COVID-19 Related Updates to Bankruptcy Courtroom Policies and Procedures

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Most bankruptcy courts have altered their practices and procedures in light of COVID-19.  Below is a summary of the changes to practices and procedures in the United States Bankruptcy Courts for the Southern District of New York, the District of Delaware, and the Southern District of Texas.  We will aim to update this report as courts revise their procedures, but given the fluidity of the situation and the frequency of COVID-19-related updates, please also consult the relevant court’s website. 

United States Bankruptcy Court for the Southern District of New York

The Bankruptcy Court issued General Order M-543 in response to COVID-19 on March 20, 2020, which provides that[1]:

  1. All hearings and conferences scheduled for the Manhattan, White Plains, and Poughkeepsie Divisions of the Bankruptcy Court will be held telephonically, and parties interested in appearing in person should file or submit an appropriate motion or request.  Parties can request adjournments of hearings or conferences by filing a motion or request detailing the request and basis, as per the Bankruptcy Judge’s procedures for requesting adjournments.  Anyone intending to appear at or attend a telephonic hearing or conference must refer to the Bankruptcy Judge’s guidelines for telephonic appearances and use Court Solutions LLC.  The telephonic service is free of charge for pro se parties and chapter 7 and 13 trustees. 
  2. Parties should contact their individual Bankruptcy Judge or courtroom deputy/law clerk to determine whether upcoming evidentiary hearings and trials will proceed as planned, and to discuss procedures and technology to be used at the evidentiary hearing.  Methods for contacting the Judge or deputies may vary by Judge (i.e., phone call or email).
  3. Bankruptcy Court personnel will be using tools available through Court Solutions to record telephonic hearings, conferences, and trials.  Those recordings will be the official record.  Transcripts can be ordered and corrected as they were before General Order M-54.
  4. The Bankruptcy Court’s three Divisions are still open for all other business.  “Clerk’s Office personnel are available by telephone, mail will be received, and the intake desks will remain open to receive pro se filings.” 
  5. Information about using CourtSolutions can be found here

Other relevant COVID-19 developments include:

  • Effective March 13, 2020, all in-person chapter 7, 12, and 13 section 341 meetings scheduled through April 10, 2020 are continued to a later date to be determined, and section 341 meetings cannot proceed during this period except through telephonic or other alternative means that does not require personal appearance by debtors.  Meetings that have already been scheduled as telephonic may proceed as scheduled[2].
  • Per General Order M-542, signed on March 17, 2020, while the Court remains open for business, access to the Bankruptcy Court building will be restricted to types of persons listed in the order.[3]

United States Bankruptcy Court for the District of Delaware

The Bankruptcy Court for the District of Delaware issued an Amended Order Governing the Conduct of Hearings Due to Coronavirus Due to Coronavirus Disease 2019 (COVID-19), which provides that[4]:

  1. Court Hearings that are not time sensitive will be continued to a later, to-be-determined date by the presiding judge on or after May 1, 2020.  Whether a Court Hearings is time-sensitive will be determined by the presiding judge. 
  2. All Court Hearings prior to May 1, 2020 will be held telephonically and/or by video conference unless otherwise ordered by the presiding judge.
  3. The method for submitting evidence for telephonic and/or video conference Court Hearings held before May 1, 2020, will be determined by the presiding judge on a case-to-case basis.
  4. Chapter 13 confirmation hearings scheduled for April 27, 2020, and the Chapter 13 motions calendar scheduled for April 28, 2020, will be held telephonically.

Some further procedural changes and updates in light of COVID-19 include:

  • No in-person public access to the Bankruptcy Court’s Clerk’s Office.  The Office will remain open through (1) telephone, (2) email access, and (3) the drop boxes located in the lobby of the court house.  CM/ECF also continues to be available for electronic filing.[5] 
  • As of March 18, 2020, all hearings at the Bankruptcy Court are being held telephonically via CourtCall.  Where video conferences are necessary, the Court is using Skype for Business.[6]
  • As of March 16, 2020, the Bankruptcy Court is no longer accepting hand deliveries of documents, and has accordingly modified several relevant local rules via Interim Order available here.[7]
  • From March 26, 2020, until May 31, 2020, the Court has temporarily suspended the requirement that attorneys obtain a debtor’s original, physical signature before electronic filing where necessary, if they have either “(a) obtained the debtor’s digital signature via any commercially available digital signed software that signature authentication and maintains a copy of the digitally signed document(s) in the debtor’s case file; or (b) obtains express written permission (including electronic mail) from the debtor to affix the debtor’s signature to the document(s), and maintains a hard copy thereof in the file.”[8] 
  • As of March 27, 2020, anticipating an increase in SBRA cases given the CARES Act’s raising of the eligibility cap, the Court has assigned, at random, all chapter 11, Subchapter V cases to either the Hon. Brendan Linehan Shannon or the Hon. John T. Dorsey.[9]
  • As of March 13, 2020, “all in-person chapter 7, 12, and 13 section 341 meetings scheduled through April 10, 2020 are continued until a later date to be determined,” and section 341 meetings may only proceed during this period through telephonic or other alternative means that does not require an in-person appearance by the debtor.[10] 

United States Bankruptcy Court for the Southern District of Texas

The Bankruptcy Court for the Southern District of Texas posted an emergency protocol (available here as 2020-04) for addressing COVID-19-related concerns, which it then invoked on March 26, 2020 for all bankruptcy courts in the District[11].  The protocol provides that[12]:

  • Hearings may still be scheduled or rescheduled by the Court to be heard during this period.  Such hearings will be conducted electronically.  The Court may also reschedule hearings it previously canceled to be conducted in the ordinary course.  Hearings may be held either by the Judge assigned to the case, or by any other Bankruptcy Judge. 
  • Notice of chapter 13 panel hearings will take place through a notice posted by the chapter 13 trustees on the trustee’s website.  Unless otherwise ordered, “chapter 13 panel hearings will only be heard if there is a statutorily imposed deadline for the conduct of the hearing,” and the trustees “will post a hearing calendar that contains only matters with statutorily imposed deadlines.”
  • “Notice of all other hearings will be entered on the docket of the case by the Clerk in each case in which a hearing is scheduled by the Court.”
  • Parties and counsel are responsible for keeping up to date with the Court’s website and their case dockets.  Electronic attendance at hearings will be required if said individual was otherwise required to appear in the hearing before the protocol period.  Personal attendance at electronic hearings will not be permitted, except as ordered by the Court.  Instead, the Court is conducting electronic hearings through audio and video communication. 
  • Witnesses must appear by both audio and video connection.  The oath will be administered over the audio connection.  The Court may allow parties-in-interest to utilize the Join.me website to present documents or other presentations, in which case the Court will allow the party to become a “presenter of a presentation.”
  • “Motions for Relief from the automatic stay must be self-calendared for hearing on the Court’s published available dates,” which will be conducted electronically.  Aside from such motions or as otherwise ordered, hearings may not be self-calendared by any filing or notice that is filed during the protocol period.  “If a hearing is required during the Protocol Period, the person seeking the hearing must file a motion for emergency consideration and request the hearing by contacting the appropriate person” on a list labeled Exhibit C on the Court’s website, containing contact information for the relevant individuals.  If a hearing is required after the Protocol Period, the person seeking the hearing should contact the appropriate person from Exhibit C after the Protocol Period ends. 
  • To request an emergency hearing during this time, in addition to complying with the local rules, an email should be sent to the Judge’s staff member and to the Emergency Request Hotline.
  • “Section 341 meetings of creditors will be conducted electronically”
  • “Statutory deadlines remain in effect” while deadlines imposed by the Court, local rule, and by the Federal Rules of Bankruptcy Procedure are tolled for the Protocol Period.  The toll is calculated by adding the length of the Protocol Period to the original deadline. 
  • Finally, Judges may vary the protocol on a case-by-case basis, and the protocol itself is subject to amendment

Other Orders issued in response to COVID-19 explain that:

  • “All in-person chapter 7, 11, 12, and 13 section 341 meetings scheduled through April 10, 2020, are continued until a later date to be determined by the United States Trustee.  Absent special circumstances, section 341 meetings may not proceed during this period except through telephonic or other alternative means not requiring personal appearance by debtors.  Appropriate notice will be provided to parties in accordance with bankruptcy law and rules.  Meetings already noticed as telephonic meetings may proceed as scheduled.”[13]
  • The Court is modifying its requirement of “wet signatures” such that documents “electronically signed utilizing a commercially available electronic signing technology (such as DocuSign) that (a) maintains an audit trail that allows the filing attorney to obtain the identification of the signer’s computer or device from the commercial provider; and (b) complies with the requirements of the United States ESIGN Act” will be accepted in place of “wet signatures.”  The Court also continues to accept “wet signatures.”[14]
  • From March 23, 2020, through May 31, 2020, Paragraphs 7 and 8.B of the Bankruptcy Rule 2016(b) Disclosure and Application for Approval of Fixed Fee Agreement is amended to allow for audio or video conference for the “in person meeting,” with preference for a video conference.  If the required meeting does not take place in person, “Debtor’s counsel must file a certificate with the Clerk identifying the alternative method of meeting (including the software program utilized); the date and time the meeting was conducted; and if audio conferencing was used, the reason why a video conference was not conducted.”[15]

[1] General Order M-543, Bankr. S.D.N.Y., March 20, 2020. 

[2] UST Notice re: Rescheduling 341 Meetings, http://www.nysb.uscourts.gov/news/ust-notice-re-rescheduling-341-meetings (last visited April 2, 2020). 

[3] General Order M-542, Bankr. S.D.N.Y., March 17, 2020. 

[4] In Re: Amended Order Governing the Conduct of Hearings Due to Coronavirus Disease 2019 (COVID-19), Bankr. D. Del., March 31, 2020.

[5] COVID-19 – Emergency Clerk’s Office Procedures, Notice Regarding Court Operations during COVID-19 Virus Outbreak, https://www.deb.uscourts.gov/news/covid-19-emergency-clerks-office-procedures (last visited April 2, 2020). 

[6] Id

[7] In Re: Cessation of Hand Deliveries, Bankr. D. Del., March 31, 2020.

[8] In Re: Order Temporarily Suspending Requirement to Obtain Original Signatures from Debtors for Electronic Filings, Bankr. D. Del., March 26, 2020.

[9] In Re: Order Assigning Certain Judges for Cases Under the Small Business Reorganization Act, Bankr. D. Del., March 27, 2020.

[10] Delaware 341 Meeting Notice, Important Notice from the United States Trustee for Regions 3 and 9 Regarding 341 Meetings, http://www.deb.uscourts.gov/news/delaware-341-meeting-notice (last visited April 2, 2020). 

[11] In Re: Invocation of Emergency Protocol, Bankr. S.D. Tex., March 26, 2020. 

[12] In Re: Adoption of Contingency Plan to Address Possible Public Health Limitations on Court Operations, Bankr. S.D. Tex., March 9, 2020.

[13] In Re: Implementation of Alternative Procedures for Conducting Creditor Meetings under 11 U.S.C. § 341, Bankr. S.D. Tex., March 16, 2020.

[14] In Re: Authorization of Electronic Signatures, Bankr. S.D. Tex., March 19, 2020.

[15] In Re: Temporary Authorization of an In Person Meeting Requirement by Alternative Means, Bankr. S.D. Tex., March 24, 2020.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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