Help Center

ABI Blog Exchange

Posted by Kathy Bazoian Phelps    Below is a summary of the activity reported for July 2015. The reported stories reflect: 10 guilty pleas or convictions in pending cases; over 166 years of newly imposed sentences for people involved in Ponzi schemes; at least 11 new Ponzi schemes involving over $112 million; and an average age of approximately 50 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.    Alisa Adler, 54, was charged with running a Ponzi scheme the involved a real estate development business run through ASG Real Estate Services Group. She solicited investor funds to supposedly purchase and develop real estate but instead used the money to make Ponzi scheme payments and for her personal expenses.    Will Allen, 36, was indicted for his involvement with a Ponzi scheme run with Susan Daub, 55, through Capital Financial Partners LLC.  The scheme involved $31 million and supposedly provided high interest short term loans to athletes. More than 40 people invested in the scheme and were promised 18% returns.    John Steven Blount, 54, pleaded guilty to charges relating to a $5.8 million Ponzi scheme that he ran through his company, Professional Consultants LLC.

Read More from: The Ponzi Blog

7 hours 9 min ago
A recap of the informed opinions (and the discussions they generated) on BankThink this week, including whether independent consultants should be criminally liable for misrepresentations in their reports and whether higher rates will help or hurt banks.

Read More from: BankThink

11 hours 43 min ago
This week on The Broke and the Beautiful, it’s all Relativity, Teresa Giudice sued her bankruptcy lawyer, and David Cassidy gave a tour of the house he’s putting up for auction.
In this Jan. 20 file photo, Ryan Kavanaugh, chief executive officer of Relativity Studios, attends the Los Angeles Premiere of “Black or White.” Relativity Media filed for chapter 11 bankruptcy protection Thursday.
Paul A. Hebert/Associated Press
As Daily Bankruptcy Review reported in The Wall Street Journal, independent film studio Relativity Media LLC filed for bankruptcy this week, weighed down by more than $500 million in debt and recent box-office flops. Relativity, known for TV show’s like MTV’s “Catfish” and “Guy’s Grocery Games,” as well as recent movies including “Black or White” and “The Lazarus Effect,” plans to sell itself at auction, with a group including Anchorage Capital (but not founder and Chief Executive Ryan Kavanaugh) leading the bidding.

Read More from: WSJ.com: Bankruptcy Beat

13 hours 53 min ago
A.  Where We Left Off As noted in Part III, movants seeking approval of structured dismissal motions typically must prove that the proposed dismissal is in the best interest of the creditors. To do so, movants will usually have to prove that the dismissal provides better treatment than would a liquidation. To that end, most structured dismissals contain what are commonly referred to as “bells and whistles” that sweeten the deal for creditors. Unfortunately, many of the bells and whistles commonly included in structured dismissal motions draw the ire of the United States Trustee. This section will identify some of the most common bells and whistles, while the next installment of this series will identify and address the U.S. Trustee objections. B.  Bells and Whistles – Dismissals with Benefits

Read More from: Insolvency Insights

14 hours 43 min ago
On Tuesday in Manhattan, the trustee unwinding Lehman Brothers Inc. will ask a bankruptcy judge for permission to pay nearly $2 billion to the defunct brokerage’s unsecured creditors, which would be the third such distribution since he paid off the brokerage’s customers. If approved by Judge Shelley Chapman, that would bring the total amount returned to creditors to more than $8 billion, a recovery of about 35 cents on the dollar. Combined with distributions made to customers, the total amount recovered in the brokerage’s liquidation would be about $114 billion. In court papers, lawyers for trustee James W. Giddens said that after the third distribution, further payouts would be contingent on winning or settling pending litigation, which would free up funds currently on reserve. Mr. Giddens began paying back creditors—former employees, pension funds, banks and investment firms with unsecured claims against the brokerage—last summer after paying back the brokerage’s customers. The distinction between “customer” and “creditor” is a crucial one in the Lehman case. Customers get 100% of their money back, while unsecured creditors get much less. Also Tuesday, a federal judge in Chicago will hear Caesars Entertainment Operating Co.’s latest bid for a quick appeal of a recent decision that creditor lawsuits can continue against the casino giant’s parent, Caesars Entertainment Corp.

Read More from: WSJ.com: Bankruptcy Beat

16 hours 57 min ago
If you go to the doctor and the doctor prescribes medicine made by a company that the doctor owns shares in, does the doctor have a conflict of interest?   What if the doctor is paid for every pill she prescribes?  Is that a conflict? Read more here.
17 hours 16 min ago
This week, the Examiners took up the issue of suffering shoppers in retail bankruptcies. Many said bankruptcy law offers sufficient protections to customers when their favorite stores run into distress, though they acknowledged customers don’t always know how to take advantage of these protections. And while some said the onus is on the consumer to protect himself by knowing the risk involved with retail transactions, others said it is simply good business for retailers to look out for consumers. Whether shoppers deserve special treatment divided readers on Twitter:    

Read More from: WSJ.com: Bankruptcy Beat

18 hours 2 min ago
It's not enough for banks to avoid deceptive practices. As the CFPB's latest enforcement action against JPMorgan Chase makes clear, banks are obligated to ensure their systems protect consumers from easily preventable mistakes.

Read More from: BankThink

18 hours 42 min ago
“Dream the impossible dream; eat the impossible sundae…”  So the song goes – or rather, went – at The Show Place Ice Cream Parlour in Beach Haven, New Jersey.  Sadly, The Show Place and the adjoining Surflight Theatre have closed their doors and will be liquidating their assets in chapter 7.  The authors have fond memories of shows at the Surflight and family outings to The Show Place, and we are now in the unenviable position of wishing the institution a melancholy happy trails.  So for this installment of Bankruptcy Beach Reading, we take you to Long Beach Island, New Jersey, to bid farewell to the Surflight Theatre and The Show Place.  The Surflight Theatre was founded in 1950, with its first shows taking place in a tent by the beach.  As Long Beach Island grew, so too did the Surflight, eventually constructing a 450-seat theater, which has stood in the same location in Beach Haven for the past thirty years.  The Surflight put on high-quality shows in its short summer seasons and was a hub of arts and culture in the burgeoning beach communities on Long Beach Island.  News sources report that in that time, it gave rise to a number of stage and screen personalities, including Jim Brochu, James Brennan, Charlotte D’Amboise, Ed Dixon, David Hartman, Richard Kind, David Loud, and Seth Rudetsky.
18 hours 51 min ago
Wall Street Journal The U.S. may be second fiddle to Europe in the Ryder Cup golf competition, but that's not the case when it comes to investment banking. As Europe's large banks with big investment bank operations talk about doom and gloom, and as their shares plummet, their U.S. counterparts are moving in the opposite direction. ...

Read More from: BankThink

19 hours 38 min ago
Ryan Kavanaugh, Relativity Media CEO, takes part in a panel titled “Can Hollywood Speak Chinese?” during the Milken Institute Global Conference in Beverly Hills, Calif., in April. The company filed for bankruptcy Thursday.
Reuters
Independent film studio Relativity Media LLC, behind releases like “The Lazarus Effect” and MTV’s “Catfish,” flied far bankruptcy with plans to sell itself at auction. Read the Daily Bankruptcy Review article 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.”) Coal maker Alpha Natural Resources Inc. may file for bankruptcy as soon as Monday, Bloomberg reports.

Read More from: WSJ.com: Bankruptcy Beat

21 hours ago
I enjoy listening to a variety of podcasts while walking the dog or driving to the office. Podcasts are really amazing thing for those who crave learning, although there seems to be some rule that requires 50 bad shows to appear before you find a really great one. (Have you loaded the Stitcher radio app on your smartphone yet?  You really should.)  The EntreLeadership podcast is one of the better shows being streamed these days, and I had the pleasure of listing to Dale Partridge talk about his new book, People Over Profits. As you might guess, the message of the book is that a business will not succeed in the long-run if it places profits over people, despite some evidence to the contrary.  Perhaps it is better to say that businesses will be more successful in the long-run if they keep their customer’s best interest at heart.  I think it really comes down to establishing trust.  We trust that Apple computers are top notch and that Starbuck’s coffee is always great–they have earned that reputation.
21 hours 5 min ago
On July 29, 2015, Deb Shops SDFMC LLC, in its capacity as debtor in possession, filed 92 preference complaints seeking to avoid and recover alleged preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code, and to disallow claims of the defendants pursuant to Section 502(d). By way of background, Deb Shops SDFMC LLC (“Deb Shops” or the “Debtors”) filed voluntary petitions for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on December 4, 2014 under Chapter 11 of the Bankruptcy Code.  By order dated December 5, 2014, the Debtors’ Chapter 11 cases were consolidated for procedural purposes only and therefore are being jointly administered pursuant to Bankruptcy Rule 1015(b). The Rosner Law Group and ASK LLP represent the Debtors in these various preference cases.  The pretrial conference has not been scheduled.  These adversary actions, as well as the Debtors’ bankruptcy proceeding, are before the Honorable Kevin Gross. For preference defendants looking for an analysis of defenses that can be asserted in response to a preference complaint, below are several articles on this topic: Preference Payments: Brief Analysis of Preference Actions and Common Defenses
1 day 7 hours ago
Several of Relativity Media LLC’s largest creditors have joined together in a stalking horse bid for the Hollywood studio that would see the exit of its founder and chief executive, said people familiar with the matter. Anchorage Capital Group LLC, Luxor Capital Group LP and Falcon Investment Advisors LLC are all part of an offer that will set the minimum floor as bidding for the studio, which on Thursday filed for chapter 11 bankruptcy, begins soon. However, Ryan Kavanaugh, Relativity’s CEO who has been a lightning rod for controversy as the company behind the Bradley Cooper thriller “Limitless” and reality show “Catfish” has faced financial and legal troubles recently, is not affiliated with the bid, one of the knowledgeable people said. He is not expected to continue as CEO if their bid is successful. Mr. Kavanaugh is attempting to put together his own bid for Relativity, a person close to the CEO said. Mr. Kavanaugh started Relativity in 2004 and guided its evolution from an arranger of financing for movies released by studios like Sony Pictures Entertainment and Comcast Corp.’s Universal Pictures into a producer and distributor of movies and television that with interests in such disparate businesses as a for-profit university and a sports agency.

Read More from: WSJ.com: Bankruptcy Beat

1 day 10 hours ago
The Cathedral of St. Paul in St. Paul, Minn.
Associated Press
A Minneapolis bankruptcy judge criticized legal fees and other expenses that have accrued over the course of the Archdiocese of St. Paul and Minneapolis’s bankruptcy case. Though he ultimately approved the bill, Judge Robert Kressel of the U.S. Bankruptcy Court in Minneapolis said Thursday he was “stunned” and “frankly a little angry” over the legal fees and other expenses, which court papers show were approaching $1.8 million as of May 31. That includes the archdiocese’s professionals and those hired by a victims group, whose fees the archdiocese is obligated to cover. “Airlines were reorganized for a fraction of this,” he said. The Archdiocese of St. Paul and Minneapolis filed for chapter 11 bankruptcy protection in January and has since been working to reach a settlement with alleged clergy sexual abuse victims, its parishes and its insurance carriers. Lawyers working on the case have to share the same limited pool of funds that the archdiocese’s creditors—primarily, the abuse victims—are counting on for compensation.

Read More from: WSJ.com: Bankruptcy Beat

1 day 12 hours ago
Ryan Kavanaugh, Relativity Media’s chief executive, in California on April 27. Relativity filed for chapter 11 bankruptcy Thursday.
Mario Anzuoni/Reuters
Relativity Media LLC’s chapter 11 filing Thursday capped off weeks of intense speculation as to when the troubled film and television studio would turn to the bankruptcy court for relief from a heavy debt load, box-office flops and a bitter legal battle. Here’s a look back at the company’s path to chapter 11. May 20: An advertising agency sues Relativity over an unpaid $401,000 bill, which Relativity paid later that day. Late May: Relativity reportedly misses a deadline to pay the holders of more than $300 million in debt, but its lenders agree to a grace period.

Read More from: WSJ.com: Bankruptcy Beat

1 day 13 hours ago
As Jason Kilborn has graciously described, Credit Slips is the blogging base of the authors of the Law of Debtors and Creditors, 7th edition, (Aspen/Wolters Kluwer 2015). We have revised the Teacher's Manual this summer and encourage all adopters or potential adopters to download the new version, available at the book's Companion Website. If we you need the professor password, email your Aspen rep or one of us.  The unfun change was discovering a few typos (blush!) in the textbook itself. We created an errata. Distributing that to your students on the first day of class will help everyone. The fun work was updating the Teacher's Manual to reflect our own experiences in the classroom and your feedback. We hope that we've given improved guidance for certain problems and we updated the discussion to reflect several changes in law.

Read More from: Credit Slips

1 day 13 hours ago
Bank of America puts an HR exec in charge of stress testing, a look at how Yellen compares to Bernanke at the 18-month mark as Fed chair, Sen. Collins tries to help small banks and Cullen/Frost shuffles some key executives.

Read More from: BankThink

1 day 14 hours ago
One of the most difficult hurdles Elkhorn bankruptcy clients face is paying bankruptcy attorney fees when they are already broke. However, the last thing an Elkhorn bankruptcy client should do is hire the cheapest bankruptcy attorney they can find. There are many low cost bankruptcy attorneys who advertise their cheap prices to unsuspecting clients, just like you. You must use extreme caution. The old saying, “You get what you pay for” holds true for bankruptcy attorney fees, too.   Hiring a Cheap Elkhorn Bankruptcy Attorney Can Be a Huge Mistake When you research bankruptcy attorney fees, you may find a huge spread in the price ranges. This is due to the quality of work that will be dedicated to your case. This could be disastrous for you. Hiring an Elkhorn bankruptcy attorney who is not skilled, experienced, or knowledgeable in bankruptcy law, could potentially end with your bankruptcy case being thrown out. Once that happens, it is over. You get one shot. You don’t want to blow it. While not all inexpensive bankruptcy attorneys are ignorant of bankruptcy laws and not all expensive bankruptcy attorneys are outstanding, you will need to proceed with caution. Research is the key to finding the best bankruptcy attorney for your needs. There are many more factors to consider, besides price, when looking for a competent Elkhorn bankruptcy attorney. You should also consider the following:

Read More from: Wynn at Law, LLC

1 day 14 hours ago
Recharacterization: an overview The Bankruptcy Code provides numerous mechanisms to ensure the equitable and efficient administration of claims against a debtor’s estate.  Certain courts, however, have gone beyond the express provisions of the Bankruptcy Code and fashioned the remedy of recharacterization as a means of enforcing the Bankruptcy Code’s priority scheme.  Recharacterization involves the reclassification of a purported debt claim to equity based on the economic substance of the transaction.  In so doing, courts endeavor to prevent parties from disguising equity investments or capital contributions as debt transactions as a means to receive treatment on par with a debtor’s creditors in the event the investment fails (i.e., the debtor files for bankruptcy).   Are you my code section?  Recharacterization and the Bankruptcy Code Courts are divided as to which provision of the Bankruptcy Code grants courts authority to recharacterize debt claims as equity.  The Third, Fourth, Sixth, and Tenth Circuits have held that a court’s power to grant such a remedy is within the scope of the court’s equitable powers granted by section 105(a) of the Bankruptcy Code.  In contrast, the Fifth and Ninth Circuits have rejected reliance on section 105(a), and held that, pursuant to section 502(b) of the Bankruptcy Code, courts may only recharacterize debt as equity where applicable state law would treat the asserted interest as equity.
1 day 15 hours ago

Pages