Bankruptcy court moves out of Danville

By SARAH ARKIN
Danville Register & Bee
Published: March 24, 2008

People from all over the area have historically counted on Danville for their federal judicial needs. Residents of four counties come to the U.S. Courthouse and Post Office Building on Main Street for District Court and Bankruptcy Court proceedings.

Last year, the government began to quietly shut down a service hundreds relied on, forcing people with little money to invest a lot of time and energy into declaring bankruptcy, according to local legal experts.

Most bankruptcy cases do not go to trial.

Instead, the U.S. Trustee Program facilitates an administrative hearing between debtors, creditors and their attorneys, also known as a 341 meeting.

The U.S. Trustee is an agency of the Department of Justice, which is ultimately responsible for securing meeting space for the 341 meeting.

Since the Danville Bankruptcy Court itself is only used once a week, 341 meetings, until recently, were held in the bankruptcy judge’s chambers when court wasn’t in session.

Typically, the U.S. Trustee used the space three or four days a month, and held between 8 and 10 meetings an hour, John Byrnes, assistant district trustee, said.

(The Trustee had been using the space free of charge for at least 30 years.)

DOWNSIZING

The United States Postal Service owns the building on Main Street and leases about 36 percent of the building to the U.S. General Services Administration (GSA), which administers the space for federal courts. District courts dealing with civil and criminal proceedings and federal probation and parole offices are on the second floor. Bankruptcy Court and the District Court clerk’s office are on the third.

About a year ago, the GSA informed the U.S. Trustee it could no longer use the courtroom for 341 meetings. Wanting to stay close, the trustees instead started holding 341 meetings in post office-owned rooms in the building.

Last summer, the GSA told the U.S. Trustee it would no longer be able to hold meetings in the building at all.

Local attorneys tried to figure out who actually owned the rooms, but hit a roadblock.

Amanda Freeman, a real estate specialist with the Postal Service, wrote in November that “all Federal Court space is arranged through the GSA.”

In a letter written in early January, Tony Tessenear, a field office manager from the GSA, wrote that the Postal Service maintained control over the rooms the U.S. Trustee was using.

A representative from the GSA in a written response last week said only that the GSA “has not received a request for additional space from the U.S. Bankruptcy Court nor a request for space from the U.S. Trustee,” but did not address space previously used.

Complaints reached Congressman Virgil Goode, who opposes stopping services.

“…Citizens are right to think they should be able to use space in a public building for federal judicial matters such as a meeting with the U.S. Trustee,” Goode, R-5th, wrote in a letter to a government representative of the Postal Service.

WHERE THE TRUSTEES WENT

After he learned trustees couldn’t use the building on Main Street, Byrnes led a search for other suitable venues in Danville.

One space considered was the Danville Regional Airport’s conference room. Director of Transportation Marc Adelman offered a maximum rental rate of $50 per day. But the Justice Department wasn’t interested.

For the past year or so, the creditor meetings have been taking place in Roanoke. Debtors, creditors and their attorneys from Pittsylvania, Patrick, Henry and Halifax counties have been affected.

With gas prices on a seemingly constant rise and wages deducted from time away from work, a three-hour haul for a 10-minute bankruptcy consultation amounts to a lot of frustration.

“No doubt about it,” Byrnes said, “it’s really inconvenient for the debtors and their attorneys.” But he added that the Justice Department isn’t budgeted for more than the building in Roanoke.

For Goode, that’s just the problem.

“The issue,” he said, “is two rooms in (the building) and whether the Department of Justice will pay $280 a month so people in Danville don’t have to drive to Roanoke.”

Contact Sarah Arkin at or (434) 791-7983.