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co-authors: Daniel Hart and Salene Kraemer The story behind the Chapter 11 filing of PTC Seamless Tube Corporation (Seamless) is a cautionary tale for Steel Valley businesses, both big and small, as to the dangers of overexpansion and the importance of business planning.  Here is what you can learn from it: On April 26, 2015, Seamless filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Western District of Pennsylvania.  Seamless estimates its assets to be between $50-100 million with liabilities between $100-500 million. Seamless is a subsidiary of PTC Group Holdings Corp..  It manufactures steel tubing, tubular shapes, bar products, fabricated parts, and precision components.  In 2013, Seamless invested more than $102 million to reopen a manufacturing plant in Kentucky.  This project involved the acquisition of a large manufacturing facility, property adjacent to the existing site, re-working the layout of the facility and the installation of manufacturing equipment.
5 hours 7 min ago
The Disney-Pixar movie 'Finding Nemo' inspired a run on clownfish in pet stores across America. Banks should pursue the same effect with content that connects with customers on an emotional level and inspires them to take action.

Read More from: BankThink

7 hours 2 min ago
Receiving Wide Coverage ... Red Card: Visa has become a key player in the FIFA corruption scandal. The credit-card network, one of FIFA's top corporate sponsors, said it's disappointment in the FIFA scandal was "profound" and added it may end its sponsorship agreements with soccer's governing body if changes aren't made. Visa's comments were the strongest voice of concern among all of FIFA's corporate sponsors. FIFA earns a total $177 million yearly from corporate sponsors, which...

Read More from: BankThink

7 hours 59 min ago
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Read More from: Kieselstein Law Firm

10 hours 49 min ago
In Cantu v. Stone (In re Cantu), Case No. 14-40762 (5th Cir. May 20, 2015), the Fifth Circuit ruled that a professional negligence claim that accrued during the pendency of the debtors’ Chapter 11 case was property of the Chapter 7 estate when the Chapter 11 case converted to Chapter 7: “Because the misconduct alleged against [the DIP’s accountant] that gave rise to the settlement depleted the estate’s assets, delayed the [Chapter 11] bankruptcy, and injured the creditor body by preventing confirmation of a reorganization plan that could have resulted in a larger recovery for the creditors, the causes of action against him accrued prior to conversion and therefore belong to the estate rather than the Cantus. See also Cantu v. Schmidt (In re Cantu), — F.3d — –, 2015 WL 1809013 (5th Cir. Apr. 16, 2015) The post Fifth Circuit: Chapter 11 Professional Liability Claims property of subsequent Chapter 7 Estate appeared first on Culhane Meadows PLLC - Chapter 11 Business Bankruptcy Attorneys.

Read More from: Richard G. Grant, P.C.

11 hours 10 min ago
Rejecting a Seventh Circuit precedent, the Fifth Circuit has ruled that a non-dischargeability claim under section 523(a)(2)(A) must be based upon a false representation.    While bad conduct that does not involve a misrepresentation may be actionable under other sections of the Code, it will not constitute actual fraud under Sec. 523(a)(2)(A).   Husky International Electronics, Incorporated v. Ritz (Matter of Ritz), No. 14-20526 (5th Cir. 5/22/15).  What HappenedOver the course of four years, Husky sold electronic components to Chrysalis Manufacturing Corp.     Chrysalis failed to pay for $163,999.38 in product.    Ritz controlled the finances of Chrysalis and was a director and 30% shareholder.  At the same time that Chrysalis was failing to pay Husky, it paid out over a million dollars to entities controlled by Ritz.   These transfers were made without reasonably equivalent consideration while Chrysalis was insolvent.Although Ritz had not guaranteed the debt, Husky sued him in an attempt to pierce the corporate veil.  Ritz filed bankruptcy before the case could go to trial.  Husky brought a dischargeability complaint under sections 523(a)(2) and (a)(6) based on the fraudulent transfers.     When the case went to trial, the Bankruptcy Court found that Ritz was not a credible witness.
18 hours 27 min ago
Today, we follow up on our earlier post where we reviewed the United States Bankruptcy Court for the District of Delaware’s decision in Energy Future Holdings, focusing on the contractual interpretation issues implicated in a make-whole analysis. As promised, today’s post focuses on the automatic stay issues raised in the bankruptcy court’s decision. The bankruptcy court held that (i) if the automatic stay were lifted, the Trustee for the EFIH First Lien Notes could decelerate the EFIH First Lien Notes and the non-settling Noteholders would then be entitled to a make-whole and (ii) a genuine issue of material fact existed as to whether the Trustee could establish cause to lift the automatic stay retroactively to decelerate the Notes.  The Summary Judgment Opinion The Trustee’s Qualified Right to Rescind the Acceleration Was Barred by the Automatic Stay
20 hours 4 min ago
Bloomberg News
Nearly seven years since the collapse of Lehman Brothers, former chief Richard Fuld Jr. is still in the first stage of grief—denial. In a rare public appearance at a conference Thursday, Mr. Fuld reportedly argued that Lehman wasn’t a bankrupt company in September, 2008. He also said it had $28 billion in equity capital and $127 billion in unencumbered collateral. For most, the fact Lehman filed for Chapter 11 bankruptcy protection would be conclusive evidence it was, in fact, bankrupt. But Mr. Fuld said the firm was “mandated into bankruptcy,” a phrase he has used in the past. That flies in the face of the 2010 Lehman bankruptcy examiner’s report, which concluded there was sufficient evidence to find Lehman was insolvent by September 8, 2008—and perhaps earlier. Mr. Fuld also insisted all 27,000 Lehman employees were “risk managers” because each owned equity in the firm. The notion that holding equity qualifies one as a risk manager at least sheds some light on the failure of Lehman to manage its risk.

Read More from: WSJ.com: Bankruptcy Beat

1 day 1 hour ago
Baltimore attorney Jeff Scholnick will be a panelist for the business workshop on May 30, 2015 at The Emerging Technology Center. The workshop will begin at 9:00AM. Mr. Scholnick will be discussing unique legal issues that employers and businesses confront on a daily basis.  For entrepreneurs who are willing to open their own businesses, there are many risks. These risks are compounded by differences caused by language barriers. The objective of the Business Seminar is to assist Latino business owners and entrepreneurs in accessing information and resources to further develop and grow their businesses.  Businesses need to be aware of insurance issues, implications of employees’ conduct and behavior, the legal ramifications of contracts as well as other “red flags” that make owning a business such a challenge. The LPN is hosting this event as part of its educational workshop series.  With a focus on business development, the LPN endeavors to contribute to building a robust business community which supports a healthy and sustainable business climate that contributes to enhancing the overall quality of life for Baltimore City. For more information, click here.

Read More from: Scholnick Law

1 day 2 hours ago
The number of U.S. workers filing new claims for unemployment rose to 282,000 last week, according to a Labor Department report released today. Despite last week’s rise in initial claims, the number stayed below 300,000 – the mark generally associated with a firming jobs market – for the 12th week. Read more here.
1 day 4 hours ago
Richard Fuld Jr., the man at the helm of Lehman Brothers Holdings Inc. when it collapsed in 2008, said a “perfect storm” of events caused the financial crisis. Among the contributing factors Mr. Fuld listed Thursday were government officials who pushed for lower home-lending standards and homeowners who used their equity on their homes “as ATM accounts.” “It’s not just a one single thing, it’s all these things taken together,” he said. His comments came at the 2015 Marcum MicroCap Conference in midtown New York, where he was giving the keynote luncheon address–his first such appearance since Lehman filed for bankruptcy. The first minutes of his remarks were broadcast live on CNBC, complete with the clinking of the silverware in the background. Mr. Fuld has kept a low profile since leaving Lehman Brothers. Most of his public remarks since then have been before lawmakers in Washington. He joked Thursday that he didn’t count “my wonderful time with Congress” as a speaking engagement. He started his remarks with a brief discussion of Lehman’s culture and its compensation practices, which he said fostered a sense of teamwork. Then he discussed the fall of Lehman and took the audience on a whirlwind tour of the easy-money policies that led its demise. “Regardless of what you heard about Lehman’s risk management, we had 27,000 risk managers because they all had a piece of the firm,” he said.

Read More from: WSJ.com: Bankruptcy Beat

1 day 4 hours ago
A visit to an overnight shipping store in Napa Valley reveals that outdated payment-processing procedures remain de rigueur with some merchants Â-- despite the fraud risk.

Read More from: BankThink

1 day 5 hours ago
The Economist had an interesting article concluding that the evidence resulting from studies after the passage of BAPCPA indicate that the rules for Chapter 7 debtors might be too strict. The authors first looked at the effect on consumer bankruptcy filings (see chart). Although the change was designed to encourage people to file Chapter 13, paying at least some of their debts, the long term effect was slightly different. The reform had a big impact. At least at first, Chapter 13 filings rose relative to Chapter 7 ones. In a new paper, from Stefania Albanesi, of the New York Federal Reserve, and Jaromir Nosal, of Columbia University, finds that the reform led to a permanent drop in the bankruptcy rate. Will Dobbie of Princeton University and Jae Song, of the Social Security Administration, have made finding that suggests that this is not necessarily a good thing. More...The post The Economist: Bankruptcy and the Economy | A Fresh Start appeared first on Culhane Meadows PLLC - Chapter 11 Business Bankruptcy Attorneys.

Read More from: Richard G. Grant, P.C.

1 day 5 hours ago
Just because you list a student loan debt on your bankruptcy case doesn’t mean it’s wiped out once the case is over. You need to take additional action – but before that, you need to do your homework. Once upon a time, student loans were dischargeable in bankruptcy court. As the years went by, more limits were placed on people who wanted to wipe out those debts. Congress gradually increased the required age of the past due federal loans to be discharged automatically, and then in 2005 put the final nail in the coffin by sweeping up private student loans as well. In 1996, the Bankruptcy Code prevented the discharge of all “educational . . . loans made, insured or guaranteed by a governmental unit or nonprofit institution.” And so anyone with a student loan that had no connection with the government or a nonprofit institution was, conceivably, home free. Enter James Corletta, who filed for bankruptcy in 1997 (under his former name of James Pappas) with the hope of, among other things, wiping out a student loan issued by Texas Higher Education Coordinating Board that he’d cosigned for a friend of his.
1 day 5 hours ago
Four years ago, in Stern v. Marshall, the Supreme Court stunned many observers by re-visiting separation of powers issues regarding the jurisdiction of the United States bankruptcy courts that most legal scholars had viewed as long settled. Stern significantly reduced the authority of bankruptcy courts, and bankruptcy judges and practitioners both have since been grappling with the ramifications of that decision. It quickly became clear, notwithstanding the Court’s characterization of its holding in Stern as “narrow,” that the Court would need to address and clarify two key questions regarding the power of judges and courts created under Article I, rather than Article III, of the Constitution: the scope of what constitutes a “public right” in the context of bankruptcy that can be decided by an Article I judge, and whether the right to have a dispute determined by an Article III judge may be waived by consent

Read More from: Bankruptcy Law Insights

1 day 6 hours ago
The continuing saga of the impact of the U.S. Supreme Court’s Stern v. Marshall decision took a major turn Tuesday when the Court issued its ruling in the Wellness International Network, Limited v. Sharif case (follow link for copy of opinion). Before considering the decision and its significance, let’s first take a look at some past hits — bankruptcy court authority-style. The Big Picture: The Stern v. Marshall Decision. In its 2011 summer blockbuster Stern v. Marshall, decided by a 5-4 vote, the U.S. Supreme Court held that even though Congress designated certain state law counterclaims as “core” proceedings, Article III of the U.S. Constitution prohibits bankruptcy courts from finally adjudicating those claims.  Like a good cliffhanger, Stern v. Marshall left a number of questions unanswered, including the following:
  1. Can a bankruptcy court enter a final judgment on “Stern claims” with the parties’ consent?; and
1 day 6 hours ago
Authored by Timothy D. Hedrick and Mark S. Mitchelland Timothy D. Hedrick and Mark S. Mitchell of Rogers TowersQuestions sometimes arise from creditors regarding the effect of a debtor sending to a bank or other creditor a check for less than the creditor’s claim that purports to be in “full satisfaction” of the creditor’s claim against the debtor. This potentially dangerous issue is governed by § 673.3111, Florida Statues, in Florida’s version of Article III of the Uniform Commercial Code. Under § 673.3111, several requirements must be met before such a payment may satisfy a creditor’s claim. Specifically, a debtor tendering less than full payment in “full satisfaction” will have the burden to show:
  • The check/instrument was tendered in “good faith”;
  • The check/instrument was tendered “as full satisfaction of the claim”;
  • The amount of the claim was liquidated or subject to bona fide dispute;
  • The creditor obtained payment on the instrument (e.g., the check was cashed); and

Read More from: Florida Banking Law Blog

1 day 6 hours ago
Burdensome requirements prevent consumer reporting agencies from providing people with educational materials in a timely manner. The Facilitating Access to Credit Act would remove these arbitrary barriers.

Read More from: BankThink

1 day 7 hours ago
Caesars Palace Hotel & Casino is pictured on the Las Vegas Strip in January 2015.
Isaac Brekken for The Wall Street Journal
A judge on Wednesday said Caesars Entertainment Operating Co. could keep control of its bankruptcy case without the threat of rival restructuring proposals until November, a win for the casino giant over several groups of creditors. 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.”) The liquidators of a pair of failed Cayman Islands-based hedge funds run by a former Harvard quarterback are suing Barclays PLC to claw back some $80 million they say was illegally funneled to the bank to cover margin calls, DBR reports in WSJ.

Read More from: WSJ.com: Bankruptcy Beat

1 day 7 hours ago
Receiving Wide Coverage ... Chinese Connections: U.S. officials' investigation of potential violation of antibribery laws is reaching to some of the highest levels of the Chinese government. Two agencies, the Securities and Exchange Commission and the Justice Department, have subpoenaed JPMorgan Chase for information about Wang Qishan, one of seven members of the Chinese politburo that rules the country, the Wall Street Journal and Financial Times reported, citing a copy of the April 29 subpoena and...

Read More from: BankThink

1 day 7 hours ago

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