ABI Blog Exchange

How much stress can we expect to see for oil and gas producers and related companies as a result of the current low prices? And what special issues does this industry face when it’s time to restructure or file for bankruptcy? The U.S. shale oil boom fueled by hydraulic fracturing has been a double-edged sword. Due to the pace of domestic crude oil production, the U.S. has become the world’s largest producer of oil and natural gas liquids in 2014. At the same time, and partially as a result, oil and gasoline prices have plummeted. While this is good news for individual and business consumers who rely on the commodity, it has quickly become a nightmare for producers, oil field service companies and their lenders and investors. “Fracking” is a much more expensive means of extraction than traditional drilling methods—by some estimates and depending on particular circumstances, more than twice as expensive. High production costs, depressed prices, limited liquidity, high leverage and costly junk-bond debt (characteristics of many producers) are a recipe for financial distress, and the evidence is plain in recent headlines trumpeting the instability or demise of small and large producers alike. This trend will continue if oil and gas prices remain depressed.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
How much stress can we expect to see for oil and gas producers and related companies as a result of the current low prices? And what special issues does this industry face when it’s time to restructure or file for bankruptcy? The U.S. shale oil boom fueled by hydraulic fracturing has been a double-edged sword. Due to the pace of domestic crude oil production, the U.S. has become the world’s largest producer of oil and natural gas liquids in 2014. At the same time, and partially as a result, oil and gasoline prices have plummeted. While this is good news for individual and business consumers who rely on the commodity, it has quickly become a nightmare for producers, oil field service companies and their lenders and investors. “Fracking” is a much more expensive means of extraction than traditional drilling methods—by some estimates and depending on particular circumstances, more than twice as expensive. High production costs, depressed prices, limited liquidity, high leverage and costly junk-bond debt (characteristics of many producers) are a recipe for financial distress, and the evidence is plain in recent headlines trumpeting the instability or demise of small and large producers alike. This trend will continue if oil and gas prices remain depressed.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
How much stress can we expect to see for oil and gas producers and related companies as a result of the current low prices? And what special issues does this industry face when it’s time to restructure or file for bankruptcy? The sobering reality about the current price collapse in the global oil and gas markets is that it’s driven by fundamental changes in both supply-side and demand-side factors—and underlying market conditions suggest that prices are likely to stabilize well below the near-high watermark experienced in recent years. On the supply side, rising North American supplies created by the increased sophistication, adoption and use of U.S. light tight oil extraction technologies, commonly known as hydraulic fracturing or fracking, are transforming the roles and relative power of OPEC and non-OPEC producers. On the demand side, factors ranging from lower demand by emerging economies to the politics of climate change and related regulation to the impact of globalization and the commercial feasibility of alternative fuels are reducing the demand rate.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
How much stress can we expect to see for oil and gas producers and related companies as a result of the current low prices? And what special issues does this industry face when it’s time to restructure or file for bankruptcy? The sobering reality about the current price collapse in the global oil and gas markets is that it’s driven by fundamental changes in both supply-side and demand-side factors—and underlying market conditions suggest that prices are likely to stabilize well below the near-high watermark experienced in recent years. On the supply side, rising North American supplies created by the increased sophistication, adoption and use of U.S. light tight oil extraction technologies, commonly known as hydraulic fracturing or fracking, are transforming the roles and relative power of OPEC and non-OPEC producers. On the demand side, factors ranging from lower demand by emerging economies to the politics of climate change and related regulation to the impact of globalization and the commercial feasibility of alternative fuels are reducing the demand rate.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
While the CFPB's proposed rules may force payday lenders to adjust their business models, well-meaning ones should be able to operate in this new framework.

Read More from: BankThink

1 week 1 day ago
Imagine the surprise of getting up in the morning and finding that your car has been repossessed. Even worse, you may have been in the process of getting a chapter 13 bankruptcy case filed or you might have been thinking about filing a chapter 13 bankruptcy case to repay the debt on the car that+ Read More The post Car Repossessed Last Night? I Can Get It Back With Chapter 13. appeared first on David M. Siegel.
1 week 1 day ago
Authored by Adam B. Brandon of Rogers TowersThe Servicemembers Civil Relief Act of 2003 (SCRA) protects members of the Army, Navy, Air Force, Marine Corps, and Coast Guard whose financial obligations and ability to participate in civil proceedings are materially affected by their active duty military service.  As the successor to the Soldiers’ and Sailors’ Civil Relief Act of 1940, the SCRA covers a wide range of issues including default judgments, termination of leases, security deposits, personal loan interest rates, mortgage interest rates, mortgage foreclosures, civil lawsuits, and income tax payments. Aspects of the SCRA that affect the rights of lenders include:

Read More from: Florida Banking Law Blog

1 week 1 day ago
How much stress can we expect to see for oil and gas producers and related companies as a result of the current low prices? And what special issues does this industry face when it’s time to restructure or file for bankruptcy? The decline in oil prices has put substantial strain on many exploration and production companies as well as industry service providers. The question of how many exploration and production and related companies will need to restructure is the focus of myriad analyst reports, and investment funds around the globe are analyzing ways to profit (or reduce losses) from the steep drop in the price of oil. While a number of exploration and production companies will need to restructure in the near term and a handful of companies have already sought bankruptcy protection, the severity with which these companies and their service providers will need to restructure likely will not be extreme. Most companies in the industry have curtailed plans that would have required significant capital expenditures and have sufficient liquidity and hedging arrangements in place to help them attempt to ride out the current storm until prices recover in this cyclical industry.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
How much stress can we expect to see for oil and gas producers and related companies as a result of the current low prices? And what special issues does this industry face when it’s time to restructure or file for bankruptcy? The decline in oil prices has put substantial strain on many exploration and production companies as well as industry service providers. The question of how many exploration and production and related companies will need to restructure is the focus of myriad analyst reports, and investment funds around the globe are analyzing ways to profit (or reduce losses) from the steep drop in the price of oil. While a number of exploration and production companies will need to restructure in the near term and a handful of companies have already sought bankruptcy protection, the severity with which these companies and their service providers will need to restructure likely will not be extreme. Most companies in the industry have curtailed plans that would have required significant capital expenditures and have sufficient liquidity and hedging arrangements in place to help them attempt to ride out the current storm until prices recover in this cyclical industry.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
Bankruptcy professionals are scrambling to find a buyer who will save Fresh Produce women’s clothing line—colorful, roomy and reminiscent of that time you took the grandkids to Sarasota, Fla., for a beach vacation—from shutdown. The Boulder, Colo., company could close by the end of August it doesn’t find a buyer to take over Fresh Produce’s 27 stores located in vacation spots like Florida, Arizona and South Carolina. In court papers, Fresh Produce Holdings LLC Chief Financial Officer Jo Stone blamed the company’s financial troubles on an “aggressive overexpansion” and high turnover in key positions. “Financial oversight and control suffered as personnel had to be replaced with individuals without sufficient institutional knowledge,” Ms. Stone said in documents filed in U.S. Bankruptcy Court in Denver. Fresh Produce, which employs 270 people, targets a tourist customer base. It made $37.9 million in sales during its most recent fiscal year.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
Bankruptcy professionals are scrambling to find a buyer who will save Fresh Produce women’s clothing line—colorful, roomy and reminiscent of that time you took the grandkids to Sarasota, Fla., for a beach vacation—from shutdown. The Boulder, Colo., company could close by the end of August it doesn’t find a buyer to take over Fresh Produce’s 27 stores located in vacation spots like Florida, Arizona and South Carolina. In court papers, Fresh Produce Holdings LLC Chief Financial Officer Jo Stone blamed the company’s financial troubles on an “aggressive overexpansion” and high turnover in key positions. “Financial oversight and control suffered as personnel had to be replaced with individuals without sufficient institutional knowledge,” Ms. Stone said in documents filed in U.S. Bankruptcy Court in Denver. Fresh Produce, which employs 270 people, targets a tourist customer base. It made $37.9 million in sales during its most recent fiscal year.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
Merchants argue that Fed policy allows banks to overcharge stores for debit-card swipe fees, resulting in higher prices for consumers. But the revenue banks earn on interchange fees benefits all Americans, since financial institutions invest a portion of it in developing security technologies to protect consumer data.

Read More from: BankThink

1 week 1 day ago
It’s so easy to get a tax filing extension and put off the unpleasant work til fall. Procrastination is easy, and even sanctioned by the simplicity of an extension. But doing it now is important to your financial wellbeing From a purely selfish point of view, you need to know where you and Uncle Sam stand. Really it’s all about next year.  What did Goldilocks know about taxes? Getting withholding just right Your withholding for next year’s tax bill needs to be just right, not too large, not too small, but right close to what you’ll owe. Just like Goldilocks and her porridge. And a good estimate of what you’ll owe for this year is what you owe for last year, the return we’re preparing this spring. Unless your finances are wildly variable, last year may not be a surefire template for this year, but it’s usually close. But you don’t know what you owed for last year til you do the math.  (I know, math, but it can’t be helped). Scared to know? Fear keeps many from figuring out what they owe on their taxes.  Fear that it’s a number bigger than they can pay.  Fear of drawing attention to themselves. So, let’s look at the downside of putting it off til October.
1 week 1 day ago
Biofuel maker KiOR Inc. won a Delaware bankruptcy judge’s permission to begin soliciting votes from creditors on its restructuring 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.”) The power plant that is the Revel casino’s sole source of electricity is moving ahead with plans to cut service to the Atlantic City., N.J., resort, the Associated Press reports. According to Bloomberg, a judge set rules for Caesars Entertainment’s August bankruptcy trial. Reuters reports on the fiscal struggles faced by the city of Chicago amid the election of Rahm Emanuel as his second term as mayor.

Read More from: WSJ.com: Bankruptcy Beat

1 week 1 day ago
Receiving Wide Coverage ... Dimon Throws Down: Outspoken JPMorgan Chase chief Jamie Dimon isn't afraid to raise some hackles Â-- and that tendency is on full display in his annual letter to shareholders. The Financial Times and Bloomberg both focus on Dimon's prediction that regulatory requirements will be to blame for the next financial crisis. His letter argues that capital and liquidity rules have limited banks' ability to withstand market turmoil, and predicts the next crisis...

Read More from: BankThink

1 week 1 day ago
The SEC staff has determined that a shareholder proposal can be excluded under Rule 14a-8(i)(3) because the supporting statement is false and misleading, a position that they have generally been reluctant to take in numerous other requests.
1 week 1 day ago
This is the next post in Plan Proponent’s series on the confirmation-related recommendations in the ABI Commission Report (and, in particular, its Exiting the Case piece). In this post, we’ll cover the Commission’s recommendations regarding Section 506(c) and charges against collateral. Section 506(c) provides that the “trustee may recover from property securing an allowed secured claim the reasonable, necessary costs and expenses of preserving, or disposing of, such property to the extent of any benefit to the holder of such claim, including the payment of all ad valorem property taxes with respect to the property.” Generally, those expenses must be reasonable, necessary, and beneficial to the secured creditor against whose collateral the expenses are sought. Section 506(c) protects collateral by giving the trustee an incentive to preserve collateral;  it protects the trustee (including the debtor-in-possession) by having the secured creditor pay for the collateral protection.

Read More from: Plan Proponent

1 week 1 day ago
Per www.globalinsolvency.com: Wed., April 8, 2015  The UK’s five largest banks cut bonus pools by more than £1 billion last year and most also reduced pay and staff numbers, according to Financial Times analysis, potentially blunting political attacks on banker excess ahead of the general election. The sweeping changes to remuneration are revealed in figures based on the annual financial statements of Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered. Overall, bonuses at the five banks fell from around £6.5 billion in 2013 to roughly £5.5 billion in 2014, a drop of about 15 per cent when the figures for all five are totalled in sterling. The data also show the five banks set aside a little less than £10 billion to deal with fines, conduct and other litigation costs last year, including about £4.7 billion related to the mis-selling of payment protection insurance products to UK customers. Competition between the political parties over who can be toughest on bankers has intensified ahead of May’s election. George Osborne, the Conservative chancellor, used his recent Budget to increase the levy that banks pay while the Labour party is promising a windfall tax of 50 per cent on bonuses above £25,000.

Read More from: The COMI

1 week 2 days ago
Trying to discharge your personal debts?  Well, here is a new method: in In re Hoover, the Bankruptcy Court for the Northern District of California ruled that a debtor’s death, under appropriate circumstances, is grounds for the debtor to discharge remaining debts owed to unsecured creditors, even though the debtor has not completed the payments under his chapter 13 plan. Background The chapter 13 debtor, Thomas Wayne Hoover, Sr., died with only one payment remaining on his five-year plan.  At the time of his death, he was living on disability and a small pension, which was not sufficient to make the final payment.  Therefore, the debtor’s attorney requested that the court grant the debtor a “hardship discharge” under section 1328(b) of the Bankruptcy Code, which provides a hardship discharge if a debtor is unable to complete payments under a chapter 13 plan due to circumstances out of the debtor’s control. The Bankruptcy Code does not specifically address the consequences of a debtor’s death on the administration of the case and the effect on an uncompleted chapter 13 plan.  Here, however, the bankruptcy court looked to the Bankruptcy Rules for a possible solution. Analysis
1 week 2 days ago
A woman walks into a store of yoga wear retailer Lululemon Athletica in downtown Vancouver in June 2014.
Ben Nelms/Reuters
A Utah company that made retail displays for a Lululemon Athletica Inc. store in San Francisco wants the yoga wear maker to pay up. In a lawsuit filed Tuesday, DGS Store Fixtures Inc. demanded money for an unpaid bill of $59,082.50. Last year, Lululemon officials hired DGS Store Fixtures to provide ceiling panels, fitting room latches and other items for a new store in the Westfield San Francisco Centre mall. According to the lawsuit, filed in U.S. Bankruptcy Court in Salt Lake City, the retailer made a partial payment of about $18,600 for the work, but officials didn’t respond to a Feb. 4 demand letter from DGS Store Fixtures. Lululemon hasn’t yet formally responded to the lawsuit, and a spokeswoman for the Vancouver-based retailer did not immediately respond to an emailed request for comment.

Read More from: WSJ.com: Bankruptcy Beat

1 week 2 days ago

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