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Recent legislative proposals to make piecemeal changes to the government-sponsored enterprises could set broader GSE reform on the wrong path.

Read More from: BankThink

3 hours 57 min ago
Receiving Wide CoverageÂ... Citigroup was fined $425 million by the U.S. Commodity Futures Trading Commission Wednesday, for claims that it tried to manipulate several interest-rate benchmarks between 2007 and 2012. However, it appears the bank could avoid any criminal charges, as the Department of Justice said it had closed its investigation already told Citi it would not prosecute over Libor. Wall Street Journal, Financial Times, New York Times. Wall Street Journal Â...

Read More from: BankThink

4 hours 27 min ago
[wsj-responsive-image P="//art.wsj.net/api/photos/31690525/smartcrop?height=499&width=749" J="//art.wsj.net/api/photos/31690525/smartcrop?height=639&width=959" M="//art.wsj.net/api/photos/31690525/smartcrop?height=853&width=1280" caption="New York financier Lynn Tilton speaks with her attorneys after her hearing at the U.S. District courthouse in New York, May 11, 2015. Alvarez & Marsal is seeking more information on the Zohar investment vehicle she founded.. " credit="Reuters" placement="Inline" suppressEnlarge="false" ] Alvarez & Marsal wants a court order to force Lynn Tilton and her Patriarch Partners firm to cough up more information on the Zohar investment funds Ms. Tilton founded. 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.”) WSJ reports on the approval of a bipartisan Puerto Rico rescue bill by a House committee.

Read More from: WSJ.com: Bankruptcy Beat

5 hours 50 min ago
Student Loan Discharge is an issue this election Happy Horses in a Field year.  So, we will get bills introduced about Student Loan Discharge. And another bill. And more bills.  Which have no chance of passing because this is late into an election year, when all our public servants do is work to keep their seat at the public trough. Such bills are the equivalent of what the horses in the picture leave behind on the ground. Nevertheless, let’s look at a recent Student Loan Discharge proposal. Student Loan Forgiveness Tax Repayment Act This one is bi-partisan!  One could define this as having at least one scoundrel from each party behind it.  So, call me a cynic.
The bill, the Stop Taxing Death and Disability Act, would save families from big tax bills when federal student loans are forgiven after death or disability.
This one is also, a re-tread, having been introduced in – you guessed it, the last election year, 2014. So, good idea, yes.  Chance of passage, not so much. Still, keep your eyes on the current crop of idiots running for office and what they say about Student Loan Discharge. The Supreme Court Does Not Want To Say Anything

Read More from: Discharge Student Loan

12 hours 52 min ago
POT OF GOLD By Donald L. Swanson A sale in bankruptcy of assets owned by Norton Networks Inc. results in a $7.3 billion (yes, that’s $7,300,000,000) pot of gold for creditors. Guess what: creditors can’t agree on how to divide the pot. So what do creditors do instead? They spend $2 billion from the pot of gold on professional fees to fight over the pot. And the fight isn’t finished. It’s not as if the parties have refused to negotiate. They’ve held at least four rounds of mediation. But all mediation rounds fail. So . . . the parties are still battling . . . and using up the pot of gold in the process. The U.S. bankruptcy case is pending in Delaware at Case No. 09-1018 (yes, the “09” in the case number reveals the 7-year age of the case). The Bankruptcy Court, in its Opinion dated May 12, 2015 (Doc. 15,544) on how the $7.3 billion sale funds should be allocated and distributed, makes this finding: –The parties “have submitted widely varying approaches” for deciding the distribution issue, “leaving virtually no middle ground.” Both sides have “strong criticism” of the other’s distribution methodology and are “sparing no expense” in fighting the battle. How could this using-up-the-pot-of-gold happen? Here are two explanations: 1. Vexing complexity.

Read More from: Mediatbankry

16 hours 29 min ago
Perhaps Next Time the Debtor Will Speak Up a Little Sooner
21 hours 56 min ago
One of the goals of the Bankruptcy Code is to provide a debtor with a fresh start. The discharge of prepetition debts at the conclusion of a bankruptcy case is one of the most important ways to attain this fresh start.  On May 16, 2016, the Supreme Court made it harder for debtors to obtain a fresh start by broadening an exception to discharge. Section 523(a)(2)(A) of the Bankruptcy Code provides that an individual debtor is not discharged from any debt “for money, property [or] services … to the extent obtained by false pretenses, a false representation, or actual fraud[.]” Circuits split as to whether actual fraud under Section 523(a)(2)(A) requires an affirmative misrepresentation; the Fifth Circuit had held that this was a necessary element to prevent discharge, but the Seventh Circuit had held that “actual fraud” encompassed a broader range of behaviors. The Supreme Court resolved this split, rejecting the Fifth Circuit’s narrow interpretation and finding that the term “actual fraud” does not need to include an affirmative misrepresentation by the debtor. With this broader reading, debtors will be unable to discharge prepetition debts where there is evidence that they inappropriately siphoned of their assets prior to filing for bankruptcy. Husky Int’l Elecs., Inc. v. Ritz, No. 15-145, 2016 WL 2842452 (U.S. May 16, 2016). Background.
1 day 6 min ago
When it comes to earning consumer loyalty with user-friendly mobile banking tools, everyday interactions can matter more than momentous ones.

Read More from: BankThink

1 day 1 hour ago
The debate over speeding up payments transactions should consider the necessity of allowing consumers time to rethink and abort their purchases.

Read More from: BankThink

1 day 3 hours ago
Unlike a Chapter 7 liquidation bankruptcy case, a Chapter 13 reorganization case can last for several years.  In fact, typically a Chapter 13 case must last for at least 36 months and can continue for as much as 60 months, or 5 years.  Clearly the Court can’t expect someone to put their life on hold for 5 years.  This blog post will lay out some of the things you can and cannot do while in a Chapter 13 case. Don’t Sell Any Property First, don’t sell any property without Court approval.  When you file a Bankruptcy case, you create something called the “Bankruptcy Estate.”  The Estate is comprised of all of your assets, with just a few exceptions.  Generally any real estate or vehicles you have will be a part of the Estate.  Any property, real or personal, that is a part of the Estate cannot be sold or transferred unless the Court approves the transfer.  The rationale behind this is that the Court doesn’t want people trying to hide assets.  If a person sells 100 acres of land to his brother for $20, then its obvious that the “sale” was just to get the land out of his name in the first place. As long as the sale is an arms-length transaction and for a fair market value, the Court shouldn’t have any issues.

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

1 day 3 hours ago
The brief is not up on the SG's webpage yet, but they are recommending granting the petition and reversing the Third Circuit.  Hat tip to Professor Lipson or Attorneys Goldblatt et al.?  I think this now places granting odds at "moderately decent." (Those less in the weeds: CVSG is Calls for Views of the Solicitor General.  When the Supreme Court's thinking of granting cert, it sometimes asks the Solicitor General for its views before making the decision.  The SG's brief filed this week says, "Yes, important, grant cert."  Of course, it's not dispositive, but as my old Latin Master used to say, it's better than a slap in the face with a wet haddock.  (Shout out to TPO'DB.))

Read More from: Credit Slips

1 day 4 hours ago
Wall Street Journal JPMorgan Chase, Citigroup, Bank of America and other banks could take a hit to their second quarter profit from litigation charges and fines, as a Libor manipulation case revived earlier this week raised the possibility of liability for violation of antitrust laws. Such violations could require them to pay triple damages. But for now, it remains to be seen what, if any, penalties are incurred. Firms that choose to deal with the problem...

Read More from: BankThink

1 day 4 hours ago
[wsj-responsive-image P="//si.wsj.net/public/resources/images/BN-OB130_0517sp_P_20160517084321.jpg" J="//si.wsj.net/public/resources/images/BN-OB130_0517sp_J_20160517084321.jpg" M="//si.wsj.net/public/resources/images/BN-OB130_0517sp_M_20160517084321.jpg" credit="Getty Images" placement="Inline" suppressEnlarge="false" ] A trio of liquidators won approval to start going-out-of-business sales at sporting-goods retailer Sports Authority Holdings Inc. The sales will begin as soon as this 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.”) IHeart Media Inc. won a legal fight against of group of lenders that were trying to put the media giant into default, DBR reports in WSJ.

Read More from: WSJ.com: Bankruptcy Beat

1 day 5 hours ago
Mountain Scene v. Lake Scene = It’s Both By Donald L. Swanson –Mediators “showed a marked preference toward” a facilitative style of mediation, but –Mediators “believe that parties and their advisers expect them” to use an evaluative style of mediation. These findings are recently published (on May 11, 2016) by the Centre for Effective Dispute Resolution (located on Fleet Street in London, England) in its “Seventh Mediation Audit: A survey of commercial mediator attitudes and experience.” Another finding on facilitative v. evaluative mediation styles reported in the study is this: “mediators trained in a facilitative doctrine tend to favour that approach and start out using it, but many (although clearly not all) veer towards more evaluative strategies when the going gets tough.” Such finding is presented with a series of charts showing that mediators use both styles within a single mediation session.  The charts show, generally, that mediators: –favor the facilitative style in the initial phase of a mediation session (when “uncovering information”) –but move toward an evaluative style in the second phase (when “trying to get negotiations moving”) –and move further toward an evaluative style in the third phase (when “everything is stuck”)

Read More from: Mediatbankry

1 day 6 hours ago
In re Cornerstone Homes, Inc., 544 B.R. 492 (Bankr. W.D. N.Y. 2015) – A chapter 11 trustee sought a judgment that a series of mortgages were unenforceable as a matter of law because the written assignments transferring them to the … Continue reading →
1 day 7 hours ago
During contract negotiations parties usually agree what law and which courts will determine any disputes arising from that contract.  This brings certainty for the parties.  However that certainty can vanish if one party is a foreign registered company and becomes insolvent – the other party may suddenly become exposed to unexpected foreign insolvency law.  At this point, the drafting of a jurisdiction clause can be worth millions. This is the situation in the recent case of Global Maritime Investments Cyprus Limited v O.W. Supply & Trading A/S  [2015] EWHC 2690 (Comm). Facts A Cypriote company, Global Maritime Investments Cyprus Limited (“GMI”), entered into derivative contracts with a Danish company, O.W. Supply & Trading A/S (“OW”).  The contracts stated: “with respect to any suit, action or proceedings relating to these general terms and conditions each party irrevocably submits to the jurisdiction of the English courts.” In November 2014 OW filed for bankruptcy in Denmark.  This was an Event of Default in the contracts and allowed GMI to either terminate the contracts or affirm the contracts but stop payments under them.  To avoid exposing itself to substantial “close-out” payments under a termination of the contracts, GMI chose to affirm the contracts, but stop payments.

Read More from: eSQUIRE Global Crossings

1 day 8 hours ago
Action Item. Preparation efforts must be made in a multi-party mediation before the parties will be ready for final mediation sessions.  

Read More from: Mediatbankry

1 day 9 hours ago
This is the first article in a blog series on emergency savings and financial security. Check out the second blog article, “A Lot of Americans with Financial Struggles Focus on the Present, Don’t Worry about the Future.” A majority of Americans report that they would probably not have the funds needed to cover emergency expenses, according to a new poll. The poll, which was conducted by The Associated Press-NORC Center for Public Affairs Research (AP-NORC), found that approximately two-thirds of adults in the U.S. would struggle to afford a $1,000 emergency. The White House even issued a comment on the AP-NORC poll, stating that “there is still more to do” when it comes to improving the economy and helping Americans avoid financial disaster. In fact, the problem may be even worse than the AP-NORC study indicates. In 2015, the Federal Reserve conducted a poll that showed that nearly half of American adults are not in a financial position to pay for a $400 emergency expense. Most of the survey respondents said that they would have to sell their possessions or ask friends or family for financial assistance if a minor emergency arose. Paying for an Unexpected Emergency Expense
1 day 21 hours ago
The long weekend is almost here, and we at the Weil Bankruptcy Blog know that, if Mother Nature does not cooperate with your plans for the long weekend, the best hedge against getting stuck inside playing endless games of Heads Up! is to claim that you have work to do.  That’s where catching up on your blog reading comes in.  Once again, we have summarized below what you may have missed over the last couple of months.  Even if you may not be able to come back from the long weekend with an impressive tan, you still will be able to wow your colleagues with your bankruptcy expertise.  When Will We Be Able to Forget Frenville?
1 day 21 hours ago
On May 18th, James Shenwick delivered a lecture on personal bankruptcy in 2016 to Deliberate Solos. I.          IntroductionWhy do people file for bankruptcy today?●     Credit card debts ●     Business reversals and job loss●     Falling real estate values●     High housing costs ●     Student loans ●     Divorce ●     Medical bills and illness●     Guaranties of debtII.        Economic Conditions that are driving Personal Bankruptcy Filing●     4.9% unemployment rate●     The effective unemployment rate is 9.7%●     The unemployment rate for recent college graduates is 7.2%●     $935.3 billion of revolving (credit card) debt as of January 2016●     The foreclosure rate is 1.2%●     11.5% of homes are “underwater.”●     Student loans total approximately $1.4 trillion III.       What can a person with too much debt do?            A.        Do nothing-“Hope and Pray”B.        Negotiate an “out of court” workout with creditors Pros: ●     Save the legal fees in filing a bankruptcy petition and the Bankruptcy Court filing fees (usual minor in comparison to the amount of debt a debtor has).●     A workout may be a less “negative factor” on your credit report than filing for bankruptcy (“FICO Score”).

Read More from: Shenwick & Associates

1 day 22 hours ago

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