ABI Blog Exchange

A view of a Cache store at The Shops at Columbus Circle in Midtown Manhattan
Sara Randazzo
For bargain hunters, prom-dress shopping may be starting early this year. Cache, a women’s dress and formalwear retailer, is about to launch going-out-of-business sales at its more than 150 stores nationwide, the company told a bankruptcy judge this week. The latest in an increasingly long line of troubled women’s retailers to seek chapter 11 protection, Cache started its run through bankruptcy hoping to find a buyer willing to keep some stores alive. That aspiration ultimately failed, though a 25-hour auction did drive up the price of the company’s remaining assets. An attorney for Cache told a judge Tuesday that the marathon auction, which lasted all day Monday and through the night, is expected to bring in $18 million for creditors.

Read More from: WSJ.com: Bankruptcy Beat

2 hours 35 min ago
  Some excuses never seem to wear out. There seems to be no limit to the number of times a mortgage loan servicer can claim they haven’t received all the documents they need. Then, they base their denial of a loan modification on the borrower’s lack of responsiveness. Whether your mental image of the problem is caught in this cartoon, or whether you image the last scene from Raiders of the Lost Ark, where the precious tablets are dutifully stored away and forgotten in a government warehouse, the problem is the same: Loan servicers assume no responsibility for the manner in which they handle, or mangle, loan modification applications. The tide is turning. Not that lenders have learned to handle paper.  I’ve seen no evidence of that. Courts reject servicer defenses But courts are losing patience with the “dog ate my homework” excuse for why borrowers were denied a modification or why they violated the California Homeowners Bill of Rights. Most recently, federal judge Claudia Wilken (N.D. CA)  ruled that servicers have legal duties to the borrower when they offer loan modifications. A breach of that duty can result in a right to damages.
2 hours 45 min ago
This Oct. 24 photo shows union members picketing outside the Trump Taj Mahal casino in Atlantic City N.J. On Tuesday Feb. 3, Local 54 of the Unite-HERE union filed 27 unfair labor practices against Trump Entertainment resorts with the National Labor Relations Board.
Associated Press
Creditors are voting on a bailout plan for the troubled Trump Taj Mahal, but the crucial ballots will be cast by federal judges in Philadelphia, who will decide the fate of the casino’s union contracts. 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.”) Oil-and-gas company Cal Dive International filed for chapter 11 protection, WSJ reports.

Read More from: WSJ.com: Bankruptcy Beat

3 hours 22 min ago
The Financial Stability BoardÂ's proposed capital and long-term debt requirements would only go part of the way toward ending the risk of government bailouts. If regulators really want to get rid of too big to fail, they need to deal with over-the-counter derivatives market.

Read More from: BankThink

3 hours 45 min ago
Wall Street Journal Is this the first wave of backlash to Apple Pay? Or was it simply to be expected that it was only a matter of time before hackers cracked the Apple Pay code? Either way, some banks say they've seen an increasing amount of fraud on Apple Pay devices. The weakness in the system is apparently related to the verification process associated with a user adding a credit card to the service, unnamed sources...

Read More from: BankThink

4 hours 44 min ago
On March 3, 2015, Cal Dive International, Inc. and five affiliates filed voluntary chapter 11 bankruptcy petitions in Delaware.  The cases are docketed at 15-10458 and have not, as of this posting, been assigned to any particular judge. According to the Declaration of Quinn J. Hebert, CEO, President, Chairman of the Board of the Debtor and acting CFO, the Debtors, together with certain non-debtor foreign affiliates are a global marine contractor providing services to customers engaged in the offshore oil and gas industry.  2014 revenue was approximately $394 million.  The Hebert Declaration cites construction delays and weather disruptions as factors impacting the Debtors’ ability to complete work and recoup capital outlays, thus dramatically impacting liquidity. Although, according to the Declaration, the Debtors worked to find a refinancing solution to shore up their liquidity, the Debtors were sharply impacted by the plummeting oil and gas prices.  In turn, the plummeting prices and uncertainty about the oil and gas market made it more difficult to find financing.  The Debtors were therefore forced to file the chapter 11 cases.
7 hours 54 min ago
In a recent article at CommercialBankruptcyInvestor.com, John Peterson provides insight for distressed investors on the potential of a debtor to re-write the business terms of a loan in bankruptcy. Read this important article here!
15 hours 31 min ago
In an article at CommercialBankruptcyInvestor.com a recent settlement between Mega RV Corp. and its Lender is discussed in detail. Find out what it means for creditors here!
15 hours 40 min ago
In a Breaking News Alert  at CommercialBankruptcyInvestor.com, Chapter11Dockets.com discusses Caesars Entertainment Operating Company’s Proposed Plan of Reorganization here!
15 hours 44 min ago
JP Morgan Chase Lies in 50,000 Bankruptcy Cases JP Morgan Chase today admitted they lied in 50,000 bankruptcy cases. Chase filed sworn statements in 50,000 bankruptcy cases, signed by people who had no idea what they were signing.  Some were “signed” by people who no longer worked at Chase. Here’s the Justice Department announcement.   Chase […]The post Biggest Bank in America Lies in Bankruptcy Cases by Robert Weed appeared first on Robert Weed.

Read More from: Robert Weed

17 hours 35 min ago
I am so pleased to offer the following post by Carolina Reid, a premier housing researcher at UC Berkeley, about her excellent study of how mortgage servicers matter in creating home-saving opportunities. Welcome Carolina to Credit Slips. By now we’re all familiar with a plethora of Wall Street financial acronyms, from ABSs to CDOs and CDSs.  But what about MSRs (mortgage servicing rights)?  Until a year ago, I had never heard of MSRs, so I was surprised to find out that the rights to collect my mortgage payment are traded on Wall Street, much in the same way mortgage backed securities are traded. And, as a borrower, I have very little control over who purchases the servicing rights to my mortgage, despite the fact that it is usually the servicer who decides whether to offer a loan modification or start the foreclosure process if I become delinquent.  Borrowers can’t “shop around” for the best servicer – you get who you get (but maybe you should get upset).

Read More from: Credit Slips

18 hours 32 min ago
Correspondent banking has long relied on a costly, multistep process to settle transactions. Now banks must weigh whether to adopt cryptocurrency technology that allows for faster, cheaper settlements or risk getting pushed out of the business entirely.

Read More from: BankThink

19 hours 58 min ago
Filing Bankruptcy Can be Good for Your Credit Score Last week, The Federal Reserve Bank of New York published a study of people who did, and didn’t, file bankruptcy. The results didn’t surprise me, but they might startle you. Comparing people in financial trouble who filed bankruptcy and people who kept struggling, these economists who […]The post Filing Bankruptcy Can be Good for Your Credit Score by Robert Weed appeared first on Robert Weed.

Read More from: Robert Weed

20 hours 42 min ago
The March 2015 edition of the ABI Journal includes an article that Jeffrey Waxman co-authored with his frequent co-counsel, Jennifer McLain McLemore, titled “Document Preservation Strategies for Creditors in a World with Changing Discovery Rules.” The article explores the potential impact on creditors’ document-retention practices and addresses the requirements and best practices for document retention by creditors in light of the new proposed changes to the Federal Rules of Civil Procedure. Click here to read “Document Preservation Strategies for Creditors in a World with Changing Discovery Rules.”
22 hours 32 min ago
According to the Fitch Ratings’ Report, annual U.S. personal bankruptcy filings are dropping for the fifth year in a row. However, the report also states that the rating decline should begin to level off soon, as lending guidelines become more lax. Total bankruptcy filings are predicted to fall another eight to 10 percent in 2015. […]
23 hours 13 min ago
The United States Bankruptcy Court for the District of Montana hereby announces the retirement of Clerk of Court Bernard F. “Bernie” McCarthy, effective February 27, 2015.Bernie was appointed to the office of clerk of court on January 2,1990 by Judge John L. Peterson. Prior to becoming clerk of court Bernie served as justice of the peace in Helena, Montana, from 1985 to 1990. Bernie graduated with a degree in history from Carroll College in 1977, and received a juris doctorate from the University of Montana School of Law in 1983. Bernie served as chair of the Federal Judicial Center Clerk’s Education Advisory Committee from 1994 to 1998, and was president of the National Conference of Bankruptcy Clerks from 1998 to 2000. He served as president of the State Bar of Montana from 2005 to 2006.  The court will hold an open house retirement celebration in Bernie’s honor at the Mansfield Courthouse in Butte from 1:00 to 3:00 p.m. on March 27, 2015.
23 hours 56 min ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  Venue has been hotly debated in bankruptcy circles for years. While the current rules provide significant leeway for a company to decide where it should file for bankruptcy protection, venue reformers believe that the rules should be amended to limit proper venue to the district of the debtor’s principal place of business or principal assets, or in a district where an affiliate has filed for bankruptcy relief when the affiliate owns more than 50% of the debtor’s voting shares. Poking a stick in the eye of the reformers, the recent ABI Commission to Study the Reform of Chapter 11 didn’t recommend any changes to the rules on venue in chapter 11 cases.

Read More from: WSJ.com: Bankruptcy Beat

1 day 17 min ago
Authored by J. Ellsworth Summers, Jr. and Scott St. Amandand J. Ellsworth Summers, Jr. and Scott St. Amand of Rogers TowersAs we discussed in our previous post, in the wake of the financial crisis that began with large financial institutions failing in 2008, practitioners and politicians alike have been calling for Bankruptcy Code reform.  Both the U.S. House and Senate have proposed solutions, yet with the recent midterm election results, the future of these two proposals is murkier than ever. Part 1: The House Plan:  Subchapter 5 The House of Representatives has proposed a revision of Chapter 11 that would add a fifth subchapter to the Bankruptcy Code dealing specifically with the promotion of recapitalization of distressed financial institutions and protecting global financial markets from panic.  The proposal, entitled the “Financial Institutions Bankruptcy Act” (FIBA), was passed by the House Judiciary Committee in a bipartisan vote in September and now sits before the full chamber.

Read More from: Florida Banking Law Blog

1 day 45 min ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  The sporadic outcry for reform of the bankruptcy venue statute is unwarranted—the existing law provides debtors with appropriate flexibility to reorganize while simultaneously protecting interested parties. In short, the venue debate is much ado about nothing. “Reformers” contend that permitting a debtor to file a case in either its state of incorporation, principal place of business or location of the filing of an affiliate inappropriately allows a debtor to file where it has the best chance of getting a favorable ruling on a particular issue. Why is this a problem? Aren’t those same incentives at play when parties negotiate what the governing law of a contract should be? If so-called “forum shopping” jeopardizes the fundamental underpinnings of our bankruptcy system, isn’t there a similar level of danger in the very fact that a  single issue could be decided differently depending on which bankruptcy court oversees a case?

Read More from: WSJ.com: Bankruptcy Beat

1 day 46 min ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  When the ABI Commission to Study the Reform of Chapter 11 declined to make a recommendation on venue selection reform this past December, a number of people were surprised and disappointed. Critics of the rules as currently written have a number of issues with them, but generally they say the rules are too broadly scripted. As a result, debtors “shop” for a venue where case law on issues critical to their reorganization are most favorable. It’s important to remember that in a restructuring only the debtor has a fiduciary duty to maximize recovery for all stakeholders, whereas individual creditors have a duty only to themselves. It’s therefore reasonable to expect that a debtor will select a venue where case law supports its efforts to achieve a successful reorganization. In fact, you could argue that’s exactly what a debtor should be doing. Of course, there are rules prescribing proper venue that must also be followed. But assuming they are, courts tend to defer to a debtor’s choice of venue and have said as much in high-profile cases like Energy Future Holdings and, most recently, in Caesars.

Read More from: WSJ.com: Bankruptcy Beat

1 day 1 hour ago

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