Just in time for the holiday season, the U.S. District Court of the Eastern District of Pennsylvania (at the request of the Board of Bankruptcy Judges) promulgated new Local Bankruptcy Rules which will go into effect Dec. 1. The rules were a culmination of an extensive study and drafting process to update the existing Local Rules to conform them to local practice and otherwise implement certain items necessary to be consistent with the National Rules which are also going into effect on Dec. 1.

The total number of Local Rules has increased substantially; however, it was not the intention to make the practice more difficult. Rather, in many instances, several existing rules were lengthy and contained numerous different ideas. They are now separated into distinct rules for ease of reference and compliance. Further, in light of the substantial amendments to the provisions of the national bankruptcy rules governing appeals in bankruptcy matters, substantial local rule amendments were required in order to conform local practice to the new national rule model.

While practitioners should review all of the Local Rules to familiarize themselves with the practice in front of the Bankruptcy Court, the goal of this article is to highlight those specific changes which will have direct impact on day to day practice. The highlighted rules are as follows:

• Rule 1002-2 creates greater complex case eligibility which will allow additional cases to be treated as “complex cases” in the Eastern District of Pennsylvania.
• Rule 2004-1 creates a more flexible and streamlined procedure for 2004 examinations and allows for the issuance of a subpoena (upon consent of the receiving party) without the need for first having to secure an order.
• Rule 2014-1 provides for increased disclosures to evaluate conflicts and eligibility for appointment for professionals representing trustees, committees and debtors-in-possession.
• Rule 2016-3 provides for an increase in the “no look” fees awarded to Chapter 13 professionals in “above median” and “below median” cases. The rule also allows for automatic adjustments to these fees every four years in the same manner that the dollar amounts in other sections of the Bankruptcy Code are adjusted by the Judicial Conference of the United States.
• Rule 3007-1 addresses the procedures related to the claim objections to prevent “trial by surprise”. It requires a claimant to advise the objector prior to the hearing date of the intention to proceed at the originally scheduled hearing on an evidentiary basis. In the absence of providing confirmation, the objector is entitled to an automatic continuance to allow for the evidentiary preparations.
• Rule 3015-1 mandates use of a district-wide local form Chapter 13 plan. The form is titled Local Bankruptcy Form 3015.1-1. Over the years, there have been numerous attempts to produce a model Chapter 13 Plan for use in the Eastern District of Pennsylvania without success. However, new motivation to promulgate a local plan was provided with the adoption of a national rule requiring use of a national form Chapter 13 plan or a single, local form plan adopted by the bankruptcy district. The Eastern District Form plan resembles the national plan, but also maintains local practice in many areas. The plan sets forth plan funding at the outset to allow trustees and creditors to determine feasibility at a glance and provides separate sections for treatment of the various types of creditor claims. After some growing pains, the plan should prove to be easy to use by debtors' counsel and should facilitate review of the plan by creditors, the Chapter 13 trustee and the court.
• Part V was revised to incorporate in one place in the local rules all of the various standing orders related to electronic filing. Also, the new rules clarify the procedure for submitting documents under seal.
• Part 8 of the Local Rules attempts to streamline the appellate process for practitioners. Since the Part 8 of the National Rules is modeled, in large part, on the Federal Rules of Appellate Procedure, the existing Local Rules are modeled, in large part, on the Local Rules of the Third Circuit.
• Rule 9019 revises the mediation rules to provide greater flexibility for professionals to identify a potential mediator, have the mediator appointed and compensated and proceed to mediation efficiently and effectively.

There are also certain changes to local forms. Other than the substantive implementation of the Form Chapter 13 Plan, the changes to the local forms are largely stylistic. Nevertheless, it requires practitioners update their “form bank” to all “new” forms in effect started Dec. 1.

Derek Baker is a partner at Reed Smith, in the firm's fnancial industry group. He is a resident in the Philadelphia and Princeton offices, practicing in the area of commercial restructuring and bankruptcy.

Patricia M. Mayer is a partner at Waterman & Mayer. She focuses her practice on representing individuals and small business owners in consumer bankruptcy cases, IRS collection matters and mortgage foreclosure defense.