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Is your legacy to your kids an encounter with your unpaid creditors? Debt problems for those over 65 may not be problems for the elder at all.  Income and assets are largely protected by law from creditors. But that doesn’t trouble creditors:  they’ll simply wait and get their money from your kids. Seniors enjoy protection from collection Elders have a raft of legal protections from creditors.  Exemption laws, pension law, and the Social Security Act often make it hard for creditors to seize the assets of elders, even to pay legitimate debts. Looking at seniors with debts they can’t easily pay, Jay Fleischman and Gene Melchione  explored the question of whether it made any sense for seniors to file bankruptcy in a recent Consumer Ledger podcast. The argument against bankruptcy for the elderly relied on the relative legal impunity of seniors to debt collectors.
10 hours 11 min ago
On June 15, 2015, the U.S. Supreme Court issued its opinion in the case of Baker Botts L.L.P. v. ASARCO LLC, 135 S. Ct. 2158 (2015), denying compensation to two law firms for the fees they incurred in defending objections to their fee applications.  Subsequent to confirmation of ASARCO’s plan of reorganization, the law firms of Baker Botts L.L.P. and Jordan, Hyden, Womble, Culbreth & Holczer, P.C. filed fee applications under section 330(a)(1) of the Bankruptcy Code.  Id. at 2163; 11 U.S.C. §§ 101-1532.  ASARCO, then controlled by a company the two law firms successfully sued during the course of the bankruptcy cases, objected.  135 S. Ct. at 2163.  The bankruptcy court overruled ASARCO’s objection and awarded the law firms, among other sums, approximately $5 million for time spent litigating in defense of their fee applications.  Id.   The Fifth Circuit reversed, holding that section 330(a)(1) does not authorize fees for defending fee applications, and the Supreme Court affirmed.  Id.
10 hours 35 min ago
The election of a Republican president could be the first prerequisite to repealing the financial reform law, but banks still need to argue their case for why repeal is necessary.

Read More from: BankThink

10 hours 42 min ago
Receiving Wide Coverage ... CEO Slashes Bonus: Credit Suisse chief executive Tidjane Thiam has asked his company's board to cut his bonus. His request comes just days after the bank reported a loss of roughly $5.88 billion in the fourth quarter, which led to a 12% drop in price in the company's stock on the Zurich exchange Thursday. The larger-than-expected quarterly loss resulted from a write-down following a reassessment of the value of Credit Suisse's investment...

Read More from: BankThink

10 hours 47 min ago
Tennessee-based Noranda Aluminum Inc. filed for chapter 11 bankruptcy Monday to sell a business segment. 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.”) Retailer American Apparel Inc. has emerged from bankruptcy, WSJ reports. DBR reports via WSJ on private-equity chief Lynn Tilton stepping down from her $2.5 billion funds. Read Bankruptcy Beat’s report on the nearly 13% rise of corporate chapter 11 filings last month.

Read More from: WSJ.com: Bankruptcy Beat

11 hours 29 min ago
An unsettled, and even unsettling, question for bankruptcy lawyers and debtors alike is whether client worksheets can be examined by the other side in a contested bankruptcy court hearing.  Does the attorney-client privilege protect such documents from being seen by hostile creditor attorneys? A bankruptcy lawyer will often provide a client worksheet at a first consultation with a new bankruptcy client.  The worksheet will typically ask the client to write down information about assets, how much these are worth, past property transfers, income history, and household living expenses.  The lawyer reviews this worksheet with the debtor and uses that information to fill out the bankruptcy documents. Next, the debtor signs these documents under oath in the lawyer’s office.  The lawyer then files the bankruptcy documents in court, where they are available to be seen as public court filings. The problem arises when a creditor or trustee claims that the debtor has been untruthful in the documents, by under-valuing an asset, concealing property or something similar.  The creditor might ask the judge to order disclosure of the client worksheet to see if there are inconsistencies between the worksheet and the public bankruptcy documents.

Read More from: Bankruptcy Law Network

1 day 22 hours ago
People wait to enter U.S. Bankruptcy Court in New York Feb. 2, 2010.
Brendan McDermid/Reuters
The number of U.S. corporate bankruptcy filings increased nearly 13% in January, while bankruptcy filings overall declined. There were a total of 2,802 businesses that filed for bankruptcy in January, almost a 13% uptick from the 2,481 in January 2015, according to data from claims agent Epiq Systems Inc. Meanwhile, total U.S. bankruptcy filings fell 11% in the past year to 52,522. Restructuring lawyers and advisers primarily pointed to the oil and gas and commodities sectors for the uptick, which is expected to continue throughout 2016. “We see the increase in corporate filings to be principally attributable to the impact of sustained reductions in the price of oil and other commodities, and pressures on retail sales,” said Michael A. Rosenthal, co-chair of Gibson, Dunn & Crutcher’s restructuring practice.

Read More from: WSJ.com: Bankruptcy Beat

3 days 4 hours ago
A seminar promoter owed nearly $24 million for arranging speaking gigs for Robert Kiyosaki, the best-selling author of “Rich Dad Poor Dad,” is fighting for access to a secret lawsuit. Lawyers for Learning Annex LLC, which has accused Mr. Kiyosaki of moving “tens of millions of dollars plus other lucrative assets” among his companies to avoid making royalty payments, are now arguing to unseal an August 2014 lawsuit that appears to cover similar ground. The request comes during Learning Annex’s long-running fight to collect from Rich Global LLC, the entity that licenses the “Rich Dad Education” brand and the Rich Dad logo. Court papers show that Rich Global took in more than $45 million in royalties from the Rich Dad seminar business from March 31, 2007, to April 31, 2010. But after Learning Annex accused Rich Global of withholding royalty payments under their agreement, Rich Global filed for bankruptcy protection—saying it only had $1.8 million worth of assets. The bankruptcy filing put Wyoming lawyer Tracy Zubrod in charge of looking for ways that Rich Global can pay off its debts, including the royalties owed to Learning Annex. In August 2014, she sued Mr. Kiyosaki and several of his companies—litigation that has unfolded under seal.

Read More from: WSJ.com: Bankruptcy Beat

3 days 4 hours ago
The bankruptcy process is often long and arduous for clients, whether debtor or creditor, and their counsel.  Bankruptcy courts feel the pain, too.  So, when we finally reach the glorious goal of plan confirmation, most revel in the conclusion of the plan process.  Though often considered anathema, appeals of plan confirmation orders are sometimes pursued.  Recognizing the public policy desire for finality in bankruptcy proceedings, the Eighth Circuit applies the “person-aggrieved” doctrine in determining whether an appellant has standing to appeal a plan confirmation order.  Recently, the Eighth Circuit had the opportunity to review whether a debtor – the proponent of the plan and the champion of its confirmation – can be a person aggrieved with standing to appeal its own plan.  In re: O&S Trucking, Inc., No. 15-2048 (8th Cir. Jan. 22, 2016)Background
3 days 4 hours ago
On February 3, 2016, EmKey Companies, LLC and its affiliates (collectively, “EmKey” the “Debtors”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division.  According to the declaration of the EmKey’s President, Worth Snyder, (the “Snyder Declaration”), the Debtors operations have been focused on the acquisition, production, exploration, and development of midstream assets and upstream oil and natural gas properties primarily within New Mexico, New York and Wyoming. The Debtors primary assets are working interests (operated and non-operated) in approximately 117 “oil and gas production sites” encompassing over 25,000 gross acres. See Synder Declaration at 6-7. The Emkey’s liabilities total approximately $14.6 million dollars in unpaid principal plus accrued interest and other fees and expenses, pursuant to a Credit Agreement with Texas Capital Bank, N.A. as Administrative Agent, secured by liens on substantially all of the Debtors assets. See Synder Declaration at 14-15 The Debtors’ bankruptcy cases are being jointly administered in the bankruptcy case captioned In re Emkey Companies, LLC, et al., Case No. 16-30548. A copy of the Synder Declaration can be accessed here: Download Snyder Declaration
3 days 4 hours ago
Orrick partner and co-head of Europe Restructuring Stephen Phillips recently joined a Debtwire panel on potential high yield restructurings in Europe and current volatile market conditions at the 12th European Distressed Debt Market Outlook. Several videos from the launch are now available on Debtwire’s site. For more information, please contact Stephen.  
3 days 5 hours ago
Filing bankruptcy is serious business.    The mere act of filing a petition creates an automatic stay effective against all entities.    Liens can be modified, taxes can be paid out and debts can be discharged.   The price of admission for getting all these benefits is full disclosure.   Unfortunately some debtors either don't understand these obligations or think they can selectively disclose only the assets they want to list.   The consequences for omitting assets can be severe as illustrated by two recent opinions from the Fifth Circuit and a press release from the Acting U.S. Attorney for the Southern District of Illinois.Judicial EstoppelJudicial estoppel is a way for courts to make lawsuits go away.   Technically, it is about preventing people from taking inconsistent positions in litigation.   However, in bankruptcy, it is a way for defendants to get out of being sued based on the plaintiff's mistakes.   Two recent cases from the Fifth Circuit illustrate the dangers of this doctrine.In Allen v. C & H Distributors, LLC, , No. 15-30330, 2015 U.S. App. LEXIS 22567 (5th Cir. 12/23/15), the debtors filed a chapter 13 petition and confirmed a plan.   One month after the plan was confirmed, one of the debtors was injured in a workplace accident.  One year later, she filed suit.  However, she did not amend her schedules to disclose either the claim or the lawsuit.
3 days 8 hours ago
Housing policy focused on government guarantees and the 30-year mortgage hasn't done much to help low- and middle-income homeowners build wealth.

Read More from: BankThink

3 days 8 hours ago
Ahead of a long weekend, companies are looking for approval from bankruptcy judges next week on a variety of motions, including one signoff that would largely conclude an old dispute. On Monday, J.P. Morgan Chase & Co. and the remnants of Lehman Brothers Holdings Inc. will ask for approval of a $1.42 billion settlement that resolves claims that J.P. Morgan illegally siphoned billions of dollars from Lehman before its collapse. The deal resolves the bulk of Lehman’s $8.6 billion lawsuit against J.P. Morgan and the bank’s counterclaims against Lehman. It also puts to rest Lehman’s challenges over J.P. Morgan’s closeout of thousands of derivatives contracts following the investment bank’s collapse. Although the settlement doesn’t resolve all the claims between Lehman and J.P. Morgan, it ends a “significant portion” of their disputes, court papers said, and allows the post-bankruptcy Lehman estate to make another $1.5 billion distribution to the investment bank’s creditors. The settlement comes after a federal judge last fall ruled for J.P. Morgan, saying the bank didn’t abuse its leverage as Lehman’s primary clearing bank to force the investment bank to hand over more collateral in the weeks before its September 2008 collapse.

Read More from: WSJ.com: Bankruptcy Beat

3 days 8 hours ago
Business owners with unpaid payroll taxes are in deep trouble. There’s no corporate shield when it comes to payroll taxes. Even if the employer is a corporation, the corporation’s management is personally liable for the trust fund portion of unpaid payroll taxes. The trust fund portion of the tax (the amount withheld from employees’ checks) can be assessed against anyone in the business who could have paid that money over to the IRS. You are in the IRS’s cross hairs, personally, if the business hands out “net” checks to employees with sending the withheld money in.  A bankruptcy discharge is no help here. What’s the payroll tax What we refer to as “payroll tax” is really a combination of two elements:  the employee’s taxes that the employer has withheld and the employer’s share of FICA  (Social Security) tax. Usually, trust funds make up about 2/3rds of the payroll tax.  The balance is the business’s matching contribution to Social Security. Trust fund liability is not dischargeable in bankruptcy.  The statute of limitations is 10 years and the IRS is a fearsome creditor. Earmark tax payments
3 days 9 hours ago
Upcoming Committee Formation Meeting:   Thursday, February 11, 2016, 10:00 a.m. Case Name:  Liquid Holdings Group, Inc., et al. Case Number:  16-10202 (KG) Location:  State Bar of Delaware 405 N. King St. Wilmington, DE 19801 The debtor’s petition is available here, and additional documents are available from the Court’s website.  The company has released a press release regarding its bankruptcy filing. Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.  
3 days 10 hours ago
Upcoming Committee Formation Meeting: February 11, 2016, 12:00 p.m. Case Name: Outer Harbor Terminal, LLC Case Number: 16-10283 (LSS) Location: The Sheraton Suites Wilmington Downtown, 422 Delaware Ave., Wilmington, DE 19801 Notice of Formation Meeting for Official Committee of Unsecured Creditors is available here. The petition, including the consolidated list of top 20 creditors, is provided.  A press release regarding the termination of the debtor’s operations at the Outer Harbor Terminal in Oakland is available here. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.
3 days 10 hours ago
Upcoming Committee Formation Meeting: February 12, 2016, 10:00 a.m. Case Name: Ryckman Creek Resources, LLC, et al. Case Number: 16-10292 (KJC) Location: The DoubleTree Hotel, 700 King St.,Wilmington, DE 1980 Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. The petition, including a consolidated list of top 30 creditors with the U.S. Bankruptcy Court for the District of Delaware are available from Kurtzman Carson Consultants, LLC. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.  
3 days 10 hours ago
Despite their recent growth, too few marketplace lenders are reporting data to the consumer reporting agencies, which could negative repercussions on the financial system.

Read More from: BankThink

3 days 10 hours ago
Upcoming Committee Formation Meeting:  Wednesday, February 10, 2016, 10:00 a.m. Case Name: Hancock Fabrics, Inc., et al. Case Number:  16-10296 (BLS) Location: The DoubleTree Hotel, 700 King St.,Wilmington, DE 1980 The petitions (including the consolidated list of top 30 creditors), the first day declaration and the docket for the cases are available through Kurtzman Carson Consultants.  The company has issued a press release regarding its restructuring. Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.  
3 days 10 hours ago

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