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How to manage lots of people By Donald L. Swanson Multi-party mediation can work effectively in bankruptcy, especially on plan confirmation issues.  Such effectiveness is apparent in the City of Detroit and the Archdiocese of Milwaukee bankruptcy cases. Keep in mind that these Detroit and Archdiocese mediation efforts aren’t merely multi-party in the sense of five or six parties.  These mediation efforts involve many, many parties. The following are a listing of some similarities and a primary difference in these two mediation efforts.  Presumably, such information can be helpful and instructive for future mediation efforts in other cases. Some Similarities Both have large numbers of people involved in the mediation.  For example: –Detroit has 40 people in the conference room at the initial mediation session on pension issues. –The Archdiocese of Milwaukee has 23 parties and their professionals in the conference room at the initial mediation session [“It was like the Paris Peace talks,” says James Stang, legal counsel to the Official Creditors Committee]. Both hold many mediation sessions over long periods of time.

Read More from: Mediatbankry

1 week 3 days ago
A couple of student loan scams to discuss NCT robo-signer this week. NCT and robo-signing National Collegiate Trust (NCT) continues to make news on the robo-signing front. NCT even files student loan collection cases when it has no robo-signed documents. Robo-signing came into its own as a term in connection with the mortgage practices so well displayed in last year’s flick The Big Short.  Some robo-signers were signing hundreds of affidavits per day, authenticating documents they clearly had no time to read. From Steve Rhode at the Huffington Post:
That’s the process where creditors swear they are the real owners of a particular debt but can’t actually produce the proof when pushed to. . . . . . . . . . . In the case of Adam Beverly, who was sued by National Collegiate Student Loan Trust over student loan debt, when he pushed them to show him the evidence they had the authority and documentation to prove they owned the debt, they could not. In Beverly’s case “a panel of Ohio judges said the collector had no evidence that it owned the debt and vacated the judgment.”
I have had success in all the NCT student loan suits I have defended.

Read More from: Discharge Student Loan

1 week 3 days ago
Requiring banks to improve records on which depositors are insured overlooks how the Federal Deposit Insurance Corp. resolves failures.

Read More from: BankThink

1 week 4 days ago
THQ, Inc. v. Starcom Worldwide, Inc. (In re THQ, Inc.), No. 14-51079 (MFW), 2016 WL 1599798 (Bankr. D. Del. Apr. 18, 2016). Giuliano v. Haskett, (In re MCG Ltd. P’ship), No. 14-50536 (CSS), 545 B.R. 74 (Bankr. D. Del. Jan. 28, 2016). Two recent rulings by the Delaware Bankruptcy Court confirm the well-known pleading standards that a preference complaint must do more than “merely parrot[] the language of section 547” to survive a motion to dismiss.  The cases also clarify the type of particularized facts that must be alleged to state a claim under section 547. Read More › Tags: Pleading Issues, Pleading Standards, Practice Points

Read More from: Delaware Bankruptcy Insider

1 week 4 days ago
The Third Parties (Rights Against Insurers) Act 2010 (“TPR”) will finally come into force on 1 August 2016, making it easier for third parties to bring claims against insurers of insolvent companies.  It has taken more than six years, spread over three separate governments and was amended even before it came into force, but TPR will finally replace the Third Parties (Rights Against Insurers) Act 1930 (the “1930 Act”). The Background There is a gap in common law where a company is insured but insolvent.  The principle of privity of contract means that only the parties to the insurance contract can enforce its rights.  Therefore, under common law, only the liquidators or the insolvent company could bring a claim under an insurance policy and the proceeds would then be absorbed into the assets of the company and distributed to its creditors.  This means that a third party, who the policy may have been specifically intended to protect, is left to claim alongside all other unsecured creditors rather than being compensated directly.  For example, if a property developer takes out insurance to cover post-completion defects and then goes into liquidation, the new owner of the property could no longer benefit from the policy as the policyholder is insolvent.

Read More from: eSQUIRE Global Crossings

1 week 4 days ago
On May 16, 2016, Sandridge Energy, Inc. and certain of its affiliates (collectively, “Sandridge” 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 Sandridge’s Chief Financial Officer, Julian Bott (the “Bott Declaration”), Sandridge has entered into a restructuring support agreement with holders of more than 79% of its secured debt and 55% of its unsecured debt. The agreement contemplates a plan that would include, among other things, a debt-for-equity conversion.  See Bott Declaration at 65-66. Debtors are an oil and gas exploration and production company with operations in Oklahoma, Kansas and Colorado.  Debtors have interests in approximately 4,300 gross producing wells, and approximately 2,063,000 acres under lease.  See Bott Declaration at 25.
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The CFPB has a new report out on auto title lending, and the findings are jaw-dropping. If ever there was a consumer financial product that looks like an exploding toaster, it is an auto title loan.  Default rates on auto title loans are one in three, with one in five resulting in a repossession. Is there any consumer product that is tolerated when one out of three products blows up? Even one in five?  There's a lot of good data in the report (which assiduously avoids any interpretation, but just presents the facts), but beyond the default rates, here's what really jumps out at me: over 80% of the loans roll over and around half result in sequences of 10 or more loans.  That means that rather than viewing auto title loans as short term products with an extension option, they are really used more like longer-term products with a prepayment option. But more importantly, it tells us something about how to interpret default rates.  

Read More from: Credit Slips

1 week 4 days ago
On May 16, 2016, Breitburn Energy Partners LP and certain of its affiliates (collectively, “Breitburn” or the “Debtors”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. According to the declaration of Breitburn’s Chief Financial Officer, James G. Jackson (the “Jackson Declaration”), Breitburn owns interest in approximately 705,597 acres and proven reserves of 239.3 million barrels of oil equivalent of which approximately 54% was oil, 8% was NGLS, and 38% was natural gas.  Debtors operate or have working interests in approximately 11,900 operating oil and gas wells. See Jackson Declaration at 8. Debtors’ liabilities total approximately $3 billion in funded debt obligations which include: (i) $1.25 billion pursuant to a 2014 RBL Credit Agreement with Wells Fargo Bank N.A., as administrative agent; (ii) $650 million pursuant to 2015 Senior Secured Notes with Delaware Trust Company, as successor indenture trustee; (iii)  $1.155 billion pursuant to several senior unsecured notes with Wilmington Trust Company as successor indenture trustee and certain trade debt.  See Jackson Declaration at 19-25. The Debtors cases are jointly administered under the lead bankruptcy case In re Breitburn LP, et al., Case No. 16-11390.
1 week 4 days ago
The silver that Jeffrey Mark McMeel bought from Northwest Territorial Mint never arrived to his home in Washington, but the unorthodox method he chose to protect his investment has him facing sanctions in a Seattle courtroom on Friday. Since Northwest Territorial Mint filed for bankruptcy on April 1, Mr. McMeel filed a set of disconnected documents not based on traditional law but on his own, improvised legal theories. Some of his filings to U.S. Bankruptcy Court in Seattle try to guide the financial investigation that is well underway to the one of the country’s largest private mints, which has stranded more than 3,000 customers. One excerpt from his filings attempts to prove the validity of his purchase; other documents include grainy copies of archived historical documents. Some pages are marked with fingerprints. But what got him in trouble was when Mr. McMeel appeared to identify himself as a special agent for several state and federal agencies, including the Justice Department’s U.S. Trustee Program. “He is not, nor has he ever been” a Justice Department official, the agency’s lawyers said in response. A representative for Washington state’s attorney general’s office said Mr. McMeel’s statements have created “needless and unwarranted confusion” and that impersonating a state officials is a felony. U.S. Bankruptcy Court Judge Christopher Alston ordered Mr. McMeel to explain in court why he shouldn’t face penalties for filing false and misleading documents.

Read More from: WSJ.com: Bankruptcy Beat

1 week 4 days ago
For a more immediate payoff, community banks should focus marketing on older customers that are facing a new set of economic pressures.

Read More from: BankThink

1 week 4 days ago
Wall Street Journal JPMorgan Chase is trying to seal off potential gaps in its security system by limiting which employees can access Swift. Unnamed sources said JPMorgan began reducing employee access in recent weeks. The move comes after two Asian banks were breached through the use of Swift's global interbank messaging service. ...

Read More from: BankThink

1 week 4 days ago
I have previously reported extensively on Teresa Guidice of the Real Housewives of New Jersey and her stint in federal prison for bankruptcy fraud.  There’s a another housewife in the news these days or, more particularly, her husband.  Erika Girardi, aka Erika Jayne, is the newest cast member of the Beverly Hills franchise and is married to a prominent attorney, Thomas Girardi.  Thomas Girardi has made a name for himself as a class action attorney who has won millions in consumer protection and product liability actions.  In fact, he was the actual lawyer who pursued the class action suit against Pacific Gas & Electric as depicted in the biopic Erin Brockovich.

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

1 week 4 days ago
[wsj-responsive-image P="//art.wsj.net/api/photos/33346776/smartcrop?height=499&width=749" J="//art.wsj.net/api/photos/33346776/smartcrop?height=639&width=959" M="//art.wsj.net/api/photos/33346776/smartcrop?height=853&width=1280" caption="A Caterpillar Inc. D10R Crawler Tractor bulldozer moves coal at an Alpha Natural Resources Inc. coal preparation plant in Logan County near Yolyn, W.V. The Justice Department says McKinsey can't advise Alpha." credit="Bloomberg News" placement="Inline" suppressEnlarge="false" ] Bankruptcy watchdogs from the Justice Department are objecting to confidential adviser McKinsey & Co.’s restructuring arm to work on Alpha Natural Resources Inc.’s and SunEdison Inc.’s chapter 11 cases, but McKinsey isn’t naming names. 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 4 days ago
Stambaugh v. PNC Bank, N.A. (In re Stambaugh), 532 B.R. 572 (Bankr. M.D. Pa. 2015) – A chapter 13 debtor sought to establish the priority of certain mortgages, and the bank that held all of the mortgages attempted to reorder the … Continue reading →
1 week 4 days ago
 By: Donald L Swanson
“Testimony from the mediator would be crucial . . . and . . . refusing to compel that testimony posed a serious threat.” “It became clear that the mediator’s testimony was essential to doing justice here–so we decided to use it.” Wayne Brazil, Magistrate Judge, U.S District Court for Northern California
The case is Olam v. Congress Mortgage Co., et al., 68 F.Supp.2d 1110 (N.D. Cal. 1999). Plaintiff files suit against her lender for violating the federal Truth in Lending Act and related standards. Before trial, the parties agree to mediate their disputes.  A mediation session occurs, and a binding settlement agreement is signed. Thereafter, plaintiff suffers settler’s remorse and wants to back out of the deal. Defendants insist on enforcing the deal, and they file a Motion with the Court to do just that. Plaintiff hires a new attorney and files an Opposition to the enforcement Motion. The Opposition document identifies two grounds for setting aside the settlement agreement: –the agreement is unconscionable; and –plaintiff signed the agreement under undue influence.

Read More from: Mediatbankry

1 week 4 days ago
Action Item. In every bankruptcy mediation where the fight is still fresh, we need to recognize that a one-and-done session expectation is probably unrealistic—and adjust our expectations accordingly.

Read More from: Mediatbankry

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Walk in registration available for Thursday’s day long training for lawyers and staff new to consumer bankruptcy practice at San Francisco’s Marriott Marquis. NACBA presents a full day of bankruptcy basics starting with a survey of consumer bankruptcy law, exploring schedules, exemptions, and the means test,  winding up with a look at Chapter 13 plans; and the intersection of family law and bankruptcy. Small group, elite practitioners as teachers, and a laser focus on what you need to know to serve clients well. Workshop runs 9-5  Thursday, May 19, 2016.  Arrive early to register.  Cost is $199 for convention attendees;  $299 if not registered for the convention. Program details Hope to see you there.       Image courtesy of Karsten Selferlin, presented under Creative Commons license.
1 week 5 days ago
By Louis S. RobinLaw Offices of Louis S. RobinLongmeadow, MAYesterday, the Supreme Court ruled that a debtor may not be discharged from a debt arising from a fraudulent transfer.   No. 15-145, Husky International Electronics, Inc. v. Ritz (5/16/16).   The case can be found here.    In short, the principal of a debtor corporation transferred assets, without consideration, to other companies he controlled in order to avoid payment to creditors of the initial debtor corporation. The principal eventually filed under Chapter 7.  The Supreme Court sent the case back to the Fifth Circuit which had found that section 523(a)(2)(A) requires a false representation.    Instead, Justice Sotomayor ruled that "actual fraud" was a broader concept. She provides an interesting review of “fraud” and “fraudulent transfers” dating back to 1571’s Statute of Elizabeth, finding that “fraud” was a very broad term, with “actual” meaning a more specific intent (so that the principal committed general fraud, but knew exactly what he was doing).

Read More from: CLLA Bankruptcy Blog

1 week 5 days ago
We are a consumer bankruptcy law firm helping persons and businesses with their financial situation.  If you believe we can be of assistance to you, please contact us today at johnrogers@glasgow-ky.com  or toll-free at 1-888-651-9353 and put our experience to work for you.  We offer a free initial consultation and we are available to accommodate your schedule and meet with you on weekends or during the evening. Click here to see what our clients have said about our representation of them over the years. We are located in Glasgow, Kentucky at 111 West Wayne Street, one block off of the Square in Glasgow.  Glasgow is conveniently located on the Louie B. Nunn Cumberland Parkway, for those traveling from west or east of Glasgow We are Board Certified in Consumer Bankruptcy Law by the American Board of Certification… one of the few attorneys in Kentucky so certified www.abcworld.org . We are an active member of the National Association of Consumer Bankruptcy Attorneys, serving as Kentucky State Chair of this organization. www.nacba.com
1 week 5 days ago

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