Help Center

ABI Blog Exchange

Over the last several years, there have been a series of decisions rendered by the federal courts of appeals that grappled with the application of §510(b) to a claim that does not readily fall within the statute’s language.  Click here to read about the continuing expansion of §510(b).
9 years 1 month ago
Over the last several years, there have been a series of decisions rendered by the federal courts of appeals that grappled with the application of §510(b) to a claim that does not readily fall within the statute’s language.  Click here to read about the continuing expansion of §510(b).
9 years 1 month ago
In a recent decision by the Delaware Bankruptcy Court, the Court held that a person holding the title of an officer, including vice president, is presumptively what he or she appears to be — an officer and, thus, an insider.  See In re: Foothills Texas, Inc. et al. (Bankr. D. Del. 09-10542).  In Foothills Texas, the Debtors are independent energy companies engaged in the acquisition, exploration, exploitation and devlopment of oil and natural gas properties, and have 10 employees.  Two of the employees have the title of Vice President, and have a prepetition employment agreement (the “Employment Agreements”) that, if the agreements were assumed by the Debtors, would provide a retention payment to each of those employees.

Read More from: Absolute Priority

9 years 4 months ago
Under the GM deal reached with the Obama Administration, the US Government will own 60% of New GM — that is, the “leaner and meaner” GM (of course, only time will tell if that becomes the case).  The problem for the Obama Administration is that the US, between Chrysler and GM, has now ventured into ownership of private companies.  There are numerous interesting questions to ponder:  what will the US do if, in the most unlikely event, another bidder bids on the assets of the GM (I realize this is a virtual improbability)?  In such a case, would the Government enter into competitive bidding?  Would the answer to this question change if such a fantasy bidder is a foreign or sovereign entity compared to a private entity?  Assume the US is the successful bidder, which it will be, what happens if the US sells its 60% share shortly after New GM is formed — the US will likely take a substantial hit leaving the taxpayers out of the money (which will create a difficult political situation for the Obama Administration)?  On the other hand, if the Government does not sell its majority interest in New GM, will it start telling New GM (and Chrysler) what type of cars to make (no doubt they will be told to make small, “green” cars)?  Will it provide tax credits to those buying New GM (and Chrysler) cars?  Will it provide subsidies like China does for Chinese companies so that New GM and Chrysler appear profitable?  If the US Government attempts to alter the market either through subsidies,

Read More from: Absolute Priority

9 years 6 months ago
GM filed for Chapter 11 bankruptcy protection today in the United States Banrkuptcy Court for the Southern District of New York at 09-50026.  A copy of the petition is here, and a copy of the GM press release describing the bankruptcy proceedings are here.  To read a good discussion about the bankruptcy proceedings, click here.

Read More from: Absolute Priority

9 years 6 months ago
According to Bloomberg.com, U.S. Treasury and some of GM’s bondholders reached a deal today that will permit GM to file for bankruptcy on Monday, June 1, 2009 (Of course, notwithstanding this “deal”, GM would likely have filed by then anyway, but that’s all speculation now).   The deal will provide the bondholders 10% equity of new GM with warrants to purchase up to 15% more.  The union health trust will get 17.5% of the new equity and the US Government will get up to 72.5%.   The details of the deal and proposed DIP financing are set forth in GM’s 8-K that was filed today.

Read More from: Absolute Priority

9 years 6 months ago
Updating a story we reported here, Margaret Diekemper was sentenced to two years of probation and a $500 fine for her role in a bankruptcy fraud scheme in the Southern District of Illinois following a plea agreement reached with the government last November.  Diekemper was also prohibited from any contact with her husband - whose sentencing hearing is scheduled for next month.  Federal prosecutors asked U.S. District Judge G. Patrick Murphy to impose a one year term of imprisonment, citing the defendant's cooperation with the government in their case against her husband.  Judge Murphy imposed probation after remarking that Diekemper's "overbearing, ignorant" husband seemed to bear the most responsibility for their involvement in the bankruptcy fraud scheme. 
9 years 9 months ago
Updating a story we reported here, Margaret Diekemper was sentenced to two years of probation and a $500 fine for her role in a bankruptcy fraud scheme in the Southern District of Illinois following a plea agreement reached with the government last November.  Diekemper was also prohibited from any contact with her husband - whose sentencing hearing is scheduled for next month.  Federal prosecutors asked U.S. District Judge G. Patrick Murphy to impose a one year term of imprisonment, citing the defendant's cooperation with the government in their case against her husband.  Judge Murphy imposed probation after remarking that Diekemper's "overbearing, ignorant" husband seemed to bear the most responsibility for their involvement in the bankruptcy fraud scheme. 
9 years 9 months ago
According to this Wisconsin State Journal article, Ismail Beciri was charged in the Western District of Wisconsin with four counts of structuring financial transactions to avoid federal reporting requirements after a federal agents searched his home for evidence of bankruptcy fraud.  Beciri filed bankruptcy in November 2007.  During the course of a search for evidence of bankruptcy fraud, authorities uncovered evidence that Beciri had cashed approximately 60 checks totalling nearly $450,000 in several banks across Wisconsin, according to the Journal.  The status of the bankruptcy fraud investigation is unclear.
9 years 11 months ago
According to this Wisconsin State Journal article, Ismail Beciri was charged in the Western District of Wisconsin with four counts of structuring financial transactions to avoid federal reporting requirements after a federal agents searched his home for evidence of bankruptcy fraud.  Beciri filed bankruptcy in November 2007.  During the course of a search for evidence of bankruptcy fraud, authorities uncovered evidence that Beciri had cashed approximately 60 checks totalling nearly $450,000 in several banks across Wisconsin, according to the Journal.  The status of the bankruptcy fraud investigation is unclear.
9 years 11 months ago
In a previous post (here) we commented that the Judicial Conference of the United States had certified to the House of Representatives that impeachment proceedings may be warranted against U.S. District Judge G. Thomas Porteus (E.D. La.) and the House Judiciary Committee has formed a task force to investigate the matter.  While no new developments have come to light, the certification documents do shed light on the nature of the allegations against Judge Porteus - and they include several bankruptcy criminal charges. According to the certification document (available here), the Judicial Conference's determination is based upon "substantial evidence" that Judge Porteus (1) repeatedly signed false financial reporting forms under oath concealing cash and other gratuities solicited and received from lawyers who appeared in proceedings before him; (2) made false representations to gain extension of a bank loan; and (3) "repeatedly committed perjury" by signing false statements under oath in a personal bankruptcy proceeding enabling him to discharge his debts.
9 years 11 months ago
In a previous post (here) we commented that the Judicial Conference of the United States had certified to the House of Representatives that impeachment proceedings may be warranted against U.S. District Judge G. Thomas Porteus (E.D. La.) and the House Judiciary Committee has formed a task force to investigate the matter.  While no new developments have come to light, the certification documents do shed light on the nature of the allegations against Judge Porteus - and they include several bankruptcy criminal charges. According to the certification document (available here), the Judicial Conference's determination is based upon "substantial evidence" that Judge Porteus (1) repeatedly signed false financial reporting forms under oath concealing cash and other gratuities solicited and received from lawyers who appeared in proceedings before him; (2) made false representations to gain extension of a bank loan; and (3) "repeatedly committed perjury" by signing false statements under oath in a personal bankruptcy proceeding enabling him to discharge his debts.
9 years 11 months ago
Tammy Beecher and Wyatt Beecher, a Pennsylvania couple, were each sentenced to fifteen days in prison by U.S. Magistrate Judge J. Andrew Smyser in the Middle District of Pennsylvania for contempt of court for untruthful conduct in their joint bankruptcy case. According to a press release issued by the U.S. Attorney's Office, the Beechers filed a chapter 7 bankrutpcy petition in May 2007.  The filing stated that the Tammy Beecher had no income and that neither debtor had been involved in the operation of a business within the previous six years.  In fact, the Beechers owned a family business, "Fun 4 Kids Entertainment."  Only after the Beecher’s were presented with a coupon for $5 off any party, and reminded by the chapter 7 trustee they signed the bankruptcy petition under penalty of perjury, did the Beecher’s admit that the business had been operated on-and-off for the past three years.
9 years 11 months ago
Tammy Beecher and Wyatt Beecher, a Pennsylvania couple, were each sentenced to fifteen days in prison by U.S. Magistrate Judge J. Andrew Smyser in the Middle District of Pennsylvania for contempt of court for untruthful conduct in their joint bankruptcy case. According to a press release issued by the U.S. Attorney's Office, the Beechers filed a chapter 7 bankrutpcy petition in May 2007.  The filing stated that the Tammy Beecher had no income and that neither debtor had been involved in the operation of a business within the previous six years.  In fact, the Beechers owned a family business, "Fun 4 Kids Entertainment."  Only after the Beecher’s were presented with a coupon for $5 off any party, and reminded by the chapter 7 trustee they signed the bankruptcy petition under penalty of perjury, did the Beecher’s admit that the business had been operated on-and-off for the past three years.
9 years 11 months ago
Eunice Roper-Allen, of the Allen Funeral Home, who was indicted last month in the Central District of Illinois, has entered a not guilty plea to charges that she concealed assets in her bankruptcy case and defrauded a funeral home client by falsifying a decedent's funeral expenses. In the three bankruptcy-related counts, the indictment charges Roper-Allen with concealing two bank accounts, a van and real estate located in Michigan.  The defendant is also charged with failing to disclose a 2005 judgment against her in the approximate amount of $70,000. In other charges, Roper-Allen is accused of committing mail fraud in a scheme to defraud a customer of $44,000.  According to the indictment, Roper-Allen advised the customer to deposit into Roper-Allen's account $84,000 that belonged to a deceased relative in order to circumvent probate proceedings.  Roper-Allen later returned $40,000 together with falsified checks and receipts of fake funeral expenses to account for the difference.
9 years 11 months ago
Eunice Roper-Allen, of the Allen Funeral Home, who was indicted last month in the Central District of Illinois, has entered a not guilty plea to charges that she concealed assets in her bankruptcy case and defrauded a funeral home client by falsifying a decedent's funeral expenses. In the three bankruptcy-related counts, the indictment charges Roper-Allen with concealing two bank accounts, a van and real estate located in Michigan.  The defendant is also charged with failing to disclose a 2005 judgment against her in the approximate amount of $70,000. In other charges, Roper-Allen is accused of committing mail fraud in a scheme to defraud a customer of $44,000.  According to the indictment, Roper-Allen advised the customer to deposit into Roper-Allen's account $84,000 that belonged to a deceased relative in order to circumvent probate proceedings.  Roper-Allen later returned $40,000 together with falsified checks and receipts of fake funeral expenses to account for the difference.
9 years 11 months ago
The trial of Louis Rivas on a multitude of bankruptcy and non-bankruptcy criminal charges arising from the collapse of his foreign curency exchange firm, The Forex Project (discussed in this post), has been re-scheduled to July 20, 2009. U.S. District Judge Curtis Collier granted a common defense motion to extend the speedy trial limits due to the complexity of the case.  Among voluminous discovery materials to be reviewed, the case includes over 500 witness located in more than 20 states.  A summary of the charges and access to the indictment is available here.
9 years 11 months ago
The trial of Louis Rivas on a multitude of bankruptcy and non-bankruptcy criminal charges arising from the collapse of his foreign curency exchange firm, The Forex Project (discussed in this post), has been re-scheduled to July 20, 2009. U.S. District Judge Curtis Collier granted a common defense motion to extend the speedy trial limits due to the complexity of the case.  Among voluminous discovery materials to be reviewed, the case includes over 500 witness located in more than 20 states.  A summary of the charges and access to the indictment is available here.
9 years 11 months ago
According to this news report, Calisto Tanzi, the founder of Italian food manufacturer Parmalat was sentenced earlier this month in Milan to serve ten years in prison for his criminal role in the firm's well-publicized collapse.  Tanzi was convicted and sentenced on bankruptcy fraud and criminal association charges.  Dubbed "Europe's Enron," the Parmalat collapse resulted in a series of criminal trials including two of Tanzi's adult children (who negotiated lighter prison sentences) and numerous other defendants.  Three employees of Bank of America were acquitted of related charges.  Tanzi is the first Parmalat executive to sentenced to prison.
9 years 11 months ago
According to this news report, Calisto Tanzi, the founder of Italian food manufacturer Parmalat was sentenced earlier this month in Milan to serve ten years in prison for his criminal role in the firm's well-publicized collapse.  Tanzi was convicted and sentenced on bankruptcy fraud and criminal association charges.  Dubbed "Europe's Enron," the Parmalat collapse resulted in a series of criminal trials including two of Tanzi's adult children (who negotiated lighter prison sentences) and numerous other defendants.  Three employees of Bank of America were acquitted of related charges.  Tanzi is the first Parmalat executive to sentenced to prison.
9 years 11 months ago