ADMINISTRATIVE ORDER 97-002

IT IS HEREBY ORDERED:

The procedures as outlined in the attachment hereto are adopted by the Court. Done and entered this the 30th day of January, 1997.

United States Bankruptcy Judge

VALUATION OF COLLATERAL (Procedure Effective 2-1-97)

Valuation of collateral may be established pursuant to Rule 3012 of the Bankruptcy Rules by using a motion and opportunity for hearing if presented in the proper form. A recommened fom has been attached hereto as "Exhibit A." The motion to value will set forth the porported value and will provide that an objection must be filed within 23 days from the date of the service of said motion or that thereafter an order will be entered establishing the value as set forth in the motion. If an objection is filed within the 23 days, then the form must provide a hearing date which the movant will obtain from the clerk's office. The hearing date must be at some time after 30 days from the date the motion was filed.

The form must be served on the creditor in conformity with Rule 7004 of the Bankruptcy Rules or the Court will not enter an order on same. Rule 7004 requires that if the creditor is an individual, it must be served by mailing a copy of same to the individual's dwelling, house or usual place of abode, or the place where the individual regularly conducts business. The Rule further provides that if the creditor is a domestic or foreign corporation that the motion must be mailed to an officer, manager, or general agent or to any other agent authorized by the appointment or by law to receive service of process, or to the agent authorized by statute to receive service.

Further, the motion must be supported by the affidavit of the debtor in substantially the form provided and attached hereto as "Exhibit B" If the subject collateral is an automobile, then the value must be based on the average of the retail and wholesale of the current NADA Guide for the geographic area in question. If there is no NADA Guide, any other appropriate market report as provided by Rule 803(17) of the Federal Rules of Evidence may be used, or if there is no published market report then other appropriate appraisals of value may be used. A copy of the page out of the NADA or other market report, or of the appraisal if available, must be attached to the motion. If the property is the type that there is no appraisal or NADA Guide on same, then same may be based on the debtor's judgment.

When the motion and opportunity for hearing, along with supporting documentation is filed, the case manager in the clerk's office will place the matter on her follow up calendar. If an objection is filed within 23 days then the case manager will enter the date set forth in the motion onto the court's trial docket for hearing on the appropriate date. If an objection is not filed within 23 days set forth in the motion, then the case manager will forward the matter to the Judge for entry of judgment in conformity with the amount set forth in the motion.

If the motion is filed at the same time that the petition is filed, then it is possible tha the value may be established prior to the confirmation hearing, and in which case the established amount will be put in the confirmation order. If the value has not been established either by default or by hearing prior to the confirmation hearing, the the confirmation order will be entered and if the creditor has filed a claim will be paid as filed until such time that amount is changed by a valuation hearing or by default.

In any event, the confirmation hearing will go forward since the confirmation order will provide that claims will be paid as duly filed unless the debtor, attorney for the debtor, or trustee files a written objection and or motion for valuation.

It is important to remember that in order for the movant to get an order by default using this procedure that first and foremost the creditor must be provided with adequate notice pursuant to Rule 7004. Secondly, the appropriate affidavit and page out of the NADA must be attached. Third, the Court will still review the motion and exhibits prior to entry of order and may still require same to be set for hearing.

CONFIRMATION PROCEDURE

(Effective with 2-20-97 341 Docket)

Commencing on February 20, 1997, confirmation hearing will be on the same day as the 341 Hearing and a confirmation ordered entered shortly thereafter unless an objection to confirmaton is filed prior thereto. The objection to confirmation may be made orally at the 341 Meeting. If an objection to confirmation is made orally at the 341 Meeting, the creditor will have 10 days within which to file a written objection and obtain a hearing date, or confirmation order will nonetheless be entered.

Each creditor must file a written proof of claim in the form provided by law in order to present to participate in a distribution in the Chapter 13. Claims will be paid as duly filed without a hearing unless the debtor, attorney for the debtor, or the trustee files a written objection in which case a hearing on the claim will be held to determine the allowed amount of the claim.

A confirmation order may be entered shortly after the 341 Hearing but if the creditor subsequenlty files a secured claim for a higher amount than what the debtor's plan proposed and was confirmed at, then the claim will either have to be objected to adn devalued, the plan modified and increased to pay said claim, or the case be dismissed for nonfeasibility.

Under Rule 3015, an objection to confirmation must be filed and served on the debtor, the trustee and any other entity designated by the Court prior to the confirmation hearing. An objection to confirmation is governed by Rule 9014. If no objection is timely filed, the Court may determine that the plan has been proposed in good faith and not by any means forbidden by law without receiving evidence on such issues. It is important to not the distinction between an objection to confirmation, which adresses the good faith issues and other issues "forbidden by law" whereas a valuation hearing is an entirely separate matter. A case may be confirmed with issues of valuation as yet undetermined. Objections to confirmation on good faith, etc. issues must be filed prior to confirmation whereas the case may be confirmed but the valuation issues remain open until the claims period runs. Thus, it is important to designate your pleadings correctly and either refer to the matter as an objection to confirmation, which addresses the issues taken up in Rule 3015(f) or as a motion for valuation, which is covered by Rule 3012 of the Bankruptcy Rules.

After the 341 meeting, if there is no objection to the confirmation filed, the trustee then will transmit to the clerk's office the order of confirmation in substantially the form as attached hereto. Upon Receipt of this order, the clerk's office will forward same to the Judge for signing and entry.

Bankruptcy Noticing

(Effective 2-18-97)

Effective on the 18th day of February, 1997, the clerk's office will resume the responsibility of noticing matters for hearing. This does not alleviate the movant from the requirements under the appropriate Bankruptcy Rules from serving a copy of th motion or pleading on the adverse party and other parties in interest.

Since the clerk's office will be doing the noticing and must describe in the notice what the matter to be heard consists of, it is very important that the pleading describe in the caption thereof, in a clear and concise fashion, what it is that the movant is requesting. As a general rule, the clerk will simply transpose into the notice what the caption on the pleading sets forth.

If the caption of the pleading is not adequate, then the clerk's office has been instructed to notify the movant that the pleading is deficient and no action will be taken on same until corrected or amended.

There will be certain expections to the clerk's role in noticing. For example, in the case of a Chapter 11 confirmation hearing, it will be still necessary for the debtor's attorney to serve the notice of the confirmation hearing because the ballots, or the ballot must be served along with a copy of a plan unless it has been previously distributed. There are certain to be other exceptions that will arise as this practice develops.

Remember, the Bankruptcy Rules still require the movant to serve a copy of the motion or pleading on certain parties. The clerk's office only serves the notice of hearing. Properly serving the pleading on the required parties is still the responsibility of the movant.