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U.S. Senate: Uncertain If Bankruptcy Courts Will Remain Fully Open

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bankruptcy court norfolk closed?by John G. Merna

On October 11, 2013, the LegalTimes blog reported that Senator Christopher Coons (D-Del.) Chairman of the Subcommittee on Bankruptcy and Courts warned his colleagues Thursday about the harm to the federal judiciary from the government shutdown.  As of today, October 15, no additional statements regarding the disposition of the bankruptcy courts in the Eastern District of Virginia have been posted on the court website.

On October 10, Chief Bankruptcy Judge Stephen St. John posted a statement saying “Notwithstanding the government shutdown on October 1, 2013, the United States Bankruptcy Court for the Eastern District of Virginia will remain open for at least twelve (12) business days, with all court proceedings to go forward as scheduled.”  The assumption this author is making is that he is referencing 12 business days from October 1st which would expire October 17th, the date through which the current federal budget will support financing the operations of the judiciary.

According to American Bar Association President, James R. Silkenat, in a report issued October 8th,  “If the shutdown continues beyond October 15, the judiciary will operate under the terms of the Anti-Deficiency Act, which allows “essential work” to continue during a lapse in appropriations. “Essential work” in the context of the judiciary includes: 1) activities necessary to support the exercise of the Article III judicial power (i.e., the resolution of cases in which there is a constitutional or statutory grant of jurisdiction); 2) emergency activities necessary for the safety of human life and the protection of property; and (3) activities otherwise authorized by law (e.g., judicial salaries, funding for jurors and the federal defender program).”  No guidance is provided on what is considered “essential” judicial functions, however, it is likely the bankruptcy will continue to perform essential operations integral to the exercise of Article III judicial powers.  The court undoubtedly will have to determine what level of staffing and functions would be considered “essential”.

Senator Coons expressed his concern about the continuation of full court operations, specifically trials, and the possibility that the lack of funding could compromise trail practice and result in a higher number of mistrials during the shutdown. The House and the Senate have yet to acknowledge the tremendous impact the shutdown of bankruptcy courts could have on struggling taxpayers in need of bankruptcy protection to halt garnishments, foreclosures, repossessions, and bank levies. According the the LegalTimes blog Coons said, “The judicial branch is not another federal agency. It is not a program that can be suspended or a benefit that can be delayed. It is a branch. The federal court system was created in our Constitution as the third pillar of our democracy.”


On a personal note, I appreciate all the thanks from our blog readers and clients about the posting sent out to try to keep them informed about the impact of the shutdown on their cases.  To link to this stream of postings just “friend” us on Google+.  I would also appreciate if you would Google +1 this page at the top and our bankrupty page to help others find this information. Stay tuned.

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