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Receiving Wide Coverage ... Goldman Goes Retail: Goldman Sachs is getting a bundle of deposits from General Electric's GE Capital castoff. Goldman will acquire $8 billion of online deposit accounts and $8 billion of brokered certificates of deposit. The GE bank that Goldman is buying does not require a minimum balance for online savings accounts; and it boasts 140,000 retail customers. ...

Read More from: BankThink

2 weeks 4 days ago
If the headline drew you in, like the Geico gecko, you can complain you’ve been duped. In bankruptcy, you disclose everything. Period. Disclosure is the price of the bankruptcy discharge. Shortchange the system by leaving out inconvenient facts and you risk both the omitted asset and the discharge. A false oath on the bankruptcy papers or transfers intended to conceal assets from creditors are each grounds on which the discharge of all of your debts can be denied, while the trustee recovers and sells the assets. It’s nasty and comes at a very high price. Tell the whole truth The problem of incomplete bankruptcy schedules is not so much an intention to conceal that leads to omissions of assets.  It’s  the filer’s failure to take disclosure seriously. People ready to file bankruptcy don’t want to read the questionnaire that prompts them for various kinds of assets they might have. They don’t commit to thinking about how this question might apply to their situation. Or they assume because an asset has little market value, it’s excluded from the schedules. Not so.  The schedules don’t ask for your significant assets or things you have with value;  they ask that you list what you own.
2 weeks 4 days ago
Optim Energy LLC will pay Blackstone Group LP $5 million to settle their fight in the Texas power-plant operator’s bankruptcy case in exchange for Blackstone dropping its appeal of Optim’s court-approved plan to exit bankruptcy. Read the Daily Bankruptcy Report story in The Wall Street Journal. The Journal takes a long look at Donald Trump’s lucrative relationship with ACN Inc., a multilevel marketing firm that has paid him millions while weathering regulatory investigations in three countries. Ocean driller Hercules Offshore Inc., the latest casualty of plunging oil prices, filed for chapter 11 bankruptcy protection on Thursday to implement a $1.2 billion debt-for-equity swap with its bondholders. Read the DBR story in the Journal. The Tulsa World writes Samson Resources could file for Chapter 11 bankruptcy before a substantial interest payment comes due Saturday.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 4 days ago
The Consumer Financial Protection Bureau (CFPB) took action against Residential Credit Solutions, Inc. for blocking consumers’ attempts to save their homes from foreclosure. The mortgage servicer failed to honor modifications for loans transferred from other servicers, treated consumers as if they were in default when they weren’t, sent consumers escrow statements falsely claiming they were due a refund, and forced consumers to waive their rights in order to get a repayment plan. Residential Credit Solutions has agreed to pay $1.5 million in restitution to victims and a $100,000 civil money penalty for its illegal actions. “By failing to honor loan modifications already in place, Residential Credit Solutions put consumers through more headaches but in some cases cost consumers their homes,” said CFPB Director Richard Cordray. “Residential Credit Solutions must now compensate its victims $1.5 million as a result of our action.”
  • Failed to honor in-process modifications
  • Provided incorrect information
  • Misrepresented to consumers that they had extra money in escrow and were due a refund
2 weeks 4 days ago
Co-Authored by Chris Evans The High Court in London gave judgment on parts A and B of the Lehman Waterfall II Application on 31 July 2015. The application is part of the ongoing dispute as to the distribution of the estimated surplus of more than £7 billion in the main Lehman operating company in Europe, Lehman Brothers International (Europe) (LBIE). LBIE entered administration on 15 September 2008 and has now paid its unsecured creditors 100p for every £1 owed. The Waterfall II Application addresses some key issues as to who should receive the surplus, concerning: (a) how statutory interest should be calculated, and (b) the impact of contracts signed after the administration date. Continue >>
2 weeks 5 days ago
By Michael RielaVedder PriceNew York, NY In Horwitz v.Montroy (In re Select Tree Farms, Inc.), A.P. No. 15-1014, 2015 WL 4594076 (Bankr. W.D.N.Y. July 17, 2015), the United States Bankruptcy Court for the Western District of New York held that an attorney was not an “initial transferee” for purposes of Section 550(a) of the Bankruptcy Code with respect to funds that were deposited into the attorney’s trust account and later used to pay the debtor’s creditors.  However, the bankruptcy court also held that the attorney was an “initial transferee” with respect to funds that were deposited into the trust account and later used to pay the attorney’s own fees.This case highlights some of the circumstances under which funds that are deposited into a trust or escrow account may be subject to recovery claims in a bankruptcy case.FactsGeorge A. Schichtel was the president of Select Tree Farms, Inc. and managed its operations.  Shortly before it commenced its Chapter 11 case on March 7, 2012, Select Tree Farms issued six checks that were payable to three creditors.  Those checks were signed by Mr.

Read More from: CLLA Bankruptcy Blog

2 weeks 5 days ago
Barclays' Barbara Byrne launches her Women in Leadership index, one bank bans all-male shortlists, the @GSElevator guy speaks out for women, Karen Peetz has some ideas to make social finance more attractive and the Manbassador movement grows.

Read More from: BankThink

2 weeks 5 days ago
Contrary to the results of a recent internal investigation, the Justice Department's Operation Choke Point circumvents due process in attempt to shutter lawful businesses like payday lenders and ammunitions dealers.

Read More from: BankThink

2 weeks 5 days ago
Earlier this year, I became mildly obsessed with (Kentucky’s own) Sturgill Simpson.  In addition to being an immensely-talented throwback musician, he appears to have predicted what many bankruptcy lawyers would be doing in 2015.  The immensity and difficulty of coal cases is also why I haven’t done much blogging lately.  From 2013, here’s Sturgill performing Old King Coal: Whether Sturgill’s song is coincidence or augury, American coal companies have seen a rough year. So far, the calendar reads: April 6, 2015:    Xinergy, Ltd. files Chapter 11 in Bankr. W.D. Virginia.  Claims Agent summary page (American Legal Claims Services) found here. May 12, 2015:  Patriot Coal Corp. files Chapter 11 (again) in Bankr. E.D. Virginia.  Claims Agent summary page (Prime Clerk) found here. June 30, 2015:  JW Resources, Inc. files Chapter 11 in Bankr. E.D. Kentucky. July 15, 2015:  Walter Energy files Chapter 11 in Bankr. N.D. Alabama.  Claims Agent summary page (Kurtzman Carson) found here. August 3, 2015:  Alpha Natural Resources files Chapter 11 in Bankr. E.D. Virginia.  Claims Agent summary page (Kurtzman Carson) found here.

Read More from: Creditors' Sidebar

2 weeks 5 days ago
Homeownership is out of reach for too many Americans. The next president could change that with a few simple policies aimed at encouraging private capital to invest in residential mortgages.

Read More from: BankThink

2 weeks 5 days ago
“Remember what we learned in school. Acquiescing to bullies only gives them more ammunition and makes it worse.” 
2 weeks 5 days ago
Wall Street Journal Citigroup has made such good progress with Citi Holdings, its "bad bank," that the unit has reported four straight quarters of profit. That was nearly unthinkable for the unit when it was first created, as a way to separate Citi's unwanted and toxic assets from the good part of Citigroup. "We're out of the dark tunnel," says Francesco Vanni d'Archirafi, who runs the unit for Citi. ...

Read More from: BankThink

2 weeks 5 days ago
Every client asks that question: how long will bankruptcy take? Probably, the real question is “when will this be over?” Like so many questions in the law, the answer is “it depends.” Filing to discharge In a Chapter 7, filing to discharge is about four months;  in Chapter 13 it’s three to five years. But, too often, the real gating issue is getting ready to file.   How long will it take you to get your attorney all the needed information. And that’s a timeline that the client controls. The source of delay It is getting the raw information to us that is the real slow-down in most cases. Cases lag when
  • the client fills out as much of our questionnaire as they find convenient;
  • provides most of the paystubs;
  • promises the tax return; and
  • has to search for information on the insurance policy.
We hustle to get the schedules done, and the client then doesn’t have all the necessary funds to finish paying us. Once filed, a Chapter 7 marches fairly predictably to discharge.  The debtor’s obligations after filing are few:  show up at the 341 meeting, and complete the post bankruptcy education class.
2 weeks 5 days ago
Authored by Jon Sacks and Heather S. Nasonand Jon Sacks and Heather S. Nason of Rogers TowersDeficiency actions arising under a mortgage note secured by Florida real estate used for personal, family or household purposes are subject to many of the same consumer protection regulations as other consumer debt. Last April, in an unrecorded case, Baggett v. Law Offices of Consuegra, P.L. No.3:14-cv-1014-J-32PDB 2015 WL 1707479 (M.D. Fla. April 15, 2015), the Middle District of Florida ruled that a deficiency action after foreclosure constituted an effort to collect on a debt under the Fair Debt Collections Practices Act (“FDCPA”) and the Florida Consumer Collection Practices Act (“FCCPA”). In Baggett, the Court held that because the deficiency action is based on a consensual obligation to pay under the note and not the foreclosure, it is a process to collect “consumer debt” and is therefore subject to the rules under FDCPA and FCCPA.

Read More from: Florida Banking Law Blog

2 weeks 5 days ago
Transportation Secretary Anthony Foxx testifies before Congress in March 2014. 
Associated Press
A bankruptcy trustee sued U.S. Secretary of Transportation Anthony Foxx to claw back more than $420,000 a defunct bus maker paid Mr. Foxx for work he allegedly never performed, the Daily Bankruptcy Review reports via WSJ. Grocery chain Great Atlantic & Pacific Tea Co. is seeking to modify parts of its collective-bargaining agreements with union workers, a likely precursor to a request for a bigger overhaul of the CBAs later this month, DBR reports. (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, visithttp://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”)

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 5 days ago
Much has been going on, although little has actually happened, in the litigation against Argentina. For instance, the court has allowed the plaintiffs to file an amended complaint seeking an injunction blocking payments on the recently-issued BONAR 2024s (USD-denominated, Argentine law bonds). That may prove important, for it's a step toward blocking Argentina from issuing any foreign currency debt, anywhere within the great orange blob known as "places-that-are-not-New-York." But no injunction yet; Argentina has not yet filed an answer to the complaint. 

Read More from: Credit Slips

2 weeks 5 days ago
I've finally finished my paper on the new Russian personal bankruptcy law (comments welcome), which is slated to go into effect on October 1 of this year. One side story from that paper will give a real chuckle to lawyers from Texas, Florida, and the other states with unlimited homestead exemptions. It turns out that the Russian Constitutional Court has been battling for years with the legislature about the unlimited exemption in "residential premises"  that represent the debtor's single suitable place of permanent abode. The Court has held this unlimited exemption to be unconstitutional at least twice, in 2007 and then again in 2012, yet the legislature continues to ignore these rulings and leave the law as is.

Read More from: Credit Slips

2 weeks 5 days ago
Two recent decisions from the District Court for the Southern District of New York have renewed interest in the Trust Indenture Act and the ability of minority bondholders to use it as a shield to protect their rights in an out-of-court nonconsensual restructuring:  Marblegate Asset Management, LLC v. Education Management Corp. and MeehanCombs Global Credit Opportunities Funds, LP v. Caesars Entm’t Corp.  Today, we focus on Education Management, under which the court concluded that the Trust Indenture Act, when read broadly, is intended to protect minority bondholders against out-of-court restructurings designed to impair their practical rights to payment of principal and interest  EDMC
2 weeks 6 days ago
The U.S. Bankruptcy Court in Manhattan
Getty Images
A Texas bankruptcy judge recently caused a stir with comments on the tendency of major corporations to turn to the New York and Delaware bankruptcy courts in times of financial trouble. Courts in those states have long had an out-sized share of the corporate chapter 11 cases, drawing accusations that they’re chosen because they cater to big banks, big hedge funds and big law firms at the expense of employees and other small creditors. As Daily Bankruptcy Review recently reported, U.S. Bankruptcy Court Judge Russell Nelms, who sits in Fort Worth, Texas, said the practice of forum shopping (filing in a court remote from a business’s headquarters or major center of operations) takes a toll on the public perception of bankruptcy as a fair way to sort through competing claims to limited funds.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 6 days ago
The U.S. Bankruptcy Court in Manhattan
Getty Images
A Texas bankruptcy judge recently caused a stir with comments on the tendency of major corporations to turn to the New York and Delaware bankruptcy courts in times of financial trouble. Courts in those states have long had an out-sized share of the corporate chapter 11 cases, drawing accusations that they’re chosen because they cater to big banks, big hedge funds and big law firms at the expense of employees and other small creditors. As Daily Bankruptcy Review recently reported, U.S. Bankruptcy Court Judge Russell Nelms, who sits in Fort Worth, Texas, said the practice of forum shopping (filing in a court remote from a business’s headquarters or major center of operations) takes a toll on the public perception of bankruptcy as a fair way to sort through competing claims to limited funds.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 6 days ago

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