DEBTOR - CREDITOR LAW

Tom Hoffman

Fall, 1994 Exam

1. Ernie Johnson recently passed the bar sum and obtained employment as an associate attorney in a large law firm in St. Paul, Minnesota. Ernie was asked by his supervising attorney, Gretchen Olson, to assist her in representing one of her best clients, C&K Trucking Company, in a number of debtor-creditor matters. Ernie picked up the following files from Gretchen:

File 1: C&K obtained a judgment against Tom Jackson, doing business as Torn's Tubas, on July 1, 1994 in Dakota County. Ernie notices in a memorandum in the file that another creditor, A&B, Inc. obtained a judgment against "Tom's Tubas" on July 15, 1994. (Ernie is not sure which county A&B obtained its judgment). Ernie also finds the transcript of a judgment of Hughes Microphones against Tom Jackson in Hennepin County dated September 28, 1982. Ernie further notices in an interoffice memorandum that Torn Jackson also has non-exempt real estate in Hennepin County. Ernie wants to levy on Tom Jackson's assets, including personal and real property. Briefly describe the steps Ernie should take to levy on Tom Jackson's assets. Also, briefly discuss priority issues Ernie might encounter with other creditors of Tom Jackson. (15 points)

File 2: Miller Companies has a judgment against Pat Chamberlain, an employee of C&K. Miller Companies mailed a garnishment disclosure form, and no other documents, to C&K. C&K wants to know how it should respond to Miller Companies. C&K also wants to know what it should do if it subsequently receives all of the statutorily required garnishment documents from Miller Companies (i.e., what are the garnishee's duties). Briefly discuss your advice to C&K. (15 points)

File 3: C&K has a judgment against Leon Carpeteur for $4,500.00. C&K knows that Leon has a bank account at Last State Bank. What steps should Ernie take to garnish or levy on Leon's funds in this bank account at Last State Bank? Also, which remedy should Ernie choose to "grab the cash" at the Bank? (15 points)

File 4: C&K recently served Shih Tzu Pot Farms, Inc. ("STPF") with a Summons and Complaint to collect $40,000.00. C&K was recently told by a "reliable informer that STPF was loading up its assets to move to Iowa because their creditors were harassing them too much. Gretchen wants a brief memorandum on all constitutional issues which C&K might encounter in proceeding with a pre-judgment seizure. Which remedy should C&K initiate, if any? Briefly discuss all issues relating to the STPF file. (15 points)

File 5: C&K recently told Ernie that it wanted a junkyard lawyer to send a tough dunning letter to a deadbeat account and to call and harass this deadbeat until they pay. What issues should Ernie be aware before he sends out his demand letter and makes his phone calls? (15 points)

2. Norma realized that she might have to file a petition in bankruptcy in the district of Minnesota because her business fortunes recently turned sour. Norma comes to you for advice on how to protect her personal assets. Norma tells you that she would like to sell her lake cabin and give the money to her sister. She also wants to sell her coin collection and other personal property and pay off a $250,000 debt secured by a valid mortgage on her home, currently valued at $300,000. Norma also has a $300,000 IRA (Norma is 38 and in good health) and a $20,000.00 motorcycle. Discuss all issues which you should raise with Norma. (15 points)

3. You represent Doug, a paralegal who makes $2000 per week. Doug has had his wages garnished in Grand Rapids, Minnesota. Assume that the minimum wage is $4.25 per hour. How much should Doug's employer withhold on a wage garnishment? Show all relevant calculations. (10 points)