Help Center

ABI Blog Exchange

If alternative small-business lenders don't get engaged in the regulatory dialogue, they risk letting a few bad apples determine their fate.

Read More from: BankThink

2 weeks 3 days ago
Overview This is the bankruptcy case study for Mr. and Mrs. C., who reside in Addison, Illinois. Although the case will be filed in DuPage County, the majority of the assets reside in another county. Let’s begin with the fact that the couple rents their current home in Addison. Their former home was foreclosed upon+ Read More The post Bankruptcy Case Study For May, 2016 appeared first on David M. Siegel.
2 weeks 3 days ago
In a recent decision, the United States District Court for the Southern District of Texas affirmed the bankruptcy court’s rejection of the cost methodology to value the right to use common amenities in a condominium development and, in the process, bolstered the notion that bankruptcy courts have discretion in determining what valuation methodologies are appropriate under the facts and circumstances of a particular case.   Diamond Beach Diamond Beach is a luxury condominium project in Galveston, Texas.  The International Bank of Commerce financed the land and construction costs for the project.  Randall J. Davis, the project’s principal owner, guaranteed a portion of the bank’s debt.  As originally conceived, the project would be built in two phases, which would share a “lavish array” of recreational facilities (for example, the largest resort pool in Texas) referred to as the “common amenities.”  Importantly, the common amenities were not commonly owned:  Phase I owned the common amenities, while Phase II merely possessed a right to use them.
2 weeks 3 days ago
It is imperative for regulators and lawmakers to approach the online small business loan market with care and an understanding of how these lenders expand access to credit.

Read More from: BankThink

2 weeks 3 days ago
Receiving Wide Coverage ... Growing Pains: The toppling of Lending Club chief executive Renaud Laplanche Monday is sure to bring heightened investor scrutiny and concerns about the peer-to-peer business model of the broader online lending industry, which has already been reporting slowing investor demand for loans or drops in lending volume this year, and now needs to prove its members won't be the ones getting disrupted, the Journal says. Legacy banking institutions have been welcoming to...

Read More from: BankThink

2 weeks 3 days ago
In a decision last month in Whyte v. SemGroup Litig. Trust (In re Semcrude L.P.), No. 14-4356, 2016 U.S. App. LEXIS 7690 (3d Cir. Apr. 28, 2016), the United States Court of Appeals for the Third Circuit held that proving that a debtor was left with unreasonably small capital will not turn on either hindsight or a “speculative exercise” based on what might have happened if certain things were known at the time.  Even though the decision was “not-precedential” since it was not issued by the full court, because it affirmed decisions of the bankruptcy and district courts, it is likely to have far-reaching significance in fraudulent conveyance litigation. Under Section 548(a)(1)(B) of the Bankruptcy Code (and similar state-law fraudulent conveyance statutes), a transaction by a debtor may be set aside as constructively fraudulent if it can be proven that the debtor (i) received less than reasonably equivalent value in exchange, and (ii) was left with “unreasonably small capital” following, or according to some courts, as a result of the transfer.  But what does “unreasonably small capital” actually mean?  After all, the term is “is fuzzy, and in danger of being interpreted under the influence of hindsight bias.”  Boyer v. Crown Stock Distrib., Inc., 587 F.3d 787, 794 (7th Cir. 2009).

Read More from: eSQUIRE Global Crossings

2 weeks 3 days ago
  The Court in In re Doucet, No. 15-21531, 2016 WL 2603072 (Bankr. D. Kan. May 3, 2016) confirmed a chapter 13 plan paying only attorneys fees, after an extensive analysis of the current case law on the issue.  The Debtor had obtained an order to pay the filing fee in installments, was below median-income, and had no prior cases in the last 8 years.  She supported three dependents, including a 31 year old daughter.  The plan proposed 36 payments of $90 to pay $2,900 attorneys fees and the $310 court filing fee with no dividend to unsecured creditors.  She was employed as a registered nurse with $2,840 gross monthly income.  She owned no real estate, had no unsecured creditors, and no significant non-exempt assets.   The Debtor asserted she has insufficient funds to employ chapter 7 counsel, and may never be able to save funds to do so.  She indicated she was unable to get assistance from friends or family to pay counsel.  She had faced 17 garnishment actions since 2006, at least three of her vehicles had been repossessed, and she had faced numerous eviction actions.  The chapter 13 trustee argued that the “inability to pay attorneys fees for the filing of a Chapter 7, does not constitute ‘special circumstances' permitting the case to proceed as a Chapter 13.  The trustee did not object to the feasibility or reasonableness of the $2,900 fee requested.

Read More from: Tampa Bankruptcy

2 weeks 3 days ago
[wsj-responsive-image P="//art.wsj.net/api/photos/29926449/smartcrop?height=499&width=749" J="//art.wsj.net/api/photos/29926449/smartcrop?height=639&width=959" M="//art.wsj.net/api/photos/29926449/smartcrop?height=853&width=1280" credit="Getty" placement="Inline" suppressEnlarge="false" ] Chaparral Energy Inc. filed for chapter 11 bankruptcy protection, and the oil and gas driller is looking to negotiate a debt-for-equity swap with lenders and bondholders. 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.”) Netflix Inc. is threatening to release two movies produced by Relativity Media LLC, which recently exited bankruptcy, before they are released in theaters, DBR reports via WSJ.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 3 days ago
The Mime Artist: An information vacuum By Donald L. Swanson I’m mediating a bankruptcy valuation dispute between a bank secured creditor and debtor. The asset is a building in need of repair. The dispute has been pending for a short while, and a hearing on declaration evidence is to occur soon. During the mediation, the banker says: “We need to see the building. We can’t settle without seeing the building.” These words may not seem like a major problem. But I know, in real time, that we have a problem: this mediation is at a crossroads—and the problem is probably insurmountable. I know that, as soon as the parties walk out my door, the mediation is over. Period. No matter what I say or do, when they leave to inspect the property, all parties will view the mediation as a failed effort and will not come back. Here’s why: –The mediation experience of the attorneys is in non-bankruptcy cases. In their experience, mediation commonly occurs after they’ve been through a year or more of interrogatories, requests for admission, requests for production, inspections of property, depositions and disputes over all such discovery things. –In their experience, mediation rarely happens when a large discovery vacuum exists. So, they view mediation as a one-and-done session: if a settlement doesn’t happen during the one session, the mediation is over. Period.

Read More from: Mediatbankry

2 weeks 3 days ago
Are you recession ready? Most Americans are not.  How Recession Ready Are You? Neal Gabler in the Atlantic discloses that he is one of the Americans who is not recession ready.  47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to [...] The post Are You Ready For The Next Recession? appeared first on Detroit Bankruptcy Lawyer Kurt O'Keefe.

Read More from: Stop Creditor

2 weeks 3 days ago
On May 5, 2016, SRC Liquidation, LLC International Holdings, LLC (“Liquidating Debtor”), filed approximately 137 complaints seeking the avoidance and recovery of allegedly preferential and fraudulent transfers under Sections 547 and 550 of the Bankruptcy Code.  The Liquidating Debtor also seeks to disallow claims of such preference defendants under Sections 502(d) and (j) of the Bankruptcy Code. SRC Liquidation, LLC (f/k/a SRC Liquidation Company f/k/a The Standard Register Company) and/or its related debtors (collectively, the “Debtors”) filed voluntary petitions for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on March 12, 2015 under Chapter 11 of the Bankruptcy Code.   On November 19, 2015, the Court entered an order confirming the Debtors’ Second Amended Chapter 11 Plan of Liquidation for SRC Liquidation Company and its Affiliates (the “Plan”).  The Plan became effective on December 18, 2015. The law firms of ASK LLP and Bayard, P.A. represent the Liquidating Debtors in these various preference cases.  The pretrial conference has not yet been scheduled. For preference defendants looking for an analysis of defenses that can be asserted in response to a preference complaint, attached is a reference guide prepared on the subject: “A Preference Reference: Common Issues that Arise in Delaware Preference Litigation.”
2 weeks 3 days ago
On May 6, 2016, we had the occasion to observe a hearing on a motion to dismiss filed in Skybridge Spectrum Foundation’s bankruptcy case, Case No. 16-10626 (CSS). The company, which identified itself as a developer of wireless bandwidth technology, filed for Chapter 11 protection in March. In his first-day declaration filed March 29, the company’s principal, Warren C. Havens, said the company sought court protection to preserve the going concern value of its estate.  On April 15, 2016, Dr. Arnold Leong filed the Motion to Dismiss [D.I. 55], alleging that he has been in a dispute with Mr. Havens about the ownership of the Debtor’s FCC licenses (as well as those of seven related entities) for the past 14 years.  This dispute has occurred within the California State Courts, and on November 16, 2015, the Superior Court appointed a receiver.  The Superior Court then authorized the sale of a number of FCC licenses, which Mr. Leong alleges prompted the bankruptcy filing (which occurred 14 days after the sale order was entered).
2 weeks 3 days ago
We should all understand now that pure gain-on-sale marketplace lending businesses, like LendingClub, are inherently unstable.

Read More from: BankThink

2 weeks 3 days ago
After counseling clients during the initial free consultation, I am sometimes asked by people considering bankruptcy, what I would do if I were in their shoes.  Bankruptcy is a personal choice and only those individuals can really understand what financial challenges they are facing (i.e., harassing calls, the inability to pay all monthly bills, etc.).  Some people can handle collection calls better than others.  Some people experience extreme anxiety when contemplating how to make their mortgage payment and lose sleep over the fact that they are struggling to provide for their families.  If you are contemplating bankruptcy, only you can know whether bankruptcy will work for you.

Read More from: Bonds & Botes, P.C.

2 weeks 3 days ago
The Federal Reserve recently held a two-day meeting, at which the country’s central banking system announced that it will not be raising interest rates, which could mean that more personal bankruptcies are on the way as the economy continues to struggle. Although the decision not to change the interest rate has at least temporarily allayed some market watchers’ concerns about what might happen if the Fed reacted too strongly to a stagnating economy, there remain fears that the government will be helpless when it comes to stopping another recession. Will the Fed Eventually Raise Interest Rates? Some economic experts still believe that the Fed will eventually have little choice but to raise interest rates as the U.S. economy remains stagnant – something that the Fed did not dispel when it indicated that a rate hike could still be coming in June. Earlier this year, several market observers predicted at least two interest rate hikes before the end of 2016. When determining whether to raise the interest rate, the Fed will likely consider a number of factors, such as the inflation rate and any “global economic and financial developments.”
2 weeks 4 days ago
On April 25, 2016, Judge Glenn of the Bankruptcy Court for the Southern District of New York issued a memorandum in an adversary proceeding in which neither of the two non-debtor parties apparently wanted to be in the Southern District of New York.  Without addressing the merits of the underlying case, Judge Glenn ruled on the plaintiff’s motion to remand the proceeding to state court on the basis of lack of subject matter jurisdiction and the defendant’s competing motion to transfer venue to the Eastern District of Virginia.  In his decision, Judge Glenn emphasizes the breadth of bankruptcy court subject matter jurisdiction, to the point that the bankruptcy court can retain jurisdiction in certain cases to hear exclusively state law disputes between non-debtor parties even after confirmation of the related chapter 11 plan.  Background
2 weeks 4 days ago
The Federal Reserve deserves praise for a proposal that would strengthen financial stability by eliminating the rights of counterparties to tear up derivatives contracts in a failure.

Read More from: BankThink

2 weeks 4 days ago
I talk with clients about walking away from underwater houses day after day. *
  • The  mortgage payments on their home eat up fifty percent or more of their income.
  • They’re struggling now, and the mortgage will reset soon.
  • Attempts to modify the mortgage are fruitless.
  • They expect a foreclosure notice any day.
Yet despite the pain and the roadblocks,  these clients express reluctance to move because of the impact on their children.
It’s our home, they intone.
It’s as though there can be only ONE home, and it’s this piece of real estate. They imagine that moving will scar the kids and render them insecure and vulnerable. Leaving a home that offers nothing but debt nonetheless seems to be a horrendous and overwhelming prospect. More than their stressed-out selves can manage. Moving away from bad mortgage That’s the parade of horrors that march through the minds of those facing decisions about a bad housing situation. I got a peek at the actual impact of moving from a former client last week:  sheer and utter delight!   The two children, middle school and high school, were happy, making friends, and making grades. The family had rented spacious and fresh housing in a lower cost community at less than 25% of the mortgage on the over encumbered house here. The family income covered their living expenses and  they were able to make  provision for some savings.
2 weeks 4 days ago
The U.S. Bankruptcy Court for the Eastern District of Michigan recently considered the issue of whether a Chapter 7 trustee may bring a cause of action against a debtor for damages caused to the bankruptcy estate by the debtor’s alleged failure to comply with the debtor’s duties under section 521 of the Bankruptcy Code. Under the circumstances, the court held that no private cause of action existed and thus ruled in favor of the debtor on the issue.[1] Read More › Tags: Chapter 7, Eastern District of Michigan

Read More from: Michigan Bankruptcy Blog

2 weeks 4 days ago
David Ampaw and Chris Parker have been promoted to partner in the restructuring group in DLA Piper’s London office. Mr. Ampaw has advised clients in restructurings, workouts and insolvencies in the U.K. and abroad, and he has experience in the oil and gas industry. Mr. Parker has experience with fraud, investigations and litigation in complex restructurings. He also worked on Lehman Brothers’ bankruptcy case in Europe. William Ellis has joined the Akerman firm as a partner. Mr. Ellis, who will work in the real estate group, has experience in real estate workouts and restructurings, financings and corporate mergers and acquisitions. He has represented hotels, banks, lenders and other parties. Mr. Ellis earned his law degree from the University of Michigan.

Read More from: WSJ.com: Bankruptcy Beat

2 weeks 4 days ago

Pages