Balancing the Scales of Justice for Pro Se Homeowners

New Century’s Mere Gesture can’t Overcome that pesky Due Process

Posted by on Apr 12, 2012

CORRECTION:  Brown v Seaman, the Court found that since the Debtor had placed ad in the local and “national editions of the New York Times, and the national edition was sold in her Philadelphia, the Debtor had met their Constructive Notice requirements.  It is important to note that Seaman’s, unlike New Century, placed ads in SEVERAL newspapers. Not just one national and one local.

During the bankruptcy, the debtor had published notice of the bar date in the New York Times, the Wall Street Journal, the Florida Times-Union, the Houston Chronicle and the St. Louis Post Dispatch. The Court held that this means of notice publication satisfied the due process clause since it was “in national publications and in newspapers of general circulation in areas where [the debtor] did business. . . .” Id. at 728 n. 2.

My apologies if I confused anyone.

New Century is paying its attorneys $100 to $300k MONTHLY to fight borrowers who are filing late in their bankruptcy.  Seems that the Constructive Notice issue is heating up and as pesky as the Trust may think “due process” rights are, all controlling case law shows that New Century’s “mere gesture” is a weak, weak argument.

When New Century launched its Constructive Notice Campaign the attorneys advised New Century that a ONE day placement in ONE national newspaper and ONE local paper would suffice.  Well, we shall find out after April 25, 2012.  After reading about 50 cases on due process I am really challenged with how Judge Carey can even began to contemplate letting  New Century’s constructive notice program be considered anything more than a mere gesture.

Starting with the cases quoted by New Century’s attorneys in their motion to have their Constructive Notice program sanctioned by the Court, the Trust references several cases as controlling case law in regards to the notification of the Bar Date.  All of these cases are distinguishable as those debtors in the cited cases acted beyond a “mere gesture” investing in programs that truly were designed to notice potential claimants.

For example, in Vancouver Health, the debtors quote, “that [a] bankrupt’s estate’s resources are limited and the bankruptcy court must use discretion in balancing [the interests of all creditors] when deciding how much to spend on notification” – however in Vancouver Health the debtors embarked on $4.5 million dollar global campaign to notify users of the Dalkon Shield of its potential harm, and THEN spent an additional 4 million (limit was  5 million) for the Bar Date Notification  itself.  This is significantly more than the paltry $12,000 the New Century debtors spent on their Constructive Bar Date Notification.  The debtors generated over 100 BILLION in loans…and all they could afford was $12,000 for the program – but can afford $100 to $300 THOUSAND dollars PER month to attorneys to fight borrowers.  Ummm…..yeah… can’t believe this will fly with any Appellate Court in the Country!

In Chemetron, the debtors published notification in both the Wall Street Journal and New York Times  as well as seven other local publications.  It is important to note that the majority of potential unknown claimants reside in or around a specific geographical area which were the targeted local publications.

In Best Products, the debtors published notification in the Wall Street Journal, New York Times, the Chicago Sun Times, the Los Angeles Times, and the Richmond- Times Dispatch as well as sent notification to 300,000 potential claimants.

In Gentry v Circuit City, Gentry was a former employee who sought to file a claim based on a class of claimants through a class action.  This is distinguishable from the case at bar as class action participants may go to the Wall Street Journal to seek information on the class action but here the borrowers are operating on an individual basis and would not seek sources  that report on class actions.

See Correction: In Brown, the debtors published notification in both the national and LOCAL editions of the Wall Street Journal – and in fact, in the Brown case it was the publication in the Local edition – NOT the national edition, that the Brown Court relied on in determining that Brown had received constructive notice from the Wall Street publication.

 In all of the cases New Century debtors have quoted, the publication efforts were significantly more than the mere gesture New Century put forth.  More on point would be to consider the Bar Date Notification efforts put for by other predatory lenders such as Washington Mutual.  In Washington Mutual the debtors ran notices (four and five times respectively) in the Wall Street Journal and New York Times, as well the Seattle and Seattle Post Intelligencer.  Washington Mutual had more than 13 ad placements – in comparison to New Century’s pitiful 2.

Now in desperation New Century has put together a listing of different news casts claiming somehow that also should be considered in their Constructive Notice program.  Small problem…most of the news casts were BEFORE the Court even knew the Bar Date.  So unless the Trust can submit some competent evidence that the newscasters were clairvoyant and divined the Bar Date – these news casts are wholly irrelevant.  Our Supreme Court has been very clear that it is not enough to know a company had started bankruptcy proceedings – the creditors needed to be informed of the actual Bar Date.  Period.

Between the damning Missal Report and its details on the “kick outs” and “scratch and dent” pools, and the lame 1 day ads placed by New Century – this situation is ripe for borrowers to throw a serious monkey wrench into the proceedings.  Stay tuned, oral arguments will be heard on April 25, 2012 in the Honorable Judge Carey’s Courtroom.






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  1. Quiteria Guardado Baeza

    Nice color choice on the blog. It is really easy on my eyes and I have bad eyes too so that’s a really big compliment lol


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