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  Divorce usually requires the division of the debts of the marriage along with the assets. The legalese usually requires each party to indemnify and hold harmless the other from the debts assigned to that party. Most folks skim over that provision to worry about the division of assets or support issues or the termination of their status as married people. Indemnification is worth another look. Long after the personal property that was divided has worn out and the need for support has passed, the right to indemnification may live on. Given the length of some statutes of limitation and an industry selling and collecting on time barred debt, the obligation to indemnify your ex may live longer than the marriage. So, what’s indemnification all about? Indemnification creates a new debt First, let’s define indemnify.  It means to make someone whole should they suffer a particular kind of loss. In the case of a divorce, a right to indemnity would require one spouse to pay all the damages inflicted on the other by reason of a debt assigned to the other spouse.
10 hours 39 min ago
Construction of the Baha Mar resort on the beach in the Bahamas. Baha Mar’s bankruptcy judge likely will rule on a bankruptcy case dismissal next month. 
Baha Mar
Baha Mar Ltd.’s bankruptcy judge outlined two different middle grounds on dismissal of the resorts project’s bankruptcy, 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.”) According to WSJ, Puerto Rico’s governor extended a draft restructuring plan deadline. A judge awarded Thornburg Mortgage Inc.’s liquidating trustee $45 million in a lawsuit against the Royal Bank of Canada, DBR reports via WSJ.

Read More from: WSJ.com: Bankruptcy Beat

13 hours 3 min ago
On August 26, 2015, Santa Fe Gold Corporation and three of its subsidiaries, filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Court”).  The case no. is 15-11761 and is pending before the Honorable Mary F. Walrath. The Debtors are continuing in possession of their properties and are managing their businesses, as debtors in possession, in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. Santa Fe Gold is a U.S.-based mining and exploration enterprise.  Santa Fe controls: (i) the Summit mine and Lordsburg mill in southwestern New Mexico; (ii) a substantial land position near the Lordsburg mill, comprising the core of the Lordsburg Mining District; and (iii) a deposit of micaceous iron oxide (MIO) in Western Arizona. According to their petition, the Debtors have approximately $19 million in total assets, and $29.8 million in total debts. Carl D. Neff is a partner with the law firm of Fox Rothschild LLP.  Carl is admitted in Delaware and regularly practices before the United States Bankruptcy Court for the District of Delaware. You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.
13 hours 37 min ago
USA Discounters Ltd. filed for bankruptcy protection in the Delaware Bankruptcy Court and plans to wind down its business.  The case is before the Honorable Christopher S. Sontchi, and is assigned case no. 15-11755-CSS. Prior to its bankruptcy filing, USA Discounters sold furniture, appliances, electronics, jewelry and other products from stores located near military bases, often financing such purchases through its own credit program. The company cited the tough retail climate, a defaulted loan and various governmental actions regarding its operations as factors for the chapter 11 filing. USA Discounters expects to use its time in chapter 11 to wind down its operations. It closed its twenty-four USA Living stores before filing for bankruptcy protection and is still considering its options for its seven Fletcher’s Jewelers stores. Founded in 1991 in Norfolk, Va., USA Discounters financed customers’ purchases of such items as televisions, washers, dryers and jewelry—products it said “might otherwise be out of reach” for its customers, many of whom were military members and their families and had “limited resources or tarnished credit profiles. USA Discounters has stated that it is owed an estimated $114 million on existing payment plans, its most significant asset.
13 hours 47 min ago
Like most bank defendants, Key Bank was looking for the quickest way out of a $5 million fraudulent transfer lawsuit brought by a chapter 7 Trustee.  Rather than wait to win in the standard path of arguing facts, the bank relied on the broad and powerful “safe harbor” provision of the bankruptcy code which protects certain transfers from recovery.  In doing so, the bank utilized a technical, but effective, argument to avoid the need for trial and simply exit the case where it entered. Intersteller Credit: Paramount Pictures I. The Underlying Loan The basic transactional history of the case will sound fairly familiar to many readers; however, that is why it will be equally important in light of the outcome.  A loan in the amount of $11.2 million was made to an insider of the bankrupt debtor prior to bankruptcy.  While the bankrupt debtor had no obligation to repay the loan, the debtor did, in fact, pay back approximately $5 million to the lender. Shortly after the note was signed and the loan was funded it was assigned to a REMIC as a CMBS governed by a Pooling and Servicing Agreement (“PSA”).  Key Bank’s servicing arm was the master servicer for another major bank as trustee (the “Trustee”) for the Loan.  II. The Lawsuit

Read More from: Tough Times for Lenders

21 hours 21 min ago
The Consumer Financial Protection Bureau (CFPB) released its monthly consumer complaints snapshot. The report spotlights credit reporting complaints. According to the report, the majority of the credit reporting complaints were about problems with incorrect information on the reports. As of August 1, 2015 the Bureau has handled over 677,000 complaints across all products. “Whether a consumer is trying to get a mortgage, apply for a student loan, or buy a car, credit reports are fundamentally important in allowing people to access their financial goals,” said CFPB Director Richard Cordray. “As we see a rise in the number of consumers complaining about this issue, the Bureau will continue to work to ensure that credit reports are fair, accurate, and readily available to all consumers.”
2 days 7 min ago
  Sounds kinky, doesn’t it? Three players in a marriage. Sharing. Everything. Only this is something you can talk about openly, without blushing: community property. Community property is the default arrangement in California for a married couple. Yet it is poorly understood by those practicing it and it isn’t inevitable. How community property works The community property system provides that everything acquired during marriage is equally owned by the spouses, regardless of which spouse acquired it. The law provides that property owned before marriage or acquired by gift or inheritance is the separate property of the spouse who acquired it. The most vivid way to imagine the community property system is to see marriage as comprised (for financial issues) of three players:
  • husband,
  • wife, and
  • the community property.
Each of the three may have different exposure to debts. [ I speak here of the traditional composition of a marital couple, but remember that both same sex couples and registered domestic partners fall under the California community property system. ] The central concept is that only the person who contracts for a debt is personally liable.
2 days 10 hours ago
Next week in bankruptcy, Patriot Coal Corp. will kick off a series of hearings on Monday, including a request to sell off its remaining mines and a trial over its bid to reject the labor agreements governing its union members. Patriot has asked Judge Keith Phillips of the U.S. Bankruptcy Court in Richmond, Va., for permission to terminate a union contract that includes pension contributions and health benefits for its union miner retirees. The company has blamed the continued strain of pension and other obligations owed to its miners as well as troubles in the coal industry for its bankruptcy. Patriot sought chapter 11 protection in May, less than two years after emerging from its prior court restructuring. The union, United Mine Workers of America, is negotiating with the company as well as with the proposed buyers, but union lawyers say Patriot is intent on walking away from its environmental cleanup costs and its obligations to workers after handing over valuable assets to top-ranking creditors. The looming battle prompted hundreds of union miners and retirees to protest outside Patriot’s headquarters last week.

Read More from: WSJ.com: Bankruptcy Beat

3 days 8 hours ago
Bloomberg
Cash-starved oil-and-gas companies are getting a lot of mileage out of their assets these days. A severe slump in commodity prices has sent energy explorers and producers scrambling to shore up their balance sheets, leading to a flurry of debt sales this year by the industry’s most financially strained firms. The new bonds typically promise creditors ownership of the company’s assets, should it default. But in many cases, that claim sits behind the liens of one or even two higher-priority slices of debt. Halcon Resources Corp. highlighted the trend late Thursday, exchanging $1.57 billion in unsecured bonds for $1.02 billion in new “third-lien” debt, backed by a claim on the company’s assets that sits behind those of its credit line and $700 million in bonds the company sold in May. Halcon followed Midstates Petroleum Co., a Tusla oil-and-gas company that in May issued $504 million in bonds with a third-priority claim on the company. Midstates sold the bonds as part of a broader financing that also swapped unsecured bonds for second-lien debt.

Read More from: WSJ.com: Bankruptcy Beat

3 days 8 hours ago
Banks need more clarity about the circumstances under which attorney-client privilege applies. Otherwise they may decline to ask questions about the legality of their actions, leading to even more compliance problems.

Read More from: BankThink

3 days 11 hours ago
As we close out the week, we have our final summary of everything you need to know from the last two months.  Enjoy the weekend and keep preparing for back to school bankruptcy! Breathing New Relevance Into the Trust Indenture Act
3 days 11 hours ago
Receiving Wide Coverage ... Mixed Signals: The backlash to the backlash has begun. After the China-infused market meltdown, hopes were dashed for a September rate hike, with voices ranging from Larry Summers to William Dudley calling the timing into question. Now we hear voices calling out, according to reports in the Wall Street Journal, New York Times and CNBC, to quit dragging your feet and get on with it. ...

Read More from: BankThink

3 days 11 hours ago
A judge’s ruling Thursday paves the way for a trial in a lawsuit over Caesars Entertainment Corp.’s debt guarantees of its operating unit in bankruptcy, Caesars Entertainment Operating Co., 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.”) Baha Mar Resort Ltd. filed a restructuring plan in a U.S. court ahead of a hearing on whether to dismiss its bankruptcy, DBR reports via WSJ. Dewey & LeBoeuf LLP’s former chairman wants fraud charges against him dismissed, WSJ reports. A casino workers’ union can’t beam words of protest against Carl Icahn from a projector onto casino walls owned by Mr. Icahn, the Associated Press reports.

Read More from: WSJ.com: Bankruptcy Beat

3 days 13 hours ago
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
4 days 5 hours 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

4 days 6 hours 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

4 days 8 hours 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

4 days 9 hours 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

4 days 9 hours 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.
4 days 10 hours 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

4 days 10 hours ago

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