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Receiving Wide Coverage ... Geithner's Turn: Most papers weighed in with coverage of Timothy Geithner's testimony on Tuesday, from Maurice "Hank" Greenberg's lawsuit challenging the federal bailout of AIG. Geithner spent six hours in a federal court witness box, so there was plenty of material to choose from. In one exchange, Greenberg's lawyer, David Boies, asked Geithner why he hung up before the end of a conference call on Sept. 16, 2008, during the Fed boardÂ...

Read More from: BankThink

5 years 1 week ago
In “Getting Over the Scariness of Filing an Involuntary Bankruptcy Petition,”Commercial Bankruptcy Litigation (October 7, 2014), commercial bankruptcy attorney William Barrett argues that the risks of filing and involuntary bankruptcy petition are often overstated and can forestall an effective means for maximizing recovery on debt through a bankruptcy case. Read the full article here or visit www.commercialbankruptcylitigation.com for more info.
5 years 1 week ago
As an early investor in Starbucks, Kenny G’s stock soared after the company’s IPO – up 12,000 percent. While his music earnings have spiraled downward due to digital downloads and music piracy, Gorelick’s stock portfolio has only gotten bigger, boasting about 30 companies. What’s the secret to his success? Visit Accredited Investor Markets to earn more about what Kenny G knows, here.  
5 years 1 week ago
Believe it or not, there are certain circumstances where you are too broke to file. You simply don’t have the means to even come up with the filing fee which is $335. Just yesterday, a potential client walked 45 minutes to see me in my office. Not only was he unemployed, but he had his+ Read More The post Can You Be Too Broke To File Bankruptcy? appeared first on David M. Siegel.
5 years 1 week ago
Regardless of whether a creditor has a claim identified in a debtor’s schedules of assets and liabilities, generally speaking, most attorneys representing creditors in the context of a chapter 11 case will advise their clients to file a formal proof of claim with the bankruptcy court.  Often this is just “belts and suspenders” and a matter of good practice but, if nothing else, a formal proof of claim will serve to protect a creditor’s rights and interests vis à vis the estate. In many cases, however, some creditors, for whatever reason, either forget or simply fail to file a proof of claim prior to the expiration of the bar date. Although the usual effect would be that the claim would be barred against the estate, a recent decision out of the United States Bankruptcy Court for the District of Idaho shows that all may not be lost because another document prepared by the creditor (there, a declaration submitted to the United States Trustee) may serve as an effective “informal proof of claim.”    Background
5 years 1 week ago
While the Volcker Rule has been in the works since 2009, the final rule is new to professionals at both banks and regulatory agencies. Everyone involved faces a steep learning curve.

Read More from: BankThink

5 years 1 week ago
Zazzali v. Wavetronix LLC (In re DBSI, Inc.), No. 12-cv-1211 (GMS), et al. (D. Del. Sept. 25, 2014)

Read More from: Delaware Bankruptcy Insider

5 years 1 week ago
Congress should amend the bankruptcy code to permit borrowers to discharge student loan debt if their net monthly income is insufficient.

Read More from: BankThink

5 years 1 week ago
Since some companies have made significant changes to the presentation of their proxy statements, Keith Higgins, Director of the SEC’s Division of Corporation Finance, is encouraging companies to make “similar strides” with their periodic reports, such as experimenting with layout, reducing duplication and eliminating stale information. The SEC staff is willing to discuss potential changes with companies, although they will not pre-clear specific disclosures.  
5 years 1 week ago
Not much new to say from the last time, except that this contempt order was signed by the judge. Argentina must "reverse entirely" the steps it has taken to remove BNY-Mellon and install a new trustee and otherwise start "complying completely" with the injunction. Or else....? The order doesn't say. So, Argentina has been ordered to stop violating orders. If it doesn't, it will be in violation of another order. Which means basically nothing. Perhaps there was some doubt as to whether the judge meant the injunction as sort of a suggestion? Or perhaps this signals that the judge plans to skip the whole unenforceable-monetary-fine thing and get right to more innovative contempt sanctions if (when) Argentina fails to comply. Or maybe the order is an attempt to defer the confrontation as long as possible. Yawn. Wake me when something interesting happens.  

Read More from: Credit Slips

5 years 1 week ago
Heatherwood Holdings, LLC v. HGC, Inc. (In re Heatherwood Holdings, LLC), 746 F.3d 1206 (11th Cir. 2014) – A chapter 11 debtor owned property that had always been used as a golf course and club. When it requested that it be … Continue reading →
5 years 1 week ago
The IMF released its long-awaited paper on sovereign debt contract reform, advocating single-tier aggregated collective action (majority amendment) clauses and a clarification of the pari passu clause to preclude its future use to block payments on restrutured bonds, a la NML v. Argentina. An accessible summary of key points per IMF GC Sean Hagan is here. The recommendations were coordinated with ICMA (whose reform proposal is discussed here and here), as well as wealthy and emerging market governments.

Read More from: Credit Slips

5 years 1 week ago
Jonathan Young and Dana Hefter wrote a great article in the August 2014 ABI Journal examining In re Rodriguez, Adv. No. 11-07012 (S.D. Tex. June 5, 2013), in which Judge Isgur held that an attorney signing a proof of claim on behalf of a creditor became a fact witness, and consequently waived attorney-client privilege and work product immunity through offensive use.  Their article is a must-read for all bankruptcy attorneys, and any non-bankruptcy attorneys who find themselves confronting Official Form B10 on behalf of clients. I do not have much of substance to add to Jonathan and Dana’s article, other to thank them for being thorough and for having excellent timing.  I read the article less than a week before I was getting ready to prepare a stack of proofs of claim.  I’m sure I’ve signed claims for clients before out of convenience, but thanks to this decision, I will never do so again.  I don’t want to end up on the business end of a deposition table.

Read More from: Creditors' Sidebar

5 years 1 week ago
Jonathan Young and Dana Hefter wrote a great article in the August 2014 ABI Journal examining In re Rodriguez, Adv. No. 11-07012 (S.D. Tex. June 5, 2013), in which Judge Isgur held that an attorney signing a proof of claim on behalf of a creditor became a fact witness, and consequently waived attorney-client privilege and work product immunity through offensive use.  Their article is a must-read for all bankruptcy attorneys, and any non-bankruptcy attorneys who find themselves confronting Official Form B10 on behalf of clients. I do not have much of substance to add to Jonathan and Dana’s article, other to thank them for being thorough and for having excellent timing.  I read the article less than a week before I was getting ready to prepare a stack of proofs of claim.  I’m sure I’ve signed claims for clients before out of convenience, but thanks to this decision, I will never do so again.  I don’t want to end up on the business end of a deposition table.

Read More from: Creditors' Sidebar

5 years 1 week ago
If you’re the bank’s attorney, the answer is always going to be the Cayman Islands.  Nothing against Odessa, they just don’t have much of a beach. But, if you are the bank, chances are you would rather be local if you need to sue.  In the recent Fifth Circuit case Monkton Insurance Services v. Ritter, case 13-50941, the Fifth Circuit agreed with Cayman Island bank Butterfield Bank (Cayman) Ltd. that a lawsuit against the bank needed to be filed in the islands. In the Monkton case, William Ritter formed a Cayman Island insurance company which was managed by the Cayman Island management company, Monkton.  David Self was the Monkton employee that was in charge of managing the insurance company.  Presumably, the insurance company was conducting legitimate business and performing reasonably well, because it had about $500K in its Butterfield Bank account which Self, allegedly, made off with. Allegedly, Self forged Ritter’s signatures.  Ritter was somewhat upset and demanded repayment, which Self paid by (again, allegedly) simply taking funds from other clients’ accounts.  Lawsuits ensued. Whereas Ritter lived in Odessa, Texas, Monkton sued Ritter for return of the cash that Self had paid to Ritter personally.  Ritter then filed a third-party lawsuit against Butterfield Bank in Odessa (as part of the Monkton lawsuit).  Basically, Ritter was claiming lender liability for failure to spot the forged withdrawal documents.

Read More from: Tough Times for Lenders

5 years 1 week ago
If you’re the bank’s attorney, the answer is always going to be the Cayman Islands.  Nothing against Odessa, they just don’t have much of a beach. But, if you are the bank, chances are you would rather be local if you need to sue.  In the recent Fifth Circuit case Monkton Insurance Services v. Ritter, case 13-50941, the Fifth Circuit agreed with Cayman Island bank Butterfield Bank (Cayman) Ltd. that a lawsuit against the bank needed to be filed in the islands. In the Monkton case, William Ritter formed a Cayman Island insurance company which was managed by the Cayman Island management company, Monkton.  David Self was the Monkton employee that was in charge of managing the insurance company.  Presumably, the insurance company was conducting legitimate business and performing reasonably well, because it had about $500K in its Butterfield Bank account which Self, allegedly, made off with. Allegedly, Self forged Ritter’s signatures.  Ritter was somewhat upset and demanded repayment, which Self paid by (again, allegedly) simply taking funds from other clients’ accounts.  Lawsuits ensued. Whereas Ritter lived in Odessa, Texas, Monkton sued Ritter for return of the cash that Self had paid to Ritter personally.  Ritter then filed a third-party lawsuit against Butterfield Bank in Odessa (as part of the Monkton lawsuit).  Basically, Ritter was claiming lender liability for failure to spot the forged withdrawal documents.

Read More from: Tough Times for Lenders

5 years 1 week ago
On Monday, October 6, 2014, the U.S. Supreme Court issued an order denying the petition for a writ of certiorari in the Jaffe v. Samsung case, also known as the Qimonda case. The Supreme Court let stand the Fourth Circuit’s December 2013 decision that affirmed the bankruptcy court’s order applying Bankruptcy Code Section 365(n) in a Chapter 15 cross-border bankruptcy case. For a full discussion of the Fourth Circuit’s decision, follow the link to this prior post discussing the case and its implications for intellectual property licensees, Chapter 15 cases, and more. For a quick refresher, here’s the conclusion from that earlier post:
5 years 1 week ago
On Monday, October 6, 2014, the U.S. Supreme Court issued an order denying the petition for a writ of certiorari in the Jaffe v. Samsung case, also known as the Qimonda case. The Supreme Court let stand the Fourth Circuit’s December 2013 decision that affirmed the bankruptcy court’s order applying Bankruptcy Code Section 365(n) in a Chapter 15 cross-border bankruptcy case. For a full discussion of the Fourth Circuit’s decision, follow the link to this prior post discussing the case and its implications for intellectual property licensees, Chapter 15 cases, and more. For a quick refresher, here’s the conclusion from that earlier post:
5 years 1 week ago
Believe it or not, when you (the good guy) accidently produce in discovery an internal memo which is subject to attorney-client privilege to the bad guys (the guys suing you), the bad guys might not give back all the copies.  And, if you are really unlucky, the bad guys will distribute it to other bad guys also suing you for similar reasons.  You might even litigate the issue to the Fifth Circuit court of appeals and win, but the cat will be out of the bag. In the Fifth Circuit case Exxon Mobil v. Hill, No. 13-30830 the Court held that an internal memo discussing the radioactivity of material (and its harm) was subject to attorney-client privilege. The Court held that the nature of its creation precluded the need to provide the memo in discovery (even though people got very sick from the radiation).  However, the cautionary tale is that even though the plaintiff returned a copy, he did not return all copies of the memo that was accidently shared.  What ensured was years of litigation.

Read More from: Tough Times for Lenders

5 years 1 week ago
Generally, the priority scheme in section 507 of the Bankruptcy Code dictates the order in which a creditor is paid. For this reason, creditors can usually predict their standing among the other creditors awaiting payment. Section 510(c) of the Bankruptcy Code, however, permits the bankruptcy court to, among other things, subordinate, on equitable grounds, all or part of a creditor’s allowed claim or interest. In exercising such authority, the bankruptcy court is, in effect, altering creditors’ expectations in the name of “equity.” When it is appropriate to equitably subordinate a claim is left to a court’s determination and requires a court’s examination of the creditor’s conduct. This issue was recently considered by the Bankruptcy Court for the District of Maryland in Atlantic Builders Group, Inc. v. Old Line Bank (In re Prince Frederick Investment, LLC). The decision serves as a reminder that bankruptcy courts may be hesitant to equitably subordinate a claim of a creditor whose conduct, though perhaps inconsiderate or self-interested, was consistent with the contractual terms governing its behavior. Facts
5 years 1 week ago