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Written by Craig D. Robins, Esq.   Bankruptcy fees practically doubled when Congress drastically changed the bankruptcy laws eight years ago, making bankruptcy more complex by creating a new means test and imposing a much greater burden on the attorney to verify information and prepare the bankruptcy petition correctly and accurately.   Most of our Long Island bankruptcy clients are able to pay the fees as they are working, but we are always asked if the fees can be paid over time.    With the most common type of bankruptcy, which is Chapter 7, the Bankruptcy Code requires the attorney’s fee to be paid in full before the petition is filed.    Otherwise, any balance owed on the fee is technically discharged and the attorney is prohibited from collecting it.  In addition, if the client still owes any funds to his or her attorney, there is a conflict of interest, as the attorney is now a creditor of the debtor as well.    The bankruptcy laws were designed to give the debtor an absolute fresh, new financial start with no prior debts still outstanding, even those owed to bankruptcy counsel.  Chapter 7 bankruptcy law does not contain any provision that provides for payment of part of the fee after the petition is filed.  
5 years 4 months ago
Written by Craig D. Robins, Esq.   Bankruptcy fees practically doubled when Congress drastically changed the bankruptcy laws eight years ago, making bankruptcy more complex by creating a new means test and imposing a much greater burden on the attorney to verify information and prepare the bankruptcy petition correctly and accurately.   Most of our Long Island bankruptcy clients are able to pay the fees as they are working, but we are always asked if the fees can be paid over time.    With the most common type of bankruptcy, which is Chapter 7, the Bankruptcy Code requires the attorney’s fee to be paid in full before the petition is filed.    Otherwise, any balance owed on the fee is technically discharged and the attorney is prohibited from collecting it.  In addition, if the client still owes any funds to his or her attorney, there is a conflict of interest, as the attorney is now a creditor of the debtor as well.    The bankruptcy laws were designed to give the debtor an absolute fresh, new financial start with no prior debts still outstanding, even those owed to bankruptcy counsel.  Chapter 7 bankruptcy law does not contain any provision that provides for payment of part of the fee after the petition is filed.  
5 years 4 months ago
If there was a real "fiscal" Cliff, at least three-quarters (¾) of Congress would have been thrown over into the abyss far below. Sorting out the facts from the political rhetoric and greed, we are quick to discover that this entire issue was created by Congress itself in 2012 because of a basic moral disconnect within Congress and a desire to stop the President’s re-election.Congress was deadlocked within itself and with the President on the National Debt-Ceiling (IT'S BACK - NEXT POST - TRILLION DOLLAR COIN?) – that is the amount of money the Country is authorized to borrow; right now it’s about $16 trillion or $16,000,000,000,000. We had hit the limit a year ago when it was nearer to $14.5 trillion and the Republican controlled House of Representatives would not go along with raising the ceiling. The argument is that we, as a nation, already owe too much – that we are mortgaging our childrens’ futures. Congress with the White House decided to pass a law that would force a minimum of $1.2 trillion in cuts to Government agencies’ budgets across the boards.
5 years 4 months ago
Both the NYSE and NASDAQ have filed further amendments to their proposed listing standards on compensation committees and their advisers. The amendments copy directly from the exception in Item 407(e)(3)(iii) of Regulation S-K with respect to the proxy disclosure rules for compensation consultants.
5 years 4 months ago
On December 20th, ISS issued two extensive FAQs on their voting policies. This post covers the compensation items (a previous post covered the non-compensation items). Although the compensation FAQs contain a number of items previously posted by ISS, there are a few new items worth noting, including:
5 years 4 months ago
In 2012, distressed commercial real estate . . . looked a lot like 2011 . . . and 2010 . . . and 2009. Here are my observations on distressed commercial real estate in 2012: Lessons from 2012:
  • Realistic Expectations:  Borrowers no longer dreamed of a magical workout leading to a better day – a day when the white knight (i.e. the dream tenant or the long-forgotten millionaire Aunt) would show up and instantly transform the project from pauperville to profit city.   Investors no longer expected lenders to increase the pace of resolving distressed commercial loans.
  • Regulators in No Big Hurry:  From life insurance companies to banks, regulators continued the course traveled the year before (and the years before) – pushing lenders to resolve loans with an eye toward avoiding pushing the lender into failure.  Prudence won over pushy.  Interestingly, I didn’t hear a lot of complaining about this approach.

Read More from: Tough Times for Lenders

5 years 4 months ago
According to a post on the Harvard Law School Forum on Corporate Governance and Financial Regulation, the SEC has updated its entry in the Office of Management and Budget’s Unified Agenda to indicate that it plans to issue proposed rulemaking requiring public companies to disclose their political spending this April.
5 years 4 months ago
The Second Circuit recently issued a decision that relates to whether a sale of one class of equity security and a purchase of a different class of equity security issued by the same company can be "paired" under Section 16(b) of the Exchange Act to result in required profit disgorgement by the transacting insider.
5 years 4 months ago
Written by Craig D. Robins, Esq.   An Unusually Entertaining Decision from Several Years Back Teaches Valuable Lesson   Bankruptcy attorneys often get busy towards the end of January each year as consumers, having just finished their family holiday obligations, receive a new round of ever-increasing credit card bills, compelling them to seek bankruptcy advice.   Of course, many of these bills contain charges for holiday gift purchases made just weeks before.  An interesting and most unusual opinion from 1992, which I found most entertaining for a bankruptcy court decision, addressed this very issue.   In re Johannsen, 160 B.R. 328 (Bkrtcy. W.D.Wis. 1992).   However, as unusual as this decision is, its importance to us today really has nothing to do with the atypical subject matter.  To me, the real lesson to be learned from this case is that no matter how sure you are of being successful with litigation, you can still end up losing what appears to be a slam-dunk case.    To further pique your interest, let me quote some of the wording from the published opinion:   “[s]he’s short and buxom with a tiny waist and remarkably long legs which — despite her age (34) — are cellulite free.”  
5 years 4 months ago
Written by Craig D. Robins, Esq.   An Unusually Entertaining Decision from Several Years Back Teaches Valuable Lesson   Bankruptcy attorneys often get busy towards the end of January each year as consumers, having just finished their family holiday obligations, receive a new round of ever-increasing credit card bills, compelling them to seek bankruptcy advice.   Of course, many of these bills contain charges for holiday gift purchases made just weeks before.  An interesting and most unusual opinion from 1992, which I found most entertaining for a bankruptcy court decision, addressed this very issue.   In re Johannsen, 160 B.R. 328 (Bkrtcy. W.D.Wis. 1992).   However, as unusual as this decision is, its importance to us today really has nothing to do with the atypical subject matter.  To me, the real lesson to be learned from this case is that no matter how sure you are of being successful with litigation, you can still end up losing what appears to be a slam-dunk case.    To further pique your interest, let me quote some of the wording from the published opinion:   “[s]he’s short and buxom with a tiny waist and remarkably long legs which — despite her age (34) — are cellulite free.”  
5 years 4 months ago
Written by Craig D. Robins, Esq.   It was big news today as the government reached an $8.5 billion settlement to resolve foreclosure abuse issues involving ten major mortgage banks including Bank of America, JPMorgan Chase, Wells Fargo and Citibank.   The settlement is broken down to give $3.3 billion to homeowners who went through foreclosure in 2009 and 2010, and $5.2 billion to troubled homeowners.  This settlement resolves a complex independent foreclosure review process that had been previously mandated by banking regulators.   There was another settlement last year involving the attorneys general in most states, in which mortgage bankers agreed to pay $25 billion.  However, some commentators have complained that the banks aren’t assisting homeowners fast enough with that settlement.  It is hoped that today’s settlement will provide more immediate relief to struggling homeowners.    If You Were In Foreclosure in 2009 or 2010   Although the specifics of the settlement have not yet been fully disclosed, it appears that all homeowners who were in any stage of foreclosure during this period and suffered mortgage abuse will be entitled to compensation although those homeowners who previously sought financial reviews under the earlier 2011 federal directive may end up receiving more.  
5 years 4 months ago
Written by Craig D. Robins, Esq.   It was big news today as the government reached an $8.5 billion settlement to resolve foreclosure abuse issues involving ten major mortgage banks including Bank of America, JPMorgan Chase, Wells Fargo and Citibank.   The settlement is broken down to give $3.3 billion to homeowners who went through foreclosure in 2009 and 2010, and $5.2 billion to troubled homeowners.  This settlement resolves a complex independent foreclosure review process that had been previously mandated by banking regulators.   There was another settlement last year involving the attorneys general in most states, in which mortgage bankers agreed to pay $25 billion.  However, some commentators have complained that the banks aren’t assisting homeowners fast enough with that settlement.  It is hoped that today’s settlement will provide more immediate relief to struggling homeowners.    If You Were In Foreclosure in 2009 or 2010   Although the specifics of the settlement have not yet been fully disclosed, it appears that all homeowners who were in any stage of foreclosure during this period and suffered mortgage abuse will be entitled to compensation although those homeowners who previously sought financial reviews under the earlier 2011 federal directive may end up receiving more.  
5 years 4 months ago
As media outlets are reporting, New York State Comptroller Thomas DiNapoli announced that the NY State Common Retirement Fund has filed suit in Delaware court against Qualcomm for the right to inspect its books and records to determine how shareholder funds are being spent for political purposes.  According to the press release, in 2011 and 2012, the Fund filed 27 shareholder proposals asking for disclosure of political spending, reaching agreement with 10 companies.
5 years 4 months ago
In the midst of shareholder proposals season as submission deadlines have largely passed and companies are analyzing the proposals received, Georgeson’s 2012 Annual Corporate Governance Review offers an interesting retrospective on 2012 events that continues to be informative for this coming season.
5 years 4 months ago
On December 20th, ISS issued two extensive FAQs on their voting policies. A separate blog will cover the compensation items. The non-compensation FAQs cover old ground in many respects, including ways to correct factual errors, engagement with ISS, policies related to poison pills and additional information on ISS’ specific definitions of director independence. A few items worth noting include:
5 years 4 months ago
The combination of 4 speaking engagements and working on 4 new (or revived) lending products buried me during the last several months.  Fortunately, I’ve navigated the course, and it is a new year.  It is time to take a look back at 2012, and step out with some comments on 2013. New commercial real estate lending started to come back in 2012.  Finally. Here are my observations on the distinctive attributes of this come back, and my prediction of what it will look like in 2013: Lessons from 2012:  
  • Tough Love: Loan documents are longer, and tougher.  Lessons learned from the tough times now are included in many base commercial real estate forms.  (I’ll comment on these in the future.)

Read More from: Tough Times for Lenders

5 years 4 months ago
Written by Craig D. Robins, Esq.   When a mortgage company agrees to accepts a lesser amount than what is due on the mortgage, then the amount of savings can be taxed as if it were ordinary income.  This is the concept of “imputed income.”   If a mortgagee forgives some or all of the balance owed on a mortgage, then the forgiven mortgage debt is taxable.   Thus, if a lender agrees to accept a payout of $100,000 on a mortgage, even though $150,000 may be owed, that $50,000 forgiven amount could be taxable as if it were regular income that the homeowner earned.   However, in 2007, Congress passed the Mortgage Forgiveness Debt Relief Act, which eliminated imputed income under most circumstances when mortgagees accepted a lesser amount.  That was great news for homeowners during these past five years, enabling many hundreds of thousands of them across the country to do short sales or mortgage modifications in which the lender accepted a reduced pay-off as full satisfaction — and the homeowner had no income tax consequences.   Unfortunately, this tax break comes to an end the last day of this month, and absent any extension by Congress, consumers will be on the hook for paying income taxes on any mortgage principal reduction, beginning with mortgage reductions that occur on or after January 1, 2013.  
5 years 5 months ago
Written by Craig D. Robins, Esq.   When a mortgage company agrees to accepts a lesser amount than what is due on the mortgage, then the amount of savings can be taxed as if it were ordinary income.  This is the concept of “imputed income.”   If a mortgagee forgives some or all of the balance owed on a mortgage, then the forgiven mortgage debt is taxable.   Thus, if a lender agrees to accept a payout of $100,000 on a mortgage, even though $150,000 may be owed, that $50,000 forgiven amount could be taxable as if it were regular income that the homeowner earned.   However, in 2007, Congress passed the Mortgage Forgiveness Debt Relief Act, which eliminated imputed income under most circumstances when mortgagees accepted a lesser amount.  That was great news for homeowners during these past five years, enabling many hundreds of thousands of them across the country to do short sales or mortgage modifications in which the lender accepted a reduced pay-off as full satisfaction — and the homeowner had no income tax consequences.   Unfortunately, this tax break comes to an end the last day of this month, and absent any extension by Congress, consumers will be on the hook for paying income taxes on any mortgage principal reduction, beginning with mortgage reductions that occur on or after January 1, 2013.  
5 years 5 months ago
On December 13, the SEC declined to permit Disney to exclude a proxy access shareholder proposal submitted by Legal and General Assurance (Pensions Management), in conjunction with its client, Hermes Equity Ownership.
5 years 5 months ago
The Automatic Stay afforded to repeat (or serial) Chapter 13 filers has long been a thorn in the side of the mortgage industry, as each successive Chapter 13 filing resurrects the Automatic Stay and prevents the mortgage lender from completing their foreclosure. Bankruptcy Code Sections 362 (c)(3)&(4) were intended by Congress to limit the duration... Read More »
5 years 5 months ago