July Total Bankruptcy Filings Decreased 8 Percent from Last Month, Commercial Chapter 11s Fall 44 Percent

Total U.S. bankruptcy filings decreased 8 percent in July 2017 from June, according to data provided by Epiq Systems, Inc. Total filings registered 61,366 in July 2017, down from the June 2017 total of 66,789. The 58,522 consumer filings in July also represented an 8 percent drop from the previous month’s consumer total of 63,372. July business filings decreased 17 percent to 2,844 from June’s business total of 3,417. Commercial chapter 11 filings registered a 44 percent decrease in July as the 325 filings were down from last month’s total of 582.

Commentary: Congress Is Not Done Yet with Puerto Rico

The enactment of PROMESA in June 2016 opened a new chapter in U.S./Puerto Rico relations, according to a commentary in The Hill on Tuesday. After decades of what can be charitably described as benign neglect, Congress recognized in 2016 that it has a moral obligation under the U.S. Constitution to foster the welfare of the U.S. citizens that live in Puerto Rico. Unfortunately, both the fiscal plan and the budget for fiscal year 2018 that have been certified by the federal Fiscal Oversight Board impose significant austerity measures in the short term, according to the commentary. The most likely result of the implementation of these policies will be a further contraction of the Puerto Rican economy: increased unemployment, poverty and inequality, thus generating further migration to the mainland and lower tax revenues in the island as the tax base shrinks, which will lead to calls for more cuts in government services, less government services in turn will lead to a general decrease in quality of life and living standards, which will result in yet more “push” migration to the mainland. Puerto Rico needs to devise and execute a complex, two-prong strategy to restore economic growth. First, it has to jumpstart economic growth in the short term. Second, the island needs to formulate an economic development plan to sustain that growth over the long term, something it has failed to do for quite some time.

Analysis: How Risky Loans Are Kept Afloat in Alphabet Soup

The last financial crisis cleared out an alphabet soup of complex credit products. One type, however, has returned in droves in recent years, although popularity is now threatening their viability, the Wall Street Journal reported on Tuesday. This product is collateralized loan obligations (CLOs), which buy portfolios of risky, leveraged loans often used by private-equity firms in buyouts. In the U.S., new CLO volumes have outstripped pre-crisis totals since 2014, while Europe is catching up to its previous levels fast. But returns from the loans they buy are getting squeezed as money from retail and institutional investors rushes in alongside CLOs to snap up loans. That could bring CLOs to a painful halt again. The biggest CLO managers, such as Blackstone’s GSO Capital Partners, Carlyle Group, Investcorp and Alcentra, run billions of dollars’ worth of deals. Such vehicles own more than 60 percent of the more than $900 billion in outstanding U.S. leveraged loans, according to S&P Global LCD.

Supreme Court Announces E-Filing Is Coming Soon

The U.S. Supreme Court announced today that electronic filing of case documents will be required beginning on Nov. 13, the National Law Journal reported today. A press release from the court said, "A quick link on the Court’s website homepage will provide access to the new system, developed in-house to provide prompt and easy access to case documents. Once the system is in place, virtually all new filings will be accessible without cost to the public and legal community." The system will not be part of PACER, the longstanding operation used by lower federal courts, which charges for documents by the page up to 30 pages. A new button called "Electronic Filing" appeared today on the court's main page.

Participate in Next Consumer Commission Meeting on Sept. 15 at NABT

The Committee on Chapter 7 of the ABI Commission on Consumer Bankruptcy will hold a public meeting during the National Association of Bankruptcy Trustees (NABT) on September 15 from 12:30 to 2:00 PM in the Marriott New Orleans in New Orleans, Louisiana. For more information, including submission guidelines, please click here.

A list of topics under consideration by the Commission is available on the Commission’s website at https://consumercommission.abi.org/. To submit any comments or suggestions for the Commission, please e-mail [email protected].

Read available written testimony from the 7/15 open meeting at NACTT’s annual seminar by clicking at the bottom of this page (linked by name).

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