ABI Blog Exchange

“Don’t care how; I want it now” – Veruca Salt, Willy Wonka and the Chocolate Factory We continue our series of blog posts on the Report of the American Bankruptcy Institute’s Commission to Study the Reform of Chapter 11 with a review of the Commission’s proposals regarding section 363 of the Bankruptcy Code, which deals with sales of some or all of the debtor’s property outside the ordinary course of business. The most interesting recommendations are those involving sales of substantially all of the debtor’s assets, which would be governed by a new provision, called “Section 363x,” and would be subject to a greater degree of scrutiny, longer timetables, and certain other requirements more commonly found in connection with confirmation of a plan of reorganization. The Commission was motivated by increasingly shorter timetables for section 363 sales, many of which are set at the insistence of a secured creditor credit bidding its debt, or by some other prospective purchaser or financer of a debtor’s chapter 11 case. The Commission’s proposed timetables and requirements seek to reintroduce the “breathing spell” that is a traditional goal of chapter 11 and to afford parties in interest (and competing bidders) a reasonable period of time to assess the proposed sale.
1 hour 54 min ago
This image from undated video provided by WSYX-TV shows the wanted billboard for fugitives Tommy Thompson and Alison Antekeier. The U.S. Marshals Service captured Mr. Thompson and Ms. Antekeier at a Hilton hotel in Boca Raton, Fla., this week.
Associated Press/WSYX-TV
Tommy Thompson’s bizarre odyssey took another twist this week after federal officials arrested the fugitive treasure hunter in Florida. Officials from the U.S. Marshals Service said Wednesday they arrested Mr. Thompson, 62, and his girlfriend, Alison Antekeier, 45, at a Boca Raton hotel. Mr. Thompson is the engineer and undersea explorer who in the 1980s found the wreck of the SS Central America, a U.S. mail steamer that went down off the North Carolina coast in 1857 with 18 tons of gold. Within a few years, Mr. Thompson had recovered more than three tons of gold, silver and other treasures, estimated to be worth at least $100 million. He’s been fighting with former partners and investors ever since.

Read More from: WSJ.com: Bankruptcy Beat

17 hours 38 min ago
    You can find out more about John Lee Dumas and his podcast, Entrepreneur on Fire, here.   Or you can find him here: Twitter: @johnleedumas LinkedIn   About John Lee Dumas   John Lee Dumas is the Founder and Host of EntrepreneurOnFire, awarded ‘Best of iTunes 2013′. John interviews today’s most inspiring and successful Entrepreneurs 7-days a week and has been featured in Forbes, Fast Company, Success, INC, & TIME Magazine. John has turned EntrepreneurOnFire into a business that generates over $250,000 a month & shares all the details via his monthly income reports at EOFire.com/income. John also founded the #1 Podcasting community in the world; Podcasters’ Paradise; a community where over 1500 Podcasters learn how to create, grow, and monetize their podcast in a supportive environment. EntrepreneurOnFire generates over 850,000 unique listens a month & recaps of these 750 plus episodes and MUCH more can be found at EOFire.com. Check out this episode!
18 hours 6 min ago
Unite Here Local 54 member Paul Smith, center, leads chants on Fifth Avenue as Taj Mahal casino workers rally outside Carl Icahn‘s office.
Kevin Hagen for The Wall Street Journal
At a Thursday protest, union employees from Atlantic City, N.J.’s Trump Taj Mahal had an angry message to deliver to billionaire Carl Icahn. And now, the employees have their answer. In a letter posted to his website, the activist investor argues that he’s “not fighting against the employees” of the Taj Mahal, who had their medical and pension benefits cut as part of the beleaguered casino’s bankruptcy. Instead, Mr. Icahn says, “I am fighting for those employees—fighting to save their jobs in the midst of a wholly unstable crisis.”

Read More from: WSJ.com: Bankruptcy Beat

18 hours 59 min ago
A recap of the informed opinions (and the discussions they generated) on BankThink this week.

Read More from: BankThink

19 hours 26 min ago
Weil Business Finance & Restructuring partner Joseph Smolinsky will participate in iGlobal Forum’s 6th Global Distressed Investing Summit. He will be moderating a panel titled “Exploiting the Distress in Energy-Related Credits.” Topics for the panel will include: the outlook for underlying commodities, such as oil, iron and coal; near-term prospects for energy companies and service providers; on-the-ground view of the amount of debt in the energy sector; where commodities businesses have been operating, and what current pricing means for their profitability; how distressed investors can exploit slow growth and low prices in the energy sector; in which market segments distressed opportunities will arise; and special considerations when restructuring exploration companies, including overcoming union and environmental issues, and legal complications for companies domiciled outside the U.S. To read more on this event and register, visit their website here.
20 hours 53 min ago
In a Radio Shack Bankruptcy Watch at CommercialBankruptcyInvestor.com, Chris Cahill discusses  Radio Shack’s financial difficulties and its impact on its commercial landlords. Read more about it here
22 hours 13 min ago
This Dec. 27, 2013, photo shows the exterior of Caesars Atlantic City in Atlantic City N.J.
Associated Press
After a heated venue fight that concluded with Caesars Entertainment Corp.’s bankruptcy remaining in Chicago, not in Delaware, the company returns to the Windy City Monday for its second courtroom appearance there. Caesars put its largest unit into bankruptcy protection in Chicago Jan. 15, days after a group of creditors filed an involuntary Chapter 11 against the company in Delaware. A Delaware judge ultimately agreed to let Caesars proceed with its restructuring of $18.4 billion of debt in Chicago, but he had some harsh words for its private-equity owners about a series of financial maneuvers designed to salvage their investment in the casino giant. Caesars, its owners, and their “suspect” dealings will be “under a magnifying glass” in Chicago, Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del., said at a recent hearing, calling into question moves the company and its owners Apollo Global Management LLC and TPG made before the bankruptcy filing.

Read More from: WSJ.com: Bankruptcy Beat

22 hours 17 min ago
This is the bankruptcy case study for E.A. from Montgomery, Kendall County, Illinois. He is here to see whether chapter 13 bankruptcy will provide debt relief for him. Let’s look at the facts of his case: he is currently a homeowner with a market value of $149,000. (www.zillow.com)He has two outstanding loans on the property.+ Read More The post Bankruptcy Case Study-Chapter 13: Get Current On Mortgage appeared first on David M. Siegel.
22 hours 19 min ago
A group of Atlantic City, N.J., casino workers rallied outside billionaire Carl Icahn ’s Manhattan office Thursday to protest benefit cuts made as part of a protracted battle to keep the Trump Taj Mahal from closing. 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 our homepage, scroll to the bottom and click “try for free.”) Valeant Pharmaceuticals International Inc. said it reached a tentative deal to buy a prostate-cancer drug and other assets from Dendreon Corp., WSJ reports. DBR(sub. req.) reports that Revel Casino Hotel’s lender and creditors are close to a deal.

Read More from: WSJ.com: Bankruptcy Beat

23 hours 12 min ago
Two Republican legislators have suggested that affordable housing funding should be put on hold until Congress finally decides what to do about Fannie and Freddie. But why give Congress another six years to fiddle around with housing finance while the poor and homeless face a declining level of government housing assistance?

Read More from: BankThink

23 hours 33 min ago
From January 23-27, 2015, Charles A. Stanziale, Jr., as the Chapter 7 Trustee (the “Trustee”) of Powerwave Technologies, Inc. (“Powerwave” or the “Debtor”), filed approximately 102 preference complaints seeking to avoid and recover alleged preferential transfers pursuant to Sections 547 and 550 of the Bankruptcy Code. Background By way of background, Powerwave filed a petition for bankruptcy in the District of Delaware on January 28, 2013 under Chapter 11 of the Bankruptcy Code.  On June 11, 2013, the Court entered an Order converting the Debtor’s Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code. McCarter & English, LLP represent the Trustee 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 Mary Walrath. Defenses to a Preference Action The Bankruptcy Code provides creditors with many defenses to preference actions. Included among these are the “ordinary course of business defense” and the “new value defense.” For reader’s looking for more information concerning claims and defenses in preference litigation, attached is a booklet that we prepared on the subject: “A Preference Reference: Common Issues that Arise in Delaware Preference Litigation.”
23 hours 37 min ago
According to Glass Lewis, approximately 100 companies will face proxy access shareholder proposals in 2015. In a blog post, Glass Lewis announced that it will continue to review each shareholder proposal, along with the company’s response, on a case-by-case basis. They believe that proxy access rights will be “rarely invoked and even more rarely successful.”  
23 hours 44 min ago
Shio-kara, or salted squid guts, is shown in this company photo served over rice.
Minoya Kichibee
A steamed fish-paste maker founded during the feudal era in the 16th century filed for court protection under Japan’s bankruptcy laws after more than 450 years in business, the company said Friday. Minoya Kichibee, based in Odawara, Kanagawa prefecture, was founded around 1550 and sells items including pickled plums, salted squid guts and fish-paste products. It is now being managed by the 22nd owner in company history, a spokesman at the company told Japan Real Time. Minoya Kichibee filed at the Odawara branch of the Yokohama District Court on Wednesday with approximately ¥3 billion ($25 million) in liabilities, according to the company. It will continue operations while seeking rehabilitation under court supervision, the spokesman said. He declined to give the reasons for the filing.

Read More from: WSJ.com: Bankruptcy Beat

23 hours 44 min ago
Receiving Wide Coverage ... Deutsche Downer: Deutsche Bank's quarterly results beat analysts' expectations, but the bar was pretty low to begin with given that analysts had forecast a loss. "A single quarter aside, the performance of the stock and of the company has simply been poor," writes the Financial Times' Lex team. The column recommends Deutsche consider spinning off "some or all" of its retail banking units and consider boosting returns by growing its asset management...

Read More from: BankThink

1 day 1 hour ago
I just finished discussing the “random walk” theory in my Corporate Finance class, so I thought I would close out my stint on Credit Slips with some “random thoughts” on reform. First, two expressions of sincere gratitude: I want to thank Bob Lawless and everyone at Credit Slips for the opportunity to blog about reform these past two weeks. It has been great fun. I also would like to thank the many practitioners, judges, financial advisors, academics, and industry groups who participated in the ABI Commission reform study process. Everyone made a meaningful contribution to the project. 

Read More from: Credit Slips

1 day 2 hours ago
Branch Bank & Trust Co. v. Michael’s Enterprises of Virginia, Inc. (In re Michael’s Enterprises of Virginia, Inc.), 519 B.R. 916 (Bankr. E.D. Va. 2014)  – A mortgage lender sought sanctions against the debtor, its sole shareholder and its attorney.  It … Continue reading →
1 day 2 hours ago
I want to take up Michelle Harner's call for "innovation and new approaches to valuation". Valuation may well be the most important issue in bankruptcy, and it is also the issue that is least subject to meaningful judicial review. Imagine a Court of Appeals trying to parse through discounted cash flow models or what are proper comparables. The lack of meaningful appellate review makes it all the more important that we get valuation right.  Our current valuation system is fundamentally adversarial.  Both sides put up evidence in the form of valuation compurgators experts, and the court then has to decide on a valuation, which need not be either of the experts'. The use of expert witnesses always has problems--the expert is employed by a litigant, which creates a concern about expert objectivity.  (I say this as someone who sometimes serves as an expert witness.) The normal solution in our litigation system is to have experts are paid for their time, not their opinions (which are their own) or the results in the case.

Read More from: Credit Slips

1 day 12 hours ago
I have had bankruptcy clients who have been overly concerned with their credit score before, during, and after they have filed for bankruptcy. The credit industry, including the credit bureaus and the credit protectors, have done a great job of marketing to Americans the importance of having a good credit score. What they fail to+ Read More The post There Is Way Too Much Emphasis On A Credit Score appeared first on David M. Siegel.
1 day 18 hours ago
In section IV.E of its report and recommendations of reforms to chapter 11 of the Bankruptcy Code, the American Bankruptcy Institute Commission to Study the Reform of Chapter 11 (the “Commission”) considered changes to the Bankruptcy Code’s “safe harbor” provisions. Generally, the filing of a bankruptcy case immediately triggers the application of the automatic stay and other protections that prohibit collection efforts and the enforcement of contractual rights against the debtor, including contractual rights of termination. The Bankruptcy Code’s safe harbor provisions exempt (as their colloquial name implies) certain financial and derivatives contracts from sections 362 and 365(e)(1), which, respectively, impose the automatic stay and prohibit the enforcement of ipso facto clauses – i.e., a contractual clause that is triggered upon the debtor’s bankruptcy filing – to the extent those sections would prevent certain counterparties from exercising certain contractual rights to terminate, liquidate or accelerate safe harbored contracts.
1 day 18 hours ago

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