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Funding Lapse 2014

Fri, 09/27/2013 - 5:00am

Many attorneys practicing before the Bankruptcy Court have expressed concern over the uncertainty that exists with regard to a possible government shut-down and the impact it will have on you and your clients, debtor and creditor alike. While we are no better positioned to predict the outcome of votes in Congress to fund the government, the Court does want to share both what we do know and our plans. Congress has not yet passed a budget or a continuing resolution (CR) for fiscal year 2014 (which begins October 1).  If Congress fails to enact a CR by October 1, 2013 most federal agencies will have to shut down - save for essential operations. The Judiciary, however, will continue to operate for an estimated 10 business days (through approximately October 15, 2013) using available funds.  There are certain limitations to these operations; but parties and litigants will notice little change.

After the 10-day period, if there is still no budget or CR, the Bankruptcy Court will operate under the Anti-Deficiency Act, which allows "essential work" to continue despite the lapse in appropriations. The clerk and judges are developing a plan should this become reality. In the event of a lapse in funds beyond October 15 the court will implement a plan to continue the “exercise of the judicial power of the United States” and dispose of matters that “preserve life or property.” The plan will provide for the staffing necessary to perform essential functions, including accepting new cases and proceedings for filing and hearing cases and controversies where essential to protect property.

The United States trustee will separately issue a statement concerning meetings of creditors and other functions of that office at the appropriate time. If asked, the Court will assist the United States trustee in disseminating the statement.

David R. Duncan

Chief Judge