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Bankruptcy Courts Coping Amid Budget Reductions According to September ABI Journal Article

Alexandria, Va. — As with other government agencies, the U.S. court system has not been immune from the ongoing federal budget cuts. An article in the September edition of the ABI Journal discusses how bankruptcy courts are adjusting to the cuts by coming up with creative ways to share administrative services to ensure that cases continue to be administered efficiently. “Federal courts have shed a significant number of employees over the past few years such that staffing levels are at levels last seen in December 1999,” Alec Leddy writes in his article “A Year in Washington, D.C.: Helping Bankruptcy Courts through Unprecedented Reductions.” Leddy took a leave of absence from his job as a court clerk for the U.S. Bankruptcy Court for the District of Maine to serve for a year as a director’s resident at the Administrative Office of the U.S. Courts in D.C. During his time there, he was tasked with helping the 94 judicial districts develop “shared administrative services” (SAS) plans, which were mandated by the Judicial Conference of the U.S. (JCUS) in late 2012. Leddy writes that the courts will experience a total minimum reduction of 34-35 percent in funding between fiscal years 2012 and 2014. “In most – if not all – bankruptcy courts, it means buyouts, layoffs and furloughs,” according to Leddy. He said that the cuts, along with the JCUS mandate, are forcing courts across the country to reduce costs by sharing services. The SAS plans are to outline the efforts that the courts within each district have either already undertaken or would undertake to handle the reductions in their staffing levels, and they call for combining the delivery of administrative functions within their districts. Each district was tasked by the JCUS to develop its plan and submit it by Feb. 15, 2013. Leddy found that there was not a one-size-fits-all approach to developing these plans for each district. “[The court districts] often do things radically differently [from one another], despite the fact that, as is the case with bankruptcy courts, they are applying the same statutes.” For example, in Idaho, the Southern District of Texas, Western District of Missouri, the Northern Mariana Islands and the District of Columbia, the district and bankruptcy courts are consolidated, so there is no distinct bankruptcy clerk’s office. Because administrative services are “back of the house” functions, such as human resources, procurement, budget management and training, Leddy writes that clerks hope that the adjustments that the courts deliver in their SAS plans will go largely unnoticed by court users. “[It] is hoped that the changes will not erode what most clerks view as their primary function: maintaining the records and ensuring the smooth and orderly flow of cases through the courts,” Leddy writes. To obtain a copy of “A Year in Washington, D.C.: Helping Bankruptcy Courts through Unprecedented Reductions,” published in the September issue of the ABI Journal, please contact John Hartgen at 703-894-5935 or via email at jhartgen@abiworld.org. ### ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 13,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.