Bankruptcy filings are decreasing nationwide but not in the Southern District, where judges are presiding over “a record high number of large mega cases,” according to the State of the District report released today.
U.S. District Chief Judge Colleen McMahon of the Southern District of New York lauded the performance of all the courts under her jurisdiction but said she was concerned about the impact of federal budget cuts on the entire system.
“Our overworked bankruptcy judges are working 24/7 365 on some of the most complicated cases in the country,” McMahon said.
The Bankruptcy Court’s mega filings have increased 60 percent in fiscal year 2016 to 2017 compared to the previous year.
“Bankruptcy judges preside over many litigious and complex cases, such as a recently filed Chapter 11 case, Ezra Holdings Ltd., where the debtor is based out of Singapore and supplies logistical support service to offshore oil and gas exploration,” according to the report.
The estimated assets in the case are between $500 million and $1 billion and the liabilities are estimated between $100 million and $500 million.
McMahon noted that cases that were filed more than six years ago are not counted in the federal statistics but are still being heavily litigated. She cited the Bernie Madoff case and filings involving Lehman Brothers, Lyondell and General Motors.
Overall, total Chapter 11 filings for the period have increased 8.5 percent and international cases, Chapter 15, are up 70 percent. Chapter 13 cases have risen almost 13 percent but Chapter 7 cases have remained steady.
In addition to the Bankruptcy Court workload, McMahon noted that bankruptcy judges from everywhere come to the U.S. District Court for the Southern District of New York to learn about the system.
“Over one-third of bankruptcy judges across the country have been through their program,” she said.
McMahon praised the court system and all of its facets.
“I hope the bar knows how lucky we are to have the people we have working for this court,” she said.
— Susan DeSantis