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New Bankrtupcy Rules Effective December 1, 2021

Monday, December 13, 2021

Several Federal Rules of Bankruptcy Procedure changes came into effect December 1, 2021. The changes are:

1. Rule 2005, subsection (c) is amended to delete the references to 18 U.S.C. § 3146(a) and (b) and replaced them with a reference to the “relevant provisions and policies of § 3142.”

2. Rule 3007(a)(2)(A)(ii) is amended to clarify that the special service method required by Rule 7004(h) must be used for service of objections to claims only on insured depository institutions as defined in section 3 of the Federal Deposit Insurance Act, 12 U.S.C. § 1813.

3. Rule 7007.1 addresses corporate ownership statements. Subsection (a) is amended to include nongovernmental corporations that seek to intervene. In addition, stylistic changes were made to subdivision (b) to reflect that some statements will be filed by nonparties seeking to intervene.

4. Rule 9036 is amended to further expand the use of electronic noticing and service. It recognizes a court’s authority to provide notices or make service electronically through the Bankruptcy Noticing Center (BNC) to entities that currently receive a high volume of paper notices from the bankruptcy courts. The rule is also reorganized to separate methods of electronic noticing and service available to courts from those available to parties. Under the amended rule, both courts and parties may serve or provide notice to registered users of the court’s electronic-filing system by filing documents with that system. Both courts and parties also may serve and provide notice to any entity by electronic means consented to in writing by the recipient. Only the courts may serve or give notice to an entity at an electronic address registered with the BNC as part of the Electronic Bankruptcy Noticing program. For those receiving notice through ECF, you are responsible for updating your electonric address in PACER which will update your information in a court's ECF system.

The changes to Rule 9036(b)(2)(B) also empowers the Director of the Administrative Office of the U.S. Courts (AO) through the BNC to contact entities that receive a high volume of paper notices. The AO has established 100 paper notices in a month as a high volume receiver and will require the recipient to establish an address to receive electronic notices. If the entity does not established an address under 11 U.S.C § 342(e) or (f) to receive electronic notices within 45 days of the notice of designation by the AO, the AO will designate an address for that entity.

In addition to the rule changes, Form 122B is modified to remind debtors and attorneys that the form is not required in chapter 11, subchapter V cases.