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In 2010, the United States Supreme Court expanded the concept of “corporate personhood” when it held in Citizens United v. FEC, 558 U.S. 310, 130 S. Ct. 876, 175 L. Ed. 2d 753 (2010), that corporations can engage in political speech protected by the First Amendment. The same rationale carried over to the religious context in Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 189 L. Ed. 2d 675 (2014), when the Court decided closely-held corporations have religious liberties under the Religious Freedom Restoration Act. Now it appears legal entities might be entitled to protection under a federal consumer protection statute too, at least in the Sixth Circuit.

Read More from: Creditors' Sidebar

5 hours 37 min ago
Just weeks after Discover was ordered by the Consumer Financial Protection Bureau to pay $18.5 million for illegal student loan servicing practices, Citibank is facing a probe into its own practices. In a filing dated August 3, 2015 with the Securities and Exchange Commission, the banking giant indicated that federal regulators have opened a probe into its student loan servicing practices. Though Citi didn’t indicate which federal agency is conducting the investigation or which student loan practices are the subject of concern, a source tells Bloomberg that that it is part of a crackdown by the Consumer Financial Protection Bureau. The investigation comes nearly five years after the company sold nearly $28 billion in securitized federal loans to Sallie Mae, and nearly $4.2 billion of private loans and $3.4 billion of securitized loans to Discover Bank. Since that time, Citi has largely remained out of the student loan business. The Citi student loans, by the way, were the same ones that landed Discover in hot water with the CFPB in July 2015.
5 hours 46 min ago
If you’re still beating yourself up over your financial woes and thinking that bankruptcy is only reserved for the poor and financially irresponsible, consider the fact that a top executive in state government who was charged with managing the state’s finances is now, himself, filing for personal bankruptcy. Former Arkansas Lieutenant Governor Mark Darr, along with his wife Kimberly, recently filed for Chapter 13 Bankruptcy protection, according to court documents. Though Darr resigned from office amid rampant financial scandal, including allegations of misappropriation of state funds, his situation proves that no matter how “successful” you seem to be, you’re still vulnerable to financial hardship and subsequent bankruptcy. You’re Not Alone: New Jersey Bankruptcy by the Numbers According to the New Jersey Bankruptcy Court, 26,956 Garden State residents have already filed for some form of bankruptcy protection so far this year. This is actually a slight uptick from the 29,286 residents who had filed at the same point last year, proving that financial struggle is a pervasive issue for both businesses and residents alike in New Jersey. Additionally, consumer bankruptcy filings continue to vastly outnumber those of businesses, many of which close down before ever getting to the point of filing for bankruptcy. Chapter 7 continues to be the most common form of bankruptcy, accounting for 19,028 cases this year.
8 hours 53 min ago
If you’re in debt up to your eyeballs, you look to the bankruptcy laws to help you dig out of the hole and start over. That, after all, is what the law’s designed to do – give you another opportunity to put yourself in a better financial position. But if your debts include student loans, you quickly find out that the bankruptcy laws won’t help unless you jump through another set of hoops and prove that your existing financial situation is not only bad, but also long lasting. That’s why so many people with student loan problems don’t consider bankruptcy as a tool to help them get ahead. As an article in the Pittsburgh Post-Gazette shows, bankruptcy is proving to be an option for some people who are struggling with their private student loan debts. The article centers around David King and Julie West, two Pittsburgh area people with private student loans and using bankruptcy as a way to keep them under control.
10 hours 1 min ago
Payment system transformation has become a pressing need for banks today. The rate at which this is happening is largely controlled by the conflict between rapid technological shifts and the barriers to product acceptance.

Read More from: BankThink

12 hours 18 min ago
Alpha Natural Resources Inc., one of the largest U.S. coal producers, filed for chapter 11 bankruptcy protection on Monday to cut its more than $3 billion debt load, The Wall Street Journal reported. The Bristol, Va., company will likely sell some of its best mines or turn them over to creditors. (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 our homepage, scroll to the bottom and click “try for free.”) Relativity Media LLC , the Hollywood studio founded by Ryan Kavanaugh, made its first appearance in bankruptcy court Friday, winning a judge’s permission to tap $9.5 million in new cash from a group of hedge funds angling to buy the company’s major assets, The Daily Bankruptcy Review reports. A judge in the Bahamas agreed Friday to delay a critical decision about the future of the $3.5 billion stalled resort project Baha Mar, WSJ reports.

Read More from: WSJ.com: Bankruptcy Beat

13 hours 3 min ago
Receiving Wide Coverage ... 'World's Local Bank' No More: HSBC has agreed to sell its Brazilian unit to Banco Bradesco for $5.2 billion as the bank seeks to scale down and concentrate on its Asian operations. The bank pledged in June to cut 50,000 jobs and retreat from low-performing business lines, with the goal of reducing annual costs by up to $5 billion by the end of 2017. The papers note the bank's retrenchment is a...

Read More from: BankThink

13 hours 9 min ago
George Orwell famously said that, "all animals are equal, but some animals are more equal than others."   A petition for writ of cert filed on July 20, 2015 challenges the 9th Circuit's ruling upholding a District Court which found that the IRS was more equal than other creditors when it came to an alter ego determination.    The case is No. 15-102, Robert A. Polittle, et al v. United States of America. The Polittes owned several Midas franchises in California through two corporations.   According to the Polittes, their CFO stopped paying employment taxes for one of their companies in 1998 and used his background as a CPA to conceal this fact from them.   The IRS did not detect the non-payment until 2005.    By this time, taxes of $5.3 million had accrued.   After selling all of the assets of the company, the tax debt managed to grow to $11.7 million.   The IRS then filed nominee liens against the Polittes and a second corporation which they owned.    The IRS collected about $1.7 million from sale of two condominiums owned by the Polittes and all of the assets of their other corporation.   The Polittes filed a refund suit against the IRS in U.S.

Read More from: CLLA Bankruptcy Blog

1 day 4 hours ago
STUDENT LOAN DISCHARGES IN THE 7TH CIRCUIT: SOME THOUGHTS Authored by:  Steven P.Taylor Student loans have become one of the largest components of debt in American society.  This size is a major problem that the bankruptcy system must address to effectuate its policy goals of fresh start (Chapter 7 bankruptcy) and rehabilitation (Chapter 13 bankruptcy).
2 days 5 hours ago
Posted by Kathy Bazoian Phelps    Below is a summary of the activity reported for July 2015. The reported stories reflect: 10 guilty pleas or convictions in pending cases; over 166 years of newly imposed sentences for people involved in Ponzi schemes; at least 11 new Ponzi schemes involving over $112 million; and an average age of approximately 50 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.    Alisa Adler, 54, was charged with running a Ponzi scheme the involved a real estate development business run through ASG Real Estate Services Group. She solicited investor funds to supposedly purchase and develop real estate but instead used the money to make Ponzi scheme payments and for her personal expenses.    Will Allen, 36, was indicted for his involvement with a Ponzi scheme run with Susan Daub, 55, through Capital Financial Partners LLC.  The scheme involved $31 million and supposedly provided high interest short term loans to athletes. More than 40 people invested in the scheme and were promised 18% returns.    John Steven Blount, 54, pleaded guilty to charges relating to a $5.8 million Ponzi scheme that he ran through his company, Professional Consultants LLC.

Read More from: The Ponzi Blog

3 days 45 min ago
A recap of the informed opinions (and the discussions they generated) on BankThink this week, including whether independent consultants should be criminally liable for misrepresentations in their reports and whether higher rates will help or hurt banks.

Read More from: BankThink

3 days 5 hours ago
In the recent opinion of Burtch v. Revchem Composites, Inc. (In re Sierra Concrete Design, Inc.), Adv. No. 10-52667 (CSS), 2015 WL 4381571 (Bankr. D. Del. July 16, 2015), the Delaware Bankruptcy Court issued a memorandum opinion following trial on claims asserted by Jeoffrey Burtch, Chapter 7 Trustee of Sierra Concrete Design, Inc. (“Sierra” or “Debtors”), seeking recovery against Defendant Revchem Composites, Inc. (“Revchem”) for alleged preferential transfers under Sections 547 and 550 of the Bankruptcy Code. In the memorandum opinion, the Court found that Revchem successfully established at trial that each of the payments received by Revchem from Sierra during the 90 day preference period were made in the “ordinary course” of the parties’ business relationship, and were thus shielded from recovery pursuant to Section 547(c)(2) of the Bankruptcy Code. This opinion is notable because Revchem was able to establish this defense even though it received payments from Sierra during the preference period at a much faster rate (a standard deviation of 27.9 days) than during the pre-preference period.
3 days 5 hours ago
This week on The Broke and the Beautiful, it’s all Relativity, Teresa Giudice sued her bankruptcy lawyer, and David Cassidy gave a tour of the house he’s putting up for auction.
In this Jan. 20 file photo, Ryan Kavanaugh, chief executive officer of Relativity Studios, attends the Los Angeles Premiere of “Black or White.” Relativity Media filed for chapter 11 bankruptcy protection Thursday.
Paul A. Hebert/Associated Press
As Daily Bankruptcy Review reported in The Wall Street Journal, independent film studio Relativity Media LLC filed for bankruptcy this week, weighed down by more than $500 million in debt and recent box-office flops. Relativity, known for TV show’s like MTV’s “Catfish” and “Guy’s Grocery Games,” as well as recent movies including “Black or White” and “The Lazarus Effect,” plans to sell itself at auction, with a group including Anchorage Capital (but not founder and Chief Executive Ryan Kavanaugh) leading the bidding.

Read More from: WSJ.com: Bankruptcy Beat

3 days 7 hours ago
This week on The Broke and the Beautiful, it’s all Relativity, Teresa Giudice sued her bankruptcy lawyer, and David Cassidy gave a tour of the house he’s putting up for auction.
In this Jan. 20 file photo, Ryan Kavanaugh, chief executive officer of Relativity Studios, attends the Los Angeles Premiere of “Black or White.” Relativity Media filed for chapter 11 bankruptcy protection Thursday.
Paul A. Hebert/Associated Press
As Daily Bankruptcy Review reported in The Wall Street Journal, independent film studio Relativity Media LLC filed for bankruptcy this week, weighed down by more than $500 million in debt and recent box-office flops. Relativity, known for TV show’s like MTV’s “Catfish” and “Guy’s Grocery Games,” as well as recent movies including “Black or White” and “The Lazarus Effect,” plans to sell itself at auction, with a group including Anchorage Capital (but not founder and Chief Executive Ryan Kavanaugh) leading the bidding.

Read More from: WSJ.com: Bankruptcy Beat

3 days 7 hours ago
A.  Where We Left Off As noted in Part III, movants seeking approval of structured dismissal motions typically must prove that the proposed dismissal is in the best interest of the creditors. To do so, movants will usually have to prove that the dismissal provides better treatment than would a liquidation. To that end, most structured dismissals contain what are commonly referred to as “bells and whistles” that sweeten the deal for creditors. Unfortunately, many of the bells and whistles commonly included in structured dismissal motions draw the ire of the United States Trustee. This section will identify some of the most common bells and whistles, while the next installment of this series will identify and address the U.S. Trustee objections. B.  Bells and Whistles – Dismissals with Benefits

Read More from: Insolvency Insights

3 days 8 hours ago
On Tuesday in Manhattan, the trustee unwinding Lehman Brothers Inc. will ask a bankruptcy judge for permission to pay nearly $2 billion to the defunct brokerage’s unsecured creditors, which would be the third such distribution since he paid off the brokerage’s customers. If approved by Judge Shelley Chapman, that would bring the total amount returned to creditors to more than $8 billion, a recovery of about 35 cents on the dollar. Combined with distributions made to customers, the total amount recovered in the brokerage’s liquidation would be about $114 billion. In court papers, lawyers for trustee James W. Giddens said that after the third distribution, further payouts would be contingent on winning or settling pending litigation, which would free up funds currently on reserve. Mr. Giddens began paying back creditors—former employees, pension funds, banks and investment firms with unsecured claims against the brokerage—last summer after paying back the brokerage’s customers. The distinction between “customer” and “creditor” is a crucial one in the Lehman case. Customers get 100% of their money back, while unsecured creditors get much less. Also Tuesday, a federal judge in Chicago will hear Caesars Entertainment Operating Co.’s latest bid for a quick appeal of a recent decision that creditor lawsuits can continue against the casino giant’s parent, Caesars Entertainment Corp.

Read More from: WSJ.com: Bankruptcy Beat

3 days 10 hours ago
On Tuesday in Manhattan, the trustee unwinding Lehman Brothers Inc. will ask a bankruptcy judge for permission to pay nearly $2 billion to the defunct brokerage’s unsecured creditors, which would be the third such distribution since he paid off the brokerage’s customers. If approved by Judge Shelley Chapman, that would bring the total amount returned to creditors to more than $8 billion, a recovery of about 35 cents on the dollar. Combined with distributions made to customers, the total amount recovered in the brokerage’s liquidation would be about $114 billion. In court papers, lawyers for trustee James W. Giddens said that after the third distribution, further payouts would be contingent on winning or settling pending litigation, which would free up funds currently on reserve. Mr. Giddens began paying back creditors—former employees, pension funds, banks and investment firms with unsecured claims against the brokerage—last summer after paying back the brokerage’s customers. The distinction between “customer” and “creditor” is a crucial one in the Lehman case. Customers get 100% of their money back, while unsecured creditors get much less. Also Tuesday, a federal judge in Chicago will hear Caesars Entertainment Operating Co.’s latest bid for a quick appeal of a recent decision that creditor lawsuits can continue against the casino giant’s parent, Caesars Entertainment Corp.

Read More from: WSJ.com: Bankruptcy Beat

3 days 10 hours ago
If you go to the doctor and the doctor prescribes medicine made by a company that the doctor owns shares in, does the doctor have a conflict of interest?   What if the doctor is paid for every pill she prescribes?  Is that a conflict? Read more here.
3 days 10 hours ago
This week, the Examiners took up the issue of suffering shoppers in retail bankruptcies. Many said bankruptcy law offers sufficient protections to customers when their favorite stores run into distress, though they acknowledged customers don’t always know how to take advantage of these protections. And while some said the onus is on the consumer to protect himself by knowing the risk involved with retail transactions, others said it is simply good business for retailers to look out for consumers. Whether shoppers deserve special treatment divided readers on Twitter:    

Read More from: WSJ.com: Bankruptcy Beat

3 days 11 hours ago
This week, the Examiners took up the issue of suffering shoppers in retail bankruptcies. Many said bankruptcy law offers sufficient protections to customers when their favorite stores run into distress, though they acknowledged customers don’t always know how to take advantage of these protections. And while some said the onus is on the consumer to protect himself by knowing the risk involved with retail transactions, others said it is simply good business for retailers to look out for consumers. Whether shoppers deserve special treatment divided readers on Twitter:    

Read More from: WSJ.com: Bankruptcy Beat

3 days 11 hours ago

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