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How many ages hence / Shall this our lofty scene be acted o’er, / In states unborn, and accents yet unknown! – William Shakespeare, Julius Caesar Yesterday, we began our analysis of Judge Scheindlin’s recent decision in the Caesars parent guarantee litigation.  Our initial discussion is available here.  Today, we bring you the next exciting chapter of our review of the other questions considered by the court, together with an assessment of the critical issues facing courts considering modifications of noteholders’ rights.  We return to our regularly scheduled programming, at question #2 before the court….  What Types of Impairment Violate the Trust Indenture Act?
17 hours 29 min ago
Phil Heath, who won the Mr. Olympia in 2012, poses for a portrait Sept.18, 2013, in Los Angeles. Supplement maker Ultimate Nutrition is suing the contest’s organizers to try to block them from making sponsorship deals with competitors.
Nick Ut/Associated Press
A company that makes tubs of protein-shake powder for bodybuilders is suing the organizers of the upcoming Mr. Olympia contest to try to block them from making major sponsorship deals with the manufacturer’s competitors. With its lawsuit, Connecticut-based Ultimate Nutrition Inc. said the organizers of Mr. Olympia—the top U.S. bodybuilding competition, held in Las Vegas—are advertising new sponsorship deals for companies that want their “brand front and center” at the Sept. 17-20 event. Those offers infringe on Ultimate Nutrition’s exclusive sponsorship deal, the company said.

Read More from: WSJ.com: Bankruptcy Beat

18 hours 30 min ago
In what looks like a case study in the need to diversify, Univita Health Inc. filed for Bankruptcy in the District of Delaware on August 28, 2015 – It is being administered as Case No. 15-11788.  Pursuant to the Bankruptcy Petition it filed, Univita has also filed for bankruptcy under chapter 7 for 11 affiliates. Although no official explanation for the bankruptcy filing appears on the docket, a quick Google search leads me to believe that Univita was the sole authorizer of home services for most Medicaid plan members in Florida.  Univita broadened its business to compete in the home health-care sector, and may have stepped on some toes in the process.  Regardless of whether it was forced into bankruptcy because of low payment rates from Medicaid or the termination of its contract by the Florida Agency for Health Care Administration (the “AHCA”), it appears likely that a single aspect of its business caused its ultimate failure.  The AHCA now lists Univita as “CLOSED”.  The listing is on AHCA’s Website here. While explanations are not readily apparent on the docket, they will likely be provided at the 341 Meeting of Creditors, which is currently scheduled for 9/25/2015 at 11:00 AM at the J. Caleb Boggs Federal Building, 844 King St., Room 2112, Wilmington, DE 19801.
19 hours 37 min ago
Some people choose to suffer through a debilitating financial situation rather than seek the perfectly legal remedy of bankruptcy – simply because of the anticipated social ramifications of doing so. Financial woes are indiscriminate across all socio-economic lines, rich or poor, many people find themselves unable to meet their financial obligations.
  • The rising cost of health-related expenses are such that an unexpected medical emergency or catastrophic illnesses have the propensity to send anyone into financial ruin.
  • Fickle economic times have caused many to lose their jobs while also preventing them from securing other employment.
  • The long-term effect of the loss of income causes many to get behind on their mortgages and other monthly expenditures.
  • Although the real estate market is recovering in many areas of the country, others are under the burden of under-valued real estate that was purchased at once premium dollar amounts.
All these scenarios put unprepared consumers at risk of having not having enough cash coming in to pay their way each month. Living with the strain of financial stress causes mental, physical and emotional damage. However, it need not cause social agony as well. Often, the social and emotional stigmas associated with bankruptcy are self-inflicted. We think ill of ourselves, so we project that others are doing so as well.
21 hours 4 min ago
Melanie Cohen
Just more than a year since his 11th-hour move to resurrect Crumbs Bake Shop Inc., investor and television personality Marcus Lemonis announced that he’s selling his stake in the bakery. Fischer Enterprises LLC, which owns Dippin’ Dots and which currently holds the majority stake in the business, has purchased his piece of the company, Mr. Lemonis said Tuesday. The investor and television personality added that he’s taking a “sizable loss” in the deal that was brokered during Crumbs’ bankruptcy case last year but didn’t name a purchase price. Mr. Lemonis said he made the decision to sell after realizing that he had underestimated his opportunities to grow the business as a minority owner of the company. “When I got into the deal, I was looking to grow the business. I’m in business to be able to affect change,” Mr. Lemonis said Tuesday. “I have a lot of respect for the Fischers, but I miscalculated my ability as a minority stakeholder to affect change.” Fischer Enterprises confirmed the transaction to Bankruptcy Beat and said the operations of the company won’t be affected. Although the deal does means that Mr. Lemonis won’t have any involvement in the company going forward, he is retaining the rights to the Crumbs name for cookies, ice cream and candy products.

Read More from: WSJ.com: Bankruptcy Beat

21 hours 4 min ago
A new study by the Richmond Fed confirms that swipe fees have only gone down for a small fraction of merchants, contrary to congressional intent. This finding should spur the central bank to limit price-fixing to a reasonable level.

Read More from: BankThink

21 hours 47 min ago
Fear accompanies debt, like a man and his shadow. People in debt are afraid of the caller on the phone.  They are afraid of the process server.  They are afraid of the truth getting out. Yet, they fear bankruptcy more, apparently. They seem to fear that life as they know it will end if they file bankruptcy. Well, at some level, the miserable life of living in debt; sleepless nights;  having no financial  reserves will end if they file bankruptcy. But they have cultivated a fear of bankruptcy that is stronger than the fear they live with now. Most fear is self generated It’s easy to fall into the trap that filing bankruptcy represents defeat, as a personal failure. My view:  most bankruptcy these days is driven by job loss, ill health, and divorce. Some fear public exposure. They imagine those around them standing in judgment on their life choices. Yet which of us chooses illness, accident, or unemployment? The failure I see is the unwillingness to utilize an effective and legal means to become economically stable. Why no fear of penniless old age This seems to me to be a real fear. Almost every client who’s struggling to repay credit cards, now at 29% interest, is skimping on saving for retirement.
22 hours 45 min ago
  (Some imagined or actual version of the Baha Mar Resort) As we discussed in two prior posts (Part 1 and Part 2), on June 15, 2015, a 6-3 Supreme Court held in the Chapter 11 case of Baker Botts, L.L.P. v. ASARCO, LLC that bankruptcy professionals employed under Section 327(a) of the Bankruptcy Code may not, under Section 330(a)(1) of the Bankruptcy Code, recover as compensation fees incurred in defending their bankruptcy fee applications. Here’s a link to the combined post: Click Here.

Read More from: Plan Proponent

22 hours 57 min ago
On August 11, 2015, Grand Ltd., Gulf Offshore Logistics, LLC, Ryan Marine Services, Inc. and Laredo Construction Inc. (collectively, the “Petitioning Creditors”) filed an involuntary Chapter 7 bankruptcy petition against Black Elk Energy Offshore Operations, LLC (“Black Elk”). On August 25, 2015, the Petitioning Creditors filed an Emergency Motion for an Order Appointing an Interim Trustee Under 11 U.S.C. § 701 and Granting Emergency Relief (the “Trustee Motion”). According to the Trustee Motion, Black Elk’s financial troubles began in November 2012, when an explosion in its facility in the Gulf of Mexico, the West Delta 32-E platform, resulted in the death of three workers.  After an extensive investigation, the Bureau of Safety and Environmental Enforcement (“BSEE”) cited Black Elk for multiple violations and Black Elk faced multiple civil lawsuits.  In addition, federal prosecutors, in August 2015, filed a six-count criminal complaint against Black Elk for alleged violations of offshore safety regulations. Trustee Motion at 3.
22 hours 59 min ago
Facets on a gem bend light and change how we see things. The same thing happens when bankruptcy law encounters a small business owner and the business itself. Seen from one angle of the law, the business is a valuable asset. Seen from another, it is nothing more than a job for the owner, having no real value without the owner. It depends on where you stand and where the light hits. Is incorporating dangerous? The question comes up when individuals have a small business that provides a living, but the owners have accumulated crushing debt. I wrote earlier about how incorporation could create a separate legal entity that could continue to operate during the bankruptcy of its shareholders. My good friend Doug Jacobs pointed out that under some circumstances, incorporation could be seen as a fraudulent transfer. A fraudulent transfer is one where the entity conveying property either intends to put it beyond the reach of his creditors, or, receives less than the asset was worth in exchange, leaving the transferor less able to pay his debts.
1 day 15 min ago
The most productive and successful salespeople hear some version of Â"No thanks, IÂ'm goodÂ" more than anyone else. This kind of daily rejection is just confirmation that they're doing their jobs correctly.

Read More from: BankThink

1 day 17 min ago
The Cathedral of St. Paul in St. Paul, Minn.
Associated Press
Lawyers representing more than 400 clergy sexual-abuse victims will head to court this week to fight a request from the Roman Catholic Archdiocese of St. Paul and Minneapolis’s parishes for permission to review victims’ confidential bankruptcy claims. Victims’ lawyers said that if the parishes’ request is approved by a judge, it could result in the dissemination of “unusually detailed and intensely personal” information to more than 1,000 additional recipients. “Many of the additional permitted parties will reside in smaller parishes outside of the metropolitan area where confidential information is more likely to be linked to specific claimants,” Robert Kugler, a lawyer for the committee representing abuse victims, said in court papers. Lawyers for the parishes, however, say the information included in the claims is crucial to efforts to broker a settlement with victims.

Read More from: WSJ.com: Bankruptcy Beat

1 day 26 min ago
Receiving Wide Coverage ... Back in Action: Bank of New York Mellon staffers could probably use a nap right about now. The Wall Street Journal reports employees worked through the night to update pricing on mutual and exchange-traded funds, putting an end to the problems that began with a software glitch at the bank's vendor SunGard a week ago. The fund valuations at 46 companies were thrown off by a software update gone awry, according to...

Read More from: BankThink

1 day 39 min ago
Authored by Mark S. Mitchell and Timothy D. Hedrickand Mark S. Mitchell and Timothy D. Hedrick of Rogers TowersThrough the economic turmoil of the late 2000s, borrowers came up with creative (and at times, inequitable) ways to protect their investments. One such method—the borrower’s indirectly purchasing and foreclosing a senior lien to rid the investment of junior liens—was recently rejected by Florida’s Third District Court of Appeal. In CDC Builders v. Biltmore-Sevilla Debt Investors, LLC, 151 So. 3d 479 (Fla. 3d DCA 2014), a real estate investor, McBride, owned a large development through a group of companies he formed and controlled. The development was financed through a mortgage with SunTrust, and McBride’s companies hired a contractor to construct homes on the development. When McBride’s companies could not pay the contractor for the last eight homes constructed, the contractor recorded statutory construction liens against the development.

Read More from: Florida Banking Law Blog

1 day 1 hour ago
Getty Images
Junior creditors of the former RadioShack are suing hedge fund Standard General LP to try to get repaid, 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.”) Ex-Apple Inc. sapphire supplier GT Advanced Technologies Inc. is cutting 40% of its workforce, DBR reports in WSJ. Patriot Coal Corp. won approval to auction its remaining assets this month, DBR reports.

Read More from: WSJ.com: Bankruptcy Beat

1 day 2 hours ago
One of the functions of the UK Insolvency Service is to investigate directors’ conduct and if appropriate to commence directors disqualification proceedings or enter into disqualification undertakings. As the Insolvency Service has recently reviewed in its Newsletter the type of conduct which led to the longest disqualification bans in 2014/2015, now would seem like a perfect opportunity to reflect on the lessons learned from the biggest offenders. The Insolvency Service’s latest quarterly statistics on enforcement outcomes for April to June 2015 also reveal that:
  1. 309 directors were disqualified in that period;
  2. the average length of disqualification was 6 years;
  3. the number of directors who were disqualified for between 10 and 15 years increased from 12% in the same quarter last year to 16% this year;
  4. the most common form of allegation was unfair treatment of HMRC compared to other creditors.
             

Read More from: eSQUIRE Global Crossings

1 day 5 hours ago
Posted by Kathy Bazoian Phelps    Below is a summary of the activity reported for August 2015. The reported stories reflect: 3 guilty pleas or convictions in pending cases; over 39 years of newly imposed sentences for people involved in Ponzi schemes; at least 3 new Ponzi schemes involving over $143 million; and an average age of approximately 59 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.    Bryan Anderson, 41, was sentenced to 7 years and 3 months in prison in connection with a Ponzi scheme to which he had previously pleaded guilty. Anderson defrauded a dozen investors out of more than $3 million. During most of the scheme, Anderson was a registered financial broker working with MetLife Securities and then Pruco Securities.    Roland Barrera, a bar owner, was ordered to pay a $150,000 penalty for breaking federal regulations when he helped persuade a businessman to invest $3 million in a Ponzi scheme run by Robert Helms and Janniece Kaelin through their company, Vendetta Royalty Partners, Ltd., claiming to have royalties on 2,000 oil and gas wells. The scheme involved as many as 129 investors who invested at least $18 million.

Read More from: The Ponzi Blog

1 day 10 hours ago
“Render unto Caesar the things that are Caesar’s, and unto [CEC] the things that are [CEC’s] [?]” – Matthew 22:21 (as revised) Last week, Judge Shira Scheindlin issued a much-awaited decision in the pending litigation over the so-called “parent guarantee” in connection with the Caesars bankruptcy case.  We discuss the decision in a two-part series beginning today.  But before we go any further, the short, short version:
  • The Trust Indenture Act (TIA) prohibits certain nonconsensual impairment of certain noteholders rights.
  • Courts are divided regarding what kind of impairment violates the TIA.
  • Judge Scheindlin (S.D.N.Y.) held that the applicable provision of the TIA bars impairment of the right to payment, as well as the right to bring suit, but only with respect to nonconsensual (i) amendments to core terms of a debt instrument or (ii) out of court debt reorganizations.
  • Judge Scheindlin further held that any alleged impairment must be evaluated as of the date that a payment becomes due, rather than the date of the transaction ultimately giving rise to the alleged impairment.
  • Judge Scheindlin certified questions regarding the interpretation of the TIA to the Second Circuit.
1 day 16 hours ago
This ruling, handed down today by the Second Circuit, may spell the end of one phase of the NML litigation. For some time, the plaintiffs have been trying to find a way to seize assets held by Argentina's central bank. Their latest effort sought an order declaring that Banco Central is an alter ego of Argentina, at least insofar as U.S. law is concerned. The effect of such an order would be to eliminate the bank's claim to be treated as a separate legal entity, making it liable for the government's debts. I understand that Banco Central has already moved most if not all of its assets out of the U.S., and earlier Second Circuit rulings already protect funds held at the Federal Reserve Bank of New York. But the plaintiffs could have taken the order to another country where Banco Central has assets and (conceivably) parlayed it into an order allowing them to attach bank funds. 

Read More from: Credit Slips

1 day 17 hours ago
By: Steven P. Taylor Law Office of Steven P. Taylor, P.C. August 31, 2015 Commonly, in consumer bankruptcy cases, Debtors have attempt resolve their financial issues by raiding their retirement accounts. For those debtors that are younger than 59 ½ years of age, this leads to the 10% additional tax (an “exaction”) of the withdrawn amount as part of their current tax bill in addition to the normal income tax. Bankruptcy may be an appropriate method to deal with tax debt and other times it’s not-and something like the Offer in Compromise program may be a much better option than bankruptcy tax relief. In the bankruptcy world, whether the Internal Revenue Service has assessed a “tax” or “tax penalty” has different implications. The priority scheme treats income taxes and tax penalty claims differently. Income taxes that a debtor owes to the government are entitled to eighth priority distribution under § 507 of the Bankruptcy Code which are not dischargeable. In contrast, tax penalties that do not compensate for the government’s actual pecuniary loss are subordinated to general unsecured claims and are dischargeable.
1 day 18 hours ago

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