U.S. Bankruptcy Judge Christopher Sontchi may not be ready for a bathrobe in pandemic work-from-home style yet, but his black judge’s robe is gone.
When he and his colleagues in one of the nation’s three busiest corporate bankruptcy venues switched to video hearings, they adopted a more informal approach that doesn’t include their tradition-bound courtroom attire.
“The judges all talked about it and we decided that was unnecessary and sort of silly if you are at home,” Sontchi said in an interview.
Dispensing with formalities is just one of many coping mechanisms deployed by the U.S. bankruptcy system during the coronavirus pandemic.
Judges across the country have pushed off non-urgent cases and big law firms are gearing up for a wave of multibillion-dollar cases. The U.S. Trustee, which oversees the bankruptcy system, has canceled tens of thousands of in-person meetings between debtors and creditors, installed 1,200 new conference lines and added 250 attorneys to specialize in small-business cases.
The result, say those in charge, is a system that is more prepared today than it was during the last major default crisis that pushed so many consumers and companies into bankruptcy after the 2008 financial crash.
“I think we are better positioned to deal with the roller coaster today than we were years ago,” said U.S. Trustee Clifford White, who oversees 360 government attorneys who are vital to helping consumers and businesses navigate the bankruptcy courts. “We have learned from experience.”
While big, corporate reorganization cases ticked up in March compared with a year earlier, overall, fewer businesses and consumers filed for court protection that month, according to the American Bankruptcy Institute. The dip in smaller cases will likely reverse itself in the coming months, said ABI Executive Director Amy Quackenboss.
Lawyers Vetted
Because of a bankruptcy law change, small business cases had been expected to rise even before the current economic turmoil, leading White’s office last year to vet about 250 new lawyers to help handle a surge of filings.