their homes, and you have seen what mortgage lenders have tried to do to the bankruptcy laws, it is hard not to feel excited watching these blood suckers parish due to their own schemes.

NACBA / Debtors Fail To Win Interpretation Battle In 10th Circuit Over Interest On 910 Vehicles

The National Association of Consumer Bankruptcy Attorneys (NACBA) along with a number of Debtors (and their bankruptcy attorneys) took their argument over whether secured claims, which cannot be crammed down under the 910-day period preceding the filing of a bankruptcy, are "allowed secured claims" under 11 U.S.C. § 1325(a)(B)(ii) entitling the creditor to interest pursuant to the Supreme Court's prior opinion in Till v. SCS Credit Corp, 541 U.S. 465, 469 (2004).

In the consolidated cases before the United States Court of Appeals, 10th Circuit the Debtors has argued before the Bankruptcy Court, the BAP and the 10th Circuit that as a result BAPCPA a creditor who has a claim secured by a 910 vehicle is not entitled to interest at all because a 910 car claim is not an "allowed secured claim" within the meaning of 11 U.S.C. § 1325(a)(5).  Alternatively, they argued that the requirement to pay interest is not mandatory with the Bankruptcy Court in this regard.

The Debtors prevailed in the Bankruptcy Court, but they did not prevail before the 10th Circuit.

The 10th Circuit ruled that although 11 U.S.C. § 506(a) bifurcation of a claim into secured and unsecured portions is no longer available if the property was purchased or financed within 910 of the bankruptcy filing, the full amount owed is an "allowed secured claim" for purposes of 11 U.S.C. § 1325(a)(5), and the Bankruptcy Court must provide the creditors involved the present value of the claim, which includes interest.  The 10th Circuit also ruled that interest is required on the entire claim, and not just that portion that would be secured except for the 910 day limitation.

Although the 10th Circuit referred to some prior collateral decisions on its part, this really was a case of first impression for the Court.  It represented a gallant effort on the part of these Debtors, their bankruptcy attorneys and NACBA, but in the end the argument did not work.  Where the case goes from here is unclear.

Former NFL Star Michael Vick Files For Bankruptcy Protection

On July 8, 2008, Michael Vick, the former NFL quarterback who is serving a 23-month prison term for plotting to run an interstate dogfighting ring, filed for Chapter 11 reorganization according to Bloomberg News.  Vick cited debts of $10 million to $50 million in Chapter 11 papers filed yesterday in U.S. Bankruptcy Court in Newport News, Virginia. He listed assets valued at between $10 million and $50 million.

It is reported that Vick's hope is that by filing bankruptcy that he can, after the conclusion of the bankruptcy case, rebuild his life on a personal and spiritual level, resurrect his image as a public figure, and resolve matters with the NFL such that he can resume his career,'' Vick's lawyers said in the bankruptcy filing.

Vick, 28, the No. 1 pick in the National Football League's 2001 college draft and a three-time Pro Bowl choice with the Atlanta Falcons, was indefinitely suspended by the league when he agreed to enter his August 2007 felony plea. He is due to be released from the U.S. penitentiary in Leavenworth, Kansas, in about a year, according to court papers.

A federal judge in December gave Vick less than half the maximum penalty for his role in buying, training and killing dogs while funding gambling on fights held on his property in Surry County, Virginia. He also received three years probation.

Vick pleaded guilty to conspiracy to travel in interstate commerce in aid of unlawful activities and to sponsor a dog in an animal-fighting venture. He publicly apologized for his actions and said he would stand against animal cruelty.

His creditors include The Atlanta Falcons, which are owed $3.75 million for a pro rated signing bonus according to the filing. Other of the largest unsecured creditors listed include Joel Enterprises Inc., owed $4.5 million for breach of contract, and Royal Bank of Canada, owed $2.5 million for a real-estate loan.

Democratic Presidential Candidate Barack Obama Calls For New Bankruptcy Reform

Democratic presidential candidate, Barack Obama, vows to put back some of those protections that were taken away from consumers when Congress passed, and the President signed into law, BAPCPA in 2005.

According to the Associated Press and Fox News, Obama has proposed changing bankruptcy laws to fast-track the process for military families, help seniors keep their homes, and protect people recovering from natural disasters. In doing so, Obama also accused Republican rival John McCain of repeatedly siding with the banking industry, saying, “When it comes to strengthening the safety net for hardworking families, he’s been part of the problem, not part of the solution.”

Obama stated, “Like the president he hopes to succeed, Sen. McCain does not believe the government has a real role to play in protecting Americans from unscrupulous lending practices. He would continue to allow the banks and credit card companies to tilt the playing field in their favor, at the expense of hardworking Americans.”

McCain spokesman Tucker Bounds responded in a statement: “Eighteen Democrats and John McCain worked together on the bipartisan Senate bankruptcy bill, and Barack Obama’s rigid partisanship and self-promoting political attacks show that he’s a typical politician — which is the problem in Washington, not the solution.”

Obama’s new proposals supplement his broader — and previously announced — bankruptcy reform agenda that includes changes intended to help people in financial distress because of medical bills and allow homeowners going through the bankruptcy process to renegotiates terms of their mortgages.

The Democrat said he also would help service members and military families struggling financially after multiple moves, lengthy deployments and, in some cases, predatory lenders, saying, “If you’re protecting America, America should be protecting you from unfair bankruptcy laws.”

He pledged to expedite the bankruptcy process for them by exempting them from a “harsh means test,” cutting “unnecessary paperwork” and “token counseling,” and enacting a minimum homestead exemption to help them keep a greater share of their home’s value.

Obama also wants to allow a speedier bankruptcy process for all service members regardless of what state they live, a departure from current law that says people can use federal bankruptcy exemption laws if their state of residence allows. Some 35 states bar families from federal exemptions, according to a campaign-issued fact sheet.

As for seniors, Obama said, “I’ll help make sure that if you’re over 62 and facing bankruptcy, you’ll have a better chance of keeping your home.”

He said people in that age bracket would get a minimum federal homestead exemption equal to the median cost of a home in their state, “giving them a better chance to keep their homes and helping them maintain both their independence and their financial security.”

In addition, Obama said he would help families recovering from a natural disaster by streamlining the bankruptcy process for those in certified natural disaster areas by eliminating “unnecessary paperwork” and waiving “unneeded credit counseling requirements.”

He also promised to enact a 120-day moratorium “on adverse credit actions from collectors, such as foreclosure” to free families from concerns about collectors as they are trying to recover. And, his campaign said he would amend the Equal Credit Opportunity Act, which bars discrimination in lending, to include protection for disaster victims, so that lenders do not unfairly restrict credit to such families.

Global Inflation Is Rising, Rising, Rising

Inflation is a bad, bad thing.  It hurts most everyone.  As gas prices, food prices and the prices for essential rise uncontrollably, people and companies simply cannot keep up with the market pressures.  People or consumers have to go further in debt, more debt does not get paid, more people are forced into bankruptcy, and then companies and creditors are squeezed.  They immediately get more aggressive, more strident, more litigious.  Operations are set in motion to collect, collect, collect, and everything just appears to spiral out of control.  Once they get their organizations headed in a particular direction, as we know, creditors and companies cannot seem to turn the system off or train it to make distinctions.  The automatic stay and discharge injunctions will be violated.

According to a report by HuffPo there is currently no where to hide from the bogeyman that is inflation.  Prices in one in four countries, many of them in emerging markets, are accelerating at a double-digit pace, which puts them at least two and a half times the 4 percent annual U.S. headline inflation rate, according to new research from Morgan Stanley.  With this, the U.S. economy has slowed to nearly a standstill in the last year because of the mounting inflation and the collapse in the housing and mortgage markets. Other industrialized countries have seen about a 2 percent average rate of growth while emerging economies have topped 7 percent.  That growth is now being threatened by inflation.  Food prices have jumped 39% from February 2007 to 2008, led by wheat, soybeans, corn and edible oils, according to the International Monetary Fund.

Morgan Stanley economists Joachim Fels and Manoj Pradhan said they were "flabbergasted" by their findings that 50 countries had double-digit inflation rates. On that list were six of the 10 most populous countries in the world, including India, Indonesia, Pakistan, Bangladesh, Nigeria and Russia.  In total, those facing such pricing pressures accounted for 42 percent of the world population.  "In other words, close to three billion consumers are currently experiencing double-digit rates of price increases," they wrote in a note to clients.

And, the problem is that soaring inflation is not easy to tame. Some countries, such as India where inflation is running at around 11 percent, may have no choice but to boost interest rates.  Many emerging-market economies also link their currencies to the dollar, and because of the U.S. Federal Reserve's loose monetary policy stance right now the central bank has aggressively cut interest rates in response to the credit crisis and that has helped feed inflationary pressures.

The longer inflation remains elevated, the more damage it will do to long-term economic growth.

As we have often seen, as goes the World eventually goes the United States.

$100 Million Bankruptcy Attorney - I Doubt It

CNNMoney reviewed what it might cost to build the $6 Million Man, who was played on TV by Lee Majors in 1974 in today's dollars.  It is a strange comparison because there really was not a $6 Million Man in 1974. There was only just an estimate of what it would take to put Lee Major's back together as one if it were possible.  And, let us face the fact that in 1974 we all thought $6 million was a heck of a lot of money.  As frivolous as money has become today (even though we do not have it) $6 million seems like chump change almost.

Nonetheless, in 2008 inflation adjusted dollars, Lee Majors would be the $26 Million Man.  But, the real cost of a modern-day cyborg in 2008 would be quite different, according to Greg Chirikjian, professor of mechanical engineering at The Johns Hopkins Institute and a big fan of the original TV show.  According to Chirikjian, research and development costs to design a bionic man would be $50 million to $100 million today. But with a completed design, production costs would only be several hundred thousand dollars per person.

What I find interesting about this discussion is that in 1986, for example, an attorney was allowed to be paid $2,500.00 in legal fees through the Chapter 13 Plan to represent a family in a Chapter 13 bankruptcy in the Eastern District of Texas.  Today, even with the extraordinary new requirements to which an attorney must plan and respond, that fee is now only $3,000.00.  Considering the inflation adjusted costs only that fee should likely be about $9,000.00 today. It is not.  And, if you consider the additional work, it should be higher still.  Judges say that consumers cannot afford these fees over a 5 year period.  However, they were able to pay the equivalent in 1986, and a larger percentage of bankruptcies survived to completion at that time.

And The Walls Come Tumbling Down

According to HuffPo and other news outlets, the City of Vallejo, California filed for bankruptcy protection in the United States Bankruptcy Court for the Northern District of California in San Francisco in order to deal with its ballooning budget deficit caused by soaring employee costs and declining tax revenue.

Vallejo is a San Francisco Bay area suburb of about 120,000 residents and it is the largest California city to seek bankruptcy protection when it filed for bankruptcy under Chapter 9 of the Bankruptcy Code.

Mayor Osby Davis said,"We've exhausted all avenues at this point, and this is all we had left  ... We can't pay our bills."

The police and firefighter unions plan to file a legal challenge, arguing that the city's finances aren't as dire as officials claim and there are other ways to fix the budget deficit, said Mat Mustard, vice president of the Vallejo Police Officers Association.

Vallejo, a mostly working-class city about 30 miles northeast of San Francisco, faces a $16 million budget deficit in its fiscal year starting July 1.

The foreclosure crisis and economic downturn have caused a sharp decline in revenue from sales tax, property tax and development fees.

Other cities around the country could find themselves in the same position as Vallejo because they're also struggling with skyrocketing employee expenses and falling revenues, experts say.

"If the economy doesn't turn, you're going to see other cities in the same spot," said Marcia Fritz, vice president of the California Foundation for Fiscal Responsibility. "You're seeing a lot of cities and counties where reserves are being drawn down to pay for benefits."

You May Now Challenge Ad Valorem Tax Assessments ... The Right Is Just Not As Endless As Some Thought

The problem with BAPCPA sometimes is that it finally clears up some rights of the debtor in dispute, only to limit or take away those rights now understood.

This was illustrated well in Steve Sather's Texas Bankrutpcy Lawyer's Blog.

It was none too clear under the old Bankruptcy Code whether a debtor could get a bankruptcy court to redetermine the appraised values used to compute ad valorem taxes so long as the values had not been previously contested.  Under the old Code debtor's attorneys did this if for not other reason than to try to get some negotiation over tax claims that taxing authorities otherwise want to believe are not negotiable.

In Texas, property tax values must be protested in by a date certain or they become final. Tax rates are then set based on the final valuations. The way some read the old 11 U.S.C. § 505, the debtor was allowed to come in after the appraisal rolls had been finalized and taxes set and complain that the valuations were not correct.  Some argued that a debtor could go back indefinitely as long as the valuations had not previously been contested.  You can read this a leverage.

But, as pointed out by Steve Sather, redetermination of tax values was a controversial. Some courts abstained from redetermining property tax values, In re New Haven Projects Ltd. Liability Co., 225 F.3d 383 (2nd Cir. 2000), while others allowed it, In re Hospitality Ventures/La Vista, 314 B.R. 843 (Bankr. N.D. Ga. 2004); In re Fairchild Aircraft Corp., 124 B.R. 488 (Bankr. W.D. Tex. 1991). The cases declining to exercise jurisdiction relied on language in the legislative history to the code stating that abstention was appropriate "where uniformity of assessment is of significant importance." S. Rep. No. 989, 95th Cong., 2d Sess. 11 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5853.

BAPCPA clears up this right with the addition of 11 U.S.C. § 505(a)(2)(C), which states that the court may not redetermine "the amount or legality of any amount arising in connection with an ad valorem tax on real or personal property of the estate, if the applicable period for contesting or redetermining that amount under any law (other than bankruptcy law) has expired."

Congress by limiting the practice, obviously understood that the practice pre-BAPCPA of redetermining those property taxes constituted a legitimate reading of the law at that time.  Now, unfortunately, you cannot retroactively challenge valuations going back prior to the filing of the bankruptcy, but you can still contest valuations which could have been challenged on the petition date and 11 U.S.C. § 108(a) would appear to give the debtor two years in which to file the motion.  The trustee may commence the action within the longer of the original period or two year.

This amendment also seems to quiet the controversy over redetermination is proper. By limiting redetermination to situations where the protest period has not expired on the petition date, Congress appears to have implicitly endorsed it in that one case.

In my way of thinking, this provision is still useful for the reason that house prices are stagnant or falling in most places.  Yet, taxing authorities are continuing to raise values for tax collection reasons.  When I have attended property tax challenges in the past, I can tell you that the process seems so very arbitrary.  To say that it is based on any exact science would be wrong.  It would also seem to be able to apply leverage in the sense this process will take the taxing authority out of the state court and administrative process they now enjoy, and place then in an environment in which they are not familiar.

(Stephen Sather pictured).

The Drew Carey Bankruptcy Party

This clip from the 3rd season The Drew Carey Show about his bankruptcy party.

Damned If You Do, Damned If You Do Not

You have really got to feel for Tenny Zahn, whether you agree or not with the outcome of her confirmed plan.

Essentially, Ms. Zahn found herself in the strange situation where she was aggrieved by her own proposed plan.  This is so because she was left with the Hopson's choice of proposing a Chapter 13 plan that she herself did not want, or risk having her Chapter 13 case dismissed.  So she chose to file the plan required of her and then file an objection to her own plan.  Neither the Bankruptcy Court of the BAP seemed to appreciate such ingenuity, but the Court of Appeals did.

In Tenny Shikaro Zahn vs. Richard Fink the Eighth Circuit Court of Appeals found that Tenny Zahn was an aggrieved party allowing the appeal of the confirmation of her proposed Chapter 13 plan to go forward.

Initially the Bankruptcy Court denied confirmation of Ms. Zahn's Chapter 13 plan because she had failed to include distributions from her non-filing husband's individual retirement account (IRA).  She then appealed that denial of confirmation to the Bankruptcy Appellate Panel (BAP).  The BAP dismissed her appeal as being interlocutory.  Having little choice, Ms. Zahn then proposed a new plan that included the IRA distributions, but filed an objection to her own plan.  The Bankruptcy Court approved this plan over Ms. Zahn's objection.  So, then she appealed the confirmation of that plan in that the decision was not now interlocutory.  The BAP dismissed this appeal as well stating Ms. Zahn lacked standing to appeal the order granting confirmation of her own amended plan because she was not an aggrieved party.  The BAP stated, "a party cannot prosecute an appeal from a judgment in its favor", reasoning that "[w]hen the court confirmed her plan, [Zahn] got all of the relief for which she asked".

The Eighth Circuit stated simply "there is a flaw in the BAP's reasoning".

The Circuit court stated that Ms. Zahn "was forced, over her express objection, to propose an amended plan" and "amended her plan with provisions she believed were erroneous and not required by the Bankruptcy Code, in order to avoid dismissal".  As a result Ms. Zahn can appeal a judgment that was not in her favor and which was prejudicial toward her.  Given these facts, Ms. Zahn was an aggrieved party.  "Not to allow a debtor to appeal confirmation of her own plan would require a debtor to comply with a plan that contains provisions the debtor does not believe are required by the Bankruptcy Code, while losing her right to appeal those provisions".

To me this is much like coercing a confession out of some criminal defendant, and then telling him he cannot appeal his conviction because of the confession.

Wizard Of OZ

Someone recently compared what we attorneys do as being something similar to the Wizard of Oz, in  that what is behind our organizations might be a little smaller than and less intimidating than as we try to make it appear.

Maybe so, but behind everything what we are trying to do is pin a conscience on corporations, banks, finance companies and creditors that pretend to tear their clothes and gnash their teeth over having to pay a little recompense to a financially vulnerable person to whom they have treated badly.  At the same time, most of the multi billion dollar corporations do not think twice of paying their badly performing management hundred million dollar compensation packages or in spending, like Citibank, hundreds of millions to change their logo from one side of their name to another side of their name on all of their signs and print material.

I had a major national bank recently tell me in an email that it would not be "bullied" by my debtor who was in bankruptcy.  Really?  Bullied by a debtor who was just minding his own business and wanted to be left alone from the constant harassment he was receiving despite the fact the lender knew it had been enjoined from this behavior and the fact that the bankruptcy attorney had warned the bank that it was violating the automatic stay.  And, what did the lender find as being bullied.  The Debtor asking them to stop, pay him $500.00 for his time in this matter, and to pay his attorneys' fees of a few thousand dollars that he had not wanted to spend but for the fact that the lender would not stop its activities when politely asked to obey the Court's order.

The last refuge is bankruptcy court, and in this the debtor is suppose to be safe for unilateral action without the knowledge and concern of the bankruptcy court.  And, when big business and big lenders do not obey the law we are increasingly fighting a war of hyperbole.

Not only bankruptcy, but predatory lending, junk fees, the inability to solve any problem or concern of a customer without litigation shows how the essential problem of big lenders and big business and big law firms that they have ceased to serve their customers.  We all feel it.  We are not now trusted customers as we feel more like targets.

Government offers few protections with the exception of the bankruptcy courts.  As a result, the Bankruptcy Code has become the de facto Code of Conduct that should be imposed on all corporations and all lenders.  Should it be so?  Maybe not, but that is what our government has left us, and they have left it to the debtors to enforce this Code of Conduct themselves.

Everybody needs a conscience.  Only it either does not come naturally to big business and those in finance or it is lost in the hierarchy.  It is necessary to ensure that individual actions do not violate a group's moral norms. Conscience consists in the internalization or acceptance of a group's moral norms as correct and overriding one's self-interest when they conflict.  These big lenders and big business do not do override, and these corporations desperately need a conscience to monitor and control their behavior.

William Langewiesche wrote in The Atlantic in November 2001: "The greatest pyramids ... are made not of stone but of people: they are the vast bureaucracies that constitute society's core, and they function not necessarily to get the "job" done but to reward the personal loyalty of those at the bottom to those at the top."  I tend to think he is right.

Adam Smith’s first major work was the Theory of Moral Sentiments. He understood, as an ethicist, that the mechanism of the “invisible hand” would be most efficient if self-interest was restrained by conscience. With remarkable prescience Smith warned that corporations would slip the restraints of human conscience.  These big companies and lenders have taken on a life of their own.  These are entities without a conscience with the potential to wreak havoc on the societies that have created them.

So, what is our job?  It is, I think, to try as best we can in individual cases to demand the respect of these big institutions and try to pin to them a little conscience -- a little concern -- as to what they do.

Election Reform

Yes, as almost all bankruptcy attorneys now know, election reform is crucial.

Confirmation Might Not Always Superceed A Stipulation Entered

In Taumoepeau v. Manufactures & Traders Trust Company, et. al. the 10th Circuit Court of appeals had to decide if a drop dead order or stipulation entered before confirmation concerning strictly post-petition house payments (which did not in fact concern the abt pre-ptition payments) on a residential mortgage was superseded in a way as to make the drop dead order or stipulation non-enforcible after confirmation.

The 10th Circuit, like the Bankruptcy Court and the BAP before it, found that both the drop dead stipulation and the confirmed plan could be read harmoniously and the automatic stay was not in effect to stop the lender's actions in selling the house at foreclosure even though the stipulation was not referred to or included in the confirmed plan.

Most of the decision issued by the 10th Circuit deals with a complicated issue of whether the Court had the jurisdiction to hear the appeal given its late filing.  If found it did, but that in no way impacted on its decision concerning the drop dead stipulation entered in this case.

The relevant facts are that in February 2003 (before BAPCPA) the Debtors filed Chapter 13 bankruptcy and a plan addressing their pre-petition mortgage arrearage.  Their amended plan in July 2003 continued this treatment s to the pre-petition arrearage only.  After filing, but before confirmation, however, the Debtors fell approximately $10,000.00 behind in mortgage payments post-petition.  It has to be assumed that they were required to make these payments on their home directly.  To resolve this post-petition arrearage only, the Debtors and the Creditor entered into a stipulation, which allowed for the automatic stay to lift and the lender to foreclose on the Debtors' home if the Debtors failed in making future payments and other considerations.   Four days after entering into this stipulation the Bankruptcy Court confirmed the Debtors' plan, which provided for the pre-petition arrearage, but made no reference to the stipulation or the post-petition payments.  The Debtors eventually defaulted on the stipulation, the stay was lifted, and the lender proceeded with foreclosure, and in fact did foreclose.  The Debtors then brought an action to stop their eviction from the house claiming that the confirmation superseded the stipulation.

The Bankruptcy Court disagreed with the Debtors.  It was appealed to the BAP and it disagreed with the Debtors as well.  The 10th Circuit found that indeed the post-petition payments missed were nowhere addressed in the order of confirmation.  However, the Court found that the stipulation in no way dealt with the issue of the lenders pre-petition claim for missed payments, and as such the documents were somehow mutually exclusive.  To state it as the Court did, "Like the bankruptcy court in interpreting its own orders, and like the BAP in affirming that interpretation, we conclude that the stipulation and amended plan can be read harmoniously, each addressing a separate debt owed."

In short, the final decision of the 10th Circuit fell on the interpretation of the orders of the Bankruptcy Court.  It is important to note that there exist decisions that disagree with the conclusion reached by the 10 Circuit, and it is concerning that the 10th Circuit would reach this decision without citing to one case or Bankruptcy Code provision, or text, that supports its findings.  It is rare to find such a decision devoid of all such references, and I am not sure what credence that can be given to this decision for this very reason.

A Better Way To Market Your Bankruptcy Practice?

Upcoming NACBA Elections - Ask The Candidates!

Jay Fleischman over at Bankruptcy Practice Pro is not only encouraging more bankruptcy attorneys to vote in the upcoming NACBA elections but, believing that many do not vote because they are not informed, is providing you an opportunity to know the candidates.  Read his post by CLICKING HERE.

As he points out, each year only about 400 of the 3,000 members of the National Association of Consumer Bankruptcy Attorneys vote in these elections.  As a result, your decision and opinion might not be represented.  As Jay points out, "[w]ithout your input, NACBA is nothing more than a wast of space and time".  Yet, it seems that the organization is best to represent you and your interest in lobbying, technology, office management and more.  So, you need to get involved by voting.

Jay has, therefore, issued a challenge to the NACBA candidates.  It is called "30 Questions".  Each candidate will chose 10 questins for the other candidate to answer.  The members of NACBA will submit an additional 10 questions.  Jay has proposed 10 questions.  No holding back.  All serious questions will be considered.  Jay will then call each candidate seperately and ask the questions, and the entire conversation will be recorded, and then you will be able to listen to the questions and answers online via mp3 audio.

Send your questions to Jay by email at bankruptcy@gmail.com.  The questions need to be submitted before Friday, April 11, 2008 at 5:00 EST.

British Paper Declares USA 2008 Great Depression

The British paper The Independent has declared the USA is headed for the Great Depression of 2008.

Shocking?  Yes.  But, to them none of the economic indicators appear sound, especially in the area of jobs and the need for food stamps.

The paper declares that things are not only bad on Wall Street, but that they are worse on Main Street, stating that as official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.

Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.

Emblematic of the downturn until now has been the parades of houses seized in foreclosure all across the country, and myriad families separated from their homes. But now the crisis is starting to hit the country in its gut. Getting food on the table is a challenge many Americans are finding harder to meet. As a barometer of the country's economic health, food stamp usage may not be perfect, but can certainly tell a story.

Forty states are reporting increases in applications for the stamps, actually electronic cards that are filled automatically once a month by the government and are swiped by shoppers at the till, in the 12 months from December 2006. At least six states, including Florida, Arizona and Maryland, have had a 10 per cent increase in the past year.

The US Department of Agriculture says the cost of feeding a low-income family of four has risen 6 per cent in 12 months.  And the next monthly job numbers, to be released this Friday, are likely to show 50,000 more jobs were lost nationwide in March, and the unemployment rate is up to perhaps 5 per cent.

Cancer Treatment's side effects may include bankruptcy

The Houston Chronicle reports on the expensive treatments for cancer in our society today, and on the trend or need for oncologists to discuss with patients the cost of treatment and their financial options.  It is a hair raising article more for what it does not directly say, and for which it alludes.  Some patients need to consider the financial costs and their position in life to determine if they want to live.  In short, maybe if the patient cannot afford the treatment, then maybe he or she should not undertake the cure.

Because of the ever increasing costs associated with chemotherapy oncologists are to receive their first guidelines on how to have a straight talk with patients about the affordability of treatment choices.  These guidelines will address in particular patients whose cancer cannot be cured but who are seeking both the longest possible survival and the best quality of life — and may be aware it could mean bankrupting their families.

The statement is particularly staggering when you think that apart from the survival rate, that patients must make financial choices on the quality of life, and the pain they must obviously endure, during the time they have remaining.  Yet, bankruptcy is an option for the survivors of these people as well.  Somehow, that is not right.  There probably needs to be guidelines for bankruptcy attorneys to discuss these issues with cancer survivors and their families who face the prospect of filing.

We have to face facts.  Drug prices are a growing issue for every disease, especially for people who are uninsured. But cancer sticker shock is hitting hard now, as a list of more advanced biotech drugs have made treatment rounds costing $100,000, or even more, no longer a rarity. Also, patients are living longer, which is good news but means they need treatment for longer periods. The cost of cancer care is rising 15 percent a year.

We as bankruptcy practitioners know that unlike some medical services that might be obtained without the appropriate amount of funds upfront, the same is not often true for medications.  Patients and families cover these costs by taking out loans on their homes, credit cards, and the like.  These come back to haunt the families and survivors later on as the only way to end the problem is through bankruptcy.

Car Title Lenders Are Doing America Harm

Is LoanMax and other companies like it the new face of evil int he eye's of consumers?  Are they preying on people?

An article in the Houston Chronicle suggests that this might be so in regard to those companies that make largely unregulated and high interest rate loans to desperate people and families in exchange for the title to their family vehicles.

The Chronicle describes a number of different automobiles at one particular automobile auction that were the victims of such unpaid title loans.

The paper also suggested that whereas payday lenders have been the bad guy in the predatory lending debate, their close cousin, car title lenders, have cruised along unnoticed and unregulated in several states. Also, in those states where there is an effort to regulate the industry efforts have failed as the lenders pour hundreds of thousands of dollars into legislative campaigns.

Advocates for the poor say they do not have the resources to fight both industries at the same time, vowing that once the payday lenders are in check, they vow to go after car title lenders.

Title loans, which are short-term, high interest loans secured by a car title, can be even more disastrous than payday loans.  This is because these types of loans are secured by family's most important asset.

Car title lenders operate in nearly half the states, about a dozen of which have specific laws regulating how much the lenders can charge. Where there are no laws specific to the industry, title lenders operate under regulations governing pawn shop brokers or other lenders, or under laws that intend to regulate credit cards.  By structuring their loans as open-end credit, the lenders can charge triple-digit interest and whatever terms they wish as long as they don't charge anything for 25 days. In most states, the entire loan is due in one month, but can be rolled over and new fees charged.

This year, legislation was introduced in at least eight states, from Florida to South Dakota. Last year, 16 states took on car title lenders, and six of those — Iowa, Mississippi, Nevada, Montana, Oregon and Utah — passed some sort of regulations.

Some have taken on payday and car title lenders at once. New Hampshire legislators are close to an agreement on a 36 percent interest rate cap on payday and car title loans, and the governor there has said he would support it. Congress also banned payday lenders, car title lenders and tax refund anticipation loan companies from charging members of the military or their families more than 36 percent interest.

The lenders have fought hard against regulations.

In Virginia alone, four car title lenders contributed more than $280,000 to legislators in 2007. One company, Anderson Financial Services, which does business as LoanMax and several other lenders, donated more than $185,000, according to the Virginia Public Access Project, an independent, nonprofit tracker of money in state politics.

There is no nationwide data on the industry. Because the lenders are unregulated in several states, officials have no way of keeping track of the loans.  There also is no way to know how many borrowers are losing their cars. Bryan Buchanan Auto Auction near Roanoke VA, for example, auction off about 100 car title loan repos each month.  On February night, about 20 repossessed by LoanMax were auctioned, most bringing between $750 and $2,500.

The Pawn Shop Business Is Booming!

As stated on HuffPo, while banks are scrambling for recover, the Fed is repeatedly cutting interest rates, the pawn shop business is booming.  What this likely means for the United States economy is not good.  What it means for those trying to avoid bankruptcy is likely worse.  After a while people will run out of valuable items to sell to pawn shops.  My guess is that they will then look at auto title loans and payday loans and credit cards to make ends meet.  As one pawn shop owner points out that money he hands out -- no questions asked -- typically comes with an effective APR of 60%.  All of this reflects that times are getting tougher.

Bush's Hoovervilles

Business Press Failed Us In Regard To The Credit Card Industry

The Columbia Journalism Review reports on how the business press missed a sea change in the credit-card industry.  Primary among what was missed is a body of work, compiled by nonprofit groups, academics, documentarians, and others, that marshaled data to make visible a dramatic qualitative and quantitative—and recent—shift in the relationship between the credit-card industry and its customers that does not benefit the consumer.  That is that the credit-card exchange has shifted from a lending and underwriting paradigm to a sales paradigm involving penalties, fees, and default interest.  Rates that were illegal a generation ago are no longer regrettable outcomes to be avoided but central to the business model.  A  business model that centers on a besieged American middle class caught in an iron vice of stagnating incomes; shrinking disposable income; rising costs for health care, housing, and education; usurious and rapacious practices of the credit-card industry; a growing, consolidating, and increasingly sophisticated debt-collection industry; and, to add insult to injury, a new bankruptcy law that closes the courthouse door to formerly eligible debtors.  And, this view is supported by credible, anecdotal and aggregate data and happens also to be true.

Debt Collectors Try to Put on a Friendlier Face

According to an article in The New York Times, the debt collection industry is working to shed its reputation for remorselessly hounding people.

Go get the money, but put on a smile, I guess, but try to appear to be more helpful and sympathetic, and act like you are a force for good.  For example, they have taken to call debtors “our customers," and they are pushing consumer tips on the ideal way to respond when a collector comes calling.  Now how nice can you get?

“Collectors actually care about consumers,” said Rozanne Andersen, general counsel of ACA International, the main industry trade group. “They want to teach consumers how to get out of debt. They’re trying to put themselves out of business.”

5th Circuit Establishes Interest Rate In 13 Plans As Prime Plus And Not Contract Rate

This has been much consternation about how to calculate the effective interest to creditors to be paid through Chapter 13 plans since BAPCPA passed in 2005.  Some creditors have continued to demand higher interest rates and have argued that BAPCPA had some way abrogated the Supreme Court's decision in Till v SCS Credit Corp., 541 U.S. 465 (2004) given the anti-cramdown provision in the new Bankruptcy Code.  Some bankruptcy judges have even argued against Till by looking at the decision personally and stating that not even bankruptcy judges can get such an interest rate.  Well, the issue is closer to be resolved.

I guess we all owe bankruptcy attorney William (Bill) Lively of Tyler, Texas a debt of gratitude in sticking with this matter, because the 5th Circuit now seems to have leveled the playing field in a decision that benefits the debtors and consumers.

In a ruling upholding the decision of the Bankruptcy Judge Bill Parker for the Eastern District of Texas, the 5th Circuit Court of Appeals in New Orleans ruled in the soon to be published decision of Drive Financial Services v. Bobby and Freda Jordan (here) (5th Cir. March 12, 2008), that the "hanging paragraph" following 11 U.S.C. § 1325(a)(9), which would limit the stripping down of a purchase money security interest of collateral purchased within 910 days of the bankruptcy filing, did not prevent a cram down of the interest rate consistent with the Supreme Court's decision in Till.

Drive Financial argued the hanging paragraph of § 1325(a)(9) made 11 U.S.C. § 506 inapplicable, and that the Supreme Court's decision in Till should not apply because (1) it was decided for the hanging paragraph was enacted into law, and (2) Till was a fragmented court decision in which no narrow ground was established as to how interest in a Chapter 13 plan was to be determined .  Therefore, Drive Financial argued that the Court should mandate its prior "presumptive contract rate approach" in Green Tree Fin. Servicing Corp. v Smithwick, 121 F.3d 211, 214-15 (5th Cir. 1997), which basically said that the plan should require the rate of interest required in the contract unless the debtor could prove that the lender would now loan the money at a lesser rate.

This would make a big difference in the feasibility of of plans proposed by debtors, especially those debtors that took out the infamous subprime loans with lenders like Drive Financial.  Whether defined as predatory lending or not, the combination of high interest rates and high collateral value is a recipe for a failed bankruptcy plan. In this case Mr. and Mrs. Jordan had an outrageous interest rate of 17.95%.  Mr. and Mrs. Jordan had proposed a more reasonable rate of 7.5%, or a few points over the prime rate at the time.  If they had been required to pay the full amount owed on the vehicle they financed through Drive Financial, and pay the contract interest, it could have seriously jeopardized not only their plan or reorganization, but the plans of most debtors who have been forced to deal with subprime automobile lenders before filing.  In short, there might not be much relieve afforded by the filing of a bankruptcy.

The 5th Circuit found Drive Financial's argument to be "unpersuasive" because Till did not rely upon the fact that the creditor's claim had be bifurcated using 11 U.S.C. § 506, and the purpose of bifurcation is to determine how much of the claim is secured and not how much interest must be paid in a plan.  Further, the hanging paragraph only prevents the bifurcation of the purchase money secured claims that are less than 910 days old at the time of the filing of the bankruptcy case.  The Court found that the only difference in Till and the case at hand is that in Till only part of the claim under the pre-BAPCPA Bankruptcy Code was secured while the full claim under the Post-BAPCPA claim is secured.  As such, Till was not superseded by BAPCPA.

The 5th Circuit also disagreed that the decision in Till was so fragmented that it did not state precedent that had to be followed in regard to plan interest rate calculations.  In fact, the 5th Circuit found that although the Justices of the Supreme Court might have been divided on issues, that a plurality of them, joined by Justice Thomas, concurred in judgment to specifically overturn the 7th Circuit the applied essentially the same standard that the 5th Circuit had applied in Smithwick, above.  To reapply Smithwick, the holding of which had been specifically overturned by the Supreme Court by five currently active justices of the Supreme Court, "would be untenable at best".

The common denominator of Till stated that creditors being paid through a plan are entitled to apply a standard of prime plus rate and not the contract rate.  Justice Thomas argued against a risk premium being added to prime, but otherwise agreed with the other 4 justices in the majority.

(Picture of Tyler Bankruptcy Court Building).

Will It Blend? - Credit Cards

See what happens when we put 24 credit cards into a Blendtec blender.

Conversations with History: Elizabeth Warren

Conversations host Harry Kreisler welcomes Harvard Law Professor Elizabeth Warren for a discussion of the economic pressures confronting the two income middle class family as it struggles to pay mortgages, health care, and education costs. Professor Warren offers surprising answers to "Who goes bankrupt and why?"  and explores the role of banks and credit card companies in tightening the squeeze on the average American family. The interface between politics and the law in addressing these problems is explored.

The "Computer Did It" Is Not A Defense

On March 6, 2008 Bankruptcy Judge Jeffery A. Deller  of the Western District of Pennsylvania in Pittsburgh, had to find again that the "Computer Did It" defense often raised by creditors and collectors is not a defense at all.

In Wingard vs. Altona Regional Health Systems and Credit Control Collections the creditor argued that it did not willfully violate the stay because of a computer error the notices and at least one phone call was made to the debtors.

The Court found first that the automatic stay was willfully violated because in the 2nd Circuit, as in all circuits, the standard for determining a willful violation is only that Defendant had notice of the bankruptcy and intended the act which violated the stay.  There was no real discussion as to whether collection letters and phone calls constituted a violation because that is obvious.

For whatever reason creditors and collectors continue to believe that a mistake on their part seems to constitute a legitimate defense, which is completely opposite of the law.  The continuation of this argument continues to run up damages in the way of legal fees and costs, which make these practices particularily regrettable.

The Court first responding to Credit Control Collections comment that the letters went out because the matter "fell through the cracks" when the computer was not properly coded, and the agencies automatic system of sending letter was the culprit.  A notice having been send to creditor's counsel after one letter was sent, the Court asks, "How many times can a bankruptcy file 'fall through the cracks'"?

As to the "Computer Did It" defense in general, the Court quoting another opinion stated the defense is a "nonstarter ... since intelligent beings still control the computer and are thus responsible for their error ... having a clear obligation to adjust their programming and procedures and their instructions to employees to handle complex matters correctly".

The decision by Judge Deller is troubling in that he did not award damages for the attorneys' fees in this case.  The matter is silent, and so it is unknown if the debtor's properly requested or proved such damages.

There Is A Problem With Emails To And From Your Client Of Which You Should Be Aware

As is common these days, bankruptcy attorneys and clients communicate via email.  You think the emails are privileged communications between the attorneys and the clients.  Certainly they are privileged as to the copy maintained by the attorneys.  However, many of these emails are being sent to the clients using general email boxes accessed by many or to their email address maintained by their employer or company.  This might be a mistake because unless these emails are encrypted (and let us face the fact that they are not) then these emails, and the content in these emails, might not be protected.

An example is the decision by New York State Judge Charles W. Ramos (here) which found that a Beth Israel doctor who sent emails to his lawyer from the Beth Israel email server did not have an expectation of privacy.

And, this argument is not limited to New York State courts either.  The New York Bankruptcy Court ruled the same same way in In re Asia Global Crossing, Ltd., 324 B.R. 503 (Bankr. S.D.N.Y. 2005), where the Court found that emails between an attorney and the client left on the corporate email system waived the privilege.  This Court found that four factors should be taken into consideration when making a determination on this issue:

1.  Does the corporation maintain a policy banning personal or other objectionable use;
2.  Does the company monitor the use of the employee's computer or e-mail;
3.  Do third parties have a right of access to the computer or emails; and,
4.  Did the corporation notify the employee, or was the employee aware, of the use and monitoring       policies?

Especially in consumer bankruptcy cases these days attorneys often encourage clients to direct their questions to the law firm via email.  The law firms often collect email addresses from clients, without regard for these four factors, and send emails to the clients.  Now often the attorneys' emails are pretty mundane.  They remind someone of a hearing, give directions to the Court, inform them of the need to receive back signed paperwork.  Most of this is controllable as to content.  The problem is on the emails sent to the attorney.  Emails that might later suggest that the attorney knew of property not scheduled, or which might indicate a fraudulent transfer, or an uncorrected inaccurate answer to the Trustee during a creditor's meeting, or instructing a client how to answer a question at trial.  I do not know, but it would seem that this road is filled with potholes, and the attorney and client need to be mindful of this fact and act accordingly.

It might also open the door in future litigation for opposing counsel to subpoena the emails of your clients from their employer just so they can see what might be happening.

US recession fueled by low wages and consumer debt

Countrywide Home Loans Being Probed

That just sounds painful.

I do not know if consumers should be smarter than what they appear sometimes.  Should they not know they cannot afford the house payments being proposed?  Should they not read the fine print?  That argument aside, why should huge lenders, including mortgage lenders, be allowed to take advantage of these people, those that actually end up funding the loans, and society as a whole?

CNNMoney, as well as other new sources, is reporting that the FBI is investigating whether Countrywide Home Loans used fraudulent lending practices and financial reporting to write all of those subprime loans, liar loans, and other non-conforming loans it did over the years.  The probe will examine underwriting and mortgage origination practices, and whether the company misrepresented losses related to subprime loans.

The reason this is shocking still is that Countrywide is the nation's largest home lender, responsible for 1 in 5 (20%) of the home notes written in this country.  If they cannot be trusted, if the government is unable to proactively protect those most threatened by predatory lending, then really nobody is safe.

The government starts its forensics only once the harm is done.  Countrywide is in serious financial trouble.  It is in the process of being acquired by Bank of America.  The foreclosures are already taking place.  The CEO has already left with an obscene paycheck in his pocket.

And yet, where is the poor aggrieved consumer to turn.  They are the ones that moved out of their shelter to buy the new home through Countrywide and others.  There houses are being foreclosed now.  They are in financial distress now.  The only place they can practically turn is to the bankruptcy courts and the law is ill equipped to deal with the problem.

Congress needs to act to allow bankruptcy judges to adjust interest rates and re-amortize home loans.  You can do it in Chapter 12 -- family farmer -- bankruptcies and that is a helps.  Pay the new house payment through the 13 trustee for 5 years, but re-amortize the note for up to 30 years.  I contend that will help the system of mortgage loans and not hurt it.

The question is do we have the political will to do what is right and necessary?

Barrett Burke Wilson Castle Daffin & Frappier (BBWCDF)

At what point does the law firm of Barrett Burke Wilson Castle Daffin & Frappier become toxic?

Let me say that I have known Mary Daffin for years.  She is one of the most gracious and upstanding people that I know.  She has achieved wonders helping this firm grow into the powerhouse that it is.  She has always been open, honest and above board with me.  The problem is, due to the size of the law firm, and the enormous duties undertaken, we do not get to deal with Mary Daffin.  So we have to say, despite Mary Daffin, that with every hit the firm takes and with sanction it receives, BBWCDF seems to redesign itself into some organization that is more discordant, more shrill, more mischievous, more authoritarian, and more impervious in its approach.

This now is nowhere more evident than in how it has decided to handle its adversary proceedings.

Bankruptcy Filings Highest Since BAPCPA Went Into Effect

According to Credit Slips, a blog dedicated to credit and bankruptcy, bankruptcy filings in the U.S. are now at their highest daily rate since the 2005 changes to the federal bankruptcy law.  There were 79,198 bankruptcy filings in February 2008, or 3,959 new filings per day. That is an increase of 28% over the same time period one year before.  Further, that represents an increase of 18% over January 2008.  Of special interest is the overall trend or rise in bankruptcy filings since BAPCPA took effect in 2005.  Credit Slips previously predicted that more than one million bankruptcies will be filed in 2008.  If this trend continues this might actually come to pass.  It also indicates that consumers are hurting financially.

There are regional variations in these numbers.  The state with the biggest increase for the first two months of 2008 is California. Florida and Nevada also appear in the top 10, and all three of these states are consistent with the story that the foreclosure crisis is pushing people into bankruptcy. Virginia, Maryland, Delaware and the District of Columbia also appear in the top 10, suggesting a regional problem. Connecticut, Rhode Island, and Kentucky are the other states with in the top 10.

Sixteen states have experienced a decrease in bankruptcy filings during the first two months of 2008 as compared to the monthly average for 2007: Colorado, Alaska, Missouri, Oregon, Idaho, West Virginia, Indiana, Ohio, Texas, North Dakota, Iowa, Maine, South Dakota, Kansas, Montana, and Wyoming.