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SFX Entertainment, Inc. (NASDAQ: SFXE) and many of its affiliates, which hold live electronic-music events, have commenced cases (Lead Case No. 16-10238 (MFW)) under Chapter 11 of the Bankruptcy Code by filing petitions with the U.S. Bankruptcy Court for the District of Delaware.  The Honorable Mary F. Walrath will preside over the cases.  According to a press release that the debtors issued, they have entered a restructuring support agreement with an ad hoc group of bondholders and intend to take SFX Entertainment, Inc. private by eliminating existing equity and converting existing debt into equity.  Additional information and documents are available from Kurtzman Carson Consultants LLC. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.
1 week 1 day ago
When a community hospital closes or is sold to a for-profit operator, there is a loss to the community. Despite protestations by for-profit operators, a community loses something of value by the conversion of a nonprofit hospital to a for-profit hospital. The mission statements are different. The question is how the loss gets valued and whether the community is compensated for the loss. Societal benefit played a role in the development of bankruptcy law in the U.S. And it should play a role in the allocation of proceeds from the sale of a nonprofit hospital. According to an article by University of New Mexico law professor Nathalie Martin, the U.S. bankruptcy system is among the many social programs that address society’s ills. Our bankruptcy laws recognize the impact of a chapter 11 case on society and vice versa. Thus, the impact of society (aka the “community”) on a chapter 11 case and the impact of a chapter 11 case on society are appropriate considerations for how assets are divided in a bankruptcy case.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
Extreme Plastics Plus, Inc., which produces specialized environmental containment solutions, has commenced a case (Lead Case No. 16-10221 (CSS)) under Chapter 11 of the Bankruptcy Code by filing a petition with the U.S. Bankruptcy Court for the District of Delaware.  The Honorable Christopher S. Sontchi will preside over the cases.  Additional information and documents are available from the Court’s website. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.
1 week 1 day ago
The best customer prospects are specific individuals, so don't fall into the trap laid by surveys and articles that recommend a grand pitch to Generation Y as a marketing strategy.

Read More from: BankThink

1 week 1 day ago
RCS Capital Corporation (OTC: RCAP), a full-service investment firm focused on individual retail investors, and eleven affiliated debtors have filed a chapter 11 petition before the United States Bankruptcy Court for the District of Delaware (lead case no. 16-10223).  The cases have been assigned to the Honorable Mary F. Walrath.  The debtors have filed a pre-packaged plan of reorganization and are seeking authority to assume a restructuring support agreement and to treat the plan as their disclosure statement.  They are also seeking approval of $100 million in debtor-in-possession financing.  The petitions (including the consolidated list of top 30 creditors) and the dockets for the cases are available through Prime Clerk.
1 week 1 day ago
Last June, the Supreme Court issued a ruling in Baker Botts LLP v. ASARCO, LLC, which dramatically altered expectations that had previously been fairly widely accepted in many areas – the right of professionals representing debtors and creditors committees to be reimbursed by the estate for fees incurred in defending objections to their fees.  In ASARCO, the Supreme Court applied the so-called “American Rule” that each party must pay its own attorneys’ fees absent explicit statutory authority to the contrary. The Supreme Court held that section 330 of the Bankruptcy Code, which governs payment of fees to estate professionals, is not sufficiently “specific and explicit” to avoid the American Rule and that Baker Botts was therefore not entitled to recover its fee defense costs. This blog previously explored the ASARCO ruling in greater detail.

Read More from: eSQUIRE Global Crossings

1 week 1 day ago
Wall Street Journal Depository Trust & Clearing will stop facilitating certain types of repurchase agreements between securities dealers, cutting a link that allows large banks to borrow from one another, unnamed sources said. The move affects about $45 billion in daily repo loans. The move principally affects Bank of New York Mellon, the largest bank that clears interbank repo loans. JPMorgan Chase also has a unit that's involved in this type of repo clearing. ...

Read More from: BankThink

1 week 1 day ago
New York-based brokerage firm RCS Capital Corp. filed for bankruptcy with nearly $2 billion in debt. 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.”) SFX Entertainment , a concert producer that puts on festivals like New York’s Electric Zoo, filed for bankruptcy with a deal that cuts $300 million in debt, DBR reports via WSJ. DealBook reports on Puerto Rico’s plan to delay some debt payments to free up cash, which it spoke of in a meeting with creditors Friday.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
In the recent opinion of In re Boomerang Inc., et al., Case No. 15-11247 (Bankr. D. Del. Jan. 29, 2016), the Delaware Bankruptcy Court considered the United States Trustee’s (“UST”) objections to retention applications of several law firms seeking to represent the Official Committee of Unsecured Creditors (the “Committee”) of Boomerang Tube, LLC (the “Debtor”). The UST objected to the applications because they include a provision indemnifying them for expenses incurred in any successful defense of their fees. The Court sustained the UST’s objection.  The Court concluded that section 328 of the Bankruptcy Code, like section 330, does not provide an exception to the American Rule and cannot support the fee defense provisions at issue under the Supreme Court’s ruling in Baker Botts L.L.P. v. ASARCO LLC, 135 S. Ct. 2158, 2169 (2015). Moreover, the Court found that the retention agreements were not contractual exceptions to the American Rule requiring each party to pay their own attorneys’ fees.  The Court also found that the retention agreements could not bind the estate, which is not a party to them.  Finally, the Court agreed with the UST that the fee defense provisions do not fit the scope of Section 328(a).
1 week 1 day ago
Posted by Kathy Bazoian PhelpsBelow is a summary of the activity reported for January 2016. The reported stories reflect: 5 guilty pleas or convictions in pending cases; over 70 years of newly imposed sentences for people involved in Ponzi schemes; at least 5 new Ponzi schemes worldwide; and an average age of approximately 53 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.Angelo A. Alleca, 46, and Mark Morrow, 54, were indicted on charges that they operated a Ponzi scheme through Summit Wealth Management and Detroit Memorial Partners, promising returns to investors from investments in hedge funds and fixed-income securities. They falsely promised investors promissory notes secured by real property. The scheme allegedly defrauded more than 300 investors out of $35 million.Lori Ann Anderson, 53, pleaded guilty to running a Ponzi scheme that defrauded about 70 investors out of over $1.7 million. Her investment business, SMTS Association, was a type of trading club.Nikolai S. Battoo was the subject of a $500 million fine and restitution order in connection with a $140 million Ponzi scheme that defrauded about 250 pool participants. He ran a group of businesses under the name BC Capital Group.

Read More from: The Ponzi Blog

1 week 2 days ago
The Russian government has announced announced that it plans to initiate legal proceedings against Ukraine by the end of the month to recover the $3 billion in bond debt now in default. It's not yet clear whether the proceedings will be in English courts or in arbitration. Officials in Ukraine say they expect to win. At first glance, that seems like posturing; after all, Ukraine borrowed $3 billion and didn't pay it back. But as it turns out, Ukraine has some pretty decent arguments, which if successful might excuse (or allow it to defer) the obligation to pay. Some of those arguments involve international law, and I'm a bit skeptical that those will succeed. But as I explain in a short new paper, Ukraine's contract-law arguments might fare somewhat better. Here's the abstract to the paper:

Read More from: Credit Slips

1 week 2 days ago
When you file a bankruptcy, you get to keep property that is considered exempt under the laws of your state. Wow! That’s great: get rid of debts and keep the house, car and whatever… Of course, it’s not quite that easy and the exemptions can vary from state to state. Those differences can be dramatic ranging from a complete exemption for your home no matter what it is worth to an exemption of only a few thousand dollars! One of the loop-holes that the new bankruptcy law from ten years ago “fixed” was allowing you to move to another state with better exemptions. Now you can still move and file bankruptcy there, but you have to use the exemptions from the state where you used to live (assuming you were there for at least two years). As with all things in bankruptcy, check with a good attorney where you live to understand your state’s exemptions. In California and the 9th circuit (the western states), you can even change the status of your property right before filing a bankruptcy and get the exemption. For example, if you have money in a savings account and can put it in a 401 or an IRA,  in most cases it will change from being non-exempt (you lose it if you file a bankruptcy) to exempt: you get to keep it.

Read More from: Bankruptcy Law Network

1 week 2 days ago
The doctrine of judicial estoppel reared its ugly head again, preventing a chapter 13 debtor from suing his former employer for racial discrimination.  The U.S. Court of Appeals, Eighth Circuit, ruled that a chapter 13 debtor should have amended his bankruptcy documents to list the lawsuit, even though the debtor suffered the alleged discrimination three years into a five year long bankruptcy reorganization case.  Jones v. Bob Evans Farms, No 15-2068 (8th Cir. Jan. 26, 2016). The debtor’s chapter 13 plan contained a provision requiring him to report any lawsuits to the trustee.  He failed to do so until after the lower court dismissed his discrimination case, after he had been granted a discharge in his chapter 13 proceeding. Judicial estoppel is court doctrine designed to protect the integrity of the judicial process.  It requires that litigants not adopt inconsistent positions in lawsuits. A chapter 13 debtor has an obligation to amend his or her bankruptcy documents during the pendency of the three to five year case if the debtor acquires a new asset, such as a valuable right to sue for employment discrimination.  If the debtor fails to do so, that failure amounts to a misrepresentation of the facts — it amounts to a sworn statement in bankruptcy court that the debtor has no lawsuits to pursue.  The debtor is not allowed to contradict that sworn statement by filing a lawsuit in another court.

Read More from: Bankruptcy Law Network

1 week 2 days ago
In re Millennium Lab Holdings II, LLC, No. 15-12284 (LSS), 2016 WL 155500 (Bankr. D. Del. Jan. 12, 2016) The Delaware Bankruptcy Court has granted direct certification of a hot-button issue surrounding confirmation of plans in bankruptcy to the Third Circuit Court of Appeals—namely, whether a bankruptcy court has the authority to release a non-debtor’s direct clams against other non-debtors without the consent of the releasing non-debtor.  As a basis for Her Honor’s holding, Judge Silverstein ruled that her decision to confirm the plan before the Court and approve the non-consensual third party releases therein over objection conflicted with Judge Walrath’s decision in In re Washington Mutual, Inc., 442 B.R. 314 (Bankr. D. Del. 2011). Read More ›

Read More from: Delaware Bankruptcy Insider

1 week 3 days ago
How can you pay thousands of dollars in mortgage payments in a year, and get a  tax Form 1098 for a fraction of actual mortgage interest paid? That’s what my client wanted to know. His monthly mortgage payment is $2715.  The loan is currently interest only.  All the payments were made. And yet, the Form 1098 from PNC says the year’s mortgage interest paid is only $1800. So what happened to the other $30,780?  That’s a lot of money to go missing. Welcome to the further screwed up world of mortgage loan servicing. The short answer right now to the question I posed at the top is I don’t know yet. But here’s what I suspect. What servicer does with your payment I’ll bet that PNC, the servicer I love to hate, has put the monthly payments in suspense, and has not posted them to the loan. By holding them in suspense, they don’t show up as interest paid on the mortgage. Why the payments were put in the suspense account I don’t know. What it takes to get them out of suspense, we’ll have to see. Getting your taxes right
1 week 3 days ago
In a 16 page opinion released January 28, 2016 in the Casino Caribbean, et al. v. Money Centers of America adversary proceeding (Bank. D. Del. Adv. No. 14-50437), Judge Christopher S. Sontchi of the Delaware Bankruptcy Court granted the motion of Quapaw Casino to intervene in the adversary proceeding.  Judge Sontchi’s opinion is available here (the “Opinion”). Plaintiffs in the adversary proceeding had obtained a court order requiring the Debtors’ to maintain a cash balance of $900,000 or more, in order to compensate the Plaintiffs if it should be determined that the Debtors were holding funds as a ‘mere conduit’ to which the Plaintiffs were entitled.  Opinion at *2.  Quapaw claimed that the Debtors were likewise holding funds to which it was entitled, and moved to intervene in the adversary proceeding, in order to obtain the same relief.  Plaintiffs opposed the motion, fearing that the set-aside funds would be insufficient to compensate them and Quapaw.  Opinion at *2. The Debtors had entered into an agreement with Quapaw to provide ATM and other cash advance services to Quapaw’s customers, and that any funds advanced to a customer by Quapaw would be reimbursed by the Debtors.  Quapaw is listed on the Debtors’ schedules and filed a proof of claim for $502,018.  Opinion at *4.
1 week 4 days ago
Upcoming Committee Formation Meeting: February 5, 2016, 10:00 a.m. Case Name: Verso Corporation, et al. Case Number: 16-10163 (KG) Location: Sheraton Suites Wilmington Downtown, 422 Delaware Ave., Wilmington, DE 19801 The Notice of Formation Meeting for Official Committee of Unsecured Creditors is available here. The voluntary petition (including the consolidated list of top 30 creditors), and the docket are available through Prime Clerk.  The debtors have issued a press release discussing their restructuring plans. Contact Norman L. Pernick, Nicholas J. Brannick, or David W. Giattino for more information.
1 week 4 days ago
Photo source: Oak
The Oak chain of clothing stores, a seller of avant-garde basics to urban creatives, is back in the hands of its two founders after a brush with death during American Apparel Inc.’s bankruptcy case. Louis Terline and Jeff Madalena, who opened the first Oak location in 2005 in Willimsburg, Brooklyn, bought the retailer back from American Apparel earlier this month. The deal saved Oak’s four stores that are divided between the New York City area—there is also one on NoHo’s Bond Street and one in Greenpoint, Brooklyn—and Los Angeles. With help from a Canadian investor, the duo paid just under $600,000 for the brand they sold in 2013. Lawyers who put American Apparel in bankruptcy tried to shut down Oak’s stores last fall. Oak’s expensive clothing line, though similar to American Apparel’s artsy minimalist style, didn’t quite fit in with the Los Angeles manufacturer’s business, they said.

Read More from: WSJ.com: Bankruptcy Beat

1 week 4 days ago
Banks' vocal opposition to the National Credit Union Administration's proposal to ease field-of-membership rules overlooks why changes are necessary and long overdue.

Read More from: BankThink

1 week 4 days ago
In 2016, Business Finance & Restructuring partner Andrew J. Wilkinson continues to co-lead the Weil team advising the Ad Hoc Creditors’ Committee, which comprises Franklin Advisers, Inc., BTG Pactual Europe LLP, TCW Investment Management Company, and T. Rowe Price Associates, Inc., in the ground-breaking restructuring of Ukraine’s sovereign debt. The restructuring plays a critical role in securing Ukraine’s ongoing stability and economic recovery. This week, Andrew sat down with The Banker’s Europe editor Stefanie Linhardt to discuss the particularities of Ukraine’s sovereign debt restructuring, why Ukraine’s case is special and what impact the dispute over Ukraine’s $3bn bond owed to Russia could have.  View the full interview below:
1 week 4 days ago

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