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The IMF has approved a new 4-year $17.5 billion program for Ukraine, with an immediate disbursement of $5 billion. This is a big economic, institutional, and geopolitical deal. I will comment on one small piece of one small piece: the treatment of Russia's $3 billion loan to the last Ukrainian government, about which I have written at various levels of weediness herehere, and here.

Read More from: Credit Slips

3 years 3 months ago
Per Part 1 of this post, the word “executory” under section 365 of the Bankruptcy Code should be defined by its original, common law meaning per Williston: a contract in which some obligations remain. That common law definition was the one on the table when Congress originally adopted this ancient provision and there is no longer any justification for imposing the labyrinthine elements of executoriness on top of it. These additional executoriness requirements were developed by the courts in the olden days when court approval of AorR was not required and executoriness was a way to protect estates from trustee foolishness or carelessness. (See my old article for details at A Functional Analysis of Executory Contracts, 74 Minn. L. Rev. 227 (1989).)  During that time, the Countryman test did a brilliant job in greatly improving the policing of those failures. However, the Countryman test is not needed for that purpose now that court approval is required for AorR. It also does not solve the underlying problem, which is manipulation of the label “executory” in lieu of applying the statute as written to cover modern problems like options and licenses. The result is confusion and unpredictable injustice to estate and counterparty alike.

Read More from: Credit Slips

3 years 3 months ago
Mobile wallets will undoubtedly become more popular with time, but plastic cards won't be easily killed off. We add to payment options to increase security, options and convenience.

Read More from: BankThink

3 years 3 months ago
Jones Day will open a permanent office in Detroit this July. The law firm, which represented the city in its chapter 9 bankruptcy case, will be headed by Timothy J. Melton, David Rutkowski and Jeff Jones. Mr. Melton will be partner in charge, while Mr. Rutkowski and Mr. Jones will serve as administrative partner and head of litigation, respectively. Dorsey & Whitney partner Annette Jarvis was named to the board of directors at the American College of Bankruptcy. Ms. Jarvis, a fellow of the ACB since 2001, works with Dorsey & Whitney’s bankruptcy and financial restructuring group. She has represented banks, debtors, trustees, creditors and other parties in chapter 11 bankruptcies and workouts. Ms. Jarvis has worked on such well-known cases as Dewey & LeBoeuf LLP, Naartjie Custom Kids Inc. and DBSI Inc.

Read More from: WSJ.com: Bankruptcy Beat

3 years 3 months ago
Jones Day will open a permanent office in Detroit this July. The law firm, which represented the city in its chapter 9 bankruptcy case, will be headed by Timothy J. Melton, David Rutkowski and Jeff Jones. Mr. Melton will be partner in charge, while Mr. Rutkowski and Mr. Jones will serve as administrative partner and head of litigation, respectively. Dorsey & Whitney partner Annette Jarvis was named to the board of directors at the American College of Bankruptcy. Ms. Jarvis, a fellow of the ACB since 2001, works with Dorsey & Whitney’s bankruptcy and financial restructuring group. She has represented banks, debtors, trustees, creditors and other parties in chapter 11 bankruptcies and workouts. Ms. Jarvis has worked on such well-known cases as Dewey & LeBoeuf LLP, Naartjie Custom Kids Inc. and DBSI Inc.

Read More from: WSJ.com: Bankruptcy Beat

3 years 3 months ago
The Supreme Court is currently considering the case of Wellness International Network, Ltd. v. Shariff. As discussed in the blog post on February 16, 2015, at issue in the Wellness International Network case is “whether Article III of the United States Constitution permits the exercise of judicial powers of the United States by the bankruptcy courts on the basis of litigant consent, and if so, whether implied consent based on a litigant’s conduct is sufficient to satisfy Article III.” Put another way, the Supreme Court is currently wrestling with the amount of judicial power a bankruptcy judge may exercise, if the consent of the litigants – whether implied or explicit – affects the ability of a bankruptcy judge to enter final orders determining the controversy at issue.

Read More from: Insolvency Insights

3 years 3 months ago
Judge Drain’s recent bench rulings in Momentive Performance Materials in 2014 generated a great deal of controversy in the distressed debt world.  Distressed investors, lenders, and commentators have questioned whether the Momentive rulings will lead to an industry trend in which debtors seek to cram down their secured lenders to take advantage of the ability to do so at below market interest rates.  
3 years 3 months ago
433 resolutions have been filed so far on a wide range of environmental and social issues, a record number, according to Proxy Preview 2015, a publication by As You Sow, the Sustainable Investments Institute and Proxy Impact.  The report provides a detailed examination of the wide range of topic areas covered in the proposals, an index of the companies that received them and brief discussions with some of the most prominent and prolific proponents about specific proposals.
3 years 3 months ago
There is a leadership void in payments innovation. The Fed has the ability and the historic precedent to take up the mantle.

Read More from: BankThink

3 years 3 months ago
By trade, James Reise is an excavator who works for developers mostly in the suburbs of Washington, D.C. Bankruptcy investing is a sideline, and he’s had some luck with it—until recently. Exide Technologies Inc. is proposing to exit bankruptcy largely the property of senior secured noteholders. Mr. Reise is a senior secured noteholder, but he won’t be getting a slice of the reorganized battery company, which some believe could be sold for far more than the value assigned to it in estimates on file with the bankruptcy court. Instead, Mr. Reise and other people who bought Exide’s debt will get something that they estimate is worth nothing or next to it because they don’t qualify as “accredited investors” under a definition established by the Securities and Exchange Commission and invoked by Exide.

Read More from: WSJ.com: Bankruptcy Beat

3 years 3 months ago
By trade, James Reise is an excavator who works for developers mostly in the suburbs of Washington, D.C. Bankruptcy investing is a sideline, and he’s had some luck with it—until recently. Exide Technologies Inc. is proposing to exit bankruptcy largely the property of senior secured noteholders. Mr. Reise is a senior secured noteholder, but he won’t be getting a slice of the reorganized battery company, which some believe could be sold for far more than the value assigned to it in estimates on file with the bankruptcy court. Instead, Mr. Reise and other people who bought Exide’s debt will get something that they estimate is worth nothing or next to it because they don’t qualify as “accredited investors” under a definition established by the Securities and Exchange Commission and invoked by Exide.

Read More from: WSJ.com: Bankruptcy Beat

3 years 3 months ago
Standard Register Co . on Thursday filed for chapter 11 bankruptcy-court protection, with a $275 million buyout offer from some of its top-ranking lenders. The Wall Street Journal has the Daily Bankruptcy Review article here. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) Puerto Rico bank-holding company Doral Financial Corp. filed for chapter 11 bankruptcy and plans to wind down, WSJ reports. A bankruptcy judge gave Aereo Inc. approval Wednesday to finalize the sale of its technology and remaining assets to TiVo Inc. and other buyers. Read the DBR article in WSJ.

Read More from: WSJ.com: Bankruptcy Beat

3 years 3 months ago
Standard Register Co . on Thursday filed for chapter 11 bankruptcy-court protection, with a $275 million buyout offer from some of its top-ranking lenders. The Wall Street Journal has the Daily Bankruptcy Review article here. (Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit http://on.wsj.com/DJBankruptcyNews, scroll to the bottom and click “try for free.”) Puerto Rico bank-holding company Doral Financial Corp. filed for chapter 11 bankruptcy and plans to wind down, WSJ reports. A bankruptcy judge gave Aereo Inc. approval Wednesday to finalize the sale of its technology and remaining assets to TiVo Inc. and other buyers. Read the DBR article in WSJ.

Read More from: WSJ.com: Bankruptcy Beat

3 years 3 months ago
Receiving Wide Coverage ... Stress Test Wrap: All 31 of the biggest U.S. banks managed to pass the Fed's stress tests this year, but for four of them it was less a "flying colors" sort of victory and more about muddling through. Goldman Sachs, JPMorgan Chase and Morgan Stanley received approval for their capital-payout plans only after adjusting them to ensure their capital ratios stayed above minimum requirements. Bank of America got conditional approval to go...

Read More from: BankThink

3 years 3 months ago
On March 12, 2015, The Standard Register Company, based in Ohio, and several affiliates filed a voluntary chapter 11 bankruptcy petition in Delaware.  The case has been docketed as case no. 15-10541, and has been assigned to the Honorable Brendan Linehan Shannon. In support of the filing, the company has filed the Declaration of Kevin Carmody.  Mr. Carmody is identified as the Chief Restructuring Officer for the Company, having been appointed as such on February 27.  Mr. Carmody is otherwise a Practice Leader in the professional services firm of McKinsey Recovery & Transformation Services U.S., LLC. According to Mr. Carmody’s declaration, the Debtors have been working to transform their century old printing goods and printing services business “to achieve success in this new [electronic and web-based] media landscape.”  In doing so, the debtors “diversified their services by adding integrated communications capabilities, including mobile and digital media . . . .” Mr. Carmody expects that in bankruptcy, the debtors will sell their businesses as a going concern.  Further, according to Mr. Carmody, the debtors have the full support of their prepetition secured lenders, including that their largest secured lender has agreed to act as a stalking horse for the sale process.
3 years 3 months ago
Last week, we announced the Weil Bankruptcy Blog’s annual March Madness Tournament.  March Madness is finally here! As we noted, we at Weil Bankruptcy Blog HQ have spent quite a bit of time discussing and debating the Final Report and Recommendations of the American Bankruptcy Institute Commission to Study the Reform of Chapter 11.  (See more of our coverage here.)  Which recommendations from the ABI Report do you think are the most compelling?  (define that however you wish, dear readers.) Beginning today, blog readers will be able to vote on each match-up, and it is up to you to decide which recommendation will move on to the next round of Blog Madness. Voting on Round One begins today and closes on Monday, March 16 at 10:00 a.m. (ET).  Click here to see our selections and to vote for your favorites!
3 years 3 months ago
Warning: Grumpy Alert. I am grumpy because the ABI Commission’s recent report rejected any reform of the bizarre American approach to executory contracts, which requires a quality of “executoriness” in a contract before it can be assumed or rejected. (Think of Stephen Colbert and “truthiness.”) Worse still, it recommended codifying the Countryman test, which was a great advance in its day but has been rendered hopelessly outdated by statutory changes and modern contract practices—e.g. in options and LLC memberships. One reason for the Commission’s recommendation was “the perceived value in maintaining some type of gating feature to vet those contracts that a debtor in possession could assume, assign, or reject in the chapter 11 case.” A reasonable conclusion from that would be that the reason for retaining the old test was that continued confusion and inconsistency would help counterparties to maneuver in the fog. But no. The Report explains that the case law is so predictable that eliminating executoriness would just create more litigation. For those who have recently reviewed that case law, I can only assure you I am not making this up. (Please note I don’t for a moment blame this error of the Commission majority on its excellent reporter.)

Read More from: Credit Slips

3 years 3 months ago
While a new report from the Administrative Office of the U.S. Courts shows a 46% decline in chapter 11 filings from 2010 to 2014, there appears to be an uptick in energy related filings, especially by Texas-based companies.The report from the Administrative Office shows that chapter 11 filings decreased from 14,191 in fiscal year 2010 to 7,658 in fiscal year 2014, a decline of 46% in just four years.    A separate report from the U.S. Energy Information Administration shows the price of West Texas Intermediate Crude dropping from over $100 per barrel in July 2014 to just over $50 per barrel in January 2015.  While bankruptcy is typically a lagging indicator in the economy, oil and gas related bankruptcy filings appear to be on the rise with at least three publicly traded companies filing this month.   I was able to locate nine energy-related filings with aggregate debt of $2.4 billion in the past few months.   Although all of the Debtors except for one are Texas-based, the filings are scattered among venues including the Districts of Delaware and Utah and the Southern and Western Districts of Texas. Date Court Case # Case Name Debts 10/10/14 DE 14-12308 Endeavour Operating Corporation (Houston, TX) $1.2B 10/31/14 UT 14-31632 Marion Energy, Inc.
3 years 3 months ago
Policymakers should stop assuming that homeownership is always better than renting and recognize the economic circumstances that young people will live with for the foreseeable future.

Read More from: BankThink

3 years 3 months ago
Reaffirming a Debt in Bankruptcy There are times when clients who have filed chapter 7 or 13 bankruptcy will ask whether or not they should reaffirm a debt that would otherwise be discharged in their bankruptcy. Reaffirmation is an agreement made with a creditor to continue paying off a debt even after bankruptcy. There may be legitimate reasons for wanting to reaffirm a debt or loan. However, before the changes in bankruptcy law in 2005, it was not uncommon for creditors to use coercive methods to try and get debtors to reaffirm a loan. Reaffirming a debt means that you will be legally responsible for repaying the debt after your bankruptcy even though the bankruptcy would have released you of any legal responsibility to pay it back. The post Reaffirming a Debt in Bankruptcy appeared first on Tucson Bankruptcy Attorney.
3 years 3 months ago