ABI Blog Exchange

In-store bankers are experts in finding creative ways to catch potential customers' attention. That's a skill that every modern bank employee needs to hone.

Read More from: BankThink

1 hour 28 min ago
Mortgage modifications were supposed to save the day. They promised to keep homeowners in their homes despite the housing crash of the Great Recession. To some extent that has worked. Or at least mortgage modifications spread the failures out over time so that the market wasn’t glutted with foreclosed properties. But anyone who has attempted a mortgage modification knows first hand the frustration of submitting an application to the servicer. Over and over, the servicer claims that you haven’t sent the documents, or the documents are stale or incomplete. That inability to account for documents is, I’m afraid, just a sneak-peak at the next mortgage horror:
Servicers have no records about the loans they did modify.
Or, more precisely, the records they have are not to be trusted. The hundred grand mistake I saw the first instance of this nightmare this week when my client’s request for a loan payoff in connection with a sale. The loan had been modified some five years ago, with the result that a sizable hunk of the amount due when the loan was modified was due only upon sale. Asked for a payoff, the servicer returned a payoff that failed to include some $127,000 of non interest bearing principal.
1 hour 54 min ago
Keith Bedford for The Wall Street Journal
RadioShack Corp. won court approval of a lender takeover that will send the retailer out of bankruptcy in pared-down form, but still selling electronics. The Wall Street Journal has the Daily Bankruptcy Review article here. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) Brazil’s Grupo OAS filed for bankruptcy amid an investigation into alleged corruption, WSJ reports. EveryWare Global Inc., manufacturer of Anchor Hocking and Oneida kitchen products, said Wednesday that it has reached a deal on the terms of a debt-for-equity swap that calls for its senior lenders to take control of the company. Read the DBR article here.

Read More from: WSJ.com: Bankruptcy Beat

2 hours 4 min ago
Wall Street Journal Fair Isaac is developing a new credit score that's aimed at the millions of people who currently don't have credit scores and are cut off from auto loans, credit cards and mortgages. About 53 million Americans are now unable to qualify for most types of bank-issued consumer credit because they don't have a credit history. The product "is largely a response to banksÂ' desire to boost lending volumes by increasing loan originations to...

Read More from: BankThink

2 hours 13 min ago
Rev Op Group v. ML Manager LLC (In re Mortgages Ltd.), 771 F.3d 623 (9th Cir. 2014) – Under the terms of a debtor’s confirmed plan of reorganization, an entity (ML Manager) was designated to manage the debtor’s portfolio of mortgage … Continue reading →
5 hours 28 min ago
Posted by Kathy Bazoian Phelps    Below is a summary of the activity reported for March 2015. The reported stories reflect: 4 guilty pleas or convictions in pending cases; over 54 years of newly imposed sentences for people involved in Ponzi schemes; a possible new massive Ponzi scheme involving $16 billion; and an average age of approximately 48 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.    Bryan W. Anderson, 40, pleaded guilty to running a Ponzi scheme that lured in 18 investors who invested $8.4 million. It is believed that 12 investors ended up losing about $3.1 million. Anderson promised the investors that their investments were 100% risk-free and had a guaranteed rate of return of 5% to 20%. He solicited them to invest in stock options and to invest in his company, 360 Properties.    Charles A. Bennett, 56, is in plea talks relating to an alleged $5 million Ponzi scheme that Bennett confessed to in a note written before a failed suicide attempt.

Read More from: The Ponzi Blog

17 hours 28 min ago
With the RadioShack Corporation bankruptcy action affecting the rights of many commercial landlords, it is important to determine ways that landlords can protect themselves during the course of the bankruptcy action. First, requiring a third-party guarantor is one way in which a landlord may obtain better creditor protection when entering into a lease. The automatic stay does not prevent a landlord from taking action against a guarantor to a corporate debtor-tenants’ lease, provided the lease guarantor is not in bankruptcy. Landlords can also seek protection through letters of credit. Using a properly drafted letter of credit allows a landlord to draw on the proceeds of the letter of credit from a third party (the lender) should the tenant default under the lease.  Letters of credit are generally not considered property of the tenant’s bankruptcy estate.  Some of the drawbacks to letters of credit include their complexity, both during lease preparations, as well as execution after default.
18 hours 36 min ago
Judge Christopher Sontchi issued a notable opinion last week in the bankruptcy case of Energy Future Holdings Corp., et al. (“EFH”), Case No. 14-10979 (D. Del.), ruling that the repayment in full of certain senior secured notes did not trigger an obligation by the debtors to pay a make-whole premium. One important aspect of this decision is that Judge Sontchi closely followed the reasoning of Judge Robert Drain last year in a similar decision involving a make-whole premium in MPM Silicones, LLC, et al. (“Momentive”), Case No. 14-22503 (S.D.N.Y.), thus extending the rationale of that decision, as well as earlier Southern District of New York cases such as In re Solutia, Inc., and In re Calpine Corp., into Delaware for the first time. (Kelley Drye & Warren LLP represents certain creditors in the EFH cases, but has had no role in these proceedings.)

Read More from: Bankruptcy Law Insights

19 hours 34 min ago
The Editorial Staff at CommercialBankruptcyLitigation.com provides a quick overview of the ramifications of a lender declaring a default on a commercial loan. Read more in this 90 second lesson here!
19 hours 43 min ago
In an article written at CommercialBankruptcyInvestor.com, Jon Petersen provides an introduction on how to analyze a distressed company. Read more about this interesting topic here!
19 hours 45 min ago
Morris James LLP has formed a Data Privacy and Information Governance Group. The Data Privacy and Information Governance Group is an interdisciplinary team of corporate and fiduciary duty attorneys, attorneys well-versed in electronic data storage and discovery, attorneys with bankruptcy and insurance-related backgrounds, and non-attorney IT staff knowledgeable about trends in data security and technology. Together, the group advises boards of directors and officers in assessing and managing risk and defending claims for alleged breach of fiduciary duty arising from data breaches. “Our new group combines extensive knowledge and experience in various aspects of law with current data privacy issues which businesses and corporate officers and directors face today,” said David H. Williams, Managing Partner. The group will offer the following services:
  • Counseling companies’ directors and officers, or special committees, on complying with fiduciary duties and making informed decisions to prevent and/or respond to data breaches;
  • Advising clients on document retention and litigation readiness with an eye toward reducing potential costs of eDiscovery;
  • Helping businesses evaluate and understand their obligations to protect personally identifiable information (PII) and their reporting obligations if the business suffers a data breach; and
21 hours 43 min ago
The sweeping reforms passed in 2010 didn't bring community banks to the brink of extinction. Rather, their numbers have dwindled because of the impact of economies of scale and dormant de novo banking activity.

Read More from: BankThink

23 hours 28 min ago
Anyone investing equity in an enterprise, whether creating a start-up or purchasing an established company, is a natural optimist.  The hope is that the business will continue to perform well and yield its owners substantial profits year-after-year (and then maybe a hefty return upon exit).  But, as those of us in restructuring know, not every company enjoys positive returns all the time.  Businesses go through down cycles for different reasons – whether it be the overall economic climate (think 2008), issues specific to a particular industry (think dropping oil prices), a great idea that needs more time to blossom into a profitable company, or the classic case of being overleveraged (i.e. too much debt).  As an owner of a business, it is important to recognize distress as soon as possible to create optionality, minimize the downside risk, and sometimes even take advantage of distressed opportunities to increase return.  
1 day 13 min ago
In a case of first impression, the Ninth Circuit held that the unsecured portion of a secured debt, for which the debtor’s liability has been discharged in a prior chapter 7 proceeding, is still a debt for determining the debtor’s eligibility to be a debtor under chapter 12 of the Bankruptcy Code.  Davis v. U.S. Bank (In re Carolyn Davis), 2015 WL 662001 (9th Cir.

Read More from: Creditors' Rights

1 day 1 hour ago
A growing lack of transparency between some businesses and their banking service providers threatens our ability to effectively manage money laundering and terrorist financing risk.

Read More from: BankThink

1 day 1 hour ago
Receiving Wide Coverage ... When Nob Met Dread: Two federal officials assigned to investigate Silk Road, the digital marketplace for drugs that only accepted payment via Bitcoin, have been charged with illegally using the defunct black-market service to enrich themselves. An agent with the Drug Enforcement Administration and a Secret Service agent have resigned and been charged with money laundering and wire fraud. The DEA agent, named Carl Mark Force IV, has also been charged with...

Read More from: BankThink

1 day 2 hours ago
Altegrity Inc., which gained notoriety for vetting former National Security Agency contractor Edward Snowden, said its restructuring plan would pay general unsecured creditors just over two cents on the dollar for their claims. Read the Daily Bankruptcy Review article here. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) The Wall Street Journal reports on the Securities and Exchange Commission’s charges against Lynn Tilton and her Patriarch Partners firm for fraud. According to WSJ, the Puerto Rico Electric Power Authority got an extended deadline for some loans.

Read More from: WSJ.com: Bankruptcy Beat

1 day 2 hours ago
Altegrity Inc., which gained notoriety for vetting former National Security Agency contractor Edward Snowden, said its restructuring plan would pay general unsecured creditors just over two cents on the dollar for their claims. Read the Daily Bankruptcy Review article here. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) The Wall Street Journal reports on the Securities and Exchange Commission’s charges against Lynn Tilton and her Patriarch Partners firm for fraud. According to WSJ, the Puerto Rico Electric Power Authority got an extended deadline for some loans.

Read More from: WSJ.com: Bankruptcy Beat

1 day 2 hours ago
In the final month of his senatorial career, Senator Tom Coburn (R, Oklahoma) published a long, detailed, and highly-specific criticism of the Internal Revenue Code, entitled “Tax Decoder.” Jim McTague, writing in the December 15, 2014 issue of Barron’s, pronounces it “delicious.” Read more here.
1 day 2 hours ago
T. Rowe Price’s proxy voting policies explains that its Proxy Committee develops the firm’s positions on major proxy voting issues.  The Proxy Committee comprises portfolio managers, investment analysts, operations managers and internal legal counsel, and relies upon its own research, independent research provided by ISS and Glass Lewis, and information presented by companies’ management and shareholder groups, in establishing policies.
1 day 2 hours ago

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