UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
900 MARKET STREET, SUITE 201
PHILADELPHIA, PA 19107
CHAMBERS OF TELEPHONE
ERIC L. FRANK 215-408-2970
CHIEF U.S. BANKRUPTCY JUDGE
Date: August 16, 2017
MEMORANDUM
To: Judge Eduardo C. Robreno
Chair, U.S. District Court Bankruptcy Committee
From: Chief Judge Eric L. Frank
U.S Bankruptcy Court
Re: Proposed Amendments to Local Rules of Bankruptcy Procedure and the
Local Bankruptcy Forms
As explained in my letter dated August 16, 2017, the purpose of this Memorandum is to
provide the District Court with an "executive summary" of the proposed amendments to Local
Rules of Bankruptcy Procedure ("the Local Rules," or "the Proposed Rules" or "L.B.R.") and
the Local Bankruptcy Forms ("the Local Forms," "the Proposed Forms" or "L.B.F.").
The Rules and Forms Review Process
Historically, in this district, most of the local rules have originated from the efforts of the
local bankruptcy bar, acting through the Eastern District of Pennsylvania Bankruptcy Conference
("the Bankruptcy Conference"). Since the early 1990's, the Bankruptcy Conference has
periodically constituted a Local Rules Advisory Committee to draft local rules and amendments
to local rules for submission to the Board of Bankruptcy Judges ("the BOJ").
In late 2013, in light of the fact that there had been no comprehensive review of the
bankruptcy court local rules in about twenty (20) years, (despite the significant changes in local
practice brought about by electronic filing and other factors), I requested that the Bankruptcy
Conference reconstitute its Local Rules Advisory Committee ("the Committee") to engage in a
full review of the local rules and local forms.
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The Bankruptcy Conference honored my request. The Committee was reconstituted with
twenty (20) members. The Committee was representative of all of the bankruptcy constituencies
(commercial practitioners, consumer practitioners, trustees, governmental units, U.S. Trustee,
Bankruptcy Court Clerk, and practitioners in both the Philadelphia and Reading vicinages). I
was appointed Chair of the Committee. As he has done each time the Committee has been
active, Professor Walter J. Taggart, of Villanova Law School, graciously volunteered, to serve as
the Reporter to the Committee.
Over a more than three (3) year period, the Committee studied the local rules and forms
that affect local bankruptcy practice and drafted and debated various potential amendments
amendments.
The review process was extremely deliberative. It involved eight (8) stages, including
publication and solicitation of informal public comment.
(1) Meetings of the full Committee to review the rules and forms and identify
potential amendments.
(2) Meetings of three (3) subcommittees to further consider the potential
amen9.ments identified by the full Committee and to draft proposed
amendments.
(3) A second round of full Committee meetings to consider, revise and adopt
the proposed amendments as drafted by the three (3) subcommittees.
(4) A series of meetings by another subcommittee -- the Style Subcommittee
-- to harmonize the drafts of the three (3) prior subcommittees, as tentatively
adopted by the full Committee, and to make stylistic changes.
(5) Full Committee review of the Style Subcommittee's proposed revisions
prior to informal public comment.
(6) Informal public comment..1
Informal public comment was solicited by direct e-mail request to the bankruptcy bar
(i.e., the members of the Eastern District of Pennsylvania Bankruptcy Conference). In addition, comment
from the general public was solicited by notice posted on the bankruptcy court's website. This occurred
in May and June 2017.
There was minimal comment regarding tlie Local Rules. Most of the comments were
directed to the proposed Local Form Chapter 13 plan that the Committee is recommending be adopted
pursuant to proposed Fed. R. Bankr. P. 3015.1 (which will be effective December 1, 2017).
The comments received resulted in some minor, technical edits to the Local Rules and the
Local Form Chapter 13 Plan.
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(7) Style Committee consideration of the public comments received and
proposed further (and proposed final) revisions to the draft rules and forms.
(8) Final consideration of the redrafted rules and forms by the full Committee
(which adopted to Style Committee's recommendations without amendment).
Following this process, the Committee submitted its proposals to the BOJ. The BOJ
adopted the Committee's proposals and has requested that the rules and forms be promulgated by
the District Court.
Overview
Presently, there are 72 local rules and 11 Local Forms, embedded in the rules. If the
proposed amendments are adopted, there will be 114 Local Rules and 15 Local Forms. For ease
of reference, the Local Forms are being separated from the Local Rules into a separate
document.
The proposed increase in the number of rules and forms are attributable to several factors:
(1) A number of Rules were restyled into shorter rules with the content moved to
new, adjacent rules;
(2) The rules governing appellate practice were enhanced substantially; and
(3) Several new rules were drafted to make common procedures in local practice
more transparent to practitioners and the public.
Rules Most Directly Affecting Practice in the District Court
On December 1, 2014, Part VIII of the national rules governing appeals to the district
court was abrogated and replaced by a new Part VIII that closely tracks many of the Federal
Rules of Appellate Procedure (FRAP). The new Part VIII of the national rules was intended to
make practice in the district court governing bankruptcy appeals substantially mirror appellate
practice in the Court of Appeals.
Many of the 16 rules in Part VIII of the Proposed Local Rules governing appeals to the
district court are based on Third Circuit's Local Appellate Rules. The subcommittee assigned
Part VIII started with the premise that since the Third Circuit's Local Appellate Rules are
designed to enhance practice under the FRAP, Part VIII of the Proposed Local Rules should be
closely modeled on the Third Circuit's Local Appellate Rules. Having mostly the same local
rules govern when a bankruptcy appeal is before both the district and the Third Circuit is
strongly favored by practitioners.
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In most respects, the proposed rules will not alter current practice. To a large extent, the
Proposed Rules make more transparent to the practitioners the current practice.
It also is the expectation of the practitioners on the Committee and the BOJ that, to the
extent that an individual District Court judge wishes to administer an appeal in a manner that
varies from the Local Rules, the judge generally will have the authority to do so. For example,
the District Court judge may modify the additiodal technical requirements of the appellate briefs'
that are set forth in proposed L.B.R. 8014-l(a) a'nd 8014-2(a).
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Two (2) rules that may be invoked with sbme regularity in the District Court are
Proposed L.B.R. 8013-2 (motion to expedite ap~eal) and Proposed L.B.R. 8018-1 (motion for
extension of time to file brief). Both of these rul~s have been drafted to provide a simple and
flexible process for the district court to decide ise common motions.
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Rules Most Substantially Modif~ing Local Bankruptcy Practice
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Set forth below is a list of the rules whicli. are likely to most substantially modify local
bankruptcy practice, along with a brief explanatibn of the change. These changes will be felt in
the bankruptcy court and are not likely to impac~ appellate practice in the district court.
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1. 1002-2 - increased complex case eligibility, allowing larger cases to be treated
in a manner generally consistent *ith chapter 11 practice in Delaware
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2. 2004-1 - new, more flexible apd streamlined Rule 2004 examination
procedure 1
3. 2014-1 - increased disclosure !requirements for appointment of counsel to
assist the court in evaluating conf1icts and eligibility for appointment
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4. 3007-1 - procedure for presuniiptive right to continuance.in certain objections
to proofs of claim contested mattJrs
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5. 3011-2 - new "cy pres" rule f~r chapter 11 cases
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6. 3015-1 - local form chapter
form) . 2
dplan made mandatory (opt-out of national
,
7. 3015-2 - increased service requirements for initial chapter 13 plan, consistent
with Fed. R. Bankr. P. 3015(d) 1
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This rule is discussed in some more detail in the next section in connection with L.B.F.
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3015.1-1.
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8. 4004-4 - increased disclosure requirements for dismissal of objections to
chapter discharge
9. 5001-1 - assignment of cases by division taken out oflocal rules and instead
to be treated as an internal court administrative matter
10. 5003-1 - procedure addressing documents filed under seal
11. 5005-1 - incorporation into the local the rules, with some modifications, the
current standing order governing electronic filing
12. 9019-2 - mediation rules revised to provide increased flexibility regarding
mediator compensation and to address confidentiality issues.
Local Forms
With the exception ofL.B.F. 3015.1-1 and L.B.F. 8012-1, the modifications to the Local
Forms involve only style and format changes. L.B.F. 3015.1-1 merits some further discussion.
L.B.F. 3015.1-1 is a local form chapter 13 plan. It is linked to L.B.R. 3015-1, which
makes its use mandatory. The reason for this requires a brief background explanation.
At the end of this year, the national bankruptcy rules will make the use of an official
chapter 13 form plan mandatory in all chapter 13 cases. See Fed. R. Bankr. P. 3015(c) (effective
December 1, 2017). This is a major shift in policy and was a controversial topic in the Judicial
Conference. The source of the controversy is the perhaps surprising reality that chapter 13
practice varies widely among the various bankruptcy districts, which has resulted in a variety of
local form plans having been adopted in many districts. In Pennsylvania, for example, there are
substantial differences in the manner in which chapter 13 cases are administered in Pittsburgh
and Philadelphia and there are presently form plans in the Middle and Western Districts, but not
the Eastern District.
To ameliorate local concerns regarding the use of a standard, national form chapter 13
plan, Fed. R. Bankr. P. 3015.1 also is being adopted effective December 1, 2017. Rule 3015.1
authorizes local districts to "opt out" of the national form chapter 13 plan and to enact a local
rule that mandates the use of i:i local chapter 13 form plan in lieu of the national form chapter 13
plan.
To "opt out," the local district must provide notice and opportunity to be heard (a
requirement that will be satisfied here through the notice and comment process for the entire
packet of rules and forms amendments proposed by the BOJ). The local form plan must also
satisfy certain format and content requirements set forth in Fed. R. Bankr. P. 3015 .1.
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The Committee strongly believed that our district should invoke Fed. R. Bankr. P. 3015.l
and "opt out" of the national form chapter 13 plan. The BOJ concurs. L.B.F. 3015.1-1 has been
drafted to both satisfy the "opt out" requirements of Fed. R. Bankr. P. 3015 ..1, as well as to
include other provisions, not found in the national plan, that conform to traditional chapter 13
practice in this district. The Committee and the BOJ both believe that the use of the local form
will enhance the local chapter 13 practice.
Conclusion
This Memorandum provides only a brief overview of the highlights of the proposed
Local Rules and Local Forms. To fully understand the proposed amendments, both the
Summaries prepared by the Committee Reporter and the Rules and Forms themselves should be
consulted.
cc: Chief Judge Lawrence F. Stengel (w/encl.) (via e-mail)
Judge Cynthia M. Rufe (w/encl.) (via e-mail
Judge Jeffrey L. Schmehl (w/encl.) (via e-mail
Judge Stephen Raslavich (w/encl.) (via e-mail)
Judge Richard E. Fehling (w/encl.) (via e-mail)
Judge Jean K. FitzSimon (w/encl.) (via e-mail)
Judge Magdeline D. Coleman (w/encl.) (via e-mail)
Judge Ashely M. Chan (w/encl.) (via e-mail)
Kate Barkman, Clerk (w/encl.) (via e-mail)
Timothy B. McGrath, Clerk (w/encl.) (via e-mail)
Marie Needham, Deputy Clerk (w/encl.) (via e-mail)
Violet Emory, Deputy Clerk (w/encl.) (via e-mail)
Professor Walter J. Taggart (w/encl.) (via e-mail)
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