Going broke? Join the crowd

One of the few places in Michigan where business is booming these days is the United States Bankruptcy Court for the Eastern District of Michigan.

The court led the nation in filings for six consecutive quarters since the beginning of 2006 through the end of June this year, Chief Judge Steven Rhodes reported in his "State of the Court" address yesterday.

In a 12-month period ending in June, the court had 31,744 filings.

And the court's judges are working harder than most. Rhodes said his court's judges have a weighted caseload of 3,169 each, compared with a national average of 946.

"Stated another way, in order for us to have the average judge's case load, we would need 16.4 bankruptcy judges in our district!" exclaimed Rhodes.

Help is on the way. Rhodes said he doesn't want to be greedy, so he's asked for three more judges. The Judicial Conference of the United States has signed off on the request, congressional support looks good, and federal administrators have told Rhodes to start looking for a place to put the new judges.

On a dour note, Rhodes said Chapter 7 debtors need to be more forthcoming about disclosing administered assets. Thirty-seven percent are not "fessing up" to all that they have.

Rhodes said proposed amendments to the court's local rules, if adopted, will give trustees and the U.S. Attorney's Office more muscle power to enforce asset disclosure rules.

"[O]ne of our new proposed local rules would require the trustee to file a report whenever the trustee discovers an undisclosed asset after the debtor testifies at the meeting of creditors that the schedules are accurate. Another ... would require the debtor to provide additional documents at the meeting of creditors," Rhodes explained.

Who will replace Whitbeck as COA chief?

True to his word, Michigan Court of Appeals (COA) Judge William C. Whitbeck is stepping down from his post as the court's chief judge at the end of the year, according to a Michigan Information & Research Service (MIRS) report.

Judge Whitbeck is on the last leg of a third, two-year term, and, MIRS reports, he announced a while back that he wasn't going to seek a fourth term as the COA's top administrator.

Last April, Michigan Supreme Court Chief Justice Clifford Taylor asserted that the COA had four too many judges. When the State Court Administrative Office (SCAO) released recommendations in August that backed Taylor's position, Whitbeck debunked the report in a sharply worded memo addressed to the rest of the COA judges.

The Michigan Supreme Court appoints chief judges for all of the lower courts, including the COA. Given Whitbeck's outspoken opposition to reducing the number of COA judges, even if he wanted a fourth term, Taylor, if he were of a mind to do it, could probably find three other votes on the high court to give the job to someone else.

MIRS says four COA judges have asked to be considered for the chief judge position. They are Pat M. Donofrio, Donald S. Owens, Henry William Saad and Michael J. Talbot.

Those of you interested in handicapping this horse race might consider this: when the COA released an initial position paper that urged the MSC to reject the SCAO's recommendation to cut four judges, Donofrio is the only one of the four chief judge candidates who signed a dissenting statement, which counseled that the COA should neither support nor oppose the SCAO recommendation.

We're not discretionary

What do cable or satellite television, sports and concert tickets, car repair, golf greens fees, marina fees, movies, and hair cuts have in common with legal fees?

These are among the services that won't be subject to Michigan's 6 percent sales tax.

The exemptions were part of some last-minute negotiations that helped push through a budget deal much earlier today to avoid a state shutdown.

But services such as bail bonding, bondspersons, consulting and lobbying, private investigators, couriers and messengers, and document preparation will get hit with the state sales tax.

According to an Associated Press report, state Treasurer Robert Kleine explained that "[e]xtending the sales tax to some services starting Dec. 1 would bring in an estimated $614 million for the 10 months remaining in the fiscal year at that point, or about $750 million annually."

So, why were some services hit with the sales tax and not others?

A quick look at a partial list of what's being taxed and what isn't might leave you scratching your head.

The AP offered this explanation, attributable to Kleine: "The tax is designed to apply to services that people don't have to use if they want to avoid the tax."

The Detroit News had this take from Kleine: "lawmakers took care to skip services that are deemed unavoidable, such as plumbing and car repairs. 'It's discretionary only,' he said."

So, a lawyer's services are considered just as essential as getting that leaky faucet fixed or that gummed-up carburetor overhauled.

Good news for law firms and their clients.

But having the untaxed services of an attorney, plumber or mechanic is apparently just as vital as being able to watch The Weather Channel or teeing one up and smacking it straight down the fairway without the state taking a cut of the action.

Governor Jennifer Granholm and state lawmakers are keeping mum about this for now.

But a lot of explaining will need to be done later.