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Students with excess cash but no bank account have fallen victim to predatory financial vendors, but the government can take steps to bypass the middleman.

Read More from: BankThink

1 hour 51 min ago
About 10 years ago, Rich Hynes wrote an intriguing paper on consumer debt collection, asking "where are all the garnishments?"  Today, Pro Publica's Paul Kiel is out with an answer: Nebraska and Missouri ... and in the future. Kiel's story challenges the longstanding conventional wisdom that debtors are unlikely to face lawsuits and collection action for small debts. That might have been true before the mid-2000s, when Hynes wrote his paper, and in Virginia and Illinois, which Hynes studied, but it's certainly not true after the financial crisis, Kiel reports, especially in certain high-volume-low-dollar-collection-heavy states.

Read More from: Credit Slips

2 hours 4 min ago
New York Times The Times has a curtain-raiser on the Consumer Financial Protection Bureau's proposal to let consumers bring class-action lawsuits against banks and other financial-services companies, rather than be forced into mandatory arbitration. Read a concise account of the CFPB's proposal by American Banker's Kate Berry here. The proposal, if approved, would be a "major setback for banks, credit unions, credit card companies and many other financial firms," AB reports. In fact, the proposal would...

Read More from: BankThink

2 hours 15 min ago
When you file for bankruptcy, the court appoints a neutral Bankruptcy Trustee to administer your case and review the information contained in your bankruptcy petition.  A small percentage of bankruptcy cases are selected each year to be further reviewed or audited by an independent public accountant or audit firm.  This is referred to as a Bankruptcy Audit. The Bankruptcy Audit The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), October 17, 2005 to be exact, requires a certain amount of bankruptcy cases filed in each judicial district to be audited by an independent public accountant or audit firm.   The purpose of a bankruptcy audit is to verify the accuracy of the information disclosed by the debtor in his or her bankruptcy petition.  If you are selected for a bankruptcy audit, the audit firm will review your bankruptcy petition and financial information for any “material misstatements” of income, expenses, assets or transfers of property usually within the last 2 years.

Read More from: Bonds & Botes, P.C.

2 hours 35 min ago
[wsj-responsive-image P="//art.wsj.net/api/photos/38115558/smartcrop?height=499&width=749" J="//art.wsj.net/api/photos/38115558/smartcrop?height=639&width=959" M="//art.wsj.net/api/photos/38115558/smartcrop?height=853&width=1280" caption="Norwegian police and rescue workers are cleaning up in the area around the helicopter crash site in Turoy, outside Bergen, Norway. Helicopter operator CHc Group filed for bankruptcy protection days after the April 29 crash." credit="European Pressphoto Agency" placement="Inline" suppressEnlarge="false" ] Helicopter operator CHC Group Ltd. filed for chapter 11 bankruptcy protection days after a fatal crash in Norwat. 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.”)

Read More from: WSJ.com: Bankruptcy Beat

3 hours 44 min ago
Ali v. Frazier “Slugfest” By: Donald L. Swanson Sometimes “a slugfest” must occur “before people get serious” about settlement possibilities. This is definitely true in the Archdiocese of Milwaukee bankruptcy. So says James I. Stang, attorney for the Official Creditors Committee in that case—and in at least a half-dozen additional cases of a similar nature. Ali v. Frazier “Slugfest” The Archdiocese of Milwaukee “slugfest” occurs on many levels. But one of the most important levels is the fraudulent transfer litigation over a cemetery trust fund. Here is a chronology of such litigation: 1. Origin of the fraudulent transfer claim: –By the end of 2006, the Archdiocese of Milwaukee had paid many millions of dollars in settlements to people abused by priests. –On April 2, 2007, the Archdiocese of Milwaukee establishes the Milwaukee Catholic Cemetery Perpetual Care Trust (the “Cemetery Trust”) for the perpetual care of Catholic cemeteries.

Read More from: Mediatbankry

6 hours 12 min ago
On April 29, 2016, Ultra Petroleum Corp. and certain of its affiliates (collectively, “Ultra Petroleum” or the “Debtors”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas, Houston Division.  According to the declaration of Ultra Petroleum’s Chief Financial Officer, Nelson M. Shaw (the “Shaw Declaration”), Debtors own oil and gas properties in Wyoming, Utah and Pennsylvania and operate a vast majority of their Wyoming and Utah properties. See Shaw Declaration at 18. Debtors’ liabilities total approximately $3.759 billion in unsecured debt which includes: (i) $1.3 billion pursuant to a 2013 Ultra Petroleum Indenture and a 2014 Ultra Petroleum Indenture, both with Delaware Trust Company, as successor trustee to U.S. Bank N.A.; (ii) $990 million pursuant to a 2011 Credit Agreement with JPMorgan Chase Bank, NA as administrative agent; and (iii) $1.46 billion of unsecured private placement notes issued under a Master Note Purchase Agreement and guaranteed by certain affiliates of the Debtors. See Shaw Declaration at 37-45. The Debtors cases are jointly administered under the lead bankruptcy case In re Ultra Petroleum Corp., et al. Case No. 16-32202. A copy of the Shaw Declaration can be accessed here: Download Shaw Declaration.
18 hours 25 min ago
Until recently, In re Atari, Inc. was a closed case, but, in a recent decision, the bankruptcy court for the Southern District of New York found that “other cause” existed to reopen the bankruptcy cases.  Background Atari, Inc. and certain of its affiliates (the “Debtors”) filed for chapter 11 in January, 2013.  Atari Europe SAS and Atari S.A. (the “Atari Entities”), which were affiliates of the Debtors but not debtors themselves in the chapter 11 proceeding, were the obligor and guarantor, respectively, under a Credit Agreement with Alden Global Value Recovery Master Fund, L.P. (“Alden”), secured by intellectual property assets of the Debtors and intercompany claims the Atari Entities held against certain Debtors.  Alden also provided post-petition financing to the Debtors.  Several months into the case, the Debtors and Atari S.A. proposed a plan of reorganization including a global settlement with Alden that provided for amendments to the Credit Agreement and mutual releases of claims.  In addition, the plan of reorganization provided that the bankruptcy court would retain exclusive jurisdiction to determine disputes arising under the plan.  The plan was confirmed and went effective on December 24, 2013.
19 hours 21 min ago
The hits that alternative lenders like OnDeck Capital are taking shouldn't be a surprise for an industry built on unsustainable business models.

Read More from: BankThink

20 hours 44 min ago
Companies in bankruptcy are typically at the mercy of the lenders that hold the purse strings. Teen clothing retailer Aéropostale Inc. is trying to tip the scales in its favor. The company immediately took aim at lender Sycamore Partners after filing for bankruptcy Wednesday, saying the private-equity firm directed a company it controls to cut off credit to the struggling retailer, hastening its demise. Sycamore, a private-equity firm that focuses on retail and consumer investments, owns MGF Sourcing, which manufactures clothing for Aéropostale and other retailers. MGF earlier this year demanded Aéropostale pay for goods in advance instead of allowing it to pay after delivery.  Aéropostale in 2014 signed a 10-year supply agreement with MGF, formerly known as Mast Global Fashions, under the terms of a $150 million loan deal with Sycamore. In court papers, Aéropostale said Sycamore essentially directed MGF to tighten Aéropostale’s payment terms to force it into bankruptcy. What’s more, the retailer said it believes Sycamore co-founder Stefan Kaluzny in January “reached out to” the chain’s other principal supplier, Li & Fung Ltd., to suggest it also demand more onerous payment terms. “The ultimate purpose may have been to drive the debtors to file this case and force it to liquidate,” Aéropostale said in court papers.

Read More from: WSJ.com: Bankruptcy Beat

21 hours 45 min ago
Aeropostale is seeking the “prompt closure” of 154 locations following the teen retailer’s chapter 11 filing Wednesday, about one-fifth of its store base. The company hopes to reorganize in bankruptcy after a string of losses and a dispute with a vendor owned by its main lender, as The Wall Street Journal reported earlier this week. A key part of its turnaround plan is to close 154 of its 770 stores, Aeropostale said in court papers Wednesday. The shops to be closed imminently range across the U.S. and Canada, include three each in Alaska and Hawaii, according to court papers. They include 117 unprofitable outlets and generated $17 million in losses for the retailer’s latest fiscal year. The teen retailer’s bankruptcy filing follows similar moves by a host of mall-based retail chains in recent years, including surfwear sellers Pacific Sunwear of California and Quiksilver Inc. and women’s formalwear chain Cache Here’s a list of the 113 U.S. stores the company plans to close first. [wsj-responsive-interactive id="0"]

Read More from: WSJ.com: Bankruptcy Beat

23 hours 55 min ago
Leases fall into a separate category of debts when it comes to filing bankruptcy.  The majority of debts are classified as either secured or unsecured.  Secured debts are those for which the creditor has a lien on some property or collateral of yours.  The most common example is the debt on a vehicle.  When you buy a vehicle, unless you pay cash for it, you make payments on the debt you owe.  The seller keeps a lien on the vehicle that enables them to repossess the vehicle if you default on the financing.  Unsecured debts have no collateral.  The creditor’s only legal option to collect the money is to file a lawsuit against you if you default. Secured and Unsecured Debts

Read More from: Bonds & Botes, P.C.

1 day 48 min ago
  Two out of three confirmed Chapter 13 cases fail.  Those are cases that met all the tests and got the judge’s OK. And still they crater. That’s a heap of people, deeply in debt, who don’t make it out of debt by using Chapter 13. Arizona bankruptcy lawyer John Skiba has a theory about those failures:
  • Life
  • Lack of a lawyer
  • Luck of the trustee draw
I wouldn’t argue against any of John’s culprits:  none of the things he lists help a Chapter 13 debtor. But I have an alternate set of reasons that those trying to reorganize their debt through Chapter 13 don’t make it to the end. #1  Overly ambitious goals Trying to keep a doomed house has to be the foremost reason that Chapter 13 cases crater. The mortgage payments were too large to begin with, or circumstances conspired to put the debtor deep in default. The amount necessary to reinstate the mortgage, while continuing to make current payments, is simply too large to  pull off within the five year limit of Chapter 13. If it isn’t the house, it’s the expensive car  or the time share.  In short, it’s the idea that nothing else should have to change to get out of financial trouble through Chapter 13.
1 day 1 hour ago
With agencies created by the Dodd-Frank Act embroiled in court battles and continued questions dealing with "too big to fail," can anyone honestly say the reform law is working?

Read More from: BankThink

1 day 1 hour ago
Wall Street Journal The backlash to online marketplace lenders is in full swing. Prosper Marketplace will fire 171 workers and its CEO won't take a salary, as loan volume declines and investors purchase fewer loans. The company will close a Utah office that's assigned to making loans for medical procedures, as it will make cuts totaling about 14% of its workforce, which is based in both San Francisco and Phoenix. Prosper's chief risk officer is being...

Read More from: BankThink

1 day 2 hours ago
[wsj-responsive-image P="//si.wsj.net/public/resources/images/BN-NV087_0501ae_P_20160502183406.jpg" J="//si.wsj.net/public/resources/images/BN-NV087_0501ae_J_20160502183406.jpg" M="//si.wsj.net/public/resources/images/BN-NV087_0501ae_M_20160502183406.jpg" credit="Getty Images" placement="Inline" suppressEnlarge="false" ] A day after it said it was prepping for bankruptcy, teen retailer Aéropostale Inc. filed for chapter 11 protection to thin out, and it is taking on supplier Sycamore Partners in court. 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.”) Appaloosa Management LP wants an independent probe of solar-energy firm SunEdison Inc., DBR reports in WSJ.

Read More from: WSJ.com: Bankruptcy Beat

1 day 3 hours ago
In Re Engels, 536 B.R. 529 (Bankr. N.D. N.Y. 2015) – Postpetition a chapter 13 debtor signed an asset purchase agreement to sell certain real estate subject to court approval. However, the debtor never sought approval – not even after … Continue reading →
1 day 5 hours ago
By Donald L. Swanson  Let’s start by acknowledging that Argentina’s road from a $100 billion debt default in 2002 to a final mediated resolution in 2016 has been long and complex and difficult.  The road began during an economic crisis, reached partial resolutions in 2005 and 2010, and achieved a final mediated-resolution in 2016. During that time multiple lawsuits were filed against Argentia in the U.S. District Court for the Southern District of New York by its creditors, and Judge Thomas P. Griesa of that Court took an active role in addressing the default problems. On June 23, 2014, Judge Griesa appointed New York trial attorney, Daniel A. Pollack, as mediator in the Argentina cases.  And the subsequent mediation process ultimately achieved the final resolution in 2016. Prior to Mr. Pollack’s appointment, however, no mediator existed in the case.  The prior partial resolutions came about through a process described as a ’judge-mediated’ sovereign debt restructuring.”    The “judge-mediated” term refers to a judicial activism in which the judge deals with issues before the court “as part of an on-going restructuring process and not as isolated suits by a series of aggrieved creditors.”  The judge acts as both, (1) an arbiter of substantive and procedural issues, and (2) a mediator between opposing parties.

Read More from: Mediatbankry

1 day 5 hours ago
Action Item.  At every significant development in a bankruptcy case, beginning at its earliest stages, parties should consider whether a mediation process might be helpful immediately in resolving remaining disputes. #bankruptcy   #mediation   #bankruptcymediation

Read More from: Mediatbankry

1 day 7 hours ago
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1 day 19 hours ago

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