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Our end of summer bankruptcy cram course continues today with Part 3 of our Lookback Period. Where Should the Court Draw the Line on Legal Advice? In Blurred Lines:  Seventh Circuit Keeps Alive Claims Based Upon Law Firm’s Alleged Failure to Advise on Degrees of Business Risk, Matthew Goren discussed the potential effect on restructuring advisors of a decision refusing to dismiss a malpractice action against a law firm.  In that case, a chapter 7 trustee commenced a malpractice action against a law firm that had advised now-insolvent hedge funds that had invested in what turned out to be a Ponzi scheme, arguing that the firm had failed to recognize certain “serious red flags” that should have led the firm to advise the hedge funds to seek additional protections in their negotiations with the fraudulent investment scheme.  In keeping the action alive, the Seventh Circuit noted that “within the scope of the engagement a lawyer must tell the client which different legal forms are available to carry out the client’s business, and how (if at all) the risks of that business differ with the different legal forms.”  SDNY Bankruptcy Court Recognizes the OAS Foreign Main Proceedings in Brazil
10 hours 50 min ago
UBS' Kathryn Shih attributes part of her success in wealth management to understanding that money is an emotional topic; #TheNew10: still not thrilled about Jackson > Hamilton; banking power couples; and more.

Read More from: BankThink

12 hours 33 min ago
Companies miss the mark when they try to woo top talent with tantalizing perks rather than a meaningful workplace culture.

Read More from: BankThink

14 hours 33 min ago
The top executive at Ultimate Nutrition Inc., which makes protein powder for bodybuilders, says he destroyed millions of dollars of the shake supplement ingredients and other raw materials before putting the company into bankruptcy last year. Executives at TD Bank N.A., which has been fighting the Connecticut company over a $13 million loan, don’t believe it. As a battle between the company and the bank escalated last fall, Chief Executive Brian Rubino says he went to Ultimate Nutrition’s warehouse and got rid of roughly 40% of company’s bank-monitored inventory because of its “unsaleability,” according to documents filed in U.S. Bankruptcy Court in Hartford. That move cost the company $3.8 million. Bank officials are calling for an investigation into what happened to the ingredients, speculating in recent court papers that they might have been “moved off site.” Perhaps the ingredients never existed in the first place but were used to “pump up” the company’s financial statements—a move that would have enabled Ultimate Nutrition to get access to a bigger loan, bank officials said. As part of the borrowing agreement between Ultimate Nutrition and the bank, Ultimate Nutrition officials were required to report—under oath—the value of its inventory each month. That value helped determine how much borrowed money it could spend.

Read More from: WSJ.com: Bankruptcy Beat

14 hours 51 min ago
By Judith K. FitzgeraldTucker Arensberg, P.C.Pittsburgh, PA Frank Arenas is licensed in Colorado to grow and dispense medical marijuana.  He and his wife own a building, half of which is used for the cultivation and the other half of which is leased to a marijuana dispensary.  These activities are legal in Colorado, but, despite then Attorney General Eric Holder’s expressed willingness to work with Congress[i] to reschedule marijuana and remove it from the Schedule I (high potential for abuse) drug list[ii], 21 U.S.C.  §856(a) has not been amended.  Thus, knowingly opening, renting, using or maintaining any place, even temporarily, for the purpose of manufacturing, distributing or using any controlled substance is a federal crime.  Similarly, 21 U.S.C. §841(a)(1) makes it unlawful for any person knowingly or intentionally to manufacture, distribute, or dispense or possess with intent to do so, a controlled substance.When Mr.

Read More from: CLLA Bankruptcy Blog

15 hours 29 min ago
U.S. gross domestic product – the strongest measure of economic growth – expanded at a seasonally adjusted annual rate of 3.7 percent in the second quarter, more than the 2.3 percent originally estimated, the Commerce Department said Thursday. Read more here.
16 hours 6 min ago
The contradictory nature of data privacy and anti-money-laundering rules in the U.S. and E.U. pose a big challenge for multinational banks. But the financial sector can help fix the problem by establishing industry standards that balance national security with individual rights.

Read More from: BankThink

16 hours 33 min ago
The SEC Office of Economic and Risk Analysis has made available on its website a lengthy working paper on proxy access, specifically on the trade-offs between universal proxy access through federal regulation and the “private ordering” of proxy access through shareholder proposals.
17 hours 15 sec ago
Wall Street Journal The Federal Reserve wants big banks to monitor payments in real-time and they want it done now. JPMorgan Chase will meet with Fed officials this week to discuss the bank's response to the Fed's demands; CEO Jamie Dimon has said JPMorgan has assigned 400 people to the project, known in banker parlance as "intraday liquidity." Bank of New York Mellon is also at the top of the Fed's to-do list. ...

Read More from: BankThink

17 hours 11 min ago
Authored by Adam B. Brandon of Rogers TowersOn July 22, 2015, the Department of Defense (DOD) issued its final rule implementing the Military Lending Act (MLA).  Enacted in 2006, the MLA seeks to protect active-duty military members and their dependents from predatory lending in high-cost consumer credit transactions.  The DOD exercises rule-making authority to delineate which types of transactions are covered by the law. Important provisions for lenders to note include: 36% cap on interest and fees.  The MLA limits the annual interest rate on covered loans to 36 percent.  Known as the Military Annual Percentage Rate (MAPR), this cap includes all interest and fees associated with a loan, including credit default insurance and debt suspension plans.  This definition of MAPR is broader than the APR calculation required by the Truth in Lending Act (TILA) or Regulation Z.

Read More from: Florida Banking Law Blog

18 hours 18 min ago
Defunct for-profit educator Corinthian Colleges Inc. won approval of a liquidation plan that will set aside some money for former students looking to discharge of loans, Daily Bankruptcy Review reports via The Wall Street Journal. (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 former RadioShack Corp. plans to refund some gift cards in full, DBR reports in WSJ. Sabine Oil & Gas Corp.’s unsecured creditors want to look into the company’s 2012 merger with Forest Oil Corp, DBR reports via WSJ. Bloomberg reports that Peabody Energy Corp. hired Lazard Ltd. to restructure its $6.3 billion in debt.

Read More from: WSJ.com: Bankruptcy Beat

19 hours 13 min ago
Series: Newbie Litigator School This webinar will highlight tips and tools of the trade when taking and defending a deposition. New litigators will gain insight from litigation experts how to effectively participate in a deposition. Read more here.
23 hours 44 min ago
We continue our bankruptcy cram course today with Part 2 of the Lookback Period – Eight Weeks. Property Co-Owner Not Off the Hook in Refusing to Sign Mortgage Ben Farrow’s piece, [Un]signed, Sealed, Delivered: Is It Still Yours? focused on equitable subrogation and how a lender might apply it when a property co-owner refuses to execute a new mortgage when the other co-owner refinances an earlier mortgage that was signed by both parties.  Applying D.C. law, the court in In re Stevenson allowed the subsequent lender to step into the shoes of the original lender under the jurisdiction’s  five-prong test for equitable subrogation:  (1) The new lender paid off the prior mortgage so it could protect its “own interest” by having a first priority mortgage; (2) the new lender did not “act as a volunteer” because the mortgage was consideration for its loan; (3) the new lender was not liable for the prior mortgage; (4) the proceeds from the new loan paid off the entire prior mortgage; and (5) subrogation would “not work any injustice to the rights of others.”  Ninth and Third Circuits Continue to Whittle (Hack?) Away at Equitable Mootness
1 day 12 hours ago
My blogging has been light the past few months as we have been working on the eighth edition of what will now be LoPucki, Warren & Lawless, Secured Transactions: A Systems Approach. For you secured transactions teachers out there, we have returned a first set of page proofs and everything looks on track for publication later this year well in advance of the spring semester. To get back into the blogging swing of things, I go to where else . . . bankruptcy filing data. Back in January, I predicted that total 2015 bankruptcy filings for the U.S. would be "somewhere around 800,000." Revisiting that prediction, the numbers seem right on track to meet it. According to data from Epiq Systems, there have been just short of 495,000 bankruptcy filings through July 31. In recent years, the bankruptcy filings for the first seven months of the year have been 61.2% of the annual total. Extrapolating, that would put us at 808,000 filings for the year. That would be a decline of 11.2% for 2015, on the heels of a decline of 11.8% in the prior year.

Read More from: Credit Slips

1 day 12 hours ago
Some thoughts on the latest dustup over venue in big chapter 11 cases, on Dealb%k.

Read More from: Credit Slips

1 day 12 hours ago
Supporters of the bankrupt Apache Railway in rural Arizona face a Nov. 30 deadline to find $7.2 million to pay off investors who they say will pull the railroad’s steel tracks out of the ground and sell them for scrap. Apache Railway officials negotiated that new deadline with investors, led by Los Angeles investment firm Hackman Capital Partners, who maneuvered to take over the 55-mile railroad because of an unpaid loan. The new deadline gives railroad supporters time to figure out whether they’ve qualified for a U.S. Department of Agriculture loan, which would pay off the investors, railroad lawyer Rob Charles told Bankruptcy Beat. The railroad’s operations, if dismantled, may be worth more than $11 million, leading local residents to worry whether that the economic lifeline will be shut down. Built in 1917, the railroad connects Snowflake, a desert town with a population of 5,590, with a bigger rail line in Holbrook in Navajo County. The effort to save the railroad has support from elected leaders, ranging from the mayor of Snowflake to U.S. Rep. Ann Kirkpatrick (D., Ariz.), who asked U.S. Department of Agriculture Secretary Tom Vilsack about the loan’s status at a congressional hearing in July.

Read More from: WSJ.com: Bankruptcy Beat

1 day 13 hours ago
Enjoy your money without worry about your creditors taking it from you. That describes asset protection. A substantial industry run by expensive professionals will scatter your money between interlocking partnerships and off-shore corporations to keep it away from those who might sue you. And, of course, a bunch of your money lands in their pockets. All to keep your assets safe from unexpected, catastrophic lawsuits. For most of us, we don’t need to go there:  Uncle Sam lays out the first step in asset protection. Retirement plans safe from creditors Federal law puts pensions, 401(k) plans, and employee benefit plans beyond the reach of even a creditor with a judgment. Any plan qualified under ERISA has an anti alienation clause that forbids transfer of plan benefits, except to the beneficiary. It takes no special set up, no costly maintenance, just regular savings in an appropriate plan to put your retirement assets beyond the reach of a financial catastrophey. If you file bankruptcy, ERISA qualified accounts don’t even come into the bankruptcy estate. It takes a plan To get the protection of law for retirement savings, they have to be in a plan.
1 day 16 hours ago
In March 2014 the European Commission issued a Recommendation considering a new approach to business failure and insolvency, targeting efficient restructuring of viable enterprises in financial difficulty and a second chance for honest entrepreneurs. The objective of this Recommendation was: “to encourage Member States to put in place a framework that enables the efficient restructuring of viable enterprises in financial difficulty” and to “give honest entrepreneurs a second chance.” Noting that the differing legal regimes across Europe negatively affect the level of recoveries to creditors,  access to cross border funding, the ability to restructure pan-European corporates, entrepreneurship, employment and innovation, the Recommendation contained detailed provisions seeking to harmonise insolvencies and restructurings throughout the EU and set out minimum standards for how it suggested this could be achieved. Last week the UK Government  published the results of a consultation it held during February and March 2015 into how the Recommendation would affect the UK, if implemented.

Read More from: eSQUIRE Global Crossings

1 day 16 hours ago
Wall Street Journal The paper has a story on Fannie Mae's revamped HomeReady program, designed to give help to low-income families in qualifying for low downpayment mortgages. Details of the program were outlined in American Banker on Tuesday. Wells Fargo expects to implement the program, said executive Brad Blackwell. Wells believes the program will help minority groups, although it may take some time to start working. ...

Read More from: BankThink

1 day 17 hours ago
For some people, filing for bankruptcy comes only when the money is gone and they’ve got no ability to repay their debts. But for one entrepreneur and his wife, filing  their Chapter 11 bankruptcy petition was a way to keep things going and ensure that everyone got paid. Craig Walker and his wife, Susan, filed for Chapter 11 bankruptcy in Colorado, estimating their assets at between $100 million and $500 million and liabilities at between $10 million and $50 million. The Walkers are officers, directors, shareholders or members of several companies, including Integrated Cable Systems Inc. of Longmont and Walker Component Group of Denver, which supplies cables and components used by Vestas Wind Systems’ wind turbines, as well as ranches, two malls, and the banks of Custer Bancorp and First Southwest Bank Corp. By all accounts, things are in fantastic shape. This doesn’t sound as if the couple needs to file for bankruptcy, does it? With plenty of money at their disposal and business interests that keep them financially fit, the last thing you’d expect would be a trip to the bankruptcy court.
1 day 17 hours ago

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