ABI Blog Exchange

JP Morgan Chase Lies in 50,000 Bankruptcy Cases JP Morgan Chase today admitted they lied in 50,000 bankruptcy cases. Chase filed sworn statements in 50,000 bankruptcy cases, signed by people who had no idea what they were signing.  Some were “signed” by people who no longer worked at Chase. Here’s the Justice Department announcement.   Chase […]The post Biggest Bank in America Lies in Bankruptcy Cases by Robert Weed appeared first on Robert Weed.

Read More from: Robert Weed

1 hour 37 min ago
Filing Bankruptcy Can be Good for Your Credit Score Last week, The Federal Reserve Bank of New York published a study of people who did, and didn’t, file bankruptcy. The results didn’t surprise me, but they might startle you. Comparing people in financial trouble who filed bankruptcy and people who kept struggling, these economists who […]The post Filing Bankruptcy Can be Good for Your Credit Score by Robert Weed appeared first on Robert Weed.

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4 hours 44 min ago
The March 2015 edition of the ABI Journal includes an article that Jeffrey Waxman co-authored with his frequent co-counsel, Jennifer McLain McLemore, titled “Document Preservation Strategies for Creditors in a World with Changing Discovery Rules.” The article explores the potential impact on creditors’ document-retention practices and addresses the requirements and best practices for document retention by creditors in light of the new proposed changes to the Federal Rules of Civil Procedure. Click here to read “Document Preservation Strategies for Creditors in a World with Changing Discovery Rules.”
6 hours 34 min ago
According to the Fitch Ratings’ Report, annual U.S. personal bankruptcy filings are dropping for the fifth year in a row. However, the report also states that the rating decline should begin to level off soon, as lending guidelines become more lax. Total bankruptcy filings are predicted to fall another eight to 10 percent in 2015. […]
7 hours 15 min ago
The United States Bankruptcy Court for the District of Montana hereby announces the retirement of Clerk of Court Bernard F. “Bernie” McCarthy, effective February 27, 2015.Bernie was appointed to the office of clerk of court on January 2,1990 by Judge John L. Peterson. Prior to becoming clerk of court Bernie served as justice of the peace in Helena, Montana, from 1985 to 1990. Bernie graduated with a degree in history from Carroll College in 1977, and received a juris doctorate from the University of Montana School of Law in 1983. Bernie served as chair of the Federal Judicial Center Clerk’s Education Advisory Committee from 1994 to 1998, and was president of the National Conference of Bankruptcy Clerks from 1998 to 2000. He served as president of the State Bar of Montana from 2005 to 2006.  The court will hold an open house retirement celebration in Bernie’s honor at the Mansfield Courthouse in Butte from 1:00 to 3:00 p.m. on March 27, 2015.
7 hours 58 min ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  Venue has been hotly debated in bankruptcy circles for years. While the current rules provide significant leeway for a company to decide where it should file for bankruptcy protection, venue reformers believe that the rules should be amended to limit proper venue to the district of the debtor’s principal place of business or principal assets, or in a district where an affiliate has filed for bankruptcy relief when the affiliate owns more than 50% of the debtor’s voting shares. Poking a stick in the eye of the reformers, the recent ABI Commission to Study the Reform of Chapter 11 didn’t recommend any changes to the rules on venue in chapter 11 cases.

Read More from: WSJ.com: Bankruptcy Beat

8 hours 20 min ago
Authored by J. Ellsworth Summers, Jr. and Scott St. Amandand J. Ellsworth Summers, Jr. and Scott St. Amand of Rogers TowersAs we discussed in our previous post, in the wake of the financial crisis that began with large financial institutions failing in 2008, practitioners and politicians alike have been calling for Bankruptcy Code reform.  Both the U.S. House and Senate have proposed solutions, yet with the recent midterm election results, the future of these two proposals is murkier than ever. Part 1: The House Plan:  Subchapter 5 The House of Representatives has proposed a revision of Chapter 11 that would add a fifth subchapter to the Bankruptcy Code dealing specifically with the promotion of recapitalization of distressed financial institutions and protecting global financial markets from panic.  The proposal, entitled the “Financial Institutions Bankruptcy Act” (FIBA), was passed by the House Judiciary Committee in a bipartisan vote in September and now sits before the full chamber.

Read More from: Florida Banking Law Blog

8 hours 47 min ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  The sporadic outcry for reform of the bankruptcy venue statute is unwarranted—the existing law provides debtors with appropriate flexibility to reorganize while simultaneously protecting interested parties. In short, the venue debate is much ado about nothing. “Reformers” contend that permitting a debtor to file a case in either its state of incorporation, principal place of business or location of the filing of an affiliate inappropriately allows a debtor to file where it has the best chance of getting a favorable ruling on a particular issue. Why is this a problem? Aren’t those same incentives at play when parties negotiate what the governing law of a contract should be? If so-called “forum shopping” jeopardizes the fundamental underpinnings of our bankruptcy system, isn’t there a similar level of danger in the very fact that a  single issue could be decided differently depending on which bankruptcy court oversees a case?

Read More from: WSJ.com: Bankruptcy Beat

8 hours 49 min ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  When the ABI Commission to Study the Reform of Chapter 11 declined to make a recommendation on venue selection reform this past December, a number of people were surprised and disappointed. Critics of the rules as currently written have a number of issues with them, but generally they say the rules are too broadly scripted. As a result, debtors “shop” for a venue where case law on issues critical to their reorganization are most favorable. It’s important to remember that in a restructuring only the debtor has a fiduciary duty to maximize recovery for all stakeholders, whereas individual creditors have a duty only to themselves. It’s therefore reasonable to expect that a debtor will select a venue where case law supports its efforts to achieve a successful reorganization. In fact, you could argue that’s exactly what a debtor should be doing. Of course, there are rules prescribing proper venue that must also be followed. But assuming they are, courts tend to defer to a debtor’s choice of venue and have said as much in high-profile cases like Energy Future Holdings and, most recently, in Caesars.

Read More from: WSJ.com: Bankruptcy Beat

9 hours 20 min ago
Trade-based money laundering happens outside the financial system. But it can still create major issues for banks because criminals typically deposit their profits in bank accounts.

Read More from: BankThink

9 hours 47 min ago
The Repo List It seems like in these tough economic times, there are more and more people driving around town worried about the repo man. After all, you don’t have to fall very far behind in your car payment to have the creditor calling you day and night about your payment. From there it’s only+ Read More The post Don’t Fear The Repo Man (It’s Still Your Car) appeared first on David M. Siegel.
9 hours 50 min ago
Should bankruptcy laws that allow companies broad latitude in selecting a venue be reformed?  The venue provisions governing where a company may file a chapter 11 bankruptcy case shouldn’t be reformed. The current venue rules for chapter 11 bankruptcies permit a company to file its bankruptcy petition in the district of its (i) state of incorporation, (ii) principal place of business, (iii) principal assets or (iv) affiliate has already filed. Critics of the venue statute complain that companies use the venue statute to venue-shop their way to courts with favorable precedent, often with an insignificant nexus to the debtors’ business activities. They also argue that the venue rules create venue options that are inconvenient for creditors or other, potentially, smaller constituencies and other stakeholders.

Read More from: WSJ.com: Bankruptcy Beat

10 hours 59 sec ago
The Truth in Lending Act (“TILA”) provides, in the event the lender fails to make certain required disclosures, a right in the consumer borrower to rescind a home loan “by notifying the creditor. . . of his intention to do so” within three years of the date the loan was consummate.  15 U.S.C. § 1635(a).  However, how must the consumer notify the creditor of his intention to rescind?  Must the consumer file a lawsuit seeking rescission, or may he rescind by simply sending the creditor a letter rescinding the loan?  In its opinion in Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015), the U.S. Supreme Court held that a simple letter will suffice. In Jesinoski, the consumer borrowers sent a letter to Countrywide Home Loans rescinding their loan within three years following consummation of their loan.  A year and a day after sending the letter, the Jesinoskis files a lawsuit seeking rescission and damages.  The District Court entered a judgment in favor of Countrywide, holding that a borrower may exercise his or her right of rescission only by filing a lawsuit within three years after the loan is consummated.  The Eight Circuit affirmed that decision, but the Supreme Court reversed. 

Read More from: Creditors' Rights

10 hours 47 min ago
If cramdown failures are par for the course, why are we all so fascinated with them? One thing is certain: they always provide a good teaching moment for practitioners. Marlow Manor’s chapter 11 single asset real estate case is no different. In Marlow Manor, the Ninth Circuit Bankruptcy Appellate Panel held that the bankruptcy court did not err in (i) refusing to confirm the debtor’s chapter 11 plan, which improperly classified two unsecured and impaired deficiency claims of its lender in separate classes as secured and unimpaired, and (ii) rejecting an aspect of the plan, which treated the lender as if it had made a section 1111(b)(2) election.  Background Marlow Manor owned a portion of a high rise in downtown Anchorage. The high rise was subdivided by a developer (the debtor’s manager, Marc Marlow into a two unit condominium project: (i) Unit A was owned by an investor and (ii) Unit B was owed by Marlow Manor. Unit B was to be converted into a senior assisted living home and was financed by a $5.4 million construction loan. In 2007, the Alaska Housing Financing Corporation (“AHFC”) refinanced the majority of the construction loan through two long term loans in the amount of $5.45 million (summarized in the chart below).
10 hours 55 min ago
Lifestyle Lift, a nationwide chain of cosmetic surgery centers, abruptly shut down the majority of its business Monday and said it is considering filing for bankruptcy. 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.”) Lehman Brothers Holdings Inc. collapsed more than six years ago, but the failed investment bank is still paying millions in bonuses to the team winding down its business, DBR reports in WSJ. Creditors have come to terms with RadioShack Corp. over bonuses top-ranking insiders stand to earn in the weeks ahead, as the retailer attempts to save a slice of its battered collection of stores, DBR (sub. req.) reports.

Read More from: WSJ.com: Bankruptcy Beat

11 hours 25 min ago
BlackRock has revised its U.S. proxy voting guidelines,following their annual review of governance and proxy voting trends. The guidelines are not expected to result in significant differences from how BlackRock has voted in the past.
11 hours 31 min ago
Banks have to invest in mobile technology in order to keep up with millennials. But bankers also need opportunities to rub shoulders with young customers Â-- and small, conveniently-situated branches give them an opportunity to do so.

Read More from: BankThink

11 hours 47 min ago
Banks have to invest in mobile technology in order to keep up with millennials. But bankers also need opportunities to rub shoulders with young customers Â-- and small, conveniently-situated branches give them an opportunity to do so.

Read More from: BankThink

11 hours 47 min ago
Receiving Wide Coverage ... Nothing But Stress: Foreign banks are stressed about the stress tests. Deutsche Bank and Santander are both expected to be called out by the Federal Reserve on Thursday, when the stress test results are announced, for lapses in risk management. Capital isn't the issue with foreign banks. Instead, it's how they measure and predict risks and losses. DB, Santander, Barclays, Credit Suisse, HSBC and UBS are "now spending heavily and recruiting projectÂ...

Read More from: BankThink

12 hours 45 min ago
In a fact-heavy 16 page opinion issued by Judge Shannon on March 2, 2015, we get a clear picture of the challenge faced by litigants when opposing aggressive pro-se litigants.  In Bishop v. Fannie Mae, Adv. Pro. No. 12-50912, the pro-se plaintiff was a chapter 13 debtor who was attempting to secure relief from his mortgage by bringing suit against Fannie Mae.  As reflected in the 5 pages of background, the plaintiffs raised litigation against Fannie Mae in multiple Delaware courts and at the time Judge Shannon’s opinion was issued, had lived in their home without having made a mortgage payment in over 6 years.  The Opinion can be read here.
13 hours 29 sec ago

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