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The explosive growth of largely unregulated online lenders has given them new opportunities to prey on unsuspecting borrowers.

Read More from: BankThink

6 hours 36 min ago
Receiving Wide Coverage ... Cracking the Tax Code: The taxman is the latest victim of identity theft. The Internal Revenue Service said hackers stole tax-return information for about 100,000 U.S. households, including Social Security numbers. The thieves used the IRS's own online services to penetrate its databases, cracking the code of multistep authentication processes. Interestingly, the IRS commissioner, John Koskinen, said the incident was "not a hack or data breach. These are imposters pretending to be...

Read More from: BankThink

7 hours 28 min ago
      A bankruptcy court in Virginia ruled against the US Trustee on a motion to dismiss under §707(b)(3)(B), finding that social security income cannot be considered under the totality of the circumstances standard.  In re Moriarty, No. 13-51437, 2015 WL 2393358 (Bankr. W.D. Va. May 18, 2015).   The US Trustee filed a motion to dismiss the case under §707(b)(3)(B) alleging that the debtor could afford to pay her debts.  In response, Ms. Moriarty converted her case to chapter 13, proposing to pay the mortgage outside the plan, and only pay the attorneys fees and administrative fees with a zero dividend to unsecured creditors.  The chapter 13 trustee objected to this plan, alleging that the case should be reconverted to chapter 7.  The Debtor did so, and responded to the renewed motion to dismiss by the US Trustee.     Debtor received income from employment of $3,226,.68 gross/month, from survivor's benefit from the Department of Labor of $2,070, and $1,591 in social security benefits.  The sole issue was whether social security benefits should be considered in determinng whether to dismiss a case as abusive under §707(b)(3)(B).     §101(10A)(B) excludes social security income from the definition of current monthly income for purposes of the means test.  Thus receipt of social security income can never give rise to a presumption of abuse under the means test.

Read More from: Tampa Bankruptcy

8 hours 36 min ago
In re Mississippi Valley Livestock, Inc., 745 F.3d 299 (7th Cir. 2014) – A debtor sold cattle for the account of a cattle producer and then remitted the proceeds to the producer.  A chapter 7 trustee sought to recover the payments as … Continue reading →
10 hours 35 min ago
Resolving an issue left open by two prior decisions, the Supreme Court ruled that the right to entry of a final judgment by an Article III court, like the right to trial by jury, is a personal right which can be waived or consented away (subject to supervision by an Article III Court).    The decision left Chief Justice Roberts, whose broad language in Stern v. Marshall spawned a plethora law review articles, in the minority, while Justice Sotomayor wrote for the six justices in the majority.   Wellness International Network, Ltd. v. Sharif, No. 13-935 (5/26/15).     The Stern ProblemArticle III of the Constitution states that the judicial power is vested in courts created under that Article, which is to say, judges appointed by the President, confirmed by the Senate and enjoying life tenure.    Over the years, Congress created many other judges, such as U.S. Magistrate Judges, Administrative Law Judges and Bankruptcy Judges, to help with the workload of the federal courts.   These judges were not appointed by the President or confirmed by the Senate and did not enjoy life tenure.    While they were under the supervision of Article III Judges, some of these legislatively created judges enjoyed great levels of independence.   In Stern v. Marshall, 564 U.S. ___, 131 S.Ct. 2594 (2011), the Court said that Congress did not have unlimited power to create adjuncts to assist the Article III judges.
22 hours 10 sec ago
This morning, the Supreme Court issued its decision in the much-anticipated Wellness International Network, Ltd. v. Sharif.  And finally, the various opinions of the Court have offered some meaningful guidance on some of the key issues raised in the wake of Stern v. Marshall.  Although the majority opinion did not directly address the first question before the Court – that of whether actions implicating state law property matters under the ambit of section 541 of the Bankruptcy Code are “Stern-type” claims or ordinary “core” claims – it did resolve the current circuit split regarding whether bankruptcy courts’ constitutional deficiencies pursuant to Stern can be cured with the parties’ consent. (Short answer: yes).  A more complete analysis will follow tomorrow, but given the breaking news, we wanted to bring the decision to your attention ASAP.  For complete coverage of Stern, Arkison, Wellness, and their progeny, please visit the Stern Files, available here. So What Do I Need to Know?
23 hours 48 min ago
In a much-anticipated decision, the Supreme Court established the parameters of consent to jurisdiction under Stern v. Marshall in Wellness Int’l Network, Ltd. v. Sharif, No. 13-935 Decided May 26, 2015. Syllabus Respondent Richard Sharif tried to discharge a debt he owed petition­ers, Wellness International Network, Ltd., and its owners (collective­ly Wellness), in his Chapter 7 bankruptcy. Wellness sought, inter alia, a declaratory judgment from the Bankruptcy Court, contendingthat a trust Sharif claimed to administer was in fact Sharif’s alter-ego, and that its assets were his personal property and part of his bankruptcy estate. The Bankruptcy Court eventually entered a de­fault judgment against Sharif. While Sharif’s appeal was pending inDistrict Court, but before briefing concluded, this Court held that Ar­ticle III forbids bankruptcy courts to enter a final judgment on claims that seek only to “augment” the bankruptcy estate and would other­wise “exis[t] without regard to any bankruptcy proceeding.” Stern v. Marshall, 564 U. S. ___, ___. After briefing closed, Sharif soughtpermission to file a supplemental brief raising a Stern objection. The District Court denied the motion, finding it untimely, and affirmed the Bankruptcy Court’s judgment.

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

1 day 4 hours ago
On May 26, 2015, continuing a springtime ritual for bankruptcy lawyers, the Supreme Court issued its latest “progeny of Stern” ruling on the adjudicative authority of the bankruptcy courts.  In a 6-3 decision the Court held that  “Our precedents make clear that litigants may validly consent to adjudication by the bankruptcy courts.” Wellness Int’l Network, Ltd. v. Sharif __ U.S. __ (May 26, 2015). This springtime ritual began four years ago when the Supreme Court issued its blockbuster opinion on the constitutional authority of bankruptcy courts to adjudicate disputes before them in Stern v. Marshall,  564 U.S. __, 131 S.CT 2594 (2011).  Stripped (excuse the pun) of is infamous association with Anna Nicole Smith, a 5-4 court determined that despite the statutory authority of the bankruptcy court to make a final decision in a “core” matter, a bankruptcy judge could not enter judgment on a tort claim asserted by debtor against a putative creditor because Article III of the Constitution prohibited congress from conferring such authority on non-Article III decision makers.

Read More from: Insolvency Insights

1 day 4 hours ago
By ensuring that all big-bank investors receive equal treatment in bankruptcy and looking for other ways to prevent short-term liquidity problems from becoming major financial crises, Congress can avoid the need to test the FDICÂ's ability to resolve large financial institutions.

Read More from: BankThink

1 day 4 hours ago
Authored by Adam B. Brandon of Rogers TowersUnder Rule 1.370, Florida Rules of Civil Procedure, a party may serve a written request that another party admit certain facts to be true. If the party served with the request fails to respond within 30 days, then the matters in the request are deemed to be admitted and need not be established by separate evidence at trial. In Wells Fargo Bank, N.A. v. Donaldson, Florida’s Third District Court of Appeal recently considered whether such technical admissions can also be used to overcome contradictory facts already in the record. This case involved a borrower who defaulted on a residential loan. Wells Fargo filed suit attempting to foreclose the mortgage. As an affirmative defense, the borrower argued that Wells Fargo lacked standing to foreclose because the original lender allegedly failed to properly assign the loan documents to Wells Fargo. In her first request for admissions, the borrower asked the bank to admit that it was not the holder of the original mortgage and note. Wells Fargo failed to timely respond to the admissions and thereby admitted that it lacked standing (per Rule 1.370). The trial court then involuntarily dismissed the foreclosure action over the objection of Wells Fargo.

Read More from: Florida Banking Law Blog

1 day 4 hours ago
The Roman Catholic Diocese of Gallup, N.M., which stretches across 55,000 square miles of northern Arizona and New Mexico, is seeking to sell 55 parcels of mostly vacant desert land to help fund a settlement with about 60 alleged victims of clergy sexual abuse. In court papers filed last week, the diocese asked U.S. Bankruptcy Court Judge David Thuma for permission to hire two real-estate brokers and to move forward with an auction process for the properties. The auction will be held 50 to 60 days after the judge signs off on the request, according to court papers. Lawyers representing the diocese, its insurers and alleged victims have spent nearly a year and a half assessing the value of the diocese’s assets and collecting evidence on the allegations of abuse and cover-up by diocesan officials. The Diocese of Gallup, home to 58,000 parishioners, filed for chapter 11 bankruptcy protection in November 2013 as several lawsuits related to sexual-abuse claims were preparing to go to trial. Of 14 Catholic dioceses and religious orders that have turned to chapter 11 to address waves of abuse-related litigation, one of the earliest was the Roman Catholic Diocese of Tucson, Ariz., in 2004. Like the Diocese of Gallup, the Diocese of Tucson also auctioned off property to pay legal bills and to help fund a settlement with alleged abuse victims.

Read More from: WSJ.com: Bankruptcy Beat

1 day 5 hours ago
Do you have a considerable amount of credit card debt? Yes? You are in good company. Unfortunately, according to a 2014 analysis of Federal Reserve and other government data conducted by NerdWallet, an average American household currently has about $7,300 in credit card debt. Further, of the close to 1,200 people surveyed recently, more than half the people who admit to having credit card debt are more than $6,000 in debt. New Yorkers have the most credit card debt – an average of $8,266. Thanks to the economic crisis that swept the entire country, and unexpected expenses such as medical emergencies, Americans are facing overwhelming debt. It’s not unusual to use credit cards when the emergency fund is dry. In April, another survey of 1,100 people who have credit card debt revealed the following interesting statistics:
  • More women than men have credit card debt
  • In fact, 63 percent of the women between the ages of 18-24 surveyed have credit card debt (compared with 36 percent of male respondents)
  • Additionally, females between the ages of 55-64 have twice as much debt as their male counterparts (66 percent v. 33 percent.)
There is hope for those facing seemingly insurmountable credit card debt.
1 day 6 hours ago
In its recent opinion in Jerome Listecki, as Trustee of the Archdiocese of Milwaukee Catholic Cemetery Perpetual Care Trust v. Official Committee of Unsecured Creditors, 2015 WL 1010089 (7th Cir.

Read More from: Creditors' Rights

1 day 6 hours ago
The best-performing banks are those that continue to invest in growth, rather than those that fixate on containing expenses, writes Capital Performance Group's Kevin Halsey.

Read More from: BankThink

1 day 6 hours ago
Receiving Wide Coverage ... A Beautiful Mind: Tributes to John Nash were plentiful after the mathematician made famous by his depiction in the film "A Beautiful Mind" was killed in an taxi accident this weekend. Nash's doctoral thesis placed game theory, the study of strategic interactions, at the heart of economics, the Financial Times said. After Nash's insights, "economists stopped thinking exclusively about unrealistic models of perfectly competitive markets and began focusing on cases in whichÂ...

Read More from: BankThink

1 day 7 hours ago
Medical device maker IMRIS Inc. has filed for chapter 11 bankruptcy protection with a buyout offer from secured lender Deerfield Management Co. 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.”) Arch Coal Inc. has hired restructuring advisers to help it deal with billions of dollars in debt, WSJ reports. Emails are going to play a key role in the Dewey & LeBoeuf trial, which starts Tuesday, WSJ reports. WSJ reports on how student loans and small businesses aren’t mixing.

Read More from: WSJ.com: Bankruptcy Beat

1 day 7 hours ago
The production crew that’s bringing Michael Lewis’ “The Big Short” to the big screen set up shop in front of the building that houses New York’s Department of Financial Services Friday morning.
courtesy Matt Anderson
  New York’s top banking regulator, Benjamin Lawsky, walked into the office of Lehman Bros. Friday morning almost seven years too late. Well, not really. Mr. Lawsky walked into the Wall Street office of the Department of Financial Services at 1 State Street this morning to find the production crew of “The Big Short” had re-created it as the lobby of the failed investment bank.

Read More from: WSJ.com: Bankruptcy Beat

1 day 8 hours ago
Per the Star-Telegram:May 20, 2015By Sandra Baker Longtime Fort Worth oil firm Duer Wagner III Oil & Gas has succumbed to falling oil prices and filed for bankruptcy protection, the second Fort Worth firm do so in the past few months.Duer Wagner Oil said in its filings in bankruptcy court in Fort Worth that its revenues and profits have dropped more than 50 percent since the price per barrel began declining nearly a year ago.The company filed the bankruptcy May 15 on behalf of 12 debtor companies, many with the names of well-known athletes, saying its liabilities were more than $120 million, most of that to a loan with LNV, a subsidiary of Beal Bank, from December 2013. The filing said more than 200 parties will have interest in the Chapter 11 reorganization case.For more, see http://www.star-telegram.com/news/business/barnett-shale/article21498180.html Read more here: http://www.star-telegram.com/news/business/barnett-shale/article21498180...

Read More from: The COMI

1 day 23 hours ago
In a detailed May 4, 2015 opinion, the Delaware Chancery Court extensively reviewed the rights of an insolvent company’s creditors to pursue derivative claims against the company’s directorsIn the opinion, Vice Chancellor Laster said that “to bring a derivative action, a creditor-plaintiff must plead and later prove that the corporation was insolvent at the time the suit was filed.” Because he found that Quadrant had introduced sufficient material to support a reasonable inference that Athilon was insolvent at the time Quadrant filed suit, and therefore he denied the defendants’ motion for summary judgment.In making these determinations, Laster broadly surveyed the legal principles underpinning derivative litigation in Delaware, including the rights of creditors to assert derivative claims under some circumstances. He reduced the various principles pertaining to these issues to a succinct bullet point list:The post Delaware Court reviews standard for derivative claims appeared first on Culhane Meadows PLLC - Chapter 11 Business Bankruptcy Attorneys.

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

2 days 1 min ago
Per Reuters:Fri May 1, 2015 12:47pm EDTBy Rania El Gamal and Reem ShamseddineDUBAI/KHOBAR, Saudi Arabia, May 1 (Reuters) - Saudi Arabia is restructuring the world's biggest energy company, Saudi Aramco, in a move apparently aimed at letting it operate more at arm's length from the powerful oil ministry.For more, see: http://www.reuters.com/article/2015/05/01/saudi-oil-aramco-idUSL5N0XS0BI20150501?type=companyNews&feedType=RSS&feedName=companyNews

Read More from: The COMI

3 days 18 hours ago

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