Do ‘No Money Down’ Bankruptcies Help or Hurt Debtors?

By
Diane Davis

The “no money down” bankruptcy, where debtors pay nothing in attorneys’ fees before
filing for Chapter 13 bankruptcy, is a nationwide phenomenon reshaping the consumer
bankruptcy system.

Chapter 7 bankruptcy, in contrast, requires the immediate payment of attorneys’ fees.

Though “no money down” might sound like a good idea to the broke consumer desperately
thinking about filing for bankruptcy, empirical data from a recent national study
suggests that “no money down” filers pay $2,000 more and have their cases dismissed
at a rate 18 times higher than if they had filed Chapter 7. That means they don’t
get the relief from the debt that prompted them to file bankruptcy in the first place.

Researchers who have been studying people who file Chapters 7 and 13 in a long-term
consumer bankruptcy research project recently released a
report entitled “‘No Money Down’ Bankruptcy.” Authors Pamela Foohey, Robert M. Lawless,
Katherine Porter and Deborah Thorne raise questions about how people access the bankruptcy
system and the extent of the benefits they get from it.

“The study is an important addition to a growing and persuasive body of research showing
that personal bankruptcy law is not race-neutral in application, even if individual
professionals have no express intent to discriminate,” Melissa Jacoby
, a law professor at University of North Carolina at Chapel Hill who teaches bankruptcy
law, told Bloomberg BNA March 13.

Jacoby was a co-principal investigator on a 2007 multi-researcher, long-term project
to understand the people who file bankruptcy and why, but had no role in the current
study.

The current study analyzes data from 2007, and 2013-2015, which allows for the collection
of data on a continuing basis and the creation of a database that “incrementally builds”
and will allow for comparisons over time, the report states.

“The authors and principal investigators are among the most careful demographers of
consumer bankruptcy working in the field today, and the model of collecting a national
random sample, as is done here, is imperative–particularly given that the government
sharply limits the demographic information it requires on bankruptcy petitions,” Jacoby
said.

Flaws in the System?

The “no money down” bankruptcy is a “buy now, pay later,” scheme that is “economically
inefficient”
but also affects consumers’ “access to justice,”
the report concludes. More than one million people file bankruptcy every year, according
to bankruptcy statistics from the Administrative Office of the US Courts.

The purpose of the report isn’t to criticize or point fingers at bankruptcy attorneys
who are the “gatekeepers”
to the system, but to “open up a conversation about what will make the bankruptcy
system more effective for the stakeholders in it,” Professor of Law Robert Lawless,
of the University of Illinois College of Law, Champaign, Ill., told Bloomberg BNA
March 8.

Stakeholders include attorneys, judges, advocates, trustees and debtors, he said.

The empirical data from the study is a national random sample and shows patterns across
the entire country, Lawless said.

The data reflects “the present world as it is,” Associate Professor of Law Pamela
Foohey, of the Indiana University Maurer School of Law, Bloomington, Ind., told Bloomberg
BNA March 10.

There has never been a national study on this topic, Foohey said. The study “goes
where the data takes you,”
she said.

The data shows that we have an inefficient bankruptcy system, Foohey said. “Money
is influencing access to the legal system that helps people deal with money problems,”
she said.

Choosing Which Chapter

In Chapter 7 bankruptcy, a debtor gets a quick discharge –his or her debt is wiped
out–but must give up assets that aren’t exempt. In Chapter 13 bankruptcy, a debtor
must make monthly payments to complete a three-to-five year repayment plan before
receiving a discharge, but most debtors can keep property like their homes and cars
as they make plan payments.

Typically, debtors pay an attorney an average of $1,229 up front before their attorney
files a Chapter 7 bankruptcy. Attorneys charge an average of $3,217 to file a Chapter
13 bankruptcy because it is more complicated than filing a Chapter 7 and takes longer,
but debtors can pay attorneys’ fees over time as part of their case.

More than 95 percent of people who file under Chapter 7 receive a discharge, whereas
only about one-third of debtors in Chapter 13 cases end in a completed repayment plan
so that they receive a discharge. Most Chapter 13 bankruptcies end without debt forgiveness,
according to the report.

Most people who need to file bankruptcy will hire an attorney. As a result, attorneys
play a significant role in determining which chapter of the Bankruptcy Code their
case is filed under.

The two most significant predictors of whether a consumer files a “no money down”
bankruptcy are a person’s place of residence and a person’s race, according to the
report. Debtors who live in judicial districts with high Chapter 13 filing rates are
more likely to file “no money down” cases, and African Americans are more likely to
file “no money down”
Chapter 13s than other debtors, the report says.

ABI’s New Commission

The timing of the research study coincides with the American Bankruptcy Institute’s
March 13 announcement of the creation of a commission to modernize the consumer bankruptcy
system “with practical and cost-effective recommendations.”

The commission, which will be co-chaired by retired bankruptcy Judges William Houston
Brown and Elizabeth Perris, will consist of 15 experts who represent various stakeholders
in the consumer bankruptcy system. One of the study’s authors, Robert Lawless, is
the commission’s reporter.

The commission expects to issue a final report in December 2018.

The “No Money Down” study is an “important empirical work” of “careful and fair scholarship,”
Prof. Angela Littwin, of The University of Texas School of Law, Austin, Tex., told
Bloomberg BNA March 13. Littwin studies bankruptcy, consumer and commercial law from
an empirical perspective. She was a principal investigator on the 2007 consumer bankruptcy
project but wasn’t involved in the current study.

The ABI’s commission will find the study useful and will take it “seriously” when
making their policy proposals, Littwin said.

Attorneys as Gatekeepers

Attorneys play an important role in bankruptcy as they are the “gatekeepers” to the
system, Lawless said.

Attorneys have a duty to advise clients which bankruptcy chapter to file under based
on the best interests of the client, Lawless said. The “no money down” Chapter 13
filing may be in the client’s best interests in that particular case, he said.

“No money down” Chapter 13s, however, create a “fundamental tension between attorneys’
and debtors’
interests, the report states. Attorneys may prefer that their clients file under Chapter
13 even if some debtors can pay attorneys’
fees up front. They spend more time on Chapter 13s than Chapter 7 cases, which allows
attorneys to charge their clients more money.

“‘No money down’ Chapter 13 simply is good business,” according to the report. Based
on the data, attorneys may be placing their business interests above their client’s
financial interests, the report states.

The report is important in “untangling race and Chapter 13s,” Littwin said. Based
on the report’s findings, attorney steering likely played a role in the large numbers
of African Americans filing Chapter 13 bankruptcy, she said.

In districts where there are higher rates of Chapter 13s filed, attorneys are expected
to put clients in Chapter 13, Littwin said. Filing Chapter 7 in those districts will
be challenged, she said.

Timing of Paying Fees

One solution to combat the effects of the “no money down” bankruptcy is to allow debtors
to pay bankruptcy attorneys’ fees in installments during their Chapter 7 cases, Foohey
said.

Eliminating the different treatment of attorneys’
fees in Chapter 7 and Chapter 13 should allow debtors to make the chapter choice based
on their needs, the report states.

It would also “align Chapters 7 and 13 on how consumer attorneys collect fees from
clients,” Foohey said.

This change would involve amending the Bankruptcy Code and would be the “cleanest”
solution, Lawless said. It would require congressional action though, which Lawless
said is unlikely at the moment.

Littwin agrees with the report’s conclusion that reforming the timing of when debtors
pay attorneys’ fees in Chapter 7 is the “superior approach.”

Revise Judge’s Standing Orders

Another possible reform would be to change the standing orders in bankruptcy courts
that typically set a “no look” attorneys’ fee for Chapter 13 cases, the report states.
These “no look” fees are for routine Chapter 13s and give attorneys assurance that
if they charge their clients no more than that amount, the bankruptcy court will approve
their fees.

The standing orders could be changed to provide that the “no look” fee will apply
only if the debtor has paid 25 percent or more in attorneys’ fees prior to filing,
the report states.

The “no look” fee could only apply in cases where the Chapter 13 plan contemplates
substantial repayment to creditors.

Revisions to standing orders are much more likely to happen and would require only
changes to local practice and the local rules in a district, Lawless said.

Publicizing this report and encouraging bankruptcy attorneys, trustees and judges
to take a look at their data is one way to get changes made to those standing orders,
Foohey said. Judges write those standing orders and they are more likely to give the
data consideration and change those orders, she said.

New Requirements for Ch. 13 Plans

The requirements for confirmation of Chapter 13 plans could also be modified to include
a condition that the plan must make a substantial repayment to creditors, Foohey said.
This would be the least likely revision to happen because it involves a substantial
change to the Bankruptcy Code, she said.

Under this proposal, bankruptcy judges could set a standard for “substantial” that
takes into account the debtor’s circumstances. The “substantial” requirement might
eliminate “fee only” Chapter 13 plans.

This change isn’t meant to “rule out the ability to do ‘fee only’ plans, but attorneys
should be aware that they will be targeted for more judicial scrutiny,”
Foohey said.

To contact the reporter on this story: Diane Davis in Washington at
DDavis@bna.com

To contact the editor responsible for this story:
Jay Horowitz at
JHorowitz@bna.com

More millennials grappling with high debt loads, says bankruptcy trustee

Rob Kilner gets a lot of visits from cash-strapped millennials. The Barrie, Ont.-based licensed insolvency trustee says there’s been a decided uptick – 20 per cent over the past five years – in the number of twenty- and thirtysomethings who are seeking solutions to their debt woes.

Many are homeowners.

“I’m seeing more and more [millennials]. It’s a substantial increase. Every time you see a millennial walk into your office – it’s disturbing,” he says.

Part of the problem, Mr. Kilner says, is how easy it is to borrow money these days. Credit cards are all-too-easy to obtain, and payday loans are just a click away. Those issues, combined with a lack of financial education and soaring housing costs, are laying the groundwork for a troublesome financial future, he says.

Millennials with part-time or contract work: We want to hear from you

Our tool: Is your mortgage leaving you house poor?

Research highlights this trend. Thirty-one per cent of millennial respondents feel it’s not a “big deal” if they carry a balance on their credit cards, according to a November, 2016, survey by Manulife Financial. The survey also showed that millennial homeowners, those between ages 20 and 34, report the lowest median amount of emergency funds among those surveyed at just $3,500.

According to the Bank of Canada, the steady inc rease in the country’s household debt has been driven by highly indebted households under the age of 45, which doubled to 8 per cent of all indebted households in 2012-14 from 4 per cent in 2005-07.

Mr. Kilner says the bulk of his younger clients come in after they have defaulted on a high-interest loan on a vehicle or on a payday loan. “Millennials are very susceptible to that – because theyve grown up [with debt].”

Although the Office of the Superintendent of Bankruptcy Canada doesn’t track millennials specifically, there was a 4.4-per-cent jump in the number of consumer debt-settlement proposals to creditors. Such appeals are made as a last resort before being forced to file for personal bankruptcy. Across Canada, that number increased to 125,907 proposals in September, 2015, from 120,261 a year earlier.

Trevor Pringle, a licensed insolvency trustee with Hamilton-based Spergel, says his clients typically have high levels of credit-card debt and student loans.

“People more readily carry debt,” says Mr. Pringle.

“The credit card companies grant them the credit cards, and they use them and they don’t have the means to pay them back,” he says. “They also have student loans that are not dischargeable, which complicates their situation,” he says, in reference to debts that are not eliminated by declaring bankruptcy.

Home buying: a whole new layer of debt

Dave Bryant, a Toronto-based mortgage broker, spends a lot of his time talking millennials out of buying homes. “It has cost me business,” he admits.

He says most of his younger clients have between $20,000 and $30,000 in student debt, have low-paying jobs or work on commission – which means their earnings can vary wildly year to year.

But despite being laden down with debt, many still aspire to home ownership. “Most millennials are looking to buy the preconstruction condos,” says Mr. Bryant, following the advice of a realtor who tells them it’s a good investment plan. Armed with a down payment from their parents, they then apply for a letter of preapproval for a mortgage.

And that’s where they run into trouble, he says.

“You actually have to qualify for that letter of pre-approval,” says Mr. Bryant, something that can’t happen if a person has only worked for six months to a year – a category many millennials fall into.

Plus, “they need to create that credit file,” says Mr. Bryant, adding that millennials need to demonstrate they have a solid credit history with a card of their own – not a joint account with a parent. He suggests establishing good credit by putting small purchases consistently on a credit card – and paying them off entirely each month.

Mr. Bryant also counsels millennials to pay their debt off before taking on the financial burden of a condo or house. “You need to pay that down,” he says. “[Debt from student assistance programs] is not going to go away.”

For those millennials who have taken the plunge and bought a home recently, the debt can quickly become insurmountable. “If we see a millennial and home owner -and they’re bought recently – these loans are very high,” says Mr. Kilner. “To own a house right now, there’s a very high mortgage. And the income stream hasn’t kept pace.”

He says many millennials are spending over half their take-home income on mortgages. But they still have to cover utilities, living expenses and food. That’s where the Visas and MasterCards come in. “They end up living off credit,” says Mr. Kilner.

Click here to see if you can afford a mortgage, and the rest of your real life expenses.

Mr. Pringle says that although he does see clients who are house-poor, “one of the reasons people have been able to avoid insolvency is that they’ve been able to leverage their equity in their houses with rising house prices.”

That situation likely won’t last. “At some point down the road, they’re going to be in a situation where house prices aren’t rising and they won’t be able to leverage that equity and they’re going to have to deal with it,” says Mr. Pringle.

Mr. Kilner is bracing for more clients when interest rates rise. Right now, he sees six to seven millennials a month – up from one every six months just a few years ago – who come in to file a consumer proposal, an appeal to creditors, or file for bankruptcy.

“As interest rates start to increase, that’s when we will see a lot more losing their houses,” he says.

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Anita Burroughs: Winners and losers in new health plan

Lets look at the winners.

This group includes young people who can stay on their parents policies until they are 26. This is a good thing in a region where so many people are working two or even three jobs to survive. And the AARP estimates that Americans ages 20-29 will save $700-$4,000 per year on their health insurance, also a positive development.

The losers in this new plan in our community include the elderly, as the new plan allows the insurance companies to charge these individuals at a higher rate. Older people will now pay approximately five times what younger people pay, rendering insurance out of reach for many seniors.

Lower-income individuals in our valley who rely on Medicaid will be in serious jeopardy, as this bill would end Medicaid as we currently know it. This includes children, who might have no recourse in the event of a serious illness.

The winners in the new health plan will be the wealthy, as health care tax credits will no longer be based on income. The new plan will make a priority of repealing substantially all the tax increases in Obamacare, most of which fall on people who make over $200,000 a year

Cancer is the largest cause of personal bankruptcy in our country for working Americans. The out of pocket (after insurance) costs to treat cancer can exceed $50,000-$100,000 per year, which will be prohibitive for those with or without insurance.

Another issue that has not gotten much attention in the media is that without health insurance, more and more people will be using their local hospitals emergency room for their medical care. This means that the cost of uninsured patients in our valley will shift to Memorial Hospital, which could over time seriously jeopardize this valued institutions financial viability. It also means that an abdominal cat scan with contrast, with an actual cost of approximately $295 to the hospital, will cost patients thousands of dollars.

In New Hampshire, the cost to the patient for this procedure ranges from $750 to $2,200. This is because community hospitals such as Memorial will be forced to subsidize the healthcare of those individuals who cannot afford insurance or who are unable or unwilling to pay their bill.

Lets for a moment forget about which side of the aisle you sit on … Democrat or Republican. Lets think about how our choices about health care will impact our neighbors, the elderly, the disabled, our children and our local hospital. This is a choice that will impact thousands of individuals in our own backyard. We are hopeful that there will be a consensus as to the importance of looking out for those of us who rely on affordable health insurance to live full and healthy lives.

Leonissa Langbehn-Abraham, North Conway
Anita Burroughs, Glen
Tom Dean, North Conway
Brenda Donnelly, Conway
Karla Ficker, Fryeburg
Suzie Laskin, Chatham
Stephanie Macomber, Conway
Virginia Moore, Conway
Sandi Poor, Jackson
Denise Sachse, Jackson
Allan Stam, Jr., MD, Jackson
Kathleen Stam, Jackson
Bert Weiss, Chatham

Credit Coach: Debunking some of the myths of personal bankruptcy

Debunking Some of the Myths of Personal Bankruptcy

Recently I wrote about the personal assignment in bankruptcy as a last-resort option for individuals facing an unsolvable debt situation. In this article I would like to write about some of the common misconceptions about filing a bankruptcy I hear day to day. Hopefully, debunking a few of these myths will remove the fears for those individuals who are afraid of the unknown and hesitant to reach out for help.

Myth: If I claim bankruptcy my credit rating will be ruined for seven years.

This is a common misconception about bankruptcy. When an individual files a personal bankruptcy they will work through what is usually a 9 to 21 month process. At the end of that time period, the process is usually complete. You will be discharged from the bankruptcy and likely most if not all your debt will be eliminated. The bankruptcy will appear in your credit file for several years after the date of discharge, however, once you have your discharge you can begin taking steps to repair your credit rating. There are a number of steps you can take to rebuild your credit. For example, a secured credit card is offered by many financial institutions for people in a bankruptcy or recently discharged. A secured credit card provides the flexibility, online security and convenience of a traditional credit card — the difference is that a secured card usually requires you to make a cash deposit up front which will be equal to your credit limit.

Myth: If I claim bankruptcy, I will lose all my assets.

As a Licensed Insolvency Trustee (LIT), I hear this common fear quite often. When you file a bankruptcy your property (or assets) do become subject to a seizure and sale. This means that your ownership in your assets basically transfers to the LIT, who will sell your assets and give the proceeds to your creditors. However, some assets are exempt, meaning you’ll be allowed to keep some of your possessions. The Bankruptcy and Insolvency Act has specific provisions — and most provinces have legislation — which exempts certain property from being seized.

The list of exemptions in Ontario includes one vehicle up to $6,600, all your clothing, and household furnishings, food and fuel valued up to $13,500. Exemptions exist for a portion of your RRSPs, pension funds, equity in your home, and tools of your trade. During your initial consultation, an LIT will review your assets and tell you more about what will happen with your property if you file a bankruptcy.

Myth: If I claim bankruptcy, my spouse, partner or family will affected

The answer to this question is not a simple one. In most cases, the answer is no, your spouse in not affected by your filing of a bankruptcy. Your credit rating, your assets that are in your name and your debts are what is largely in play. Your spouse’s property and credit rating are separate. However, the answer to this question can get difficult if you and your spouse have jointly-held property or have co-signed and/or co-mingled your debts. In this case, your best course of action is to speak to an LIT to determine what, if any, financial effect your bankruptcy will have on your spouse.

Myth: If I claim bankruptcy, everyone will know about it.

It is true that the filing of a bankruptcy is a matter of public record — it is registered with the federal government and sometimes the courts. However, bankruptcy is generally a relatively private action with little to no general public (mom and dad) knowledge. For the majority of bankruptcy filings, there is no requirement to put any notice in the newspaper. (A small number of bankruptcies require that the LIT advertises a meeting of creditors.) Can people find out that you filed for bankruptcy? Yes. Does the LIT have to share notice of your bankruptcy filing with your creditors? Yes. But we do not make up t-shirts and hats to hand out at the mall, disclosing the names and faces of the debtors we help on a daily basis.

There are many myths about filing an assignment in bankruptcy. That’s why it’s important to arm yourself with some knowledge about all debt solutions, including bankruptcy. The Office of the Superintendent of Bankruptcy (OSB) website offers a good, easy- to-understand overview of the bankruptcy process and the role of an LIT. I ask you please not to stew on something you heard from a friend who has a friend that had a pet dog that had to file bankruptcy and they said….well you know how that goes.

Jayson Stoppel is a Licensed Insolvency Trustee and Chartered Accountant with BDO First Call Debt Solutions. With over 15 years in practice, Jayson assists individuals, families and companies with financial difficulties in Thunder Bay and throughout Northwest Ontario. To reach Jayson by email: JStoppel@BDO.ca

Owner of The Gun Store in Las Vegas loses control of business, files for bankruptcy

The Gun Store offers shooting packages, including a wedding ceremony in its chapel, with five shotgun blasts each by the newlyweds, and a “Vegas VIP” option at almost $1,000 per person that lets customers shoot submachine guns, a sniper rifle, an AK-47 and more.

And, since nothing says Vegas like heavily armed, scantily clad women, bestbachelorpartylasvegas.com has images of a barely dressed blonde with a handgun, an ammo bandolier and a belt buckle with The Gun Store’s logo, as well as a photo gallery that includes a porn star in a Gun Store shirt.

“Do you love beautiful woman (sic) and guns? Check out these photos of our Gun Store girls,” the site says.

The Gun Store used to be the only tourist-focused shooting range in town, Irwin said. The Review-Journal reported in early 2012 that its ads were “commonplace” at McCarran International Airport, on taxicabs and on billboards “anywhere tourists queue outdoors.” But more options were on the way, as eight other machine-gun ranges reportedly had opened by the end of that year.

Competitors include The Range 702, Machine Guns Vegas and Strip Gun Club. Overall, Irwin said last week, competition had sliced The Gun Store’s foot traffic “basically in half.”

He expanded his range from 12 lanes to 30 — or 36 “if you count the wedding chapel” — and constructed a new building for it. Las Vegas-based Meadows Bank financed the project, he said.

Irwin, however, filed bankruptcy protection for The Gun Store in summer 2015. He claimed $4.2 million in liabilities, and his listed creditors included banks, ammunition vendors, a bookkeeper, a cleaning-products supplier, and media companies (including the Review-Journal, which had a $4,811.83 claim for newspaper advertising).

In summer 2016, his lender Bank of America filed court papers alleging the business “appears to be consistently operating at a significant loss” and “cannot establish a reasonable likelihood of rehabilitation within a reasonable time.”

The next day, the lender sued Irwin, the store, Meadows and others in Clark County District Court. Bank of America alleged that its loans were unpaid or in default and that The Gun Store was “insolvent” or in “imminent danger” of it.

‘PICK OVER THE SPOILS’

A federal judge in September approved the bank’s request to dismiss the bankruptcy, clearing the way for its lawsuit to move ahead. Irwin’s attorney argued that no receiver was needed, but a judge disagreed, appointing Melech in January to take charge of the store and liquidate its assets.

Irwin filed for personal bankruptcy last month, claiming some $255,000 in assets and $3.4 million in liabilities. The debts were largely business-related, he indicated to the RJ.

Irwin said he looked into merging with other gun ranges over the past year and a half but found that “friendly competitors wanted to pick over the spoils.” He also said that Meadows had been “incredibly cooperative with us” and that Bank of America wanted to show it “can grind me into the dirt.”

In a statement, Bank of America spokeswoman Colleen Haggerty said: “We want every business client to succeed. That’s why, if a company unfortunately decides they need to file bankruptcy, we dedicate a team to work with them and try to find solutions to stay in business.”

Meadows CEO Arvind Menon declined to comment, citing ongoing litigation.

Irwin’s office is in the building at 2950 E. Tropicana Ave., the one that got hit with graffiti. Melech said that 2950 is being closed and that the store’s operations are all based in 2900.

Irwin said he has no plans to open another gun shop, though as he sees it, his former business would “lose something if I’m gone completely.”

The Gun Store’s website still talks about Irwin, and on a recent visit, the property had a banner outside for his radio show.

“I’m still the face of The Gun Store,” he said.

The face, perhaps, but not the boss. And while speaking with the Review-Journal in his office last week, a creditor called, something he says happens daily.

“That’s my life now,” he said.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

Owners of Bartolotta Fireworks file for bankruptcy, but business will continue

The president and co-owner of Bartolotta Fireworks has sought personal bankruptcy protection, and the company is becoming part of Wolverine Fireworks.

The Delafield-based fireworks business, which is not affiliated with The Bartolotta Restaurant Group in Milwaukee, says it’s still in operation and is booking shows for this year, including Milwaukee’s Summerfest.

Third-generation, family-owned Bartolotta Fireworks does hundreds of events a year in Wisconsin and elsewhere in the Upper Midwest. The business was started in 1977, but traces its roots to the 1930s when founder Sam Bartolotta developed a passion for pyrotechnics.

4 from Central Texas among victims of Melbourne plane crash

Four victims of a plane crash in Melbourne, Australia are from Central Texas.

Public records list Russell Munsch and Greg DeHaven as residents of Spicewood. Glenn Garland lives in a gated community along the Barton Creek Greenbelt in West Austin. The fourth victim, 67-year-old John Washburn, was the president of the Barton Creek Lakeside board.

Munsch was a co-founder of law firm Munsch Hardt Kopf amp; Harr, PC The firm released a statement on Tuesday morning:

It is with great sadness that we inform you our dear friend, colleague, and co-founder Russ Munsch passed away in a tragic plane crash in Melbourne, Australia yesterday. Russ was enjoying retirement, and doing what he loved almost more than practicing law – playing golf. Russ was a lawyer’s lawyer; one of the best of all time. During his nearly 40-year career, he worked on high-profile bankruptcy cases including Enron Corporation, Coho Energy Corporation, Northwest Airlines, and as bankruptcy counsel to Nelson Bunker Hunt in what is still considered the largest personal bankruptcy proceeding in history. Russ was a loving husband, father and friend, and he will be dearly missed. Until we learn more, we ask that you keep Russ’s family in your thoughts and prayers.

Business partner, David Mattka said Munsch was a multi-talented guy and one of the smartest and hardest working people he knew. Although semi-retired, Munsch continued to mentor young lawyers and began a non-profit, The First Tee of Greater Austin.

A good friend of mine says, we arent here for a long time; we are here for a good time. And, I think Russ had a good time, said Mattka.

Mattka said Munsch leaves behind a wife and a daughter, as well as countless friends.

DeHavens sister Denelle Wicht posted on Facebook that her 70-year-old brother had been killed on a once in a lifetime trip to Australia with friends.

Glenn Garland was one of the founders in 2003 of CLEAResult and served as chief executive before retiring in 2015.

The Associated Press reports the group was on a golfing vacation when their private plane crashed in flames into a shopping mall on Tuesday shortly after takeoff in the Australian city of Melbourne.

The five were on a twin-engine Beechcraft Super King Air that crashed about 45 minutes before the Direct Factory Outlet mall in suburban Essendon was to open, Police Minister Lisa Neville said.

The pilot was Max Quartermain, owner of the charter company Corporate and Leisure Travel.

The plane had taken off from Melbournes second-biggest airport at Essendon for a golfing trip to King Island, 255 kilometers (160 miles) to the south, officials said.

The mall adjoins the airport.

Police Assistant Commissioner Stephen Leane said no one outside the plane was injured.

Looking at the fireball, it is incredibly lucky that no one was at the back of those stores or in the car park of the stores, that no one was even hurt, Leane said.

The pilot reported a catastrophic engine failure moments before the plane crashed into a storage area at the rear of the mall, police said.

Police and paramedics rushed to the crash site, where firefighters doused the flames.

A witness who gave his name as Jason told Australian Broadcasting Corp. he was passing the mall in a taxi when the plane crashed.

I saw this plane coming in really low and fast. I couldnt see the impact but when it hit the building there was a massive fireball, he said.

I could feel the heat through the window of the taxi, and then a wheel — it looked like a plane wheel — bounced on the road and hit the front of the taxi as we were driving along, he said.

The Associated Press contributed to this report.

Plane crash victim a prominent US bankruptcy attorney

AUSTIN, Texas gt;gt; The Latest on a plane crash in Australia that killed the Australian pilot and four American tourists (all times local):

9:45 am

A Texas law firm has confirmed that one of five men killed in a plane crash in Australia was a founding partner who litigated some of the most prominent bankruptcy cases in the US

Munsch Hardt said in a statement that Russell Munsch had retired but was “one of the best of all time.”

Munsch died Tuesday when a light plane in which he was a passenger crashed into a shopping mall shortly after takeoff in the city of Melbourne.

The firm said Tuesday that Munsch was involved in the 2001 bankruptcy proceedings for Houston-based Enron Corp., one of the largest energy companies in the world before its collapse.

He also counseled Nelson Bunker Hunt, the oil tycoon whose financial dealings led to what’s considered the largest personal bankruptcy proceeding in history.

A light plane carrying five people crashed into a shopping mall on Tuesday in the city of Melbourne, officials said.

There were no immediate reports of causalities, but the twin-engine Beechcraft Super King Air crashed about 45 minutes before the Direct Factory Outlet mall in suburban Essendon was to open, Police Minister Lisa Neville said.

The plane had taken off from Melbourne’s second-biggest airport at Essendon on a chartered flight to King Island, 255 kilometers (160 miles) to the south, Neville said.

The mall adjoins the airport.

Police Superintendent Mick Fruen said a pilot reported a “catastrophic engine failure” moments before the plane crashed into a storage area at the rear of the mall.

Police and paramedics rushed to the crash site, where firefighters doused the flames.