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Chain of title in assigned claims: Rochester Judge

A common situation: a chapter 13 debtor's account with a credit card bank is deep in default. In Chapter 13 all creditors are requested to file claims. A new entity files a claim as successor or assignee of the original credit card bank, but the claim does not include any proof that the claim was, in fact, assigned. What is missing is a "chain of title"; proof that the claim has been legally sold or assigned to the alleged new owner.

Rochester bankruptcy judge John C. Ninfo II issued a written decision on February 23, 2009 (In re: Doherty 06-22278 & Benedetti 07-21620) stating that the successor creditor was obligated to prove it was the legal holder of the claim. Apparently the judge's patience with creditors creditors -- and their attorneys -- on this issue is wearing thin. In a court appearance on October 7, 2009, Chapter 13 Trustee George Reiber argued several chain-of-title claim objections, starting with In re Alabaugh (WDNY Bk 08-22836).

"I can shorten all of this", said the judge, according to the official transcript (see link). "I'm absolutely fed up with this to the point that I'm going to tell you what I'm going to do. . . I now have a folder. What I'm going to start to record are the law firms or lawyers who represent these ridiculous clients who can't understand that they have to put a chain of title together because that is what the Court requires . . . And I think that the law firms that are representing these entities in this Court, which is what happened here, need to send their lawyers back to law school so they can take a course in chain of title. I'm really serious. And if this continues, I'm going to start inviting those law firms not to practice here. . . . Now, I don't know who to present this to, but I would suggest,
Mr. Reiber, that you get a transcript of this and start giving it to these creditors along with your . . . motions in the future, if you want to, because then the lawyers can read it who are going to represent them and come in here and do it."


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Peter R. Scribner, Esq.
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