ABI Blog Exchange

Like many others, I have been struggling to figure out whether the new lunar year is a Sheep or a Goat. I found the answer last week in the archives of the League of Nations Committee for the Study of International Loan Contracts, which spent four years from 1935 to 1939 trying to figure out why sovereign debt was so screwed up, and what to do about it. During these four years, committee notables and their experts managed to foresee just about every 21st century sovereign debt controversy, from pari passu and feckless trustees to the epic and tiresome battle between contractual and statutory sovereign bankruptcy. The 1937 meeting minutes below also show a solid grasp of Odious Debt and sovereign lemons. Some governments might walk away from their debts just because, others have good economic or moral reasons not to pay, but the creditors cannot tell the two apart.

Read More from: Credit Slips

1 day 2 hours ago
Posted by Kathy Bazoian Phelps    Below is a summary of the activity reported for February 2015. The reported stories reflect: 2 guilty pleas or convictions in pending cases; over 64 years of newly imposed sentences for people involved in Ponzi schemes; at least 5 newly discovered schemes involving more $138 million; and an average age of approximately 47 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.    Kenneth Brewington, 50, was charged with running an alleged $2.5 million Ponzi scheme through a financial services marketing company called Compass Financial Solutions. The indictment alleges that Brewington and other co-conspirators falsely represented to investors that they held millions of Euros in overseas bank accounts and that investor funds would be used to obtain the release of the funds.    John A. Geringer, 48, of GLR Advisors and GLR Capital Management was barred by the SEC from the securities industry. The SEC charged Geringer with running a $60 million Ponzi scheme which GLR advertised as “SEC approved” and represented that it had returns of 17% to 25% during every year of its operation.

Read More from: The Ponzi Blog

1 day 8 hours ago
Think about bankruptcy. Nobody reads a bankruptcy blog for fun. You are here to find something out. You want to know if it is reasonable for you to think about bankruptcy. Does it make you nervous to think about bankruptcy? Perhaps it arouses feelings of shame. Are you too embarrassed to seek bankruptcy advice? If your answers are “yes,” you are perfectly normal. People with debt problems usually don’t seek help until things reach crisis proportions. There’s got to be something in human DNA that makes us put things off. Minor tooth pain is often ignored instead of seeing a dentist. Minor discomfort in your private parts down below will be ignored instead of seeing a butt doctor. Think hard. Think about freedom from debt worries. Think about bankruptcy. Human DNA also gives us a incredibly strong survival instinct. We may suffer hurt that is constant or unbearable. But we don’t just sit there waiting to die. We look for help. We expect help. We cry for help.

Read More from: Los Angeles Bankruptcy Blog

1 day 13 hours ago
Oregon student loan debtors breathed a sigh of relief this week when the Department of Education announced that it was finally firing five debt collection agencies that had been giving inaccurate information to student borrowers. I say finally firing these agencies because the department had been under fire for years for its partnership with these agencies and its insistence on paying them roughly a billion a year to harass student loan borrowers. The Department of Education ultimately found that Pioneer Credit, one of their largest collection partners, and four others had been regularly doling out inaccurate information about the department’s loan forgiveness program.  Due to incentive-pay structures, the debt collectors had little incentive to rout student loan debtors into loan forgiveness programs and often misinformed debtors to keep them outside the loan forgiveness programs. The original post is titled Good News for Oregon Student Loan Debtors , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .

Read More from: Oregon Bankruptcy Lawyer

1 day 19 hours ago
The 8th Circuit Court of Appeals has ruled that retirement funds rolled over from an Individual Retirement Account to purchase an annuity are exempt from the bankruptcy estate.  In re Miller (No. 13-3682).  Prior to filing bankruptcy, Joseph Miller, rolled over $267,319 from his IRA account to purchase an annuity contract from Minnesota Life Insurance Company.  The annuity was to pay the debtor $40,497.95 for the next 8 years.  Although it is clear that funds held in IRA accounts are exempt, the trustee argued that the funds lost that protected status when the annuity was purchased because the annuity did not meet the tax qualification rules of Internal Revenue  Code Section 408. Section 522(b)(3)(C) of the Bankruptcy Code provides that funds which are exempt from federal taxation are thereby made exempt from the claims of creditors.  Such funds are not part of the “bankruptcy estate.”
1 day 19 hours ago
A recap of the informed opinions (and the discussions they generated) on BankThink this week, including Dodd-Frank's impact on small institutions, Fed chair Janet Yellen's handling of attacks on her staff and Bitcoin's public but pseudonymous ledger.

Read More from: BankThink

2 days 11 hours ago
Twenty-five years ago, the Supreme Court held that a Bankruptcy Court had the authority to order the IRS to allocate payments made "voluntarily" by a Debtor when necessary to effectuate a successful reorganization.    United States v. Energy Resources Co., 495 U.S. 545 (1990).   Left to its own devices, the IRS will generally allocate payments to the oldest taxes first, or, in the case of payroll taxes, to non-trust funds taxes first.   If the Debtor can require the IRS to allocate payments differently, it can greatly impact the overall amount the Debtor will be required to pay.   A recent decision out of Fort Worth illustrates how Energy Resources continues to provide a valuable tool for Debtors with tax obligations.    In re Fielding, 522 B.R. 888 (Bankr. N.D. Tex.
2 days 12 hours ago
Dear Clients, Colleagues, and Friends:Twenty-six years is a long time in one place. While there is sadness in parting, the partners of Seder & Chandler, LLP and I have mutually agreed to separate our practices. Effective March 1, 2015, I will leave the firm and join my wife, Marina R. Matuzek, at her law offices located at 5 Austin Street, Worcester, MA 01609. As for my practice, I will continue to offer my services to present and future clients and represent them in consumer bankruptcy, business bankruptcy, and bankruptcy litigation in Massachusetts courts. As I have often said in my  “elevator speech”, it does not matter whether you are a debtor or creditor, consumer or business, owner or claimant, plaintiff or defendant—if you plan to be involved or are already involved in a bankruptcy case or an adversary proceeding, I can assist you. I offer my experience and knowledge in business and consumer Chapter 7, Chapter 11, and Chapter 13 cases, on all sides of a bankruptcy case and on all sides of an adversary proceeding. My twenty-six years in bankruptcy practice have also provided me with experience and knowledge in commercial litigation, loan transactions, corporate matters, mortgage foreclosure, and secured party sales. If you have a problem or need representation in any of these areas, I will be willing to sit down with you and explore your options. Seder & Chandler, LLP and I plan to continue our amicable relationship.
2 days 13 hours ago
When filing bankruptcy, it is very, very important to tell your attorney about ANY and ALL possible or potential claims that you have or may have against anyone. If you don’t list these claims in your bankruptcy filing, then it is quite likely that you will be prevented from pursing them later. In a recent opinion in the Bankruptcy Court for the Western District of Kentucky, Judge Stosberg ruled that an individuals employment law claim could not be pursued by her as she did not list the potential claim in her previous bankruptcy filing, even thought she had not yet hired an attorney to pursue the claim at the time she filed bankruptcy. For the full case, click here. Always disclose all claims to your bankruptcy attorney !
2 days 15 hours ago
United States District Court, District of Arizona PLEA AGREEMENT BY RICHARD S. BERRY, WHY PAY A LAWYER Case 2:14-cr-00322-SRB Document 47 Filed 01/27/15 BANKRUPTCY FRAUD USA v Richard Sylvester Berry                 CR14-0322-PHX-SRB (SPL) 03/05/2014 Excerpt from Plea Agreement: 9. From April, 2010 through March, 2014, in the District of Arizona: 1. The defendant devised a scheme or plan to defraud 2. The defendant acted with the intent to defraud; 3. The defendant filed or caused to be filed a document in a proceeding under a Title 11 bankruptcy proceeding to carry out or attempt to carry out an essential part of the scheme. 4. The defendant’s act was material; that is, it had a natural tendency to influence, or was capable of influencing the acts of an identifiable person, entity, or group. 10. FACTUAL BASIS a. The defendant admits that the following facts are true and that if this matter were to proceed to trial the United States could prove the following facts beyond a reasonable doubt:
2 days 15 hours ago
Keith Bedford for The Wall Street Journal
Small-town shopkeepers who have been peddling RadioShack products out of their hardware or appliance or general electronics or corner drug stores across America have been waiting to hear where they stand in the plan for the retailer’s future. This week, RadioShack’s independent dealers and franchisees finally heard from the company. RadioShack cut them off from credit and demanded cash in advance from small-business owners who have been selling its goods for decades if they want inventory now. The small business owners are worried, said Richard Mikels, the Boston lawyer who spoke for them in court this week. What if they send their money in and get no inventory from RadioShack, which is on its last legs? Worse, what if the small-town dealers are the last folks standing at RadioShack counters when it finally dawns on consumers it’s time to cash in roughly $20 million worth of gift cards outstanding before they become worthless? “It’s going to be very awkward for the dealers if RadioShack is not going to be standing behind them,” Mr. Mikels told Judge Brendan Shannon at a hearing Wednesday in the U.S. Bankruptcy Court in Wilmington, Del.

Read More from: WSJ.com: Bankruptcy Beat

2 days 16 hours ago
Keith Bedford for The Wall Street Journal
Small-town shopkeepers who have been peddling RadioShack products out of their hardware or appliance or general electronics or corner drug stores across America have been waiting to hear where they stand in the plan for the retailer’s future. This week, RadioShack’s independent dealers and franchisees finally heard from the company. RadioShack cut them off from credit and demanded cash in advance from small-business owners who have been selling its goods for decades if they want inventory now. The small business owners are worried, said Richard Mikels, the Boston lawyer who spoke for them in court this week. What if they send their money in and get no inventory from RadioShack, which is on its last legs? Worse, what if the small-town dealers are the last folks standing at RadioShack counters when it finally dawns on consumers it’s time to cash in roughly $20 million worth of gift cards outstanding before they become worthless? “It’s going to be very awkward for the dealers if RadioShack is not going to be standing behind them,” Mr. Mikels told Judge Brendan Shannon at a hearing Wednesday in the U.S. Bankruptcy Court in Wilmington, Del.

Read More from: WSJ.com: Bankruptcy Beat

2 days 16 hours ago
Gary Holtzer, co-chair of Weil’s Business Finance & Restructuring Department, was interviewed by The Dealon what PE firms should consider when their portfolio companies become stressed or distressed. The interview, which took place at the 2015 TMA Distressed Investing Conference in Las Vegas on February 12, was conducted by The Deal’s Senior Editor of Out-of-Court Restructuring, Jamie Mason. In addition to discussing what PE firms should consider, other topics covered include:
  • The techniques private equity firms can use to manage the liabilities of their portfolio companies’ balance sheets
  • How private equity funds can proactively seek opportunities in situations which do not involve their own portfolio companies
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2 days 17 hours ago
On Wednesday in Coeur d’Alene, Idaho, the Roman Catholic Diocese of Helena will seek a bankruptcy judge’s permission to proceed with a plan to pay $16.4 million to compensate hundreds of people who allege they were sexually abused by the diocese’s clergy. The plan, which was largely put in place during mediation that preceded the Montana diocese’s bankruptcy filing in January 2014, calls for about 360 victims to receive a minimum payment of $2,500 each. An abuse-claims reviewer will determine the actual payment based on the severity and long-term effects of the abuse. Any future abuse claims also will be paid out of the trust. If approved by Judge Terry Myers, the diocese’s insurance companies would contribute $14.4 million to the trust, and the diocese itself would contribute $2 million. The plan also includes another $4.45 million from the Ursuline Sisters of the Western Province to settle a lawsuit filed by 45 Native Americans who alleged they were abused at the Ursuline Academy in St. Ignatius. In total, 11 other Catholic dioceses have turned to chapter 11 to address waves of litigation related to alleged sexual abuse by priests and others, the vast majority of which allegedly took place decades ago.

Read More from: WSJ.com: Bankruptcy Beat

2 days 17 hours ago
On Wednesday in Coeur d’Alene, Idaho, the Roman Catholic Diocese of Helena will seek a bankruptcy judge’s permission to proceed with a plan to pay $16.4 million to compensate hundreds of people who allege they were sexually abused by the diocese’s clergy. The plan, which was largely put in place during mediation that preceded the Montana diocese’s bankruptcy filing in January 2014, calls for about 360 victims to receive a minimum payment of $2,500 each. An abuse-claims reviewer will determine the actual payment based on the severity and long-term effects of the abuse. Any future abuse claims also will be paid out of the trust. If approved by Judge Terry Myers, the diocese’s insurance companies would contribute $14.4 million to the trust, and the diocese itself would contribute $2 million. The plan also includes another $4.45 million from the Ursuline Sisters of the Western Province to settle a lawsuit filed by 45 Native Americans who alleged they were abused at the Ursuline Academy in St. Ignatius. In total, 11 other Catholic dioceses have turned to chapter 11 to address waves of litigation related to alleged sexual abuse by priests and others, the vast majority of which allegedly took place decades ago.

Read More from: WSJ.com: Bankruptcy Beat

2 days 17 hours ago
Big banks are making critical risk management decisions with data that is old, incomplete or even inaccurate. This endangers the safety of the global financial system in more ways than one.

Read More from: BankThink

2 days 18 hours ago
Michael E. Wiles
New York’s bankruptcy bench is expanding again, this time with the appointment of a longtime corporate bankruptcy lawyer in New York. Michael Wiles, until recently a partner at New York law firm Debevoise & Plimpton LLP, will be sworn in Tuesday as the newest judge in U.S. Bankruptcy Court for the Southern District of New York, a federal appellate court announced Friday. The appointment comes two weeks after the court brought Judge James Garrity back to the nine-member bench after a hiatus of more than 15 years in private practice. Mr. Wiles replaces Judge James Peck, who retired in 2014 and joined the law firm Morrison & Foerster.

Read More from: WSJ.com: Bankruptcy Beat

2 days 18 hours ago
Michael E. Wiles
New York’s bankruptcy bench is expanding again, this time with the appointment of a longtime corporate bankruptcy lawyer in New York. Michael Wiles, until recently a partner at New York law firm Debevoise & Plimpton LLP, will be sworn in Tuesday as the newest judge in U.S. Bankruptcy Court for the Southern District of New York, a federal appellate court announced Friday. The appointment comes two weeks after the court brought Judge James Garrity back to the nine-member bench after a hiatus of more than 15 years in private practice. Mr. Wiles replaces Judge James Peck, who retired in 2014 and joined the law firm Morrison & Foerster.

Read More from: WSJ.com: Bankruptcy Beat

2 days 18 hours ago
Caesars Palace casino in Las Vegas, Nevada, is seen in a file picture taken July 14, 2004.
Reuters
The bankrupt main operating unit of Caesars Entertainment Corp. has asked that an outsider be summoned to probe alleged insider-led looting of the gambling operation, a request slated for court review next week. 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.”) Aereo Inc., the defunct TV-streaming service that once promised to revolutionize the way consumers watch network television, was sold for parts this week to TiVo Inc. and other buyers at a bankruptcy auction. Read the DBR article in WSJ.

Read More from: WSJ.com: Bankruptcy Beat

2 days 19 hours ago
Caesars Palace casino in Las Vegas, Nevada, is seen in a file picture taken July 14, 2004.
Reuters
The bankrupt main operating unit of Caesars Entertainment Corp. has asked that an outsider be summoned to probe alleged insider-led looting of the gambling operation, a request slated for court review next week. 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.”) Aereo Inc., the defunct TV-streaming service that once promised to revolutionize the way consumers watch network television, was sold for parts this week to TiVo Inc. and other buyers at a bankruptcy auction. Read the DBR article in WSJ.

Read More from: WSJ.com: Bankruptcy Beat

2 days 19 hours ago

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