As ‘good stewards of public funds,’ Modesto Bankruptcy Court to close
The U.S. Bankruptcy Court office in Modesto will close June 5, transferring its cases and staff to Sacramento.
In an “open letter sent to the bar,” Chief Bankruptcy Judge Fredrick Clement noted that declining case loads and advancing technology are the main reasons for the closure, which applies to both the court and the clerk’s office.
“Our decision is simply a matter of being good stewards of public funds. The Modesto Courthouse is expensive to operate and receives little usage,” Clement wrote.
The court’s office moved to the building at 1200 I St. from its previous location at 1130 12th St. amid a rising number of bankruptcy cases during the late 2000’s financial crisis, The Bee previously reported. At the time, Modesto’s bankruptcy filings rose to over 1,300 in the first half of 2008 — a 97% increase from the same time period the previous year.
Now, however, the Modesto office receives very little foot traffic. As of May, it’s processed just 388 cases this year. The ability to both file and process bankruptcy proceedings online makes it unnecessary to go in person for most cases. In recent years, the Modesto courthouse took on cases from Calaveras, Tuolumne and other parts of Stanislaus County. But even then, it didn’t justify the cost.
Between rent and additional staffing, the office cost taxpayers “deep into six figures ... and perhaps as much as seven figures,” according to Clement’s letter.
Employees working out of the Modesto office were given a “soft landing” ahead of the closure, including a “liberal work-from-home policy for an extended period.” After that, employees would need to either relocate or commute to Sacramento.
The move already has affected prominent local cases. Former employees of Martinez Pallets Services now have to drive to Sacramento for their hearings, adding another barrier to their ongoing struggle to recover wages.
On Thursday, a Modesto judge approved an order to shut down Martinez Pallets to help compensate workers who allege the company stole wages. Martinez Pallets filed for Chapter 11 bankruptcy last year.
