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It has been a while since I last checked in on bankruptcy filing rates. The arrival of the latest figures from Epiq Systems was a welcome reminder to do so. We are at the halfway point for the year, and the U.S. has had 398,000 bankruptcy filings. It is tempting to simply double that figure to get an estimate of what filings will total for all of 2016, but that estimate would be too high. Bankruptcy filings are somewhat more concentrated in the first six months of the calendar, which have accounted for about 52% of yearly filings for the past two years. Extrapolating from recent experience would mean there will be 764,000 filings for the calendar year. That would be a 6.7% decline in filings from 2015. Back in January, I forecasted a 5% decline or 780,000 filings for 2915. Given that we are well within the confidence interval of that estimate, I will take that. Although we still have half the year left to go, the model I use for the forecasting looks to be holding up.

Read More from: Credit Slips

3 weeks 2 days ago
After a hearing on the approval of a disclosure statement, Judge Edward J. Coleman of the Middle District of Georgia ruled that the absolute priority rule and new value exception apply in individual Chapter 11 cases.  In re Rogers, Ch. 11 Case No. 14-40219, 2016 WL 3583299 (Bankr. M.D. Ga June 24, 2016) (click here for .pdf of opinion). Debtors were the sole owners of Wetdog LLC, which in turn owns the Foley House Inn in Historic Savannah.  After a default in payments to Wetdog’s secured creditors, Wetdog filed a Chapter 11 petition.  Wetdog’s Chapter 11 Plan was confirmed in September 2014.  The individual Debtors, because they were guarantors of the Wetdog debt, filed their own Chapter 13 petition in February 2014 and subsequently converted their case to a Chapter 11 case.  Their principal asset was their 100% ownership interest in Wetdog.  Debtors filed a Plan and Disclosure Statement that called for a 25% distribution to unsecured creditors other than the two secured creditors of Wetdog.  Debtors’ Plan called for no distribution to those creditors as they were being paid in full in the Wetdog Plan.  Debtors also proposed to retain all non-exempt, pre-petition property, including their interest in Wetdog which they valued at $00.00.

Read More from: Georgia Bankruptcy Blog

3 weeks 2 days ago
Debt collector Debt collector John Williams, owner of Williams, Scott & Associates LLC, a debt collection firm, told his employees to coerce consumers into paying money they did not owe, according to article in Reuters, by Nate Raymond.   Employees at Williams’ firm falsely claimed to be a “detective” or “investigator,” or tied to government agencies. Consumers were also told they could be arrested or face prison time if they refused to pay.  LIES!! According to Assistant U.S. Attorney Sarah Paul Williams’ firm defrauded 6,000 customers from 2009 to 2014 into paying about $4.1 million by misrepresenting how much they owed and by falsely claiming they could face prison time.  In late 2014 the FBI raided the debt collector and the Federal Trade Commission (FTC) sued to halt its operation. Debt collector firms such as Williams’ buy delinquent debts, often for just pennies on the dollar, and try to collect the full amount the original lender claimed. Many of these debts are, by law, uncollectable, such as discharged in bankruptcy or outside the statute of limitations.
3 weeks 2 days ago

Millennials, who alreadymake up a third of banked consumers in America, are used to transacting life in clicks and swipes. Institutions must embrace their needs now or risk extinction.

Read More from: BankThink

3 weeks 3 days ago
Upcoming Committee Formation Meeting: Wednesday July 12, 2016, 2:00 PM Case Name:  Triangle USA Petroleum Corporation., et al. Case Number:  16-11556 (MFW) Location:  The Double Tree Hotel, 700 King Street, Salon D, Wilmington, DE 19801 Notice of Formation Meeting for Official Committee of Unsecured Creditors can be found here. The petitions (including the consolidated list of top 20 creditors), the first day declaration and the docket are available through Prime Clerk.  The debtors have issued a press release regarding their reorganization. More information about this filing can be found here.
3 weeks 3 days ago
As an attorney who meets with clients in difficult financial situations every day, I can say with certainty that there is still a stigma associated with filing bankruptcy.  However, if you stop and think about it, I think you’ll realize that bankruptcy is a part of what makes America great. Bankruptcy is Part of the American Spirit Ours is a nation of risk-takers.  We value entrepreneurs, inventors, and everyone with the “can-do” attitude that is quintessentially American.  But where would that attitude be without bankruptcy?  How many risk-takers would we lose if there wasn’t a safety net in place?  If a person knew they could be buried in debt and hassled by debt collectors for years, what are the odds that they would ever try to start a new business or take a chance on a new investment?  We all know that taking a big risk doesn’t always lead to a big reward.  Knowing that we can recover from a failure is part of what inspires us to take those big risks in the first place.  That’s what makes bankruptcy so important; it can provide peace of mind not just in the present but also for the future.  Each of us can rest easy knowing that even in the darkest of financial situations, there is still a path back to success.

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

3 weeks 3 days ago
Zucker v Wesbanco Bank, Inc. (In re Fairmont General Hospital, Inc.), 546 B.R. 659 (Bankr. N.D. W.Va. 2016) – A chapter 11 liquidating trustee and a bond trustee brought an adversary proceeding against the Marion County Commission (Commission) as the … Continue reading →
3 weeks 3 days ago
Over the past few months, we have commented on the steel industry crisis and some of the employment law issues arising from it in the context of insolvency. The article written by our Pensions team here discusses the Government’s proposals to assist the British Steel Pension Scheme and its struggling principal employer Tata Steel, one of its primary aims being to avoid entry into the PPF by reducing increases to members’ benefits to the statutory minimum (but which would ultimately see those members better off). Such changes would usually require member consents, which logistically and/or conceptually can present real difficulties. The article questions whether measures intended to help this pension scheme and certain others facing similar financial difficulties could in fact result in bad law and inconsistencies, however good the intentions are. Insolvency practitioners should be aware of this potentially changing landscape. If measures putting more control into the hands of pension trustees are implemented and schemes have a better chance of avoiding being wound up then it may assist a few companies to trade through financial difficulties.

Read More from: eSQUIRE Global Crossings

3 weeks 3 days ago
In May, we reported on the judicial rescission of MetLife’s designation as an entity “too big to fail,” and noted that the court’s decision provided designated companies with a framework to challenge their designation.  Another effective option is to fundamentally change the nature of the business, which is what GE Capital Global Holdings, LLC (“GE”) has done over the past three years.  As a result, on June 28, 2016, the Financial Stability Oversight Council (“FSOC”) determined that GE is no longer too big to fail and released GE from the heightened regulatory standards and oversight imposed upon designated entities.  This is first time FSOC has released an entity from the “SIFI” designation.

Read More from: Hughes Hubbard & Reed

3 weeks 3 days ago
[wsj-responsive-image P="//si.wsj.net/public/resources/images/BN-OT702_outout_P_20160705121502.jpg" J="//si.wsj.net/public/resources/images/BN-OT702_outout_J_20160705121502.jpg" M="//si.wsj.net/public/resources/images/BN-OT702_outout_M_20160705121502.jpg" credit="Bloomberg News" placement="Inline" suppressEnlarge="false" ] After more than seven years, Bankruptcy Beat is going off the air as we transition to WSJ Pro Bankruptcy. Thanks to our readers over the past 7 1/2 years who tuned in as we covered everything from the Lehman Brothers collapse to 50 Cent’s bankruptcy.  We hope you continue to tune in to our work on WSJ.com and eagerly await WSJ Pro Bankruptcy, launching later this month.  Although Bankruptcy Beat will no longer be active after the launch, you’ll still be able to view articles on this platform, and you can still follow us on Twitter. Auf wiedersehen! -Bankruptcy Beat Staff

Read More from: WSJ.com: Bankruptcy Beat

3 weeks 3 days ago
 After 25+ years representing hardworking but financially struggling men and women in the Atlanta area, I can report to you that the #1 secret to surviving Chapter 13 is living below your means. This can mean you have to make some difficult choices.Chapter 13 Trustees are Increasingly DemandingWhen you enter Chapter 13, you need to eliminate the “wants” in your life in exchange for the “needs.” I advise my clients that if you find yourself meeting with a bankruptcy lawyer, everything needs to be on the table. And this includes your cars, home, furniture, jewelry and just about any other type of property you are financing. You will also find that your Chapter 13 trustee likely has a much more restrictive view of what constitutes a true “need:”
  • if you find yourself paying more than $300 per month for a car or truck, you need to consider giving that vehicle back to the creditor and buying a car for cash or financing a vehicle and keeping the payment below $300 per month
  • if you are financing vehicles, furniture or jewelry for your children or other relatives, you should be prepared to surrender that property and let your relative work out a deal on his/her own
  • if your budget includes out of pocket payments for your children’s college expenses, expect push back from the trustee.

Read More from: The BK blog

3 weeks 3 days ago
Hercules Offshore Files For Chapter 11 Bankruptcy Protection | June 6, 2016 Hercules Offshore and certain of its affiliates filed for protection under Chapter11 of the United States Bankruptcy Code on June 6, 2016 in the United States Bankruptcy Court for the District of Delaware under Case No. 16-11385. The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are: Cliffs Drilling Company (8934); Cliffs Drilling Trinidad L.L.C. (5205); FDT LLC (7581); FDT Holdings LLC (4277); Hercules Drilling Company, LLC (2771); Hercules Offshore, Inc. (2838); Hercules Offshore Services LLC (1670); Hercules Offshore Liftboat Company LLC (5303); HERO Holdings, Inc. (5475); SD Drilling LLC (8190); THE Offshore Drilling Company (4465); THE Onshore Drilling Company (1072); TODCO Americas Inc. (0289); and TODCO International Inc. (0326). The Debtors’ corporate headquarters are located at, and the mailing address for each Debtor is, 9 Greenway Plaza, Suite 2200, Houston, TX 77046. Troy L. Carson is the Senior Vice President and Chief Financial Officer of Hercules Offshore, Inc. (“HERO”) since 2007 and discusses the filing: INTRODUCTION “The Debtors and their Non-Debtor Subsidiaries (collectively, “Hercules”) are providers of shallow-water drilling and marine services to the oil and natural gas exploration and production industry globally.

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

3 weeks 3 days ago
Until recently the oil and gas sector has not been on the restructuring communities radar. However, last year global oil prices hit an all-time low, which led to a record number of insolvencies in the industry. Consequently in conjunction with Lexis Nexis we have produced the Guide to insolvency in the UK oil and gas industry. Historically, the oil and gas market has been a significant contributor to the UK economy. It has generated over £300 billion and supports a workforce of more than 375,000. However, in 2015-16 UK oil and gas production generated negative receipts to the UK Government of -£24m, compared with +£2.15bn the year before. The North Sea is an increasingly mature basin and consequently it is one of the more expensive places in the world to produce oil. To put this in context it costs US$40 to produce a barrel of oil in the UK compared to less than US$5 in Kuwait. Record low oil prices have therefore significantly impacted the North Sea, leading to a 56% rise in oil and gas insolvencies in 2015. Oil and Gas UK released figures earlier this month showing that employment in the industry has fallen by 8,000 with a further 120,000 jobs being lost in the wider economy.

Read More from: eSQUIRE Global Crossings

3 weeks 3 days ago
On 12 February 2016 Snowden J handed down his judgment in Indah Kiat International Finance Company B.V. [2016] EWHC 246 (Ch). Indah Kiat International Finance Company B.V. (“Indah Kiat”), part of the global Asia Pulp & Paper Group (one of the world’s largest pulp and paper manufacturers), applied for an order convening a meeting of scheme creditors to consider and, if thought fit, approve a proposed scheme of arrangement (the “Scheme”) under Part 26 of the Companies Act 2006. One creditor, APPIO, opposed the Scheme on various grounds and in this hearing sought an adjournment on the basis that insufficient notice was given to the creditors of the convening hearing.
3 weeks 3 days ago
Toshiba Samsung Storage Technology Korea Corporation has commenced a case (Case No. 16-11602) under Chapter 15 of the Bankruptcy Code by filing a petition with the U.S. Bankruptcy Court for the District of Delaware.  The Honorable Brendan Linehan Shannon will preside over the case.  The debtor is seeking recognition of a foreign main proceeding in South Korea.  More documents are available from the Court’s website. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.
3 weeks 3 days ago
Lenders often go to great lengths to ensure their borrowers are Special Purpose Entities—entities whose assets will not be commingled with the assets of parent or affiliated companies—rendering bankruptcy filings by the SPE less likely. However, when a SPE does file bankruptcy and its trustee seeks to substantively consolidate its estate with the estate of its parent and affiliates, does the lender have standing to contest that motion and thereby be a “person aggrieved” from an adverse order? The Eighth Circuit recently answered this question in the negative, holding a lender to a special purpose entity is not a person aggrieved by an order of substantive consolidation and, therefore, lacks standing to appeal the order. Opportunity Finance, LLC et al v. Kelley, 2016 WL 2848587 (8th Cir. 2016).

Read More from: Creditors' Rights

3 weeks 3 days ago
“Thank You for all you have done. I feel much better than I have since my husband’s passing. The stress has lifted immensely. ” -Vivian “Always there when we needed you and it didn’t take long to wait for things to get done.” -Gene and Gloria “Thanks for helping when no one else would !” -Shelia “I thank God for all of you. Thank you for being so good to me. Keep God in your services.” -Geneva “You all made me feel comfortable going through this Bankruptcy. Not at anytime did you make me feel belittled getting into this situation.” -Richard “They accepted my handicap, I couldn’t make steps, and came downstairs.”    -anonymous “Everyone was very nice. No one wants to file bankruptcy. We never felt like anyone was judging us. It was a great relief. We are very grateful for your services.” -Roy and Keatina “Open and willingness to help in time of distress, and handicapped convenience” -Octava “Thanks for helping us begin again after our business failed” -Jason and Bridgett “Professional, discreet, and helpful”  -anonymous “Your staff and you were so nice to us, you made an unpleasant experience as pleasant as you could. … You all go the extra mile. As a matter of fact, we have already recommended you to other people.” -Michael and Linda
3 weeks 3 days ago
Recently, the City of Jackson, Mississippi settled a federal class action lawsuit that challenged the use of debtors’ prisons. The civil rights group Equal Justice Under Law and the Roderick and Solange Macarthur Justice Center of the University of Mississippi School of Law filed the lawsuit on behalf of seven plaintiffs. The previous system jailed people who were unable to pay court imposed fines and fees without assessing their ability to pay. Those people were credited a rate of $25 a day for general incarceration or $58 a day for work at the Hinds County Penal Farm. After the settlement, individuals who cannot pay their fines in full have the option of paying $25 a month or performing community service that will credit their debt at $9 an hour. State Losing Money By Jailing Debtors

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

3 weeks 4 days ago
SynCardia Systems, Inc. has filed a chapter 11 petition before the United States Bankruptcy Court for the District of Delaware (Case No. 06-11599).  The debtor is the manufacturer of an FDA-approved Total Artificial Heart.  The company has entered into a stalking horse asset purchase agreement and filed a motion to sell substantially all of its assets to its first lien lender, which has also agreed to provide debtor-in-possession financing.  The petition (including the list of top 30 creditors), the first day declaration and the docket are available through Omni Management. Contact Norman L. Pernick or Nicholas J. Brannick for more information.
3 weeks 4 days ago

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