Overview of ABI's National Study of Individual Chapter 11 Bankruptcies

by Anne Lawton
Professor of Law, Michigan State University College of Law

Recently, Profs. Richard Hynes Margaret Howard and I completed the National Study of Individual Chapter 11 Bankruptcies, a project funded by a grant from ABI’s Anthony H.N. Schnelling Endowment Fund. Our findings are published in the Winter 2017 issue of the ABI Law Review. The study found that individuals filed more than 30 percent of the chapter 11 cases filed in the years covered by the study (2010 and 2013). A significant number of these debtors could have filed for chapter 13, but decided not to do so. The fact that many debtors opted for chapter 11 rather than chapter 13 indicates that these debtors considered chapter 11 to be a better fit for their needs. Moreover, more than a third of the debtors in the study successfully reorganized in chapter 11.

Commentary: The Trillion-Dollar Credit Card Question

After years of packing on debt, more American consumers are increasingly struggling to pay their credit card bills, according to a Bloomberg commentary yesterday. Credit card charge-offs have been rising steadily, posting their biggest surge since 2015 in February. Lenders from Capital One Financial Corp. to Discover Financial Services have ratcheted up loan-loss provisions and reported increasing delinquencies. This has raised concern among analysts and investors alike, especially when paired with the fact that card loans outstanding just surpassed $1 trillion for the first time since the financial crisis.

 

California Supreme Court to Review State Law Eliminating Pension Benefit

The California Supreme Court yesterday agreed to review the legality of 2013 legislation, challenged by labor unions, that eliminated a pension benefit for hundreds of thousands of state and local government employees in California, the San Francisco Chronicle reported today. The justices voted unanimously to grant a hearing to the unions and decide whether the law violated the rights of employees to the pension benefits that were available when they were hired. This benefit, which lawmakers had approved in 2003, allowed employees with at least five years of service to purchase up to five years of additional credits before retiring. A worker who retired after 20 years, for example, could pay for the right to receive a pension based on 25 years of contributions. The 2003 law did not increase costs to government employers, but it added to pensions at a time when statewide public-retirement systems were facing increasing deficits, estimated to now be at $500 billion or more according to recent studies. Legislators cited those deficits in 2013 when they barred employees from buying future retirement credits.

 

Commentary: The $7 Trillion Hazard that Lies Beneath the M&A Boom

With a bankruptcy filing looming, the Westinghouse Electric Co. nuclear business delivered one last stinging blow to Japanese parent Toshiba Corp.'s balance sheet in February: a 712.5 billion yen ($6.4 billion) goodwill writedown. But Toshiba probably won't be the last big company to rue overpaying for assets, according to a Bloomberg commentary on Tuesday. The global M&A boom has left a giant footprint on corporate balance sheets, and we're not just talking about all that debt. Goodwill — the difference between what assets are worth on paper and how much an acquirer paid for them — is also soaring, and that could spell trouble for corporate earnings. At S&P 500 companies, goodwill has risen by two-thirds over the past decade and accounts for more than one-third of net assets.

 

ASM Spotlight: Former U.S. Energy Secretary Spencer Abraham to Examine E&P Industry Recovery, Future Policy

Former Senator and U.S. Energy Secretary Spencer Abraham will provide the luncheon keynote at the Annual Spring Meeting next Friday, April 21. Sworn in as the U.S.’s 10th Energy Secretary in 2001, Abraham led efforts to broaden America's international energy partnerships, working with China, Japan, Russia, the E.U., countries in South America and Africa, and certain OPEC nations. Prior to being named Secretary of Energy, Abraham served as a U.S. Senator from Michigan for six years, chairing two subcommittees: Manufacturing and Competitiveness, and Immigration. Abraham is currently chairman and CEO of The Abraham Group, an international strategic consulting firm based in Washington, D.C., and a principal at Blank Rome Government Relations LLC in Washington.

Don't miss the engaging speakers and sessions at the 2017 Annual Spring Meeting! Click here for more information and to register.

Sign up Today to Receive Rochelle’s Daily Wire by E-mail!
Have you signed up for Rochelle’s Daily Wire in the ABI Newsroom? Receive Bill Rochelle’s exclusive perspectives and analyses of important case decisions via e-mail!

Tap into Rochelle’s Daily Wire via the ABI Newsroom and Twitter!