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northwestbankruptcyattorneys.com Tax refund season is typically the busiest time of year for bankruptcies to be filed.  The reason is pretty simple, people who have been slogging along trying to pay their bills have not had the extra money to use for a bankruptcy attorney.  Their tax refunds change that and finally make it possible for many people to get their cases filed. If you are considering bankruptcy there are some things to keep in mind if you are expecting a big tax refund. Filing a case before you receive the refund can lead to some or all of the refund having to be turned over to your bankruptcy trustee.  This all depends on your state’s exemptions. Some states, Ohio for example, will allow you to exempt all of your additional child tax credit and earned income credit.  Some states, Washington and New York for example,  allow you to use either state or… View original post 188 more words
5 hours 33 min ago
When I tell a client to stop paying credit cards, they look at me as though I’d suggested they jump into shark infested waters.But they’ll start calling me”, they wail. “I’ll be sent to collection“. In their mind, “collection” is a real place, with manacles dangling, barred windows, and water dripping down moldy dungeon walls. Turns out that it’s not very likely you’ll deal with a debt collector, according to  Lessons on debt collection, published in the San Jose Mercury News. The interviewee was a former president of the California Association of Collectors. Debt collectors more reputation than fact Truths about debt collection:
  • Only 6 % of consumer debt is turned over for collection
  • The rate of collection on those accounts is 13%, down from 17% two years ago
  • One half of 1% of the people turned over to collection are sued
The weapons of a debt collector are mostly psychological: all a phone call can REALLY do is attempt to get you to write a check. If you don’t pay them, the collector has to either continue psychological warfare, give up, or sue.
6 hours 45 min ago
The shell of mobile accessory maker Targus has filed for chapter 11 protection to help settle its final affairs. 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.”) DBR reports via WSJ that the struggling SunEdison is facing more woes, thanks to a failed Latin American power deal. Oil and debt don’t mix—something private-equity firm KKR & Co. learned the hard way, WSJ reports.

Read More from: WSJ.com: Bankruptcy Beat

7 hours 21 min ago
Action Item.  Let’s urge all constituencies in every Chapter 11 case to create a “successful path” toward plan confirmation by seeking the appointment of a mediator. #caesarsentertainment   #bankruptcy   #mediation  #bankruptcymediation

Read More from: Mediatbankry

7 hours 33 min ago
Businesses should be aware that new anti-avoidance tax rules will take effect from 6 April 2016 which will have a negative impact on members’ voluntary liquidations (“MVLs”). The new rules are part of a crackdown by Revenue and Customs to avoid ‘income-into- capital’ tax planning. This is probably in part due to the higher dividend tax rates coming into force in April this year which will further increase the incentive for returns to be taxed as capital rather than income. Under the current rules, distributions in MVLs are taxed as capital gains (rather than income), which has lower rates and specific exemptions. However, with effect from 6 April 2016, certain MVL distributions will be taxed as income and to really stick the boot in, the tax rate on income distributions will increase by an effective 7.5%. The cumulative effect of an MVL distribution being taxed as income and the rise in the tax rate will be to increase the tax levied up to a staggering 28%.

Read More from: eSQUIRE Global Crossings

8 hours 38 min ago
In this day and age, there’s not much appetite for the artificial (whether it be artificial sweetener or feigned affection).  We want our food, relationships, and clothing to be authentic and legitimate.  Unfortunately, as demonstrated by a recent decision from the Sixth Circuit Court of Appeals, artificiality still manages to creep into certain chapter 11 plans and courtrooms in the form of “artificial impairment.”  Artificial impairment refers to a scenario whereby a debtor, which may otherwise be capable of satisfying a class of claims in full, proposes to impair the claims in that particular class (quite often, only ever so slightly) in order to contrive an “impaired accepting class” for purposes of section 1129(a)(10) of the Bankruptcy Code.  Section 1129(a)(10) states that a plan can only be confirmed when at least one class of claims that is impaired under the plan has voted to accept the plan.  In Village Green I, GP v. Fed. Nat’l Mortg. Assoc’n, the Sixth Circuit considered the appropriate legal framework for addressing allegations of artificial impairment and whether such allegations should be addressed under section 1129(a)(10) or section 1129(a)(3) of the Bankruptcy Code, which requires that a plan be proposed in good faith.  Read on to find out the answer!  Facts
1 day 2 hours ago
It’s never too late to value a lien and avoid it in bankruptcy. Even after the Chapter 13 case is done and closed. So says the 9th Circuit Bankruptcy Appellate Panel in Chagolla, decided February 9, 2016.
In the absence of prejudicial delay, we find that a motion to value and avoid the lien of a junior lienholder may be brought after discharge if the confirmed plan called for its avoidance and treated it as unsecured and if no prejudice to the  junior lienholder will occur
And it’s a welcome decision in Northern California, where a number of courts have held that failure to value a lien in advance of confirmation of a Chapter 13 prevents subsequent avoidance of the lien. Lien slips through cracks Here’s what happened to Lucio and Maria when they filed Chapter 13 in 2008. Chase held a junior mortgage on the their home which was way underwater at filing.  The debtors’ plan proposed that the debtor would bring an adversary proceeding to strip off the lien. For reasons not explained, the adversary was never brought, the Chase lien was treated as an unsecured claim in the bankruptcy, and the plan completed five years from filing. With the Chase lien still on title.
1 day 4 hours ago
On Monday in the Samson Resources Corporation Chapter 11 bankruptcy case, Delaware’s Judge Sontchi adopted Judge Walrath’s recentBaker Botts opinion in Delaware’s Boomerang Tube Chapter 11 case regarding fee-defense costs after Baker Botts. As we discussed last week, Judge Walrath’s opinion interpreted the U.S. Supreme Court’s Baker Botts, L.L.P. v. ASARCO opinion, a case that we’ve been covering since last June. Specifically, she held that neither § 328(a) of the Bankruptcy Code, nor a retention agreement provides a sufficient Baker Botts workaround. As a recap, the Supreme Court held in Baker Botts that professionals employed under § 327(a) may not be reimbursed for fees that they incur in defending their bankruptcy fee applications. Judge Sontchi’s Letter to Counsel

Read More from: Plan Proponent

1 day 5 hours ago
The Federal Court of Australia has approved a settlement, effectively resolving one of the most complex corporate insolvencies in Australian history. On 18 December 2015 the Federal Court of Australia approved a settlement relating to inter-company loans and disputed assets between the liquidators of Lehman Brothers Australia Ltd (LBA) and American parent company Lehman Brothers Holdings Inc. The expected dividend of 80 cents in the dollar is likely to provide significant relief to the 72 major investors in financial products, many of whom had sustained losses in the 10’s of millions, including institutional investors, private wealth individuals, councils across Australia and significant charitable organisations and churches which had surplus funds invested in a range of financial products, including the collateralised debt obligations or CDOs that they acquired through LBA. This outstanding result will see a number of investors, many of whom are not-for-profits and community based organisations receive much needed funds for their operations. This settlement is an important step for investors who have been involved in this seven year-long process, which began when they purchased a number of complex financial instruments from LBA, prior to the collapse of its US parent on September 15 2008.

Read More from: eSQUIRE Global Crossings

1 day 6 hours ago
A couple of years back, I resolved to try to get in better shape. Being in my mid-50s, I had made this resolution several times during my life. What I have learned is that making the resolution is easy. It is keeping the resolution that is the hard part. Trying to keep on track, I stopped at the local YMCA on my way home from work tonight to get in some time on the elliptical machine. What struck me while there is that it is only the second week in February and the crowds that were there the first of the year have already started to thin out. Many people who had resolved to get in better shape for the new year had packed the YMCA and other health facilities in early January but most have them had apparently already given up. I hope that some of them will get a “second wind” and follow through on the resolutions that they made.

Read More from: Bonds & Botes, P.C.

1 day 6 hours ago
Alpha Natural Resources Inc. lenders have offered a $500 credit bid, or the exchanging of debt for assets in the company, to help get it out of bankruptcy. 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.”) MF Global’s liquidation, which began on Halloween in 2011, is finally ending, DBR reports via WSJ. DealBook looks at companies in the oil patch facing a vast reckoning over too much debt.

Read More from: WSJ.com: Bankruptcy Beat

1 day 7 hours ago
ASARCO, LLC v. Celanese Chemical Corp., 792 F.3d 1203 (9th Cir. 2015) – ASARCO, as a successor to the owner of a Superfund site, sued CNA as the successor to a lessee that operated a sulfur dioxide plant on the site, … Continue reading →
1 day 9 hours ago
Sen. Bernie Sanders' victory in New Hampshire will undoubtedly boost his campaign, but his plan to cap interest rates for credit card and other consumer loans at 15% won't help anyone in the short term and could potentially wreak havoc on low-income people in the long term. Here's how.

Read More from: BankThink

1 day 19 hours ago
Federal bankruptcy law can benefit debtors and creditors alike. Provisions such as the automatic stay and absolute priority ensure a streamlined proceeding, preserving the debtor’s scarce resources for business rehabilitation and creditor repayment.  The alternative, multiple state court debt enforcement actions, would waste the debtor’s time and money on litigation (as valuable as bankruptcy lawyers may be).  But federal bankruptcy law also has provisions that benefit particular parties while disadvantaging others.  Section 502(b)(6), for example, caps landlords’ rejection damage claims, helping the debtor but harming landlord creditors. In In re Murray, a judgment creditor creatively sought to use section 363(h) to its advantage, and to the detriment of a third-party interest holder in the debtor’s property.  The bankruptcy court for the Southern District of New York (Judge Gerber) held that the use of an involuntary chapter 7 bankruptcy filing as an enforcement tool in a two party dispute was improper and dismissed the filing for cause under section 707(a) of the Bankruptcy Code.
1 day 20 hours ago
It’s amazing to me that people are worried about getting credit before they even completed a bankruptcy case. This is due in fact based upon Americans desire and obsession for credit. After all, credit is what more than likely got the person into financial problems to begin with. Now there are other causes of bankruptcy+ Read More The post How Soon Will I Get Credit After Filing Bankruptcy? appeared first on David M. Siegel.
1 day 22 hours ago
In re Samson Resources, Corp., Case No. 15-11934 (CSS) (Bankr. D. Del. Feb. 8, 2016) [Letter Ruling] The Boomerang Tube decision has already been followed by one other Delaware bankruptcy judge.  In a letter ruling in In re Samson Resources Corp., Judge Christopher S. Sontchi agreed with, endorsed, and applied Judge Walrath’s ruling to deny fee defense provisions in retention applications for debtors’ counsel. Read More › Tags: Employment, Retention & Compensation, Insider's Scoop

Read More from: Delaware Bankruptcy Insider

2 days 4 hours ago
Overhauling the S&L crisis-era method for intervening in struggling banks, which did not live up to expectations during the 2008 meltdown, should be a higher priority.

Read More from: BankThink

2 days 4 hours ago
The Supreme Court’s decision last term in Baker Botts v. Asarco, in which the Court ruled that professionals that are paid from a debtor’s bankruptcy estate cannot be compensated for time spent defending their fee applications, continues to rankle bankruptcy practitioners.  Moreover, a recent decision in a Delaware bankruptcy case shows that the impact of Asarco will not be easily circumvented. Attorneys and other advisors retained by a debtor, a trustee or an official creditors’ committee are known as “estate professionals,” because their retention in each case must be approved by the bankruptcy court, and their fees and expenses are paid out of the debtor’s bankruptcy estate and are subject to review and approval pursuant to Section 330 of the Bankruptcy Code.  Section 330(a)(1) of the Bankruptcy Code states, “After notice to the parties in interest and . . . a hearing . . . the court may award to . . . a professional person . . . reasonable compensation for actual, necessary services . . . .”

Read More from: Bankruptcy Law Insights

2 days 4 hours ago
Chair White covered a wide array of topics recently at a securities regulation conference, though the press immediately focused on her comments about the possibility of new rules for disclosing board diversity. Her comments on that and other governance issues follow.
2 days 5 hours ago
Individuals may want to think twice before seeking relief under chapter 11 following a recent decision from the Ninth Circuit Court of Appeals. In Zachary v. California Bank & Trust, the Ninth Circuit affirmed a bankruptcy court’s order denying confirmation of a plan of reorganization in which individual debtors proposed to retain their pre-petition and post-petition property but to pay a dissenting unsecured creditor just .26% of the creditor’s claim. The Ninth Circuit held that the absolute priority rule still applies to individual chapter 11 debtors, and that individual chapter 11 debtors may not confirm a plan under which they retain prepetition property if they do not pay dissenting creditors in full.

Read More from: eSQUIRE Global Crossings

2 days 6 hours ago

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