ABI Blog Exchange

My favorite news magazine, The Economist, has a cover article this week entitled "The Great Distortion" portraying "tax-free debt" as "the dangerous flaw at the heart of the world economy".  In their usage, "tax-free debt" refers to residential mortgage debt and business debt on which interest payments are deductible (not, as an American taxpayer might think, tax-free state and local government debt which is literally tax-free to the holder). Unusually for this sophisticated magazine, the article seems to have a poor understanding of the underpinning of the tax deduction for interest expense incurred by businesses, so I am putting up this post to address that. The characterization of mortgage and business debt as "tax-free" is a good example of their confusion.  Neither residential mortgage debt nor business debt is tax-free to the holder, as long as the holder is a taxable entity.  The beneficial holder of a mortgage / MBS or a loan / loan fund will have to treat the interest payments received as ordinary income under US tax law.  The payor is allowed to deduct those payments.

Read More from: Necessary and Proper

1 week 1 day ago
CONSUMER FINANCIAL PROTECTION BUREAU LAUNCHES PUBLIC INQUIRY INTO STUDENT LOAN SERVICING PRACTICES Bureau Seeks Information On Industry Practices That Can Create Student Debt Stress Here is an announcement from the Consumer Financial Protection Bureau: WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) is launching a public inquiry into student loan servicing practices that can make paying back loans a stressful or harmful process for borrowers. The issues that the Bureau is seeking information on include: industry practices that create repayment challenges, hurdles for distressed borrowers, and the economic incentives that may affect the quality of service. The CFPB is also re-launching an enhanced version of its Repay Student Debt online tool to help borrowers figure out their options for affordable repayment. “Student debt stress can make borrowers feel like they are walking a tightrope where any false move in paying back a loan can cause them to fall,” said CFPB Director Richard Cordray. “Today’s inquiry seeks information on the pain points in student loan servicing that make repayment a more difficult and stressful process.” The Request for Information.
1 week 2 days ago
Missoula May 7 – Court May 6 – Chapter 7 341 meetings May 14 Chapter 13 341 meetings June 4 – Court June 3 – Chapter 7 341 meetings June 11 – Chapter 13 341 meetings July 9 – Court July 8 – Chapter 7 341 meetings July 16 – Chapter 13 341 meetings August – no Court August 12 – Chapter 7 341 meetings August 13 – Chapter 13 341 meetings September 3 – Court September 4 – Chapter 7 341 meetings September 17 – Chapter 13 341 meetings October 8 – Court October 5 Chapter 7 341 meetings October 13 – Chapter 13 341 meetings November 5 – Court November 4 – Chapter 7 341 meetings November 12 – Chapter 13 341 meetings December 3 – Court December 2 – Chapter 7 341 meetings December 10 – Chapter 13 341 meetings Kalispell May 4 – Chapter 7 341 meetings May 14 – Chapter 13 341 meetings June 1 – Chapter 7 341 meetings June 11 – Chapter 13 341 meetings July 10 – Chapter 7 341 meetings July 16 – Chapter 13 341 meetings August 10 – Chapter 7 341 meetings August 13 – Chapter 13 341 meetings September 2 – Chapter 7 341 meetings September 17 – Chapter 13 341 meetings October 2 – Chapter 7 341 meetings October 15 – Chapter 13 341 meetings Billings May 12 – Court May 28 – Chapter 7 341 meetings May 13 – Chapter 13 341 meetings June 23 – Court June 25 – Chapter 7 341 meetings June 17 Chapter 13 341 meetings July 28 – Court July 23 – Chapter 7 341 meetings July 22 – Chapter 13 341 meetings August – no Court August 27 – Chapter 7 341 meetings
1 week 2 days ago
Shark Tank is a very popular show. It supposedly draws back the curtain on the behind the scenes wheeling-and-dealing between the entrepreneur and the angel investor. Read more here.
1 week 2 days ago
A recap of the informed opinions (and the discussions they generated) on BankThink this week, including the financial inequalities exposed by the Baltimore riots and whether the changes to Dodd-Frank proposed in Sen. Richard Shelby's regulatory relief plan go too far.

Read More from: BankThink

1 week 3 days ago
This week on The Broke and the Beautiful, Teresa Giudice mulls her future, Kelly Rutherford petitions the White House, and Rhode Island clears a pair of lobbyists tied to Curt Schilling’s defunct videogame company.
In this Jan. 4, 2012, photo, Teresa Giudice poses for a portrait in New York.
Associated Press
“Real Housewives of New Jersey” star Teresa Giudice is almost halfway through her prison stay. And although she will have to celebrate her 43rd birthday in Danbury, Conn., she at least has some time to think about her future. According to E!, Ms. Giudice plans to leave Connecticut better off than she was before. “She’s taking care of her body, she’s taking care of her mind,” attorney James J. Leonard told E!, adding that “she’s reprioritizing things in her life.”

Read More from: WSJ.com: Bankruptcy Beat

1 week 3 days ago
This week on The Broke and the Beautiful, Teresa Giudice mulls her future, Kelly Rutherford petitions the White House, and Rhode Island clears a pair of lobbyists tied to Curt Schilling’s defunct videogame company.
In this Jan. 4, 2012, photo, Teresa Giudice poses for a portrait in New York.
Associated Press
“Real Housewives of New Jersey” star Teresa Giudice is almost halfway through her prison stay. And although she will have to celebrate her 43rd birthday in Danbury, Conn., she at least has some time to think about her future. According to E!, Ms. Giudice plans to leave Connecticut better off than she was before. “She’s taking care of her body, she’s taking care of her mind,” attorney James J. Leonard told E!, adding that “she’s reprioritizing things in her life.”

Read More from: WSJ.com: Bankruptcy Beat

1 week 3 days ago
You can file a bankruptcy case on your own which is known as filing pro se. However, I would not recommend this and I would certainly never recommend it in a chapter 13 bankruptcy case. Approximately once per month, someone will come into my office who has filed a bankruptcy case on their own behalf+ Read More The post Filing Bankruptcy On Your Own: It’s Not That Simple appeared first on David M. Siegel.
1 week 3 days ago
 I highly recommend this great article in the New York Times.  Everyone should understand the issues related to protecting your own or your parents’ hard earned retirement funds when faced with a financial crisis.  A good portion of every client I meet has dipped into their retirement funds to pay off debts, only to find the debts never end – default interest, late charges, attorney and collection fees…… the list goes on and on. The following is a brief clip of the entire article. For some older Americans, bankruptcy can bring much-needed relief from debt brought on by medical expenses or helping needy children, and experts say it can be a valuable tool to protect retirement assets, after negotiating with creditors. But with reliable statistics on current bankruptcies hard to come by, anecdotal evidence suggests that shame at being in financial turmoil frequently prevents retirees from getting help early. “People usually postpone bankruptcy for several years before filing,” said Deborah Thorne, an associate professor of sociology at Ohio University, who has studied older Americans and bankruptcy. “When finances head south, they should file right away.”
1 week 3 days ago
The European Court of Justice has handed down its judgment in the Woolworths case, concerning the trigger point for collective redundancy consultation under UK legislation. Back in 2013, the UK Employment Appeals Tribunal had considerably extended the burden of collective redundancy consultation by requiring all proposed redundancies across a business to be taken into account when deciding whether the threshold for collective redundancy consultation was triggered. To the relief of UK employers, the European Court of Justice decided last week that there is no requirement under EU law for an employer to take account of the number of proposed dismissals across its entire business when determining whether the threshold for collective redundancy consultation has been reached. It is sufficient to determine this by reference to each individual local establishment. Continue > >
1 week 3 days ago
Sen. Richard Shelby's attempt to reform Dodd-Frank could ease key bank regulations that improve the safety and soundness of big banks. That would be an immense disservice to the American taxpayers who might bear the cost of the changes with future bailouts.

Read More from: BankThink

1 week 3 days ago
Supplement company Natrol Inc. heads to bankruptcy court Wednesday in Wilmington, Del., to see if it can sway a judge to sign off on a creditor-payment plan that’s being held up by a disputed settlement. Judge Brendan Shannon refused to approve the plan at a May 12 hearing, saying he had “a very bad feeling” about some things happening in the case. At issue is a settlement between Natrol’s current owner, Aurobindo Pharma , and the former owner that sold it during the bankruptcy proceeding, Plethico Pharmaceuticals Ltd. Judge Shannon said the settlement, which would see Aurobindo get $23.3 million back of the $132.5 million it paid for Natrol, needed more scrutiny. The settlement would put to rest fraud allegations Aurobindo aimed at Plethico accusing the company of draining some $25 million out of Natrol through an allegedly fake construction contract. Natrol’s sale brought in enough money to pay off all of the supplement company’s creditors, but until the payment plan gets approved, creditors are still waiting for their checks. Complicating the situation is Plethico’s own insolvency proceeding in India. Bondholders that have been trying to collect their money say the proposed settlement runs afoul of an Indian court order that forbids Plethico from transferring its assets.

Read More from: WSJ.com: Bankruptcy Beat

1 week 3 days ago
Supplement company Natrol Inc. heads to bankruptcy court Wednesday in Wilmington, Del., to see if it can sway a judge to sign off on a creditor-payment plan that’s being held up by a disputed settlement. Judge Brendan Shannon refused to approve the plan at a May 12 hearing, saying he had “a very bad feeling” about some things happening in the case. At issue is a settlement between Natrol’s current owner, Aurobindo Pharma , and the former owner that sold it during the bankruptcy proceeding, Plethico Pharmaceuticals Ltd. Judge Shannon said the settlement, which would see Aurobindo get $23.3 million back of the $132.5 million it paid for Natrol, needed more scrutiny. The settlement would put to rest fraud allegations Aurobindo aimed at Plethico accusing the company of draining some $25 million out of Natrol through an allegedly fake construction contract. Natrol’s sale brought in enough money to pay off all of the supplement company’s creditors, but until the payment plan gets approved, creditors are still waiting for their checks. Complicating the situation is Plethico’s own insolvency proceeding in India. Bondholders that have been trying to collect their money say the proposed settlement runs afoul of an Indian court order that forbids Plethico from transferring its assets.

Read More from: WSJ.com: Bankruptcy Beat

1 week 3 days ago
Lehman Brothers Holdings Inc. headquarters stands in New York, U.S., on Monday, June 16, 2008.
BLOOMBERG NEWS
Lehman Brothers Holdings Inc. is suing the Federal Home Loan Bank of New York for more than $150 million over dozens of soured interest-rate swaps. 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.”) The Philadelphia Inquirer reports that the state of New Jersey ordered the power to be kept on at the Revel casino in Atlantic City.

Read More from: WSJ.com: Bankruptcy Beat

1 week 3 days ago
Lehman Brothers Holdings Inc. headquarters stands in New York, U.S., on Monday, June 16, 2008.
BLOOMBERG NEWS
Lehman Brothers Holdings Inc. is suing the Federal Home Loan Bank of New York for more than $150 million over dozens of soured interest-rate swaps. 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.”) The Philadelphia Inquirer reports that the state of New Jersey ordered the power to be kept on at the Revel casino in Atlantic City.

Read More from: WSJ.com: Bankruptcy Beat

1 week 3 days ago
Wall Street Journal Despite shareholders' complaints about its sluggish stock price and earnings growth, Bank of America's board appears to be fully supportive of Chairman and Chief Executive Brian Moynihan. As part of an update on Moynihan's tenure, the Journal interviews directors, shareholders, former colleagues and Moynihan himself about his job performance. Jack O. Bovender Jr., the former CEO of hospital chain HCA and a B of A director, applauds Moynihan's personality. "You don't have to...

Read More from: BankThink

1 week 3 days ago
The Commercial Law League of America (CLLA) recently announced that […] The post Robert S. Bernstein Named New Commercial Law League of America President appeared first on Bernstein-Burkley, P.C..

Read More from: Bernstein-Burkley, P.C.

1 week 4 days ago
Chris Dickerson and Matt Murphy have joined law firm Paul Hastings in the Chicago office. Mr. Dickerson has worked on well-known bankruptcy cases including CIT Group Inc. and Refco Inc., and he has worked with investors and lenders on debtor-in-possession financing. Mr. Murphy has experience advising public and private clients both in and out of chapter 11 and has worked with companies such as Alco Stores Inc. Mr. Dickerson and Mr. Murphy formerly worked with DLA Piper. Lisa Schiller has joined law firm McGlinchey Stafford as a member with the creditors’ rights and bankruptcy group. Ms. Schiller, who will work in in the Fort Lauderdale, Fla., office, has represented financial institutions as well as chapter 11 trustees, creditors and other parties. She is a member of the American Bankruptcy Institute and the International Women’s Insolvency and Reorganizations Confederation.

Read More from: WSJ.com: Bankruptcy Beat

1 week 4 days ago
Chris Dickerson and Matt Murphy have joined law firm Paul Hastings in the Chicago office. Mr. Dickerson has worked on well-known bankruptcy cases including CIT Group Inc. and Refco Inc., and he has worked with investors and lenders on debtor-in-possession financing. Mr. Murphy has experience advising public and private clients both in and out of chapter 11 and has worked with companies such as Alco Stores Inc. Mr. Dickerson and Mr. Murphy formerly worked with DLA Piper. Lisa Schiller has joined law firm McGlinchey Stafford as a member with the creditors’ rights and bankruptcy group. Ms. Schiller, who will work in in the Fort Lauderdale, Fla., office, has represented financial institutions as well as chapter 11 trustees, creditors and other parties. She is a member of the American Bankruptcy Institute and the International Women’s Insolvency and Reorganizations Confederation.

Read More from: WSJ.com: Bankruptcy Beat

1 week 4 days ago
It's difficult to draw useful lessons from a small pilot, since banks typically stack the deck for success. Trying out new projects at average locations that serve average customers can give banks a much better picture of the obstacles that lie ahead.

Read More from: BankThink

1 week 4 days ago

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