ABI Blog Exchange

I just received an e-mail from a gentleman who filed a chapter 13, but later decided to dismiss his case.  He is wondering if the Bankruptcy Court can instruct the credit reporting agency to remove the bankruptcy from his credit report.  Unfortunately, the answer is no.  A bankruptcy will stay on the debtor’s credit report for ten years, even if the case is later dismissed. I don’t know if this result would have made a difference for this gentleman, but at least he should have been told the result. Follow The StepsTo schedule your Free Bankruptcy Consultation with Diane The post Bankruptcy Stays on your credit report even if case dismissed appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
2 weeks 4 hours ago
Chapter 11's ability to empower true reorganization has received much criticism of late in light of an increasingly held assumption that most Chapter 11 cases end in a 363 sale of the debtor's assets. Around this time last year, the American Bankruptcy Institute and the University of Illinois College of Law co-hosted a symposium dedicated to discussing secured creditors’ rights and role in modern Chapter 11. Papers from the symposium (including by Slips contributors) very recently became available here. I was lucky enough to moderate a couple of the symposium panels. As I was listening to the discussion, I noticed that what I was hearing about secured creditors and 363 sales did not match  what I had observed in my study of how religious organizations (mainly smaller churches) currently use Chapter 11. To accompany the release of the symposium papers, I wrote a short piece describing how secured creditors influenced religious organizations' Chapter 11 cases in ways that did not lead to widespread sales, but rather, plans and settlements.

Read More from: Credit Slips

2 weeks 10 hours ago
Is a rent-stabilized lease in New York a “local public assistance benefit” that is exempt from property of a debtor’s bankruptcy estate, or is it merely “a quirk of the regulatory scheme in the New York housing market[?]”  That was the question recently decided by the Second Circuit in In re Monteverde.   As we have covered on this blog in the past, here, and here, section 522 of the Bankruptcy Code recognizes certain types of property as “exempt” from the bankruptcy estate.  Among the listed exemptions is section 522(b)(3), which exempts property that is exempt under Federal, State or local law.  In turn, section 282(2) of New York Debtor and Creditor Law creates an exemption for a debtor’s interest in “a local public assistance benefit.” Facts
2 weeks 10 hours ago
Ceres, on behalf of institutional investors representing nearly $2 trillion in assets under management, sent a letter to the SEC on April 17, 2015, requesting that the agency scrutinize the lack of “carbon asset risk” disclosure in oil and gas company filings. The letter defines “carbon asset risk” broadly to include risks associated with capital expenditures on high cost/carbon intensive oil and gas exploration projects, government efforts to limit carbon emissions and the possibility of reduced global demand for oil as early as 2020. Ceres claims that carbon asset risks are material “known trends” requiring disclosure under SEC rules. The New York State Office of the State Comptroller and the New York City Office of the Comptroller simultaneously sent a letter to the SEC in support of Ceres’ request.
2 weeks 11 hours ago
Over at Dealb%k, I have a new column up about Colt's rather aggressive dual-track exchange offer and prepack. In short, it involves very little creditor input. Perhaps part of a larger trend of aggressive use of chapter 11 by private equity backed debtors? And no, I have no idea if Robert Culp is holding a Colt firearm that that picture ... but he looks kind of cool, doesn't he?

Read More from: Credit Slips

2 weeks 12 hours ago
On April 19, 2015, Frederick’s of Hollywood, Inc., a well-known retailer of women’s lingerie, filed for chapter 11 protection in the United States Bankruptcy Court for the District of Delaware.  In addition to the petition filed by Frederick’s, petitions were filed by five other related entities.  The cases have been assigned to The Honorable Kevin Gross, and are docketed as case no. 15-10836. William Soncini, the Chief Operating Officer for each of the debtors since July 2014, has filed a declaration in support of the various petitions.  According to the Soncini declaration, the Debtors sell high quality women’s apparel and related products under their proprietary Frederick’s of Hollywood® brand.  According to Mr. Soncini, the debtors previously went through a bankruptcy filing between 2000 and 2003.  Recently, “in the face of growing liquidity issues and concerns about their ability to continue operating as a publicly listed company and a going concern, the Debtors were taken private by a consortium consisting of HGI Funding, LLC . . . , Tokarz Investments, LLC, TTG Apparel, LLC, Arsenal group, LLC, Fursa Alternatives Strategies LLC and William F. Harley, III, . . . , for an aggregate transaction value of approximately $24.8 million.”
2 weeks 12 hours ago
More and more legal businesses are finding themselves shut out of the banking system. But there are a number of possible solutions-including passing a law that would require banks to maintain accounts for businesses able to meet some standard of due diligence.

Read More from: BankThink

2 weeks 13 hours ago
You’ve got a lot to keep an eye on. You  probably regularly check the performance of your stocks. Your blood pressure. Your credit report. Your bank balance. Your team’s standings. Yet chances are, your home is your biggest investment and perhaps even the cornerstone of your retirement plan. But you have no idea what lurks in the file of your mortgage lender or its servicer. Where is the lender applying your payments?  To principal and interest?  To fees? Or is the money held in suspense? Does the monthly mortgage statement you see match the records on the servicer’s computer?  You would assume so, but assume at your peril. Got a mortgage modification?  Who knows what the lender’s records look like.  A client recently asked for a loan payoff and the response was off by $127,000! You need to know what the servicer is doing with your payments soon enough to fix it.
  • While you still have records, and recollection.
  • While the loan is still serviced by the current folks.
  • While you have time to fix errors.
How lenders get away with theft Nasty questions about your mortgage balance usually come up when time is short:  sale or refinance.
2 weeks 13 hours ago
Members of the US Armed Forces have just as much right to file for bankruptcy protection as civilians. In fact, while one or both spouses are away from home serving their country, it’s not unusual for bills to pile up. Recent economic conditions have made it difficult to make ends meet and being away for long periods of time means there is less of an opportunity to get a second or third job to pay down debt. While there are no restrictions on whether or not military members can file for bankruptcy, there are a few things to keep in mind. If you are planning a career in the military, or have your hopes set on working your way up the ranks, be aware that some of the higher ranks require security clearances. A bankruptcy on your record could squash your chances of being approved for those clearances. In fact, you may not get far in the process of promotion once you are forced to reveal that you’ve had an account delinquent by more than 180 days. Also, if you have had your wages garnished or any judgments against you, getting the high ranking security clearances will be extremely difficult, if not impossible.
2 weeks 13 hours ago
Judge Robert Gerber ruled last week that General Motors LLC (“New GM”), the entity formed in 2009 to acquire the assets of General Motors Corporation (“Old GM”), is shielded from a substantial portion of the lawsuits based on ignition switch defects in cars manufactured prior to New GM’s acquisition of the assets of Old GM in 2009. Judge Gerber determined that the lawsuits are barred by the provisions of the Sale Order he entered at that time, which transferred the assets to New GM “free and clear” of claims against Old GM (other than a narrow range of expressly assumed liabilities) and protected New GM from any claims based on theories of successor liability.

Read More from: Bankruptcy Law Insights

2 weeks 14 hours ago
In the same way that Napster and peer-to-peer file sharing changed the face of the recording industry, blockchain technology will force banks to reconsider their traditional roles.

Read More from: BankThink

2 weeks 15 hours ago
Russia has threatened to take Ukraine to arbitration unless the country pays its $3 billion bond in full. As Anna notes, the bond gives the holder the option to sue in English court or to arbitrate under the rules of the London Court of International Arbitration (LCIA). The LCIA is a preeminent international arbitration institution, but the choice of arbitration over litigation is an unusual one in this context. Non-consumer lenders typically prefer litigation to arbitration. As I've shown elsewhere, sovereign lenders share this preference. Arbitration clauses rarely appear in sovereign bonds unless (i) the issuer's internal law forbids it to submit to foreign court jurisdiction (e.g., Brazil, El Salvador) or (in English-law bonds) (ii) the issuer has not agreed to enforce English court judgments but has signed on to the New York Convention, which requires it to enforce foreign arbitration awards.

Read More from: Credit Slips

2 weeks 15 hours ago
Thanks to the folks who run Credit Slips for the opportunity to post.  I hope to be back in a few months with musings about the following: 
  1. Since the CFPB has very limited authority over auto finance, and since securitization of consumer auto loans is back with a vengeance and since low and moderate income folks desperately need used cars, we need to watch carefully this first post-crash subprime challenge. 
  2. Do preference recoveries redirect dollars in accordance with the goal of preference avoidance? With help from Ronald Mann I hope to do a small empirical study that others might replicate in their localities.Such information is crucial in figuring out the right size and shape for the preference recovery net. 
  3. Has the combination of the fall-off of law student numbers and the pressure toward more practice-oriented courses impacted the use of adjuncts in law schools?
  4. What are the factors behind the significant fall-off in insolvency work and is this a normal cycle or does it constitute institutional change for the business bankruptcy bar? I hope to combine my thinking with what I can learn from interviews with lawyers, lenders of every type, turnaround folks and academics who study this type of thing.   Till next time. 

Read More from: Credit Slips

2 weeks 15 hours ago
Receiving Wide Coverage ... Putting Postbank to Pasture: One way or another, Deutsche Bank plans to ditch its Postbank retail unit. The German megabank is leaning toward selling a majority stake in Postbank over the next year and a half whilst unloading a fifth of its investment-banking assets. But it's also considering the more drastic measure of getting out of retail altogether. The latter move has been recommended by some analysts, who say Deutsche should attempt...

Read More from: BankThink

2 weeks 15 hours ago
Frederick’s of Hollywood filed for bankruptcy protection Sunday with a $22.5 million offer in hand from Authentic Brands Group LLC. 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.”) PricewaterhouseCoopers LLP said it would pay $65 million to settle a class-action lawsuit over MF Global Holdings Ltd., WSJ reports. Women’s clothing chain Simply Fashion Stores Ltd. sought bankruptcy protection Thursday with plans to liquidate, DBR reports via WSJ. WSJ reports that Patriot Coal Corp., which left bankruptcy less than two years ago, sought help form restructuring advisers.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 15 hours ago
Frederick’s of Hollywood filed for bankruptcy protection Sunday with a $22.5 million offer in hand from Authentic Brands Group LLC. 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.”) PricewaterhouseCoopers LLP said it would pay $65 million to settle a class-action lawsuit over MF Global Holdings Ltd., WSJ reports. Women’s clothing chain Simply Fashion Stores Ltd. sought bankruptcy protection Thursday with plans to liquidate, DBR reports via WSJ. WSJ reports that Patriot Coal Corp., which left bankruptcy less than two years ago, sought help form restructuring advisers.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 15 hours ago
Funding Circle is the leading global marketplace for small business loans. We connect creditworthy small businesses who want to borrow with accredited investors and institutions who want to lend. Using technology to cut out the middleman, we can connect supply directly with demand for a fraction of the cost, creating a transparent marketplace that gives small businesses access to fast and affordable financing and investors the opportunity to invest in a new fixed income product. Read more here.
2 weeks 18 hours ago
When I tell people that I’m a student loan lawyer, I usually get a strange look. That’s followed by something like, “I didn’t think you could do anything about student loans.” It’s as if people are reading from a script, over and over again. Josh Cohen and I spend a lot of time training lawyers how to practice in the field of student loan law. But a lot more attorneys wonder whether there’s anything they can do to help people. There are lots of companies promising to help student loan borrowers. Why then, my lawyer friends wonder, would someone would hire an attorney instead of one of those companies? After all, it doesn’t seem as if a lawyer is worth the money. Better to spend less and hire one of those “student loan consultants” instead, right? Unless you know exactly what you need and are dealing with only a single federal loan, that’s half right. You may not need a lawyer – then again, you probably don’t need to hire anyone at all. But before you make the move to hire a consultant rather than a student loan lawyer, consider these points. A Student Loan Lawyer Can Be Cheaper Many consultants charge $1,000 or more for a federal student loan consolidation. Getting you into income-based repayment often costs about the same, if not more.
2 weeks 23 hours ago
Once you opt to surrender you home in your Oregon Bankruptcy, you will probably want to stay in the house for as long as you can. All too often we have seen Oregon Bankruptcy clients move out of homes in bankruptcy, thinking the foreclosure would soon follow. But lenders often change course. The rapid foreclosure that was on track for sale prior to the bankruptcy may now languish for months and sometimes years on end. So why not stay in the house for as long as you can. Moreover, if you live in a condo, HOA fees start to accrue after your case until the foreclosure is completed, so why not get something for your money. Once the foreclosure sale is completed, it’s time to contact the lender to make a “cash for keys” deal. Fulfilling your end of this deal may enable you to walk away with several thousand dollars to secure your first rental. Make sure the bank puts your deal in writing. The Department of Housing and Urban Development offers free counseling to help you negotiate and evaluate cash for keys offers.  Take advantage of this service. The downside is that these deals usually require that you leave the house in “broom clean” condition. You must treat your move out as you would if you were moving out of an apartment and were looking to get your deposit back. You really need to remove all furniture and clean up the home. You also must turn in all house keys and garage door openers or remotes. The bank will normally inspect the home after you move out.

Read More from: Oregon Bankruptcy Lawyer

2 weeks 1 day ago

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