CHAPTER 5 VIEWS FROM THE BENCH
| Jurisdiction | United States |
(Feb 2010)
VIEWS FROM THE BENCH
Chief United States Bankruptcy Judge
Western District of Texas
Hon. Judge Leif M. Clark
United States Bankruptcy Judge
Western District of Texas
Hon. Judge Stacey G. C. Jernigan
United States Bankruptcy Judge
Northern District of Texas
Eli O. Columbus
"Erik" Weiting Hsu
Gregory M. Zarin
Winstead PC
Dallas, Texas
Thomas A. Creekmore III
Hall Estill
Tulsa, Oklahoma
Hon. Judge Ronald B. King is the Chief U.S. Bankruptcy Judge for the Western District of Texas, based in San Antonio. He has been a bankruptcy judge since 1988 and teaches regularly at continuing legal education courses on bankruptcy. He is a member of the San Antonio Bar Association, San Antonio Bankruptcy Bar Association, and the National Conference of Bankruptcy Judges. Judge King obtained his B.A. in Political Science with High Honors in 1974 from Southern Methodist University and his J.D. with High Honors in 1977 from the University of Texas School of Law.
Hon. Judge Leif M. Clark has served as a bankruptcy judge for the Western District of Texas since 1987. During his tenure on the bench, he has authored well over 200 opinions, some of which have been seminal decisions on emerging issues in both consumer and business bankruptcy. In addition, he has published scholarly articles in law reviews, including a series of articles on bankruptcy jurisprudence in the Fifth Circuit from 1995 through 2002 in the Texas Tech University Law Review. For many years, Judge Clark also authored a monthly column offering a judicial perspective on legal and practice issues in the ABI Journal. He also testified before the National Bankruptcy Review Commission regarding Article III issues relating to bankruptcy. Judge Clark has been a frequent lecturer on bankruptcy issues at seminars nationwide, speaking on a wide range of bankruptcy issues, both consumer and business-related. In addition, he served as a director and officer of the American Bankruptcy Institute for many years and participated in the formation of that organization's Endowment Committee to fund bankruptcy research. He currently serves as a member of the Endowment Board for the National Conference of Bankruptcy Judges. Teaching has always been an important part of Judge Clark's professional career. For sixteen years, he taught short courses in American Constitutional Law to foreign students as part of the International Master of Laws Program for McGeorge School of Law, teaching in Salzburg, Austria. He also helped to design and then administer a judicial training program for USA-ID, training judges in Poland, Romania, Latvia, and the Ukraine. He has also taught both basic and advanced courses in bankruptcy law for the University of Texas School of Law as an adjunct professor. Judge Clark has also been privileged to participate in the development of international insolvency regimes, serving as part of the advisory committee to the U.S. delegation to UNCITRAL's drafting of the Model Cross Border Insolvency Law. In addition, he served on the ABA's delegation to UNCITRAL as it developed its legislative guide for insolvency law, participating in working group sessions in Vienna, Austria. He also was a member of the advisory group that developed the Transnational Insolvency Guide for ALI-ABA. Before attending law school at the University of Houston School of Law (where he graduated with honors and was a published editor on that school's law review), he served in specialized ministries for the American Lutheran Church, after graduating from the Evangelical Lutheran Theological Seminary (now Trinity Lutheran Seminary) in Columbus, Ohio, where he obtained a master of divinity degree. He completed his undergraduate work with honors at the University of Maryland in College Park, Maryland. Judge Clark takes special pride in what he deems his most important accomplishments - his son, Harrison (born in 2003) and his daughter, Carson Renee (born in early 2006). And he values the love, partnership, and support that he enjoys with their mother and his wife, Rochel Lemler-Clark, who is a practicing commercial litigation attorney. They all live in happy chaos in San Antonio, Texas.
Hon. Judge Stacey G. C. Jernigan was appointed to the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, on May 12, 2006. Previous to her appointment, she practiced for 17 years in the Business Reorganization and Bankruptcy Practice Group of the international law firm of Haynes and Boone, LLP (Dallas, Texas office) (1989-2006) and was the Head of the Bankruptcy Practice Group (2000-2006). She represented mostly debtors, committees, and purchasers in large, complex Chapter 11 cases and out-of-court workouts. Judge Jernigan was also an adviser to the California Legislature, Sacramento, California, in connection with the California utility financial crisis in 2001. She is: Board Certified in Business Bankruptcy Law by the American Board of Certification; Fellow, American College of Bankruptcy; Fellow, Texas Bar Foundation; Fellow, Dallas Bar Foundation; Master, Board Member, and Bankruptcy Course Instructor for John C. Ford American Inn of Court; Member, American Bankruptcy Institute; Member, National Conference of Bankruptcy Judges; Member, State Bar of Texas Bankruptcy Section; Member, Dallas Bar Association Bankruptcy and Commercial Law Section. She was selected by D Magazine in 2002 as one of Dallas' Best Lawyers Under 40, by Texas Monthly Law & Politics as one of the Texas Super Lawyers in various years, and was named in the 2005 and 2006 editions of Chambers USA America's Leading Lawyers for Business as one of the leading lawyers in the bankruptcy practice field in Texas. Judge Jernigan's publications include: Mass Preference Litigation: Proper Exercise of Fiduciary Duties or Perversion of Equality of Distribution Policy (and What Impact Will the 2005 Bankruptcy Code Amendments Have), 24th Annual Bankruptcy Conference, University of Texas School of Law (Nov. 2005) (co-authored with Francis Smith); Bringing Home the Bacon, or Just Being a Hog? Employee and Executive Compensation Issues in Chapter 11, 22nd Annual Bankruptcy Conference, The University of Texas School of Law (Nov. 2003) (co-authored with Frances Smith); The Insolvency Expert, Chapter 28, Advanced Expert Witness II Course, State Bar of Texas (Feb. 2002) (co-authored with Eric Terry); Tax Attributes of a Debtor as Property of the Estate: When the Tax Planning and Bankruptcy Worlds Collide, 17th Annual Advanced Business Bankruptcy Course, State Bar of Texas (May 1999); 1994 Consumer Bankruptcy Developments: The Bankruptcy Reform Act of 1994, 50 BUSINESS LAWYER 1193 (May 1995). Judge Jernigan obtained her J.D. from the University of Texas School of Law, and her B.B.A., magna cum laude, from Southern Methodist University in 1986.
Thomas A. Creekmore III is with the firm of Hall Estill in Tulsa and has been practicing in the Bankruptcy field for more than 25 years. He has an individual AV-rating through Martindale-Hubbell and has been selected a Best Lawyer in America in Bankruptcy and Creditor/Debtor Rights. In addition, he has been recognized as an Oklahoma Super Lawyer in Bankruptcy and Creditor/Debtor Rights and was named to the 2006 bankruptcy law "dream team" by the Tulsa Business Journal.
Overview of Topics
I. Section 503(b)(9) Administrative Expense Claims for Goods Provided in the Ordinary Course of Business within 20 days of the Bankruptcy Filing
II. Producer (or First Purchaser) Liens
III. Mineral and Mechanic's Lien Issues
IV. Contractual Cross-party Netting Agreements
V. Other Issues
I. Section 503(b)(9) Administrative Expense Claims for Goods Provided in the Ordinary Course of Business within 20 days of the Bankruptcy Filing
Section 503(b)(9) of the Bankruptcy Code, added by the 2005 amendments, created a new administrative claim for the value of any goods received by the debtor within 20 days before the date of the bankruptcy filing for goods sold to the debtor in the ordinary course of business. This is a positive development for vendors and sellers because administrative expense claims are required to be paid in full as a condition to approval of a chapter 11 plan.
Recent case law has addressed certain issues that might arise under Section 503(b)(9) with respect to transactions involving oil and gas and other minerals or commodities. For example, courts have recently addressed arguments over whether natural gas or other similar commodities constitute "goods" for purposes of section 503(b)(9), and how to determine value of a section 503(b)(9) claim involving commodities.
A. Are oil & gas minerals "goods" under Section 503(b)(9)?
In the Pilgrim's Pride1 bankruptcy case, the debtor argued that natural gas provided by its utility provider does not fall within the definition of "goods" and, therefore, should not be subject to allowance of Section 503(b)(9) administrative expense claims. The bankruptcy court disagreed with the debtor and held that natural gas falls within the definition of "goods." The court noted that Congress could have, but chose not to, exclude utilities and mineral suppliers from Section 503(b)(9).
The court relied on Section 2-107(1) of the Uniform Commercial Code ("UCC")...
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