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Resolving an issue left open by two prior decisions, the Supreme Court ruled that the right to entry of a final judgment by an Article III court, like the right to trial by jury, is a personal right which can be waived or consented away (subject to supervision by an Article III Court).    The decision left Chief Justice Roberts, whose broad language in Stern v. Marshall spawned a plethora law review articles, in the minority, while Justice Sotomayor wrote for the six justices in the majority.   Wellness International Network, Ltd. v. Sharif, No. 13-935 (5/26/15).     The Stern ProblemArticle III of the Constitution states that the judicial power is vested in courts created under that Article, which is to say, judges appointed by the President, confirmed by the Senate and enjoying life tenure.    Over the years, Congress created many other judges, such as U.S. Magistrate Judges, Administrative Law Judges and Bankruptcy Judges, to help with the workload of the federal courts.   These judges were not appointed by the President or confirmed by the Senate and did not enjoy life tenure.    While they were under the supervision of Article III Judges, some of these legislatively created judges enjoyed great levels of independence.   In Stern v. Marshall, 564 U.S. ___, 131 S.Ct. 2594 (2011), the Court said that Congress did not have unlimited power to create adjuncts to assist the Article III judges.
13 hours 54 min ago
This morning, the Supreme Court issued its decision in the much-anticipated Wellness International Network, Ltd. v. Sharif.  And finally, the various opinions of the Court have offered some meaningful guidance on some of the key issues raised in the wake of Stern v. Marshall.  Although the majority opinion did not directly address the first question before the Court – that of whether actions implicating state law property matters under the ambit of section 541 of the Bankruptcy Code are “Stern-type” claims or ordinary “core” claims – it did resolve the current circuit split regarding whether bankruptcy courts’ constitutional deficiencies pursuant to Stern can be cured with the parties’ consent. (Short answer: yes).  A more complete analysis will follow tomorrow, but given the breaking news, we wanted to bring the decision to your attention ASAP.  For complete coverage of Stern, Arkison, Wellness, and their progeny, please visit the Stern Files, available here. So What Do I Need to Know?
15 hours 43 min ago
In a much-anticipated decision, the Supreme Court established the parameters of consent to jurisdiction under Stern v. Marshall in Wellness Int’l Network, Ltd. v. Sharif, No. 13-935 Decided May 26, 2015. Syllabus Respondent Richard Sharif tried to discharge a debt he owed petition­ers, Wellness International Network, Ltd., and its owners (collective­ly Wellness), in his Chapter 7 bankruptcy. Wellness sought, inter alia, a declaratory judgment from the Bankruptcy Court, contendingthat a trust Sharif claimed to administer was in fact Sharif’s alter-ego, and that its assets were his personal property and part of his bankruptcy estate. The Bankruptcy Court eventually entered a de­fault judgment against Sharif. While Sharif’s appeal was pending inDistrict Court, but before briefing concluded, this Court held that Ar­ticle III forbids bankruptcy courts to enter a final judgment on claims that seek only to “augment” the bankruptcy estate and would other­wise “exis[t] without regard to any bankruptcy proceeding.” Stern v. Marshall, 564 U. S. ___, ___. After briefing closed, Sharif soughtpermission to file a supplemental brief raising a Stern objection. The District Court denied the motion, finding it untimely, and affirmed the Bankruptcy Court’s judgment.

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

20 hours 9 min ago
On May 26, 2015, continuing a springtime ritual for bankruptcy lawyers, the Supreme Court issued its latest “progeny of Stern” ruling on the adjudicative authority of the bankruptcy courts.  In a 6-3 decision the Court held that  “Our precedents make clear that litigants may validly consent to adjudication by the bankruptcy courts.” Wellness Int’l Network, Ltd. v. Sharif __ U.S. __ (May 26, 2015). This springtime ritual began four years ago when the Supreme Court issued its blockbuster opinion on the constitutional authority of bankruptcy courts to adjudicate disputes before them in Stern v. Marshall,  564 U.S. __, 131 S.CT 2594 (2011).  Stripped (excuse the pun) of is infamous association with Anna Nicole Smith, a 5-4 court determined that despite the statutory authority of the bankruptcy court to make a final decision in a “core” matter, a bankruptcy judge could not enter judgment on a tort claim asserted by debtor against a putative creditor because Article III of the Constitution prohibited congress from conferring such authority on non-Article III decision makers.

Read More from: Insolvency Insights

20 hours 18 min ago
Authored by Adam B. Brandon of Rogers TowersUnder Rule 1.370, Florida Rules of Civil Procedure, a party may serve a written request that another party admit certain facts to be true. If the party served with the request fails to respond within 30 days, then the matters in the request are deemed to be admitted and need not be established by separate evidence at trial. In Wells Fargo Bank, N.A. v. Donaldson, Florida’s Third District Court of Appeal recently considered whether such technical admissions can also be used to overcome contradictory facts already in the record. This case involved a borrower who defaulted on a residential loan. Wells Fargo filed suit attempting to foreclose the mortgage. As an affirmative defense, the borrower argued that Wells Fargo lacked standing to foreclose because the original lender allegedly failed to properly assign the loan documents to Wells Fargo. In her first request for admissions, the borrower asked the bank to admit that it was not the holder of the original mortgage and note. Wells Fargo failed to timely respond to the admissions and thereby admitted that it lacked standing (per Rule 1.370). The trial court then involuntarily dismissed the foreclosure action over the objection of Wells Fargo.

Read More from: Florida Banking Law Blog

20 hours 39 min ago
The Roman Catholic Diocese of Gallup, N.M., which stretches across 55,000 square miles of northern Arizona and New Mexico, is seeking to sell 55 parcels of mostly vacant desert land to help fund a settlement with about 60 alleged victims of clergy sexual abuse. In court papers filed last week, the diocese asked U.S. Bankruptcy Court Judge David Thuma for permission to hire two real-estate brokers and to move forward with an auction process for the properties. The auction will be held 50 to 60 days after the judge signs off on the request, according to court papers. Lawyers representing the diocese, its insurers and alleged victims have spent nearly a year and a half assessing the value of the diocese’s assets and collecting evidence on the allegations of abuse and cover-up by diocesan officials. The Diocese of Gallup, home to 58,000 parishioners, filed for chapter 11 bankruptcy protection in November 2013 as several lawsuits related to sexual-abuse claims were preparing to go to trial. Of 14 Catholic dioceses and religious orders that have turned to chapter 11 to address waves of abuse-related litigation, one of the earliest was the Roman Catholic Diocese of Tucson, Ariz., in 2004. Like the Diocese of Gallup, the Diocese of Tucson also auctioned off property to pay legal bills and to help fund a settlement with alleged abuse victims.

Read More from: WSJ.com: Bankruptcy Beat

21 hours 15 min ago
Do you have a considerable amount of credit card debt? Yes? You are in good company. Unfortunately, according to a 2014 analysis of Federal Reserve and other government data conducted by NerdWallet, an average American household currently has about $7,300 in credit card debt. Further, of the close to 1,200 people surveyed recently, more than half the people who admit to having credit card debt are more than $6,000 in debt. New Yorkers have the most credit card debt – an average of $8,266. Thanks to the economic crisis that swept the entire country, and unexpected expenses such as medical emergencies, Americans are facing overwhelming debt. It’s not unusual to use credit cards when the emergency fund is dry. In April, another survey of 1,100 people who have credit card debt revealed the following interesting statistics:
  • More women than men have credit card debt
  • In fact, 63 percent of the women between the ages of 18-24 surveyed have credit card debt (compared with 36 percent of male respondents)
  • Additionally, females between the ages of 55-64 have twice as much debt as their male counterparts (66 percent v. 33 percent.)
There is hope for those facing seemingly insurmountable credit card debt.
22 hours 10 min ago
In its recent opinion in Jerome Listecki, as Trustee of the Archdiocese of Milwaukee Catholic Cemetery Perpetual Care Trust v. Official Committee of Unsecured Creditors, 2015 WL 1010089 (7th Cir.

Read More from: Creditors' Rights

22 hours 30 min ago
The best-performing banks are those that continue to invest in growth, rather than those that fixate on containing expenses, writes Capital Performance Group's Kevin Halsey.

Read More from: BankThink

22 hours 30 min ago
Receiving Wide Coverage ... A Beautiful Mind: Tributes to John Nash were plentiful after the mathematician made famous by his depiction in the film "A Beautiful Mind" was killed in an taxi accident this weekend. Nash's doctoral thesis placed game theory, the study of strategic interactions, at the heart of economics, the Financial Times said. After Nash's insights, "economists stopped thinking exclusively about unrealistic models of perfectly competitive markets and began focusing on cases in whichÂ...

Read More from: BankThink

23 hours 19 min ago
Medical device maker IMRIS Inc. has filed for chapter 11 bankruptcy protection with a buyout offer from secured lender Deerfield Management Co. 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.”) Arch Coal Inc. has hired restructuring advisers to help it deal with billions of dollars in debt, WSJ reports. Emails are going to play a key role in the Dewey & LeBoeuf trial, which starts Tuesday, WSJ reports. WSJ reports on how student loans and small businesses aren’t mixing.

Read More from: WSJ.com: Bankruptcy Beat

23 hours 26 min ago
The production crew that’s bringing Michael Lewis’ “The Big Short” to the big screen set up shop in front of the building that houses New York’s Department of Financial Services Friday morning.
courtesy Matt Anderson
  New York’s top banking regulator, Benjamin Lawsky, walked into the office of Lehman Bros. Friday morning almost seven years too late. Well, not really. Mr. Lawsky walked into the Wall Street office of the Department of Financial Services at 1 State Street this morning to find the production crew of “The Big Short” had re-created it as the lobby of the failed investment bank.

Read More from: WSJ.com: Bankruptcy Beat

1 day 23 min ago
Per the Star-Telegram:May 20, 2015By Sandra Baker Longtime Fort Worth oil firm Duer Wagner III Oil & Gas has succumbed to falling oil prices and filed for bankruptcy protection, the second Fort Worth firm do so in the past few months.Duer Wagner Oil said in its filings in bankruptcy court in Fort Worth that its revenues and profits have dropped more than 50 percent since the price per barrel began declining nearly a year ago.The company filed the bankruptcy May 15 on behalf of 12 debtor companies, many with the names of well-known athletes, saying its liabilities were more than $120 million, most of that to a loan with LNV, a subsidiary of Beal Bank, from December 2013. The filing said more than 200 parties will have interest in the Chapter 11 reorganization case.For more, see http://www.star-telegram.com/news/business/barnett-shale/article21498180.html Read more here: http://www.star-telegram.com/news/business/barnett-shale/article21498180...

Read More from: The COMI

1 day 15 hours ago
In a detailed May 4, 2015 opinion, the Delaware Chancery Court extensively reviewed the rights of an insolvent company’s creditors to pursue derivative claims against the company’s directorsIn the opinion, Vice Chancellor Laster said that “to bring a derivative action, a creditor-plaintiff must plead and later prove that the corporation was insolvent at the time the suit was filed.” Because he found that Quadrant had introduced sufficient material to support a reasonable inference that Athilon was insolvent at the time Quadrant filed suit, and therefore he denied the defendants’ motion for summary judgment.In making these determinations, Laster broadly surveyed the legal principles underpinning derivative litigation in Delaware, including the rights of creditors to assert derivative claims under some circumstances. He reduced the various principles pertaining to these issues to a succinct bullet point list:The post Delaware Court reviews standard for derivative claims appeared first on Culhane Meadows PLLC - Chapter 11 Business Bankruptcy Attorneys.

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

1 day 15 hours ago
Per Reuters:Fri May 1, 2015 12:47pm EDTBy Rania El Gamal and Reem ShamseddineDUBAI/KHOBAR, Saudi Arabia, May 1 (Reuters) - Saudi Arabia is restructuring the world's biggest energy company, Saudi Aramco, in a move apparently aimed at letting it operate more at arm's length from the powerful oil ministry.For more, see: http://www.reuters.com/article/2015/05/01/saudi-oil-aramco-idUSL5N0XS0BI20150501?type=companyNews&feedType=RSS&feedName=companyNews

Read More from: The COMI

3 days 10 hours ago
Per www.globalinsolvency.com:Wed., May 20, 2015Administrators of the furniture arm of failed lender African Bank Investments said on Tuesday creditors were paid 14 percent of what they were owed by Ellerine Furnishers, which had debts of around 1.3 billion rand ($109 million), Reuters reported. Administrators Matuson Associates said they paid out 14 cents for each rand owed, higher than the previously anticipated 13 cents per rand. Ellerine was forced into business rescue last year, which allows for temporary protection from creditors, as parent African Bank Investments crumbled under bad debts. The administrators also said they were in talks with several potential buyers for stores outside South Africa and may not receive as much as they had previously anticipated. Matuson Associates said last year they had received an indicative offer of 400 million rand for Ellerine's stores in other African countries from a listed South African retailer but Matuson said he was no longer sure he would receive that amount. 

Read More from: The COMI

3 days 11 hours ago
Per www.globalinsolvency.com:Thu., May 21, 2015Russia on Wednesday demanded the timely repayment of all debts owed to it by Ukraine and accused Kiev of effectively preparing the way for default with a new law. It threatened to take the issue to international courts if necessary. The law, approved by Ukraine's parliament on Tuesday, gives the government the right to miss payments to its international creditors as it wrangles over the terms for restructuring $23 billion worth of foreign debt. Russia holds a $3 billion Ukrainian Eurobond whose full repayment is due by the end of the year. Moscow, whose relations with Kiev have been wrecked by a year-long conflict in eastern Ukraine, has declined to join the debt restructuring talks. President Vladimir Putin, speaking at a meeting with government ministers, said he found the new law "strange". "To effectively announce an impending default shows a poor level of professional responsibility, all things considered," said Putin, noting that the International Monetary Fund does not lend to countries in default. Ukraine, its economy battered by recession and rampant graft as well as by the conflict in the east, hopes to secure the next tranche of a $17.5 billion bailout programme with the IMF this summer to shore up its foreign currency reserves.

Read More from: The COMI

3 days 11 hours ago
The Canadian and US courts have now ruled in the Nortel case. (Disclosure: I served as an expert for the UK pension interests in the case.) The case was already incredibly important because of an agreement among the parties to sell the worldwide assets of the corporate group without regard to territory or corporate ownership, creating a global pool of proceeds (about $7B) for distribution in such manner as agreed by the parties or as mandated by the two courts. (The UK court was not involved at this stage, which is an interesting point for another day.) A unified worldwide sale is a central advantage of universalism, enabling the parties here to achieve much higher values than had been predicted. However, when the parties could not agree as to distribution, the two courts were forced to decide. Ignoring many significant aspects of that process, after a joint on-line trial the two courts reached a common result. The joint trial and common result were two more extraordinary accomplishments. The common resolution is a special triumph for universalism.

Read More from: Credit Slips

4 days 15 hours ago
The confirmation order entered in every Oregon Chapter 13 Bankruptcy requires you to report to the Trustee if your actual or projected gross income increases by ten percent. The income figures included in Schedule I of your Bankruptcy Schedules filed with the Oregon Bankruptcy Court before confirmation serves as the baseline for determining whether there has been a ten percent increase. If  ten percent increase arises after confirmation, you should contact your attorney to review all of your income and expenses and file amended schedules to reflect the changes. Just because your income has increased by over ten percent doesn’t always mean that there needs to be an accompanying ten percent increase in your plan payment. For most of us, increases in income are almost always accompanied by the necessity to start really paying what we need to be paying for household living expenses or get the car that we have been putting off.   The original post is titled My Income Has Gone Up in My Oregon Chapter 13 Bankruptcy , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .

Read More from: Oregon Bankruptcy Lawyer

4 days 18 hours ago
In this Dec. 3, 2014 file, photo, Kanye Wests attend the premiere of “Top Five” at the Ziegfeld Theatre in New York.
Evan Agostini/Invision/Associated Press
Online streetwear retailer Karmaloop Inc., which was sold to one of its creditors Thursday, drew interest from a number of celebrities—including Kanye West, according to people familiar with the sale process. “We were doing our best to avoid being starstruck,” said Michael O’Hara, Karmaloop’s investment banker. Entertainment moguls, well-known athletes and at least 50 other prospective purchasers held meetings with Karmaloop’s professionals during a months-long effort to find a buyer for the bankrupt company. “They ranged from your traditional private equity firms all the way through to Kanye West,” said Brian Davies, Karmaloop’s chief restructuring officer. Mr. Davies said Karmaloop’s core demographic, those between the ages of 18 and 35, was particularly attractive to many of the sports stars and other celebrities. “For a lot of these athletes and a lot of these stars, that was the demographic they are looking at,” he said. Both Mr. O’Hara and Mr. Davies said Karmaloop may still partner with a celebrity, which could add significant value to the company’s business.

Read More from: WSJ.com: Bankruptcy Beat

4 days 19 hours ago

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