ABI Blog Exchange

Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  The bankruptcy venue requirements strike a fair balance between deference to a debtor’s chosen venue and the interests of other stakeholders. In our experience, a prudent venue choice by a debtor can enhance the progress and outcome of a chapter 11 case and thereby benefit all stakeholders. Further limiting a debtor’s venue choices is not necessary or advisable. The current venue rules permit a debtor to file for bankruptcy in the district where the debtor is domiciled, resides, has a principal place of business, or has principal assets, generally within 180 days immediately preceding the filing date. A “piggy-back” filing may also be made in the district where there is another bankruptcy case pending with respect to an affiliate of the debtor.

Read More from: WSJ.com: Bankruptcy Beat

1 day 18 hours ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  The passion and politics of the venue reform debate, while fueled by legitimate and sincere motivations and differences of opinion, all too often obfuscate underlying factual predicates and real-world venue disputes. The remarkable intensity of divergent voices makes it difficult to sort out whether reform of the venue statute is necessary at all, or what the imperative is to limit companies from their exercise of reasonable business judgment. If reform has merit, it’s even more challenging to conclude what potential reform might best serve the diverse interests in chapter 11 cases. Under current law, the primary venue options are the debtor’s domicile (i.e., place of incorporation), principal place of business, location of principal assets and place of an affiliate’s filing (which permits bankruptcy cases of multiple affiliated debtors to be prosecuted in the same courthouse in a jointly administered, cost-efficient manner).

Read More from: WSJ.com: Bankruptcy Beat

1 day 18 hours ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  The passion and politics of the venue reform debate, while fueled by legitimate and sincere motivations and differences of opinion, all too often obfuscate underlying factual predicates and real-world venue disputes. The remarkable intensity of divergent voices makes it difficult to sort out whether reform of the venue statute is necessary at all, or what the imperative is to limit companies from their exercise of reasonable business judgment. If reform has merit, it’s even more challenging to conclude what potential reform might best serve the diverse interests in chapter 11 cases. Under current law, the primary venue options are the debtor’s domicile (i.e., place of incorporation), principal place of business, location of principal assets and place of an affiliate’s filing (which permits bankruptcy cases of multiple affiliated debtors to be prosecuted in the same courthouse in a jointly administered, cost-efficient manner).

Read More from: WSJ.com: Bankruptcy Beat

1 day 18 hours ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  The venue determination aspect of bankruptcy law has been a subject of debate for many in our industry. The bankruptcy venue statute permits a bankruptcy case (except a case under chapter 15) to be filed in any federal district court containing the debtor’s “domicile, residence, principal place of business or principal assets in the United States.” Consistent with longstanding rules and practice that have governed venue for litigation in federal courts, a corporation’s domicile is generally held to be its state of incorporation. Those laws appear to be straightforward and non-controversial. This debate stems from what I consider to be the myth of forum shopping. Special interest groups have proposed measures that fundamentally shift the venue choices available to a company seeking the protection of a chapter 11. The proposals generally would require that a chapter 11 proceeding be filed only in the state where the parent company holds its assets or principal place of business. This is in direct conflict with the rights that companies currently have that allow a filing to occur in their state of incorporation.

Read More from: WSJ.com: Bankruptcy Beat

1 day 19 hours ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  The venue determination aspect of bankruptcy law has been a subject of debate for many in our industry. The bankruptcy venue statute permits a bankruptcy case (except a case under chapter 15) to be filed in any federal district court containing the debtor’s “domicile, residence, principal place of business or principal assets in the United States.” Consistent with longstanding rules and practice that have governed venue for litigation in federal courts, a corporation’s domicile is generally held to be its state of incorporation. Those laws appear to be straightforward and non-controversial. This debate stems from what I consider to be the myth of forum shopping. Special interest groups have proposed measures that fundamentally shift the venue choices available to a company seeking the protection of a chapter 11. The proposals generally would require that a chapter 11 proceeding be filed only in the state where the parent company holds its assets or principal place of business. This is in direct conflict with the rights that companies currently have that allow a filing to occur in their state of incorporation.

Read More from: WSJ.com: Bankruptcy Beat

1 day 19 hours ago
A recent CFPB enforcement action shows that lenders must not only avoid misleading statements, but anything in connection with their advertising that may have the likelihood of significantly confusing consumers.

Read More from: BankThink

1 day 19 hours ago
Admitting it was a "bad boy" handling mortgages in bankruptcy, Chase recently entered a settlement with the federal government to compensate more than 25,000 US homeowners. The settlement is subject to court approval. The United States Trustee Program, a unit of the Department of Justice whose attorneys at the bankruptcy court oversee the integrity of the system, announced on March 3 it had reached an agreement with Chase forcing it to pay homeowners $50 million in cash, mortgage loan credits and loan forgiveness for "robo-signing" and other improper practices before the bankruptcy court. Chase also agreed to change internal operations and submit to the oversight of an independent compliance reviewer. Chase admitted it submitted more than 50,000 mortgage "payment change notices" that were signed by persons who had no knowledge of the accuracy of the notices they signed:
  • More than 25,000 of the notices were signed by employees or former employees who had nothing to do with reviewing the accuracy of the notices.
  • The rest of the notices were signed by employees of third party vendors who also were not involved in verifying the accuracy.
Chase also admitted it failed to file the notices in a timely fashion, as well as failing to provide timely escrow statements to homeowners in bankruptcy.
1 day 19 hours ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  While the venue provisions for chapter 11 cases are fairly straightforward, much like a comet or solar eclipse, controversy surrounding the venue statute comes around every few years.  Due to a number of recent developments, it appears to again be the season for this debate. Briefly, the venue statue provides that a chapter 11 case may be filed in any district “in which the domicile, residence, principal place of business…or principal assets…have been located for the 180 days immediately preceding” the bankruptcy filing.  Criticism that these provisions led to a disproportionate percentage of chapter 11 filings in Delaware and New York brought calls for reform more than a decade ago. Legislation was introduced to eliminate state of incorporation as a basis for venue, with proponents claiming that creditors received smaller recoveries in these venues.  While many cast a more cynical eye on what were perceived as “parochial” arguments, in the end, these changes failed to be included in the wide-ranging Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Read More from: WSJ.com: Bankruptcy Beat

1 day 19 hours ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  While the venue provisions for chapter 11 cases are fairly straightforward, much like a comet or solar eclipse, controversy surrounding the venue statute comes around every few years.  Due to a number of recent developments, it appears to again be the season for this debate. Briefly, the venue statue provides that a chapter 11 case may be filed in any district “in which the domicile, residence, principal place of business…or principal assets…have been located for the 180 days immediately preceding” the bankruptcy filing.  Criticism that these provisions led to a disproportionate percentage of chapter 11 filings in Delaware and New York brought calls for reform more than a decade ago. Legislation was introduced to eliminate state of incorporation as a basis for venue, with proponents claiming that creditors received smaller recoveries in these venues.  While many cast a more cynical eye on what were perceived as “parochial” arguments, in the end, these changes failed to be included in the wide-ranging Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Read More from: WSJ.com: Bankruptcy Beat

1 day 19 hours ago
Is a university degree a good investment? This is the question asked in a June 28th article published in The Economist. While the article concludes that statistics back a college education makes good financial sense on average, it also concludes that, “like so much else in economics, [it] boils down to supply and demand.” Read more here.
1 day 20 hours ago
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

1 day 20 hours ago
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

1 day 20 hours 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.
1 day 20 hours ago
Duke, Kentucky, University of North Carolina, Lehman, Spickelmeier: March Madness champions all.  It’s that time of year again folks—the Weil Bankruptcy Blog’s annual March Madness Tournament is here.  This year, we at the Weil Bankruptcy Blog have spent quite a bit of time discussing and debating the Final Report and Recommendations of the American Bankruptcy Institute Commission to Study the Reform of Chapter 11.  (See more of our coverage here.)  But this brain trust can only do so much on its own.  Now the time has come for you, our devoted, faithful, brilliant readers, to weigh in.  Which recommendations from the ABI Report do you think are the most compelling?  As the old saying goes, “Enquiring minds want to know!”  
1 day 20 hours 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

1 day 21 hours 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

1 day 21 hours 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

1 day 21 hours ago
The SEC announced a whistleblower award of nearly half a million dollars to a former company officer whose report of misconduct resulted in an SEC enforcement action. In order for a whistleblower submission to be considered original information, it must be derived from a claimant’s independent knowledge or analysis, which is generally not applicable if the whistleblower obtained the information as an officer, director, trustee or partner.  
1 day 22 hours 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

1 day 22 hours 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.
2 days 1 hour ago

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