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Two Citigroup affiliates have agreed to pay nearly $180 million to settle charges they defrauded investors in two hedge funds that collapsed during the financial crisis by claiming they were safe, low-risk investments, the Securities and Exchange Commission said Monday. Read more here.
1 week 3 days ago
We think about a pre nuptial agreement as protection or direction if a couple later divorces. It can be far more than that. A prenup can earn its keep for decades in marriages where divorce never enters the picture. Why? It protects the assets of the marriage from outsiders. A prenup can limit what assets the creditors of one spouse can reach to satisfy a debt.  Let’s see how that works. What’s a prenup A prenuptial agreement is a contract between two parties, made prior to their marriage, that controls the ownership, management, and division upon divorce, of their assets and income. After the divorce case of San Francisco Giants Barry Bonds testing his prenuptial agreement that denied his wife any part of his earnings during marriage, California prenups must meet a series of tests designed to make sure that the agreement was made knowingly and preferably with advice from a lawyer.
1 week 3 days ago
In its opinion in Dewsnup v. Timm, 502 U.S. 410 (1992) the Supreme Court held that a debtor may not under § 506(d) of the Bankruptcy Code, strip down a partially undersecured mortgage lien against his home to the value of the lender’s collateral.  In its recent opinion in Bank of America, N.A. v. Caulkett, 135 S. Ct. 1995 (2015), the Court has extended that reasoning to prohibit a debtor from stripping off a fully undersecured mortgage lien under § 506(d).  In Caulkett, the debtor argued that the Court’s reasoning in Dewsnup applied only to partially secured liens and did not apply to fully secured lines.  The Court rejected that argument and held that its reasoning in Dewsnup applies equally to fully undersecured liens.

Read More from: Creditors' Rights

1 week 3 days ago
On 5 August 2015, the President of the Republic of Poland signed an amendment to the Act of 29 August 1997 on Covered Bonds and Mortgage Banks and related laws (the “Amendment”). These new changes will come into force on 1 January 2016. The main goal of the Amendment is to enhance the availability of well-diversified funding sources from capital market investors to the Polish banking sector. While Poland has had covered bonds since 1997, tax treatment and limits on pension fund investments in these securities has limited their use. These new regulations turn Polish covered bonds into high quality instruments, appealing to international investors and giving Polish pension funds a realistic choice for putting their funds into well-secured, low risk investments. Polish legislators felt that this goal could be achieved by changing the recently adopted Restructuring Law of 15 May 2015 to the extent that it relates to covered bond issuers, i.e. mortgage banks. The Amendment excludes mortgage banks from the provisions of the Restructuring Law. Instead, changes are made to the Bankruptcy Law of 28 February 2003, bankruptcy proceedings of mortgage banks. These new regulations under the Bankruptcy Law are intended to ensure proper satisfaction of the claims relating to covered bonds in the event of bankruptcy.

Read More from: eSQUIRE Global Crossings

1 week 3 days ago
Critics of the Consumer Financial Protection Bureau's data collection haven't bothered to learn the basic facts about the data the regulator collects before veering off into black helicopter paranoia.

Read More from: BankThink

1 week 3 days ago
Authored by Douglas L. Waldorf, Jr. and Irvin Weinsteinand Douglas L. Waldorf, Jr. and Irvin Weinstein of Rogers TowersFlorida law has permitted the creation of community development districts or “CDDs” since 1980. According to the Florida Department of Economic Opportunity there are presently 593 active community development districts that have been established within the state. These CDDs qualify as governmental bodies in that they are local units of special purpose government that perform special functions as delineated in Chapter 190, Florida Statutes. CDDs frequently have need for short-term and long-term borrowing to fund improvements, repairs and the like. Commercial banks, in considering these loan requests, must consider both the authority of the CDD to borrow, the available collateral for the loan and also the ability of the CDD to pledge the collateral to secure the debt.

Read More from: Florida Banking Law Blog

1 week 3 days ago
A New Head in the Fed: The new president of the Dallas Federal Reserve is something of a mystery man. Robert Steven Kaplan's background as a former Goldman Sachs executive and management professor at Harvard Business School is well known; what's less clear are his views on monetary policy. This enigma is exciting a lot of interest among observers, since Kaplan will be highly influential as a member of the Fed's policy-setting committee when hisÂ...

Read More from: BankThink

1 week 3 days ago
Patriot Coal Corp. reached a new deal to sell two West Virginia mines that will relieve it of $400 million in debt.Read the Daily Bankruptcy Review article via 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.”) According to WSJ, American Apparel Inc. is avoiding default after it agreed it a deal with creditors that will give it $90 million. Caesars Entertainment Operating Co. and its lenders have stalled on talks about the casino unit’s bankruptcy plan, the Associated Press reports.

Read More from: WSJ.com: Bankruptcy Beat

1 week 3 days ago
As the old saying goes, if you don’t use it you lose it.  The “it” in this case is the right to sue someone for an unpaid debt. Every state has a set of laws that create a deadline for creditors to sue for an unpaid debt.  In Nebraska there are two key laws that govern debt collectors when it comes to suing for an unpaid debt.
  1. Written Agreements.  An action upon a written contract can only be brought within five years.  Nebraska Statute 25-205. This law covers most credit card agreements, bank loans, and other written agreements to pay money.  A voluntary payment of any amount basically “resets” the statute, so we measure the five years from the date of last payment.
  2. Oral Agreements.  An action upon a verbal contract can only be brought within four years of the date of last payment.  This provision covers most medical debts.  Nebraska Statute 25-206.
1 week 4 days ago
For many parents with school-age kids, the month of August marks the end of summer vacation and the start of the new school year, and in this spirit, a post on practice fundamentals seems appropriate.  Specifically, attorneys are responsible for (i) maintaining an accurate address of record to ensure proper service and (ii) monitoring their case docket to avoid missing a deadline.  While this may seem elementary, the recent decision from Judge Teel of the United States Bankruptcy Court for the District of Columbia nonetheless reinforces a point that is particularly applicable to a bankruptcy practitioners’ day-to-day practice.  Background
1 week 4 days ago
Credit cards have become an important building block in establishing and re-establishing favorable credit. Without a valid credit card, it’s incredibly difficult to rent a car, order things online and more. Unfortunately, the mishandling of credit cards is the first step on the path to crippling debt and financial ruin. Next thing you know, you are seeking a way to get your head above water economically and thought soften turn to bankruptcy. You may hate your debt and wish you could wrap your arms around it. But credit card debt is unavoidably difficult to overcome. Unless you come into a major financial windfall, the excessive interest and fees can make it feel like you are going three steps forward and two steps back every month. So much so, in fact, that many debtors give up and max out their cards without trying to figure out a payback strategy. If you are in this position, contact a savvy debt lawyer who will help you determine if bankruptcy is your best bet, or if there is an alternative to bankruptcy that will work for you. However, when it’s time to get back to building your credit, it’s important to realize that there are variety of credit card choices out there. At first, you may not have much choice about who you accept credit from and at what cost. However, little by little, you will restore your credit and want to consider things like annual fee, interest rate and late charges before jumping into the deep end of the credit card pool
1 week 4 days ago
The SEC's new rule requiring companies to disclose the relationship between CEO pay and that of the median employee may be a headache for big banks. But smaller financial institutions should have an easier time calculating the pay ratios, and the numbers are unlikely to attract much scrutiny.

Read More from: BankThink

1 week 4 days ago
  Judge Jennemann ruled that the chapter 7 Trustee failed to meet the burden of proof in objecting to IRA funds that the debtor briefly held in his savings account before rolling over to his IRA.  In re Rivera-Cintron, No. 6:14-BK-12581-KSJ, 2015 WL 4749217 (Bankr. M.D. Fla. Aug. 12, 2015).  Prior to the filing of the case the Debtor received $9,741.79 from her retirement fund from her employment as a teacher in Puerto Rico.  The debtor deposited these funds in her savings account, then withdrew them on 5 August 2014 to deposit them into an IRA at the same bank.  She then filed chapter 7 bankruptcy on 14 November 2014.  The chapter 7 trustee objected to the exemptions arguing that this did not meet the IRC definition of a rollover.  Florida has opted out of the federal exemptions, and exempts IRA's under §222.21(2), exempting such funds if the funds are “held in in a fund or account that is maintained as an IRA pursuant to a plan or governing instrument that is exempt from taxation under certain provisions of the Internal Revenue Code.”  Robertson v. Deeb, 16 So.3d 936, 937–38 (Fla. 2d DCA 2009).  The trustee argued that because the funds were not immediately placed in the IRA, they did not meet the rollover requirement of 26 U.S.C.

Read More from: Tampa Bankruptcy

1 week 4 days ago
On July 15, 2015, David Weil, Administrator for the United States Department of Labor, Wage and Hour Division, issued an “Administrator’s Interpretation” regarding independent contractor misclassification—essentially firing a warning shot at the armada of rising independent-contractor-model  businesses navigating the current … Continue reading →
1 week 4 days ago
Do you have an order of discharge following the completion of your Chapter 7 or Chapter 13 case? If not, you may want to fix this problem now before it bites you later.Every Chapter 7 or Chapter 13 debtor must attend two credit counseling classes. The first, called the pre-bankruptcy credit counseling course, is required before you can file. Your certificate of completion is your ticket in to the bankruptcy process.Once you have an active case, however, you must attend a second course called a financial management course, obtain a certificate of completion and have your lawyer file that certificate with the clerk of bankruptcy court.This financial management course offers tips about how to set up a household budget and how to avoid financial mistakes that resulted in your need to file for bankruptcy in the first place.If your lawyer does not file this financial management course certificate of completion you will not be eligible for a bankruptcy discharge. Instead, your case will be closed without discharge.Why is a discharge order so important? It represents a formal order from the bankruptcy judge that all debts which can be eliminated or adjusted have been so modified.

Read More from: The BK blog

1 week 4 days ago
“Being sent to collections” is a boogie man for businesses as well as for individuals, I learned this week. I was counseling a small business with lots of vendor debt. We were looking for a strategy that could keep them in business. When I suggested that management sort their payables into vendors they needed and wanted to keep, and those they could live without and wouldn’t pay going forward, I heard the familiar refrain:  “but they’ll send us to collection!” So? Sent to collections Where is “collections”? What is so bad about a corporation being there?  It isn’t painful… Let’s think:   “collections” is little more than an accounting category including debt that isn’t paying or isn’t likely to pay without something more. Collectors, whether business or consumer, rely on the same weapons.  Their job is to “motivate” the debtor to pay up, because the alternative approaches for the creditor are expensive, timeconsuming, and uncertain. My pitch to this business was premised on the idea that 1) there wasn’t enough money to pay everyone; 2) they had multiple sources for the product they bought from this vendor; and 3) the survival of the business was at stake.
1 week 4 days ago
While marketplace lenders have introduced valuable innovation into financial services, they carry a fundamental flaw that threatens to undermine their business, destabilize financial markets and cause real economic hardship.

Read More from: BankThink

1 week 4 days ago
As explained in a prior post, the Liquidating Trustee had sent out demand letters, the first step towards preference litigation.  The prior post is here: Furniture Brands International – Preference Litigation has Begun. On August 13, 2015, Alan D. Halperin, the Trustee of the FBI Wind Down, Inc. Liquidating Trust began filing preference actions.  In what is almost certainly the first of many waves of complaints, he has filed complaints against 9 companies alleging they received preferential transfers. Defenses to a Preference Action The Bankruptcy Code provides creditors with many defenses to preference actions. Included among these are the “ordinary course of business defense” and the “new value defense.” For reader’s looking for more information concerning claims and defenses in preference litigation, attached is a booklet I prepared on the subject: “A Preference Reference: Common Issues that Arise in Delaware Preference Litigation.”
1 week 4 days ago
Receiving Wide Coverage ... India to Reform State Banks: India is betting that a private-sector mindset can help restore its public banks. The country has hired former top executives from Microsoft and Citigroup to take charge of the state banks' recapitalization efforts and reforms. Writing for Quartz, professor T.T. Ram Mohan sounds a bit skeptical about the plan: "It's hard to see why the best professionals in the private sector would want the job," he writes,Â...

Read More from: BankThink

1 week 4 days ago
Altegrity Inc., which became known after National Security Agency contractor Edward Snowden was vetted by one of its units, won approval of its chapter 11 plan.Read 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.”) Samson Resources Inc. plans to file for chapter 11 bankruptcy protection by the middle of next month, The Wall Street Journal reports. Relativity Media LLC plans to delay its sale timeline by about two weeks, DBR reports via WSJ. DBR (sub. req.) reports on Hercules Offshore Inc.’s September hearing on its prepackaged bankruptcy plan.

Read More from: WSJ.com: Bankruptcy Beat

1 week 4 days ago

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