Analysis In Asarco Case Supreme Court Will Decide Whether Fees and Costs Incurred

Analysis In Asarco Case Supreme Court Will Decide Whether Fees and Costs Incurred

ABI Bankruptcy Brief | October 2, 2014
 
  

October 7, 2014

 
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ANALYSIS: IN ASARCO CASE, SUPREME COURT WILL DECIDE WHETHER FEES AND COSTS INCURRED DEFENDING FEE APPLICATIONS ARE COMPENSABLE

By Valerie P. Morrison and John T. Farnum of Wiley Rein LLP

Late last week, the Supreme Court granted certiorari in the case of Baker Botts L.L.P., et al. v. Asarco, LLC to review the Fifth Circuit's determination that §330(a) of the Bankruptcy Code does not authorize compensation for the fees and costs that counsel incur while defending their fee applications in bankruptcy court. The Supreme Court's decision should provide much-needed guidance on whether §330(a) of the Bankruptcy Code ever authorizes compensation for the costs borne by counsel and other professionals for defending their fee applications in bankruptcy court, and if so, under what circumstances. Click here to read the full analysis.

STOCKTON RULING ISN'T A FREE PASS FOR CITIES TO CUT PENSIONS, EXPERTS SAY

Although Judge Christopher M. Klein ruled on Wednesday in the Stockton, Calif., chapter 9 case that the city could use bankruptcy to wipe away its pension debt, experts do not view the bankruptcy judge's oral statement as a free pass for other California cities struggling with rising pension costs, the New York Times reported on Friday. "He did give us a tool," said Richard L. Barnett, mayor of Villa Park, Calif., and a bankruptcy lawyer. "But it's not a tool the city will be using in the immediate future." Other analysts said that they doubted there would be a stampede to the courts. CalPERS observed that what Judge Klein said was a signal, but not necessarily a precedent. "It's not binding on any other bankruptcy court," said Michael A. Sweet, a partner at the law firm of Fox Rothschild who represents California municipalities in chapter 9. Judge Klein made his remarks orally from the bench on Wednesday, adding that he reserved the right to issue a written opinion later. He adjourned the trial on Stockton's bankruptcy exit plan until Oct. 30. CalPERS said that it disagreed with what the judge had said, but without a written opinion, it has nothing to take on appeal to a higher court. Read more.

ABA: INSTALLMENT-LOAN DELINQUENCIES HIT NEW LOW

The rate of delinquencies on eight types of installment loans fell to 1.57 percent in the second quarter, down from 1.63 percent in the previous quarter, according to the American Bankers Association's (ABA) Consumer Credit Delinquency Bulletin, American Banker reported today. The figure was the lowest since the ABA began producing the bulletin in the early 1970s. The previous low was 1.59 percent in the fourth quarter of last year. Also, delinquencies on bank-issued credit cards fell to 2.43 percent from 2.44 percent. Delinquency rates rose in all three of the home-lending categories that the ABA tracks, as home prices have recently increased. Those loan categories are home equity lines of credit, home equity loans and property improvement loans. Read more. (Subscription required.)

For more on delinquency rates and other economic data related to the trend of falling bankruptcy filings, be sure to read Ed Fynn's column in the October ABI Journal, "Bankruptcy by the Numbers: Why Are Filings Still Falling?"

STUDY: STUDENT BORROWING INCREASES AMONG AFFLUENT IN U.S.

Students from affluent families are taking out loans for college at twice the rate of two decades ago, Bloomberg News reported today. Fifty percent of graduates in the class of 2012 whose parents had incomes of more than $125,700 left college with loans, up from 24 percent about 20 years earlier, making them the fastest-growing borrowers group, according to a study released today by the Pew Research Center. For graduates whose parental income was below $44,000, the rate rose to 77 percent from 67 percent. Nationally, the $1.2 trillion in outstanding education loans, which topped U.S. credit card debt in 2010, continues to rise. Graduates of the class of 2012 who took loans for a bachelor's degree owed $29,400 on average, up from $23,450 in 2008, according to the nonprofit Institute for College Access & Success in Oakland, Calif. Read more.

AMERICAN BANKS STOCKPILE TREASURIES AS DEPOSITS TOP LOANS

American banks are loading up on U.S. government debt, a sign that they remain cautious about the economy even with the jobless rate at a six-year low and corporations at their healthiest in a generation, Bloomberg News reported yesterday. Commercial lenders increased their holdings of Treasuries and debt from federal agencies in September by $54 billion to an unprecedented $1.99 trillion, data from the Federal Reserve show. Banks have now been net buyers for 12 straight months. Bank of America Corp. and Citigroup Inc. are among the lenders adding government bonds this year as loan growth fails to keep up with record deposits and banks prepare for rules that take effect in January requiring them to hold more high-quality assets. Banks' holdings of U.S. government debt securities rose last month by the most since 2010, even as Treasuries slumped on deepening concern the Fed would end more than six years of near-zero rates sooner than some investors expected. The 0.6 percent decline was the biggest monthly loss of 2014. Read more.

ATTENDING THIS WEEK'S NCBJ ANNUAL MEETING IN CHICAGO? BE SURE TO DOWNLOAD THE OFFICIAL CONFERENCE APP!

So that you can navigate, network and take advantage of everything that NCBJ's 88th Annual Meeting in Chicago this week has to offer, ABI has sponsored the official conference app! Be sure to download to your device (available in iOS and Android) to pull up scheduling and speaker information, maps and much more! To download to your device, click below:

-iOS: http://goo.gl/d6A6wK

-Android: http://goo.gl/FJ6GS9

LATEST ABI PODCAST FEATURES AUTHORS DISCUSSING SURVIVAL TIPS FOR NEW LAWYERS

The latest ABI podcast features Resident Scholar Lois Lupica talking with Kevin M. Baum of Baum & Bailey, P.C. (Rockville Centre, N.Y.) and Craig T. Lutterbein of Hodgson Russ LLP (Buffalo, N.Y.), the authors of ABI's newest publication Survival Guide for the New Lawyer: What They Didn't Teach You in Law School. Baum and Lutterbein discuss their book and provide pointers to new lawyers on the everyday aspects of practicing law, with a special emphasis on bankruptcy law. Click here to listen to the podcast.

WE WANT TO HEAR FROM YOU: MAKE SURE TO FILL OUT ABI'S ANNUAL MEMBER SURVEY!

ABI's Annual Member Survey was sent via e-mail yesterday. Please take the time to fill out the survey so that we can better tailor our products, events and services to your needs. If you did not receive an e-mail yesterday containing the Annual Member Survey, please contact ABI Membership Director Chris Thackston at [email protected]

NEW CASE SUMMARY ON VOLO: CLEAR SKY PROPERTIES LLC V. ROUSSEL (IN RE ROUSSEL; 8TH CIR.)

Summarized by Lars Fuller of BakerHostetler

The Eighth Circuit dismissed the debtor's appeal for lack of jurisdiction pursuant to 28 U.S.C. § 158, and ruled that the district court's decision, which reversed the bankruptcy court and remanded for determination of the dischargeability of the state court attorney fee award, was not a final judgment subject to further appeal. The district court's remand for the determination of dischargeability of attorney fees was more than a "ministerial act," and thus, the district court's decision was non-final for appellate purposes.

There are nearly 1,500 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI's Volo website.

NEW ON ABI'S BANKRUPTCY BLOG EXCHANGE: IMF AND KAZAKHSTAN, FIXING SOVEREIGN DEBT IN UNISON

A recent blog post looked at the recently released IMF 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 restructured bonds.

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

ABI Quick Poll

The debt ceiling for chapter 13 cases should be increased substantially again, perhaps to $5 million.

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

INSOL INTERNATIONAL

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  CALENDAR OF EVENTS
 

2014

October
- Midwestern Bankruptcy Institute
    Oct. 16-17, 2014 | Kansas City, Mo.
- Views from the Bench
    Oct. 24, 2014 | Washington, D.C.
- Claims-Trading Program
    Oct. 30, 2014 | New York, N.Y.
- International Insolvency & Restructuring Symposium
    Oct. 30-31, 2014 | London

November
- Complex Financial Restructuring Program
    Nov. 6, 2014 | Philadelphia
- Corporate Restructuring Competition
    Nov. 6-7, 2014 | Philadelphia
- Chicago Consumer Bankruptcy Conference
    Nov. 11, 2014 | Chicago, Ill.
- Detroit Consumer Bankruptcy Conference
    Nov. 11, 2014 | Troy, Mich.
- Mid-Level Professional Development Program
    Nov. 12, 2014 | Chicago

  

 


December
- Winter Leadership Conference
    Dec. 4-6, 2014 | Palm Springs, Calif.
- 40-Hour Mediation Training Program
   Dec. 7-11, 2014 | New York, N.Y.

January
- New Orleans Consumer Bankruptcy Conference
    Jan. 19, 2015 | New Orleans, La.
- Rocky Mountain Bankruptcy Conference
    Jan. 22-23, 2015 | Denver, Colo.

February
- Caribbean Insolvency Symposium
    Feb. 5-7, 2015 | Grand Cayman, Cayman Islands

 

 

 
 
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