The National Conference of Bankruptcy Judges, formerly known as the National Association of Referees in Bankruptcy, turns 90 this year. It was formed in 1926.
In 1920 Referee Herbert M. Bierce of Winona, Minnesota became concerned that support in Congress could develop to repeal the Bankruptcy Act of 1898. He thought about forming an organization of Referees in Bankruptcy. Referee Bierce heard that Referee Paul H. King of the Eastern District of Michigan was “a man of personal magnetism, high ideals and splendid organizing ability.” In 1923, he wrote Referee King about the concept of forming an organization for Referees in Bankruptcy. Referee King was interested. At the time, there was no centralized list of Referees in Bankruptcy. Referee King compiled a list by contacting each of the Clerks of Court across the county, which showed there were approximately 535 active Referees in Bankruptcy in the continental United States. For many years, Referee Bierce maintained the only reasonably accurate roster of referees in the country. He estimates there were as many as 800 referees earlier in the century.
Referee King then wrote a letter to each Referee in Bankruptcy in the country inquiring as to their interest in forming a national organization of referees. He received a positive response. Referee Bierce recounts what happened next:
“Late in the Spring of 1925 a Rotary district conference was held at Hibbing, Minn., on the ‘Iron Range’, which Mr. King attended as the representative of Rotary International. There I met him. We discussed pushing the organization, with a meeting to be held in Detroit. He readily agreed to undertake the detailed task and to so proceed. He secured the cooperation of the Michigan and Detroit Bar Associations and the Detroit Lawyers Club all of which appointed committees to assist him. His ‘boss’, U S. District Judge Arthur J. Tuttle, who shared the federal judicial work in the Eastern District of Michigan with, now, Circuit Judge Charles C. Simons, was enthusiastic for the movement. Both judges were very proud of the Detroit bankruptcy court organization and were anxious that its virtues be made known. The Book-Cadillac, a new edifice in place of a smaller popular hostelry, was selected as headquarters and July 9th and 10th, 1926, Friday and Saturday, were chosen as dates. Mr. King issued the call and continued, by one method or another, to secure pledges of attendance. As soon as a Referee indicated his intention to attend, Mr. King made this intention certain by drafting such Referee to participate in the program. Thus he early built up an interesting program, as the idea worked admirably.”
In July 1926, a conference of bankruptcy referees from across the nation was held at Detroit’s Book Cadillac Hotel, organized by Referee King. Eighty-two referees from 24 states and the District of Columbia attended. There were The National Association of Referees in Bankruptcy (NARB) “was organized July 9, 1926, when, on motion of Referee J. F Hendricks, Doylestown, N.Y., seconded by many, it was unanimously decided to form a permanent organization ‘even though the Referees would not necessarily be permanently in office.'”
Paul H. King was elected the first President. Referee Watson B. Adair of Pittsburgh was elected Vice President. Referee Herbert M. Bierce of Winona, Minnesota was elected Secretary-Treasurer and became the first Editor of the Journal of the National Association of Referees in Bankruptcy. A Board of Directors was elected, one member from each of the nine regional circuits then in existence. Four committees were formed: Ethics, Legislation, Resolutions, and Uniformity of Practice. Membership on each committee consisted of one member judge from each of the nine circuits.
This is an excerpt of an article published in December, 1926, in the first issue of the first volume of the Journal of the National Association of Referees in Bankruptcy about NARB’s formation at Detroit’s Book Cadillac Hotel:
[click on the article to enlarge it]
Until the formation of NARB, the more than five hundred bankruptcy referees serving nationwide in 84 judicial districts were mostly isolated within their respective districts. There were no uniform practices. Referees were criticized as being inefficient, having conflicts of interest, and disproportionately paying estate assets for costs of administering the estate. Prominent law firms did not practice in the bankruptcy arena dominated by small cliques of attorneys and other professionals. Referees, appointed by district courts for two-year renewable terms, served a judicial function and administered the estate, and routinely had ex parte communications. Decisions of bankruptcy referees were not reported.
It was in this environment that the National Association of Referees in Bankruptcy was formed. Initially, NARB’s principal goals were to work towards the adoption of at least some uniform practices, formulate administrative practices to improve efficiency, foster communication among referees, establish ethical guidelines, and improve the public’s perception of bankruptcy. Toward these ends, NARB began publishing a Journal called the Journal of the National Association of Referees in Bankruptcy. In 1971, the academic aspect of the Journal became the American Bankruptcy Law Journal, and the news aspect the Conference Newsletter, now known as the NCBJ Conference News. Ultimately, formal rules establishing uniform practices among referees were adopted after bankruptcy administration was brought within the Administrative Office of the United States Courts in 1946.
During Paul King’s year as NARB’s first president, NARB conducted a comparative statistical study to identify the most and least efficient referees measured by administrative fees and creditor distributions, and prepared a Code of Ethics for Referees. The Code of Ethics for Referees was adopted at NARB’s second annual conference held August 29 and 30, 1927 in Buffalo, NY.
Referee Watron B. Adais, NARB’s second president, describes the purpose of NARB and the Journal of the National Association of Referees in Bankruptcy in his introduction to the 1927, No. 1, Journal issue:
“This issue of the Journal reports the proceedings at the second Annual Conference, as well as the current news of the Association. The success of the two conferences and the interest shown in the various issues of the Journal prove the value of both. With rare exceptions, each referee in bankruptcy works alone, consulting with no other referee and having inadequate knowledge of how things are done by other referees. If this Association could make available the experience of each referee for the information of all it would really benefit both the referees and the public. The Journal serves as a line of communication among the referees and as a forum for discussion of bankruptcy practices and policies. These services can be further developed.”
In 1965, NARB changed its name to the National Conference of Referees in Bankruptcy (NCRB). In 1973, NCRB changed its name again to the National Conference of Bankruptcy Judges (NCBJ) to coincide with adoption of new Federal Rules of Bankruptcy Procedure, effective October 1, 1973, which referred to bankruptcy referees as bankruptcy judges for the first time. Today, over 80% of the nation’s active bankruptcy judges are members of the National Conference of Bankruptcy Judges, which has continued and expanded upon the pioneering efforts of NARB.
Sources for this article include Herbert M. Bierce, Twenty-five Years of Association Activity: In Retrospect, 25 J. Nat’l Ass’n Ref. Bankr. 67 (1951); Russell L. Hiller, A Conference Anniversary – Fifty Years in Retrospect, 51 Am. Bankr. L.J. 31 (1977); Paul King and the Making of the Modern Bankruptcy Courts by Kevin Ball, published by The Historical Society for the United States District Court, in the Court Legacy, Vol. XVI, No. 3, © 2009; and several other issues of the Journal of the National Association of Referees in Bankruptcy. You can find Kevin Ball’s interesting article here: 200909_Court_Legacy