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A recap of the informed opinions (and the discussions they generated) on BankThink this week, including a call for a small-business loan brokers' code of ethics and why Congress needs to level the playing field for investors in bank obligations.

Read More from: BankThink

8 hours 51 min ago
co-authors: Daniel Hart and Salene Kraemer The story behind the Chapter 11 filing of PTC Seamless Tube Corporation (Seamless) is a cautionary tale for Steel Valley businesses, both big and small, as to the dangers of overexpansion and the importance of business planning.  Here is what you can learn from it: On April 26, 2015, Seamless filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Western District of Pennsylvania.  Seamless estimates its assets to be between $50-100 million with liabilities between $100-500 million. Seamless is a subsidiary of PTC Group Holdings Corp..  It manufactures steel tubing, tubular shapes, bar products, fabricated parts, and precision components.  In 2013, Seamless invested more than $102 million to reopen a manufacturing plant in Kentucky.  This project involved the acquisition of a large manufacturing facility, property adjacent to the existing site, re-working the layout of the facility and the installation of manufacturing equipment.
13 hours 10 min ago
The Consumer Financial Protection Bureau continues to innovate and offer new ways to really help consumers. They now offer an online complaint form to file complaints regarding consumers experiences with banks and other financial companies. Having a dispute with a credit card company over their fees ? Click here ! Can’t get help with a student loan company on loan consolidation or forbearance or forgiveness ? Click here ! Your mortgage company giving you the runaround on loan modification ? Click here !
13 hours 49 min ago
Since the collapse of Lehman Brothers and the ensuing global financial crisis, policymakers, central banks and regulators have introduced a raft of new measures designed to assist the resolution and recovery of systemically important financial institutions. In an article for International Corporate Rescue, Andrew WilkinsonAlex Wood and Paul Bagon evaluate legislative and market efforts to impose temporary stays on closing-out OtC transactions, including under the European Bank Recovery and Resolution Directive and the new ISDA protocol.  The authors consider the impact of these measures on the authorities’ powers to implement an effective and timely resolution of distressed financial institutions and debate whether the possibility of “another Lehman Brothers” has now been consigned to the history books.
14 hours 3 min ago
Series: Commercial Bankruptcy Litigation It has been said countless times that a debtor in bankruptcy is like a goldfish in a bowl-  exposed for the whole world to see.  Something similar can be said of debtor’s counsel.  Read more here.
14 hours 8 min ago
Series: Private Company M&A Boot Camp 2015 Shareholder litigation involving M&A is on the rise. Take this webinar to ensure you are up to speed on this hot topic. Read more here.
14 hours 11 min ago
On Wednesday, biofuel maker KiOR Inc. will go before a Wilmington, Del., bankruptcy judge to seek final approval of its chapter 11 reorganization plan. Under the proposed plan, KiOR will turn over control of its business to lender Pasadena Investments LLC—a company affiliated with venture capitalist and KiOR co-founder Vinod Khosla—in exchange for $16 million in debt forgiveness. KiOR’s unsecured creditors, owed more than $79 million, voted overwhelmingly to reject the plan, but all other creditor classes approved it unanimously, court papers show. The plan is also facing objections from a federal bankruptcy watchdog as well as the Mississippi Development Authority, which holds the bulk of KiOR’s unsecured debt. Founded in 2007 by Mr. Khosla’s Khosla Ventures and Dutch company Bioecon, KiOR converts wood chips, logging residue and other biomass into renewable crude oil. The company, based in Pasadena, Texas, filed for chapter 11 bankruptcy protection in November. Also Wednesday, another Wilmington judge will hear from Frederick’s of Hollywood Inc., which recently canceled an auction of the company and plans to ask for approval of a sale to lead bidder Authentic Brands Group Inc.

Read More from: WSJ.com: Bankruptcy Beat

14 hours 23 min ago
During a recent chapter 7 341 meeting of creditors, the trustee inquired about a stock loss. The inquiry was a result of examining the debtor’s tax return for the current year and seeing a carryover loss of nearly $40,000. The trustee wrongfully believed that the debtor had sold or liquidated $40,000 worth of stock during+ Read More The post Chapter 7 Bankruptcy Trustee Questions A Stock Loss appeared first on David M. Siegel.
14 hours 44 min ago
The Disney-Pixar movie 'Finding Nemo' inspired a run on clownfish in pet stores across America. Banks should pursue the same effect with content that connects with customers on an emotional level and inspires them to take action.

Read More from: BankThink

15 hours 5 min ago
 
Richard “Dick” Fuld, former chief executive of Lehman Brothers Holdings Inc., right, exits the Grand Hyatt Hotel after speaking at the Marcum MicroCap Conference, in New York, U.S., on Thursday May 28, 2015.
Victor J. Blue/Bloomberg News
According to The Wall Street Journal, ex-Lehman Brothers chief Dick Fuld said Lehman could have survived the financial crisis but was “mandated into bankruptcy.” Frederick’s of Hollywood Inc. canceled an auction of the company, which likely puts the iconic brand in the hands of lead-bidder Authentic Brands Group Inc. WSJ 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

15 hours 31 min ago
A collective sigh of relief was the main effect of this week’s much-awaited Supreme Court decision on bankruptcy jurisdiction in Wellness International Network, Ltd. v. Sharif, No. 13-935, ___ U.S.___ (May 26, 2015, Sotomayor, J.). While a number of minor issues remain, the majority’s ruling that bankruptcy judges can issue judgments and final orders with the parties’ consent means that the current bankruptcy system can continue to function normally. The Wellness case involved the bankruptcy court’s jurisdiction to determine whether assets purportedly held in a trust were actually property of the debtor’s bankruptcy estate. The case presented the Court with two possible issues involving bankruptcy jurisdiction. The first was whether the non-Article III bankruptcy judges could constitutionally exercise jurisdiction over that dispute and the second was whether the debtor’s alleged consent permitted the bankruptcy judge to enter a final order even if it otherwise lacked the constitutional authority to do so. The majority and dissenting opinions disagreed on which issue was the easier one and the one that should be resolved first. The majority chose to avoid the question of bankruptcy court power by holding that consent cured any problem that might otherwise exist. This is consistent with prior Supreme Court case law upholding the consent jurisdiction of federal magistrate judges.

Read More from: GT Restructuring Review

15 hours 33 min ago
Seven companies this proxy season are offering investors with alternative management and shareholder proposals on proxy access. The two competing proposals provide different ownership thresholds for when a shareholder can make a proxy access nomination. Some of the management proposals are binding, while the shareholder proposals are always precatory. Four of the proposals have come to a vote so far, with mixed result. 
15 hours 36 min ago
Receiving Wide Coverage ... Red Card: Visa has become a key player in the FIFA corruption scandal. The credit-card network, one of FIFA's top corporate sponsors, said it's disappointment in the FIFA scandal was "profound" and added it may end its sponsorship agreements with soccer's governing body if changes aren't made. Visa's comments were the strongest voice of concern among all of FIFA's corporate sponsors. FIFA earns a total $177 million yearly from corporate sponsors, which...

Read More from: BankThink

16 hours 2 min ago
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Read More from: Kieselstein Law Firm

18 hours 53 min ago
In Cantu v. Stone (In re Cantu), Case No. 14-40762 (5th Cir. May 20, 2015), the Fifth Circuit ruled that a professional negligence claim that accrued during the pendency of the debtors’ Chapter 11 case was property of the Chapter 7 estate when the Chapter 11 case converted to Chapter 7: “Because the misconduct alleged against [the DIP’s accountant] that gave rise to the settlement depleted the estate’s assets, delayed the [Chapter 11] bankruptcy, and injured the creditor body by preventing confirmation of a reorganization plan that could have resulted in a larger recovery for the creditors, the causes of action against him accrued prior to conversion and therefore belong to the estate rather than the Cantus. See also Cantu v. Schmidt (In re Cantu), — F.3d — –, 2015 WL 1809013 (5th Cir. Apr. 16, 2015) The post Fifth Circuit: Chapter 11 Professional Liability Claims property of subsequent Chapter 7 Estate appeared first on Culhane Meadows PLLC - Chapter 11 Business Bankruptcy Attorneys.

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

19 hours 13 min ago
Rejecting a Seventh Circuit precedent, the Fifth Circuit has ruled that a non-dischargeability claim under section 523(a)(2)(A) must be based upon a false representation.    While bad conduct that does not involve a misrepresentation may be actionable under other sections of the Code, it will not constitute actual fraud under Sec. 523(a)(2)(A).   Husky International Electronics, Incorporated v. Ritz (Matter of Ritz), No. 14-20526 (5th Cir. 5/22/15).  What HappenedOver the course of four years, Husky sold electronic components to Chrysalis Manufacturing Corp.     Chrysalis failed to pay for $163,999.38 in product.    Ritz controlled the finances of Chrysalis and was a director and 30% shareholder.  At the same time that Chrysalis was failing to pay Husky, it paid out over a million dollars to entities controlled by Ritz.   These transfers were made without reasonably equivalent consideration while Chrysalis was insolvent.Although Ritz had not guaranteed the debt, Husky sued him in an attempt to pierce the corporate veil.  Ritz filed bankruptcy before the case could go to trial.  Husky brought a dischargeability complaint under sections 523(a)(2) and (a)(6) based on the fraudulent transfers.     When the case went to trial, the Bankruptcy Court found that Ritz was not a credible witness.
1 day 2 hours ago
Today, we follow up on our earlier post where we reviewed the United States Bankruptcy Court for the District of Delaware’s decision in Energy Future Holdings, focusing on the contractual interpretation issues implicated in a make-whole analysis. As promised, today’s post focuses on the automatic stay issues raised in the bankruptcy court’s decision. The bankruptcy court held that (i) if the automatic stay were lifted, the Trustee for the EFIH First Lien Notes could decelerate the EFIH First Lien Notes and the non-settling Noteholders would then be entitled to a make-whole and (ii) a genuine issue of material fact existed as to whether the Trustee could establish cause to lift the automatic stay retroactively to decelerate the Notes.  The Summary Judgment Opinion The Trustee’s Qualified Right to Rescind the Acceleration Was Barred by the Automatic Stay
1 day 4 hours ago
Bloomberg News
Nearly seven years since the collapse of Lehman Brothers, former chief Richard Fuld Jr. is still in the first stage of grief—denial. In a rare public appearance at a conference Thursday, Mr. Fuld reportedly argued that Lehman wasn’t a bankrupt company in September, 2008. He also said it had $28 billion in equity capital and $127 billion in unencumbered collateral. For most, the fact Lehman filed for Chapter 11 bankruptcy protection would be conclusive evidence it was, in fact, bankrupt. But Mr. Fuld said the firm was “mandated into bankruptcy,” a phrase he has used in the past. That flies in the face of the 2010 Lehman bankruptcy examiner’s report, which concluded there was sufficient evidence to find Lehman was insolvent by September 8, 2008—and perhaps earlier. Mr. Fuld also insisted all 27,000 Lehman employees were “risk managers” because each owned equity in the firm. The notion that holding equity qualifies one as a risk manager at least sheds some light on the failure of Lehman to manage its risk.

Read More from: WSJ.com: Bankruptcy Beat

1 day 9 hours ago
Baltimore attorney Jeff Scholnick will be a panelist for the business workshop on May 30, 2015 at The Emerging Technology Center. The workshop will begin at 9:00AM. Mr. Scholnick will be discussing unique legal issues that employers and businesses confront on a daily basis.  For entrepreneurs who are willing to open their own businesses, there are many risks. These risks are compounded by differences caused by language barriers. The objective of the Business Seminar is to assist Latino business owners and entrepreneurs in accessing information and resources to further develop and grow their businesses.  Businesses need to be aware of insurance issues, implications of employees’ conduct and behavior, the legal ramifications of contracts as well as other “red flags” that make owning a business such a challenge. The LPN is hosting this event as part of its educational workshop series.  With a focus on business development, the LPN endeavors to contribute to building a robust business community which supports a healthy and sustainable business climate that contributes to enhancing the overall quality of life for Baltimore City. For more information, click here.

Read More from: Scholnick Law

1 day 10 hours ago
The number of U.S. workers filing new claims for unemployment rose to 282,000 last week, according to a Labor Department report released today. Despite last week’s rise in initial claims, the number stayed below 300,000 – the mark generally associated with a firming jobs market – for the 12th week. Read more here.
1 day 12 hours ago

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