Bankruptcy Headlines

Life Partners Trustee Alleges Wide-Ranging Death-Bond Fraud

A bankrupt seller of stakes in life insurance policies didn’t just mislead investors with early death estimates but it also deceived them about how much they would get when the policyholder died, Bloomberg reported yesterday. A trustee found that Life Partners Holdings Inc. employed a “wide-ranging scheme” to cheat investors in so-called life settlements, adding new allegations about the company, which has already been the target of a Securities and Exchange Commission lawsuit. Life settlements are investments in which terminally ill or elderly persons sell their life-insurance policies for cash, and an intermediary (e.g., Life Partners) sells a stake in the policy to investors. When the insured person dies, the investor gets the death benefit as a return on the investment. The trustee requested court approval to control the payout of death benefits, manage premiums and take other measures to unwind the fraud in chapter 11. Life Partners lied about when policies lapsed, charged massive undisclosed fees and deceived investors about its practices in order to dodge securities regulations — all of which came on top of “egregious and continuous self-dealing by insiders,” the trustee said.

Puerto Rico Gov. Files $9.8 Billion Budget that Calls for Deep Cuts

Puerto Rico’s governor submitted a $9.8 billion budget proposal calling for $674 million in cuts amid the U.S. territory’s economic crisis, The Washington Post reported on Wednesday. Gov. Alejandro Garcia Padilla did not present the budget during a televised address as is traditional, opting instead to file it after legislators recessed for the day. Legislators will soon hold public hearings before the House of Representatives approves the budget and turns it over to the Senate. The budget has to be approved by June 30. “We are facing a historic fiscal crisis where the available resources are extremely limited,” the 56-page proposal states. The proposed budget seeks to set aside $1.5 billion to help pay off Puerto Rico’s debt, an increase of $400 million from last year’s budget. Officials also have said the governor wants to close 95 schools and 20 public agencies to cut costs.

Acclaim Academy Charter Schools File for Chapter 7

An Orlando, Fla.-based company that closed three military-style charter schools suddenly on May 6 has now filed for chapter 7, The Orlando Sentinel reported yesterday. The company cited more than $1 million in debts as a basis for the bankruptcy filing dated May 20. Acclaim Academy was a private, nonprofit business run by Windermere businessman Dennis Mope. His Orlando academy had about 180 students, while a Jacksonville, Fla.-area academy had about 250 students — all of whom had to transfer suddenly after those schools were closed. Another campus in Kissimmee was taken over by the Osceola County school district. In February, Mope was notified by the State Board of Education that his schools would have to close because they had received two annual “F” ratings in a row. Despite that notification, many students and parents said they received no warning of the closures. The bankruptcy petition shows more than 100 people and companies that are possibly owed money, including Center State Bank, Brighthouse, FPL, Orkin, Fedex, and the Orlando Utilities Commission.

Judge: Mediation Likely Between UMC and Children's Hospital

A bankruptcy judge on Thursday strongly indicated that he'll order El Paso Children's Hospital and University Medical Center of El Paso back to mediation, The El Paso Times reported yesterday. In a dispute that was compared to conjoined twins threatening each other, the two El Paso hospitals made their first appearance in bankruptcy court on Thursday. Children's Hospital filed for chapter 11 protection on Tuesday after a round of negotiations over a significant debt between it and UMC broke down. Bankruptcy Judge H. Christopher Mott issued temporary orders to ensure that employees will continue to be paid and that the hospital will have enough cash to pay its bills and care for its patients. A series of subsequent hearings was scheduled for the next two months in Austin and El Paso. UMC has said that Children's Hospital owes it more than $90 million, which Children's Hospital disputes. Children's Hospital owes lesser amounts to about 50 other creditors. The relationship between the hospitals' governing boards is increasingly bitter and resignations on the Children's Hospital Board of Directors is leading some officials to say a settlement is key. County Judge Veronica Escobar fears that a protracted bankruptcy could end by eliminating debt and selling the hospital — which was built with a $120 million taxpayer-funded bond. Judge Mott said that it's important for the community to be able to follow proceedings. So in addition to the June 11 hearing, a hearing July 14 was scheduled for El Paso. Hearings for June 26 and July 30 have also been scheduled in Austin. 

Wall Street Flouts Fed Standards to Fund High-Risk Loans

Regulators’ efforts to rein in Wall Street’s biggest banks are in danger of backfiring, Bloomberg reported today. Guidelines aimed at strengthening lending standards are shifting the market for high-yield credit to less-supervised loan funds, raising alarm this week from the Financial Stability Oversight Council. Since the funds don’t have depositors, some of their money comes from Wall Street banks, leaving systemically important institutions exposed to risks regulators hoped to avoid. Loans by nonbanks are a small part of the market, but they’re growing. Direct-lending funds, which raise money from institutional investors such as pension funds and insurance companies, surged to a global record last year of $29.9 billion. Loans by U.S. business development companies (BDCs), many of which have credit lines with banks, jumped to $55 billion last year from $17 billion in 2010. Asset managers are reshaping the market for lending to midsize companies, some top U.S. bankers told the Federal Reserve Board earlier this month. Regulators have scrutinized large banks for risk, publishing strict guidance on leveraged lending in 2013. That’s allowing nonbank funds, many with ties to private-equity firms, to fill the void by helping finance buyouts and indebted companies. The credit sustains jobs and businesses, but it’s also operating beyond the oversight of bank supervisors.

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

 

Presented by the Asset Sales Committee

 

 

DURATION

90 Minutes

1:15-2:45 pm ET

1.5 hours of ethics

 

SPEAKERS

Peter J. Barrett

Kutak Rock LLP; Richmond

Bryan Gaston

Conway MacKenzie; Houston

Ira L. Herman

Thompson & Knight LLP; New York

Shari L. Heyen

Greenberg Traurig, LLP; Houston

 

Description:

 

The panelists will explore issues arising in section 363 sales involving businesses involved in the energy industry, with a specific 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.

Register Here for the Consumer Track.

 

 

 

 

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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