Help Center

ABI Blog Exchange

The Roman Catholic Archdiocese of St. Paul and Minneapolis has asked a bankruptcy judge for permission to hire a criminal defense team, after prosecutors in Minnesota filed charges against the archdiocese for allegedly failing to protect children from abusive priests. In court papers filed Tuesday with the U.S. Bankruptcy Court in St. Paul., Minn., the archdiocese asked Judge Robert Kressel to approve its application to employ two attorneys from Fredrikson & Byron P.A., a Minneapolis-based law firm. The two attorneys are Joseph T. Dixon and Chelsea Brennan DesAutels, who will charge $400 per hour and $320 per hour respectively. Mr. Dixon’s fee represents a “substantial discount,” according to court papers. For corporations in bankruptcy, expenses outside the ordinary course of business are typically subject to bankruptcy-court approval because those expenses could eat into limited resources that might one day be used to repay creditors or, in the archdiocese’s case, compensate alleged victims.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 2 days ago
A Colt 9mm pistol sits on display in the Colt’s Manufacturing Co. booth on the exhibition floor of the 144th National Rifle Association (NRA) Annual Meetings and Exhibits at the Music City Center in Nashville, Tennessee, U.S., on Saturday, April 11.
DANIEL ACKER/BLOOMBERG NEWS
A showdown is looming in the bankruptcy of gun-maker Colt Defense LLC, with a group of bondholders taking aim at the company’s plans for an early August auction led by its current majority owner. 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.”)

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 2 days ago
A Colt 9mm pistol sits on display in the Colt’s Manufacturing Co. booth on the exhibition floor of the 144th National Rifle Association (NRA) Annual Meetings and Exhibits at the Music City Center in Nashville, Tennessee, U.S., on Saturday, April 11.
DANIEL ACKER/BLOOMBERG NEWS
A showdown is looming in the bankruptcy of gun-maker Colt Defense LLC, with a group of bondholders taking aim at the company’s plans for an early August auction led by its current majority owner. 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.”)

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 2 days ago
A Colt 9mm pistol sits on display in the Colt’s Manufacturing Co. booth on the exhibition floor of the 144th National Rifle Association (NRA) Annual Meetings and Exhibits at the Music City Center in Nashville, Tennessee, U.S., on Saturday, April 11.
DANIEL ACKER/BLOOMBERG NEWS
A showdown is looming in the bankruptcy of gun-maker Colt Defense LLC, with a group of bondholders taking aim at the company’s plans for an early August auction led by its current majority owner. 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.”)

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 2 days ago
In re Ramz Real Estate Co., LLC, 510 B.R. 712 (Bankr. S.D.N.Y. 2013) – An undersecured mortgagee objected to a debtor’s proposed plan of reorganization on several grounds, including that (1) the plan was not approved by a proper impaired class … Continue reading →
2 weeks 2 days ago
The 8th Circuit Court of Appeals has ruled that the Additional Child Tax Credit is a protected asset in bankruptcy cases filed in Missouri.  In re Hardy, case number 14-1181 (2015).   Are such tax credits exempt in Nebraska bankruptcy cases? Missouri law protects a person’s right to receive a “Social Security benefit, unemployment compensation or a public assistance benefit”  Mo. Rev. Stat. §513.430.1(10(a).  The term “public assistance benefit” is not defined under Missouri law, so the court reviewed the history of the Additional Child Tax Credit, especially the legislative history of recent amendments favoring lower income taxpayers. In reversing the lower courts, the 8th Circuit found that the Additional Child Tax Credit was indeed a “public assistance benefit” even though some of the credits went to higher income families. Whether Nebraska’s public assistance exemption applies to the Additional Child Tax Credit is less clear. Nebraska’s public assistance exemption law states the following:
2 weeks 3 days ago
Some argue that nonbank mortgage lenders' rising market share poses a risk to the financial system. But this belief arises from an inaccurate understanding of what is in fact a well-regulated sector.

Read More from: BankThink

2 weeks 3 days ago
I agree with Adam about all that post-Starr hyperventilation. No, it does not mean that bailouts are over, that the Fed has been slapped down, or any of that lurid stuff. (Though tabloidness does feel strangely gratifying in financial journalism.) Nevertheless, we should be careful not to dismiss the AIG decision as a realist vignette. Its implications for crisis management will become clearer over time, and may well turn out to be important. At first blush, Starr feels like a stock crisis move by the Court of Claims, evoking the Gold Clause cases in 1935, where the U.S. Supreme Court held that the Congress violated the 14th amendment when it stripped gold clauses from U.S. Government debt, but denied Court of Claims jurisdiction because the creditors suffered no damages. Had they gotten the gold, they would have had to hand it right over to the Feds. And if you measured the creditors' suffering in purchasing power terms, getting their nominal dollars back still put them way ahead of where they had been in 1918 thanks to all the deflation.

Read More from: Credit Slips

2 weeks 3 days ago
I studied Russian in college because I thought a post-Gorbachev Russia was poised to become an economic superpower. I've been bitterly disappointed to see that country's leaders taking one step forward and two back for years now. The latest disappointment concerns my new academic focus: consumer bankruptcy. First, Russian lawmakers seem to have ignored the rest of the world as they drafted a new law on "rehabilitative procedures" for "citizen-debtors." The law reflects neither direct input from international experts nor indirect analysis of the challenges and successes that dozens of other countries have encountered over the past 30 years with consumer insolvency systems. That Russia would ignore the 120-year-old U.S. consumer bankruptcy system is understandable; that it would ignore 30 years of recent trial and error in Europe and the rest of the world is ... disappointing.

Read More from: Credit Slips

2 weeks 3 days ago
While marketplace lenders like LendingClub and Prosper are at the cutting edge of innovation for now, banks may gain ground eventually. Either way, the competition greatly benefits the expanding pool of borrowers who will have greater access to credit.

Read More from: BankThink

2 weeks 3 days ago
On May 4, Judge Vincent Bricetti of the United States District Court for the Southern District of New York issued a ruling in the Momentive Performance Materials cases affirming the bankruptcy court’s confirmation rulings.  Key themes raised in this case of interest to distressed investors and addressed in Judge Bricetti’s ruling include the appropriate interpretation of certain indenture subordination provisions, an affirmation of the Till “formula” approach to cramdown interest rates in the Second Circuit, and a reminder that the ability to receive a make whole upon automatic acceleration requires explicit language in the applicable indenture (discussed in this post).  The law on the availability of make whole premiums is the bankruptcy context is getting clearer with each ruling that comes down.  Here’s what you need to know:
2 weeks 3 days ago
The decision issued yesterday by Judge Thomas Wheeler of the Court of Federal Claims concerning the lawsuit by Starr International, a large shareholder of AIG, will have significant implications for the similar claims brought by various shareholders of Fannie Mae and Freddie Mac (hereinafter, the "GSEs").   I've previously put up a postcritical of the trial judge's Fifth Amendment reasoning in certain of those lawsuits.There are definitely some similarities between the two and they should be worrisome to the government and heartening to the GSE shareholders.  For example, Judge Wheeler refers to the Federal Reserve taking a 79.9% stake in AIG equity (in the form of convertible preferred) as "draconian", writes that the government "usurped control of AIG without ever allowing a vote of AIG's shareholders" and notes that, even after the loan was repaid, the government retained its stake.  Of course those facts are all identical to the government takeover of the GSEs.But I see some significant differences as well.  Judge Wheeler makes a very significant ruling under the Fifth Amendment, using a theory that, frankly, I was heretofore unaware of, that of "illegal exaction".

Read More from: Necessary and Proper

2 weeks 3 days ago
This image provided by RMK Services shows a Colt .45 SAA revolver that belonged to Robert LeRoy Parker, better known as Butch Cassidy.
Associated Press
Colt Defense LLC is looking toward an early August auction that its financial backer hopes will let it hang on to the gun maker, Daily Bankruptcy Review reports in The Wall Street Journal.  (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.”) The Roman Catholic Archdiocese of Saint Paul is facing an unprecedented convergence of litigation that lawyers say will continue to pose serious challenges for the archdiocese’s leadership. WSJ has the DBR article here.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 3 days ago
This image provided by RMK Services shows a Colt .45 SAA revolver that belonged to Robert LeRoy Parker, better known as Butch Cassidy.
Associated Press
Colt Defense LLC is looking toward an early August auction that its financial backer hopes will let it hang on to the gun maker, Daily Bankruptcy Review reports in The Wall Street Journal.  (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.”) The Roman Catholic Archdiocese of Saint Paul is facing an unprecedented convergence of litigation that lawyers say will continue to pose serious challenges for the archdiocese’s leadership. WSJ has the DBR article here.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 3 days ago
We are a consumer bankruptcy law firm helping persons and businesses with their financial situation. We are located in Glasgow, Kentucky at 111 West Wayne Street, one block off of the Square in Glasgow.  Glasgow is conveniently located on the Louie B. Nunn Cumberland Parkway, for those traveling from west or east of Glasgow We are Certified in Consumer Bankruptcy Law by the American Board of Certification… one of the few attorneys in Kentucky so certified www.abcworld.org We are an active member of the National Association of Consumer Bankruptcy Attorneys, serving as immediate past Kentucky State Chair of this organization. www.nacba.com We are also have been designated a debt relief agency by Congress and the United States Supreme Court and we provide legal assistance to consumers seeking relief under the Bankruptcy Code.
2 weeks 3 days ago
  The old joke about banks is that they only lend money to people who don’t really need it. The California homestead law has the same problem. Just when you need the homestead to protect the equity in your home, the homestead protection expires. That’s right. The homestead protection for the proceeds of a sale of your home vanishes 6 months from the sale, unless you buy another home. If your financial life is healthy, you’re young and working, buying another home is no big deal. But if you’re retired, disabled, or out of work, buying a new home may be out of the question. And unless you buy a replacement home, the homestead proceeds become available to your creditors. Homes as retirement vehicles All too many Californians see the equity in their home as their retirement “plan”.  With the high cost of real estate, buying a home often squeezes out genuine retirement savings. All’s well until it comes time to tap that equity at retirement.  If getting to the money requires the sale of the home, the senior is left with as much as $175,000 in proceeds that was, before the sale, protected from lien or levy by a creditor with a judgment.
2 weeks 3 days ago
Receiving Wide Coverage ... Analyzing the AIG Ruling: Is former AIG chief Maurice "Hank" Greenberg a happy man? A federal judge partially validated Greenberg's four-year legal battle with the government Monday by ruling that the Federal Reserve overstepped its authority in the 2008 bailout of the insurance giant. But Judge Wheeler also declined to award Greenberg and other AIG shareholders any of the $40 billion in damages they had requested, arguing that AIG would have filed...

Read More from: BankThink

2 weeks 3 days ago
Authored by J. Ellsworth Summers, Jr. of Rogers Towers“Deepening Insolvency” is a developing theory of law in cases brought by bankruptcy trustees, litigation trust trustees, receivers, reorganized debtors, or some other plaintiff “standing in the shoes” of an insolvent company. Essentially, the deepening insolvency theory is premised on allegations that the defendants (directors, officers, law firms, accounting firms, or any combination of the foregoing) caused the corporation to incur more liabilities, thereby “deepening” its insolvency. More specifically, the theory is that the corporation was insolvent or in the “zone of insolvency” when the purported fraud, breaches or wrongdoing occurred, and but for the actions of the defendants, the corporation would not have continued to raise unserviceable debt and would have filed for bankruptcy more promptly, which would have avoided the unserviceable debt. Originally only a theory of damages, it has received some judicial recognition as an independent cause of action under which a bankrupt company or its representatives may recover damages caused by professionals and/or its prepetition officers and directors who have facilitated the company’s mismanagement or misrepresented its financial condition, resulting in bankruptcy and loss of corporate assets.

Read More from: Florida Banking Law Blog

2 weeks 3 days ago
Andrew Ross Sorkin is waiving his arms about the Starr v. Board of Governors ruling being the "end of bailouts." And he is SO wrong.  Sorkin writes that "Legal experts say that the ruling, coupled with certain provisions of the Dodd-Frank financial overhaul law enacted after the crisis, makes it unlikely the government would ever rescue a failing institution, even if an intervention was warranted."  I don't know which "legal experts" Sorkin is referring to (not least as he doesn't name any), but anyone who has imbibed the slightest draught of legal realism will recognize that bailouts are never constrained by law. The prime directive in a financial crisis, as Anna Gelpern has taught us, is to prevent the ship from sinking.  All other concerns--legality, moral hazard, expense, etc.--are jettisoned the moment they get in the way. Afterwards there's inevitable finger waging and cases like Starr, but whenever there's trouble again, we'll be right back at it. Put another way, the Fed is not Superman, but Batman. It will break the rules to protect Gotham, no matter what.  And that's probably the way we want it deep down.  

Read More from: Credit Slips

2 weeks 3 days ago
This morning, in a 6-3 decision, the Supreme Court held in Baker Botts LLP v. ASARCO that under section 330(a)(1) of the Bankruptcy Code, estate professionals are not entitled to fees for defending fee applications.  The Court found that in drafting the Bankruptcy Code, Congress had not expressly departed from the American Rule, which provides that each side must pay its own attorney’s fees, unless a statute or contract provides otherwise.  A more in-depth analysis of this decision will follow, but we wanted to alert our readers to this latest decision from what has been an active term for bankruptcy cases at the Supreme Court. A few initial thoughts:
  • The Supreme Court only addressed the fees awarded to Baker Botts for defending its fee applications, not the $4.1 million fee enhancement that Baker Botts was previously awarded for its “exceptional performance” or the time spent preparing the fee applications.
2 weeks 4 days ago

Pages