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Fed’s Lacker: Big Banks Still Seen as Too Big to Fail

Richmond Fed President Jeffrey Lacker said yesterday that the Federal Reserve and other financial regulators have yet to adequately deal with the problem of banks that are viewed as too big to fail — and many of their interventions only heighten the perception, the Wall Street Journal reported today. “Perceived guarantees thus encourage fragility, which induces interventions, which encourages further fragility,” Lacker said. “The ultimate result of this cycle is taxpayer-funded subsidies to financial firms that are widely viewed as deeply unfair.” Lacker, a frequent critic of the Fed’s interventions during the financial crisis, said that new regulations stopped short of ensuring regulators will resist the urge to bail out very large Wall Street firms that run into trouble. “Regulation alone is not likely to be enough to counteract the moral hazard afflicting such a large — and growing — share of the financial sector’s liabilities,” said Lacker. “Creditors must not expect government support in the event of financial distress. Policymakers must actually allow financial firms to fail without government support.”

Judge Approves Sale of Doral Insurance Unit

A judge last week approved the $17.25 million sale of Doral Financial Corp.’s insurance arm to Popular Insurance LLC, which won a competitive auction earlier this month for the business, the Wall Street Journal reported today. The order was signed on Friday by Bankruptcy Judge Shelley C. Chapman. According to prior court filings, Popular Insurance won a 28-round auction on May 12 against Anglo-Puerto Rico Insurance Corp., which had served as the opening bidder with a $10.75 million offer. The two companies were the only qualified bidders. The judge had approved procedures for the auction early last month, including a $250,000 breakup fee that goes to Anglo-Puerto Rico since it served as the lead bidder but lost the auction. Doral had told the judge in court filings that Doral Insurance Agency LLC would likely have experienced a “rapid and substantial decline” in value if it wasn’t sold quickly.

Dueling Narratives in Trial of Ex-Dewey & LeBoeuf Leaders

Jurors in a New York state court heard vastly different characterizations yesterday of the alleged roles of three former executives who are facing criminal fraud charges related to the 2012 collapse of Dewey & LeBoeuf, the American Lawyer reported today. In the first day of what is expected to be a four-to-six-month trial, prosecutors portrayed the three defendants — former firm chair Steven Davis, onetime executive director Stephen DiCarmine and ex-chief financial officer Joel Sanders — as “[directing] a fraudulent scheme” that deceived Dewey & LeBeouf’s lenders and investors into thinking that the firm’s financial performance was healthier than it was. But defense counsel, in their own opening statements, pinned the blame for the accounting misconduct on their three clients’ subordinates. They also asserted that the firm's demise was triggered not by accounting fraud but by the recession and departure of key rainmakers in 2011 and 2012, as well as publicity surrounding a probe of the now-defunct firm by the New York County District Attorney’s Office.

Government Investigation Finds Companies Are Not Overcharging Troops on Student Loans

Government officials say that they have found little evidence that student loan servicers, the middlemen who collect and apply payments to debt, are unlawfully charging active-duty service members high interest rates on student loans, the Washington Post reported today. The findings come a year after the Justice Department fined student loan servicer Navient Solution $60 million for charging members of the military more than the 6 percent interest permitted by the law. At the time, Education Secretary Arne Duncan said that the department would comb through the records of all of its loan servicers to make sure the violations were not widespread. The department yesterday said that less than 1 percent of the troops’ files it reviewed from 2009 to 2014 contained violations of the Servicemembers Civil Relief Act (SCRA), a federal law that extends legal and financial protections to military personnel. The department only reviewed files from the four largest servicers — Navient, Great Lakes, Nelnet and American Education Services. A review of the records from the seven remaining loan servicers is expected to be completed later this year.

Gallup Diocese Seeking to Sell Land to Pay Victims

The Roman Catholic Diocese of Gallup, N.M., which stretches across 55,000 square miles of northern Arizona and New Mexico, is seeking to sell 55 parcels of mostly vacant desert land to help fund a settlement with about 60 alleged victims of clergy sexual abuse, the Wall Street Journal reported today. The diocese in a court filing last week asked Bankruptcy Judge David Thuma for permission to hire two real-estate brokers and to move forward with an auction process for the properties. The auction will be held 50 to 60 days after the judge signs off on the request, according to court papers.

New York University School of Law, in association with the NYU Pollack Center for Law & Business, is pleased to present the 41st Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization. This two-day workshop features professors from the top law schools in the region, along with experienced practitioners, who will deliver an advanced program for experienced business bankruptcy practitioners and financial professionals. This year's program will again address the topics that practitioners need and will conclude with a networking cocktail reception.

 

 

 

 

Conference Address

Notice: Attendee information is not meant to be used for mass mailings, invitations, bulk emails, e-mail harvesting or any other commercial purpose. Personal or contact information on this list is intended solely for personal use and should not be duplicated, reproduced or distributed to a third party If you are interested in opting out of inclusion of either printed or online attendee lists, please send an email to meetings@abiworld.org.

ABI Live Webinar: Asset Sales Issues in Oil and Gas Bankruptcies

 

Presented by the Asset Sales Committee

 

 

DURATION

75 Minutes

12:00-1:15 pm ET

 

REGISTRATION FEES

$75 for members

$125 for non-members

(includes a one-year ABI membership)

 

SPEAKERS

Bryan M. Gaston

Conway MacKenzie; Houston

Ira L. Herman

Thompson & Knight LLP; New York

Shari L. Heyen

Greenberg Traurig, LLP; Houston

 

Description:

 

As a result of falling energy prices, experts expect bankruptcy filings in the energy sector to increase, especially those in the oil and gas industry. Bankruptcy cases involving energy companies raise unique issues due to the interplay among the Bankruptcy Code, federal and state laws, the regulatory structure governing the energy industry, and the political and practical realities of the industry’s significance on national, regional and local levels. This webinar will explore the unique challenges that can arise in a § 363 sale of the assets of a business involved in the energy industry, with a particular emphasis on oil and gas bankruptcies.

 

 

 

 

 

Conference Address

Notice: Attendee information is not meant to be used for mass mailings, invitations, bulk emails, e-mail harvesting or any other commercial purpose. Personal or contact information on this list is intended solely for personal use and should not be duplicated, reproduced or distributed to a third party If you are interested in opting out of inclusion of either printed or online attendee lists, please send an email to meetings@abiworld.org.

ABI’s outstanding consumer bankruptcy program returns this fall to the Chicago area. This day-long educational conference is devoted entirely to the consumer bankruptcy professional and will focus on current issues affecting debtors and creditors in consumer cases. Faculty members include Bankruptcy Judges Janet S. Baer, Catherine J. Furay, Mary P. Gorman and Eugene R. Wedoff, along with experienced local chapter 7 and 13 consumer attorneys and panel trustees. We look forward to seeing you at the Jenner & Block Conference Center on October 12!

Earn up to 7.5/9 hours of CLE/CPE credit, including 1 hour of ethics!

 

 

 

 

Conference Address

Notice: Attendee information is not meant to be used for mass mailings, invitations, bulk emails, e-mail harvesting or any other commercial purpose. Personal or contact information on this list is intended solely for personal use and should not be duplicated, reproduced or distributed to a third party If you are interested in opting out of inclusion of either printed or online attendee lists, please send an email to meetings@abiworld.org.

Commission Recommendations on Resolving Court Splits:

Coming Soon to a Judicial Opinion Near You

 

 

PROGRAM

3:00-4:30 p.m. ET

RECEPTION

5:00 - 7:00 p.m. ET

 

REGISTRATION FEES

$95.00 for Program and Reception

$50.00 for Reception Only

$75.00 for Live Webstream Only

 

SPEAKERS

Hon. Dennis R. Dow

U.S. Bankruptcy Court (W.D. Mo.); Kansas City

Hon. Bruce A. Harwood

U.S. Bankruptcy Court (D. N.H.); Manchester

Hon. Barbara J. Houser

U.S. Bankruptcy Court (N.D. Tex.); Dallas

Hon. C. Ray Mullins

U.S. Bankruptcy Court (N.D. Ga.); Atlanta

Hon. Eugene R. Wedoff

U.S. Bankruptcy Court (N.D. Ill.); Chicago

 

Description:

 

ABI's Commission to Study the Reform of Chapter 11 identified more than 30 splits in case law on important issues. Such a split of authority results in delay, increased litigation costs and above all, uncertainty -- imposing a kind of "ambiguity tax" on the system, as one witness put it in testimony before the Commission. The recommendations contained in the Commission's final report, in many cases, can be implemented by judicial opinion at the bankruptcy court or court of appeals level, without need for action by Congress.
This program featuring some of the most experienced and thoughtful judges on the bench today, will assess the Commission recommendations, and identify some that might be effected soon.

 

Continuing Education Credit:

 

ABI will seek 1.5 hours of general CLE credit in 60-minute-hour states and 1.5 hours of credit in 50-minute-hour states. CLE-Approved States: ABI’s live webinars and teleconferences ordinarily receive CLE credit in AL, CA, DE, GA, IL, MN, NE, NH, NJ, NY (approved jurisdiction policy), PA, TN and TX. ABI will obtain approval in additional states. ABI does not seek direct accreditation of live webinars in KS and OH. Credit hours granted are subject to approval from each state, which may not be determined prior to the program.

 

 

 

 

 

Conference Address

Notice: Attendee information is not meant to be used for mass mailings, invitations, bulk emails, e-mail harvesting or any other commercial purpose. Personal or contact information on this list is intended solely for personal use and should not be duplicated, reproduced or distributed to a third party If you are interested in opting out of inclusion of either printed or online attendee lists, please send an email to meetings@abiworld.org.

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