New Bankruptcy Rules may become effective December 1.

It is expected that the U.S. Supreme Court will adopt proposed amendments to the Federal Rules of Bankruptcy Procedure, and order that they be transmitted to Congress. If Congress takes no action, these amendments will become effective December 1, 2002.

The most significant changes will be new rules concerning the necessity of evidentiary hearings and the calling of witnesses. A summary of the proposed amendments to the bankruptcy rules follows.

Rule 1004. Rule 1004 deals with bankruptcy petitions concerning a partnership. Section 303(b)(3)(A) of the Bankruptcy Code provides that fewer than all of the general partners may commence an involuntary case against a partnership. There is no counterpart provision in the Bankruptcy Code that proscribes the manner in which a partnership commences a voluntary case. The Supreme Court has held that applicable non-bankruptcy law determines whether authority exists for a corporate debtor to commence a bankruptcy case. See Price v. Gurney, 324 U.S. 100, 107, 65 S.Ct. 513, 517 (1945). This holding has since been applied to partnerships. See, e.g., Jolly v. Pittore, 170 B.R. 793, 797 (S.D.N.Y 1994). As presently written, Rule 1004(a) requires the consent of all of the general partners to the filing of a voluntary petition, even if fewer than all would have the authority under applicable nonbankruptcy law to commence a bankruptcy case for the partnership. Since this is a matter of substantive law beyond the scope of t he Bankruptcy Rules, Rule 1004(a) will be deleted as will be the designation of subdivision (b), and the rule will be recaptioned to reflect that it applies only to involuntary petitions field against partnerships. Rule 1004 will, therefore, no longer be able to be construed as setting some substantive standard for the commencement of a voluntary case by a partnership.

Rule 1004.1. Rule 1004.1 will be added to set out the manner in which a case is commenced or prosecuted on behalf of certain debtors. Rule 1004.1 is derived from Fed. R. Civ. P. 17(c) and will recognize that an appointed representative may file a voluntary bankruptcy petition on behalf of an infant or incompetent person.

Rule 2004. Rule 2004 allows parties to engage in discovery before an adversary proceeding is commenced. Rule 2004(c) will be amended to clarify that an examination ordered under that rule may be held outside of the district in which the case is pending. The court where the deposition will be held, not the court where the bankruptcy case is pending, shall be named at the top of the subpoena, and the subpoena must be served in the manner provided in F.R.Civ.P. 45 made applicable by Rule 9016. Moreover, Rule 2004(c) will make plain that an attorney authorized to practice in the court in which the case is pending may issue and sign the subpoena on behalf of the court for the district in which the examination will be held. This provision supplements the procedures for the issuance of a subpoena set forth in Fed. R. Civ. P. 45(a)(3)(A), and is consistent with one of the purposes of the 1991 amendments to Rule 45: to ease the burdens of inter-district law practice.

Rule 2015. Rule 2015 delineates who is responsible to keep records, to make reports and to give notice. Rule 2015(a)(5) will be amended to clarify that the duty in a ...