ABI Blog Exchange

Supplement company Natrol Inc. heads to bankruptcy court Wednesday in Wilmington, Del., to see if it can sway a judge to sign off on a creditor-payment plan that’s being held up by a disputed settlement. Judge Brendan Shannon refused to approve the plan at a May 12 hearing, saying he had “a very bad feeling” about some things happening in the case. At issue is a settlement between Natrol’s current owner, Aurobindo Pharma , and the former owner that sold it during the bankruptcy proceeding, Plethico Pharmaceuticals Ltd. Judge Shannon said the settlement, which would see Aurobindo get $23.3 million back of the $132.5 million it paid for Natrol, needed more scrutiny. The settlement would put to rest fraud allegations Aurobindo aimed at Plethico accusing the company of draining some $25 million out of Natrol through an allegedly fake construction contract. Natrol’s sale brought in enough money to pay off all of the supplement company’s creditors, but until the payment plan gets approved, creditors are still waiting for their checks. Complicating the situation is Plethico’s own insolvency proceeding in India. Bondholders that have been trying to collect their money say the proposed settlement runs afoul of an Indian court order that forbids Plethico from transferring its assets.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
Lehman Brothers Holdings Inc. headquarters stands in New York, U.S., on Monday, June 16, 2008.
BLOOMBERG NEWS
Lehman Brothers Holdings Inc. is suing the Federal Home Loan Bank of New York for more than $150 million over dozens of soured interest-rate swaps. 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 Philadelphia Inquirer reports that the state of New Jersey ordered the power to be kept on at the Revel casino in Atlantic City.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
Lehman Brothers Holdings Inc. headquarters stands in New York, U.S., on Monday, June 16, 2008.
BLOOMBERG NEWS
Lehman Brothers Holdings Inc. is suing the Federal Home Loan Bank of New York for more than $150 million over dozens of soured interest-rate swaps. 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 Philadelphia Inquirer reports that the state of New Jersey ordered the power to be kept on at the Revel casino in Atlantic City.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
Wall Street Journal Despite shareholders' complaints about its sluggish stock price and earnings growth, Bank of America's board appears to be fully supportive of Chairman and Chief Executive Brian Moynihan. As part of an update on Moynihan's tenure, the Journal interviews directors, shareholders, former colleagues and Moynihan himself about his job performance. Jack O. Bovender Jr., the former CEO of hospital chain HCA and a B of A director, applauds Moynihan's personality. "You don't have to...

Read More from: BankThink

1 week 1 day ago
The Commercial Law League of America (CLLA) recently announced that […] The post Robert S. Bernstein Named New Commercial Law League of America President appeared first on Bernstein-Burkley, P.C..

Read More from: Bernstein-Burkley, P.C.

1 week 2 days ago
Chris Dickerson and Matt Murphy have joined law firm Paul Hastings in the Chicago office. Mr. Dickerson has worked on well-known bankruptcy cases including CIT Group Inc. and Refco Inc., and he has worked with investors and lenders on debtor-in-possession financing. Mr. Murphy has experience advising public and private clients both in and out of chapter 11 and has worked with companies such as Alco Stores Inc. Mr. Dickerson and Mr. Murphy formerly worked with DLA Piper. Lisa Schiller has joined law firm McGlinchey Stafford as a member with the creditors’ rights and bankruptcy group. Ms. Schiller, who will work in in the Fort Lauderdale, Fla., office, has represented financial institutions as well as chapter 11 trustees, creditors and other parties. She is a member of the American Bankruptcy Institute and the International Women’s Insolvency and Reorganizations Confederation.

Read More from: WSJ.com: Bankruptcy Beat

1 week 2 days ago
Chris Dickerson and Matt Murphy have joined law firm Paul Hastings in the Chicago office. Mr. Dickerson has worked on well-known bankruptcy cases including CIT Group Inc. and Refco Inc., and he has worked with investors and lenders on debtor-in-possession financing. Mr. Murphy has experience advising public and private clients both in and out of chapter 11 and has worked with companies such as Alco Stores Inc. Mr. Dickerson and Mr. Murphy formerly worked with DLA Piper. Lisa Schiller has joined law firm McGlinchey Stafford as a member with the creditors’ rights and bankruptcy group. Ms. Schiller, who will work in in the Fort Lauderdale, Fla., office, has represented financial institutions as well as chapter 11 trustees, creditors and other parties. She is a member of the American Bankruptcy Institute and the International Women’s Insolvency and Reorganizations Confederation.

Read More from: WSJ.com: Bankruptcy Beat

1 week 2 days ago
It's difficult to draw useful lessons from a small pilot, since banks typically stack the deck for success. Trying out new projects at average locations that serve average customers can give banks a much better picture of the obstacles that lie ahead.

Read More from: BankThink

1 week 2 days ago
Facing foreclosure is bad enough; worrying about your exposure afterwards is worse. Breathe deeply. Two provisions of California law shield California homeowners from further collection by a lender who has foreclosed. Understanding Foreclosure Sales To understand California’s protections for homeowners, you have to understand how a typical foreclosure sale works. The deed of trust, given the lender when a loan is made, grants the lender a lien on the home.  If the borrower doesn’t pay as promised, the lender can exercise the power of sale in the deed of trust to conduct a public auction of the home that is security for the loan. The lender can decide where to start the bidding at the foreclosure sale.  While the lender can bid the entire amount that the lender is then owed, the lender can bid less when the property is worth less than the total debt. So whether because the debt has grown large because it’s been in default for a long time, or whether the value of the house has dropped,  the winning bid at a foreclosure sale may well be less than the total debt. What happens to the difference between what the sale price at auction and the amount owed to the foreclosing creditor? Antideficiency Law
1 week 2 days ago
The U.S. Bankruptcy Court for the Northern District of Illinois recently held in Krol v. Key Bank National Association (In re MCK Millennium Centre Parking, LLC) that the safe harbor of section 546(e) of the Bankruptcy Code applies to a debtor’s payments made in respect of mortgages pooled and held by a REMIC trust.  The case appears to be the first to interpret the phrase “in connection with a securities contract” to include payments of this type.  Background In 2008, MCK Millennium Centre Retail, LLC, a subsidiary and insider of debtor MCK Millennium Centre Parking, LLC, obtained a loan from Key Bank National Association.  Key Bank sold the promissory note to a trust qualified as a real estate mortgage conduit (“REMIC”).  The promissory note was pooled with other mortgages, and certificates representing beneficial ownership interests in the trust were issued to investors.  The certificates entitled the holders to payments from principal and interest on the pool of mortgages, in the manner provided for in the pooling and servicing agreement (“PSA”) among Key Bank, Wells Fargo, as trustee, and other financial institutions.
1 week 2 days ago
In the months, even years, before selling a business, there are certain steps that a business owner can take to maximize sale price.  These can range from financial housekeeping (i.e. consider whether audited financial statements should be paid for) to operational improvements (i.e. are all customers actually profitable?  Should more money go into R&D).  Read more here.
1 week 2 days ago
In the first of what is promised to be a series, the PCAOB issued a communication to audit committees to highlight key areas of recurring concern in PCAOB inspections of large audit firms and emerging risks to audits. This Audit Committee Dialogue includes questions that the PCAOB encourages audit committees to ask their auditors. 
1 week 2 days ago
Cathedral of St. Paul
Jim Mone/Associated Press
A bankruptcy judge last week gave the parishes of the Roman Catholic Archdiocese of St. Paul and Minneapolis a greater voice as creditors in the archdiocese’s bankruptcy case, a development that is “troubling” to victims of alleged clergy sexual abuse and their advocates, who say the judge’s ruling effectively gives the archdiocese a place on both sides of the bargaining table. Judge Robert Kressel of the U.S. Bankruptcy Court in St. Paul, Minn., signed off on an order that gives the archdiocese’s 187 parishes increased representation in their bid to reach a settlement with alleged victims through a separate, parish-only creditors’ committee, one with equal standing to the current creditors’ committee made up of alleged victims. Though parishes have banded together in past diocesan bankruptcies to facilitate negotiations with abuse victims, never before have they been allowed to form their own creditors’ committee, lawyers familiar with the bankruptcies say. By forming a committee, any legal fees the parishes generate will paid by the archdiocese, sparing the parishes a significant expense.

Read More from: WSJ.com: Bankruptcy Beat

1 week 2 days ago
Cathedral of St. Paul
Jim Mone/Associated Press
A bankruptcy judge last week gave the parishes of the Roman Catholic Archdiocese of St. Paul and Minneapolis a greater voice as creditors in the archdiocese’s bankruptcy case, a development that is “troubling” to victims of alleged clergy sexual abuse and their advocates, who say the judge’s ruling effectively gives the archdiocese a place on both sides of the bargaining table. Judge Robert Kressel of the U.S. Bankruptcy Court in St. Paul, Minn., signed off on an order that gives the archdiocese’s 187 parishes increased representation in their bid to reach a settlement with alleged victims through a separate, parish-only creditors’ committee, one with equal standing to the current creditors’ committee made up of alleged victims. Though parishes have banded together in past diocesan bankruptcies to facilitate negotiations with abuse victims, never before have they been allowed to form their own creditors’ committee, lawyers familiar with the bankruptcies say. By forming a committee, any legal fees the parishes generate will paid by the archdiocese, sparing the parishes a significant expense.

Read More from: WSJ.com: Bankruptcy Beat

1 week 2 days ago
Vendors that specialize in Bank Secrecy Act compliance can help ease community banks' regulatory burden while strengthening their controls.

Read More from: BankThink

1 week 2 days ago
Corinthian Colleges filed for bankruptcy and shut down all its campuses, and its former students just won a formal committee role in the case. This photo taken July 8, 2014, shows a person walking past an Everest Institute sign in a office building in Silver Spring, Md.
JOSE LUIS MAGANA/ASSOCIATED PRESS
The interests of former students of defunct Corinthian Colleges Inc. who could potentially have billions of dollars in claims against the for-profit educator are getting an official voice in company’s bankruptcy case, a win for students seeking a greater sway in the case’s outcome. 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

1 week 2 days ago
Corinthian Colleges filed for bankruptcy and shut down all its campuses, and its former students just won a formal committee role in the case. This photo taken July 8, 2014, shows a person walking past an Everest Institute sign in a office building in Silver Spring, Md.
JOSE LUIS MAGANA/ASSOCIATED PRESS
The interests of former students of defunct Corinthian Colleges Inc. who could potentially have billions of dollars in claims against the for-profit educator are getting an official voice in company’s bankruptcy case, a win for students seeking a greater sway in the case’s outcome. 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

1 week 2 days ago
Wall Street Journal Loyalty trumps lucrativeness, at least for the time being, in the world of credit cards. Issuers like American Express, JPMorgan Chase and Commerce Bancshares in Kansas City are all picking up the pace in securing co-branded partnerships with merchants. The reason? Some merchants' customer bases are deemed more loyal, even if they generate less fee income, and a partnership with a merchant is a considered a more efficient way to grow a customer...

Read More from: BankThink

1 week 2 days ago
Although bankruptcy cases can be complex, many of the procedures and cases are routine. Before filing a bankruptcy case, you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and which form of relief is most beneficial to you. Be sure you understand the relief you can obtain and its limitations. To file a bankruptcy case, documents called a Petition, Schedules, and Statement of Financial Affairs, as well as in some cases a Statement of Intention need to be prepared correctly and filed with the bankruptcy court. You will have to pay a filing fee to the bankruptcy court. Once your case is filed, you will have to attend a first meeting of creditors where you will be questioned under oath by a court official called a “trustee”. At this meeting you may also be questioned by your creditors. If you choose to file a Chapter 7 case, you may be asked to reaffirm a debt. You may want help deciding whether to do so. A creditor is not permitted to coerce you into reaffirming debts. If you choose to file a Chapter 13 case in which you repay your creditors what you can afford over a 3 to 5 year period, your attorney will help you in preparing your Chapter 13 plan and with the confirmation hearing on your plan which will be before a Federal Bankruptcy Judge.
1 week 2 days ago
Nothing says “closure” quite like a termination agreement reaffirmed by a bankruptcy court – right? Apparently not.  As demonstrated in In re Great Lakes Quick Lube Limited Partnership, under certain circumstances, a prepetition agreement for an early lease termination might provide unsecured creditors an opportunity to commence an action in the bankruptcy court seeking to avoid the lease termination as a preferential or fraudulent transfer. In February 2012, less than two months prior to filing a Chapter 11 petition, the debtor and its landlord entered into a lease termination agreement under which the debtor agreed to relinquish its leasehold interests in five retail stores. Nine months after the debtor filed for bankruptcy, the committee of unsecured creditors brought a complaint against the landlord claiming that the agreement should be avoided as a preferential or fraudulent transfer under the Bankruptcy Code, alleging that two of the five leases that were terminated held a combined value of $825,000.  At issue was whether the lease termination agreement was an avoidable preference or fraudulent transfer under either section 547(b) or section 548(a)(1)(B). Ruling
1 week 3 days ago

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