BANKRUPTCY FILINGS FALL 12 PERCENT FOR THE FIRST HALF OF 2015, COMMERCIAL FILINGS DROP 19 PERCENT
Total bankruptcy filings totaled 422,782 nationwide during the first six months of 2015 (Jan. 1-June 30), a 12 percent decrease from the 479,573 total filings during the same period a year ago, according to data provided by Epiq Systems, Inc. The 407,764 total noncommercial filings for the first half of 2015 represented a 12 percent drop from the noncommercial filing total of 460,931 for the first half of 2014. Total commercial filings during the first six months of the year were 15,018, representing a 19 percent decrease from the 18,642 filings during the same period in 2014. Commercial chapter 11 filings also fell during the first half of 2015 as the 2,576 filings represented a 15 percent decrease from the 3,046 commercial chapter 11 filings during the first six months of 2014. "Bankruptcy filings through the first half of the year continue to recede amid sustained low interest rates and flat consumer debt levels," said ABI Executive Director Samuel J. Gerdano. "Total bankruptcies remain on a pace to total just over 800,000 for 2015." Read the press release.
OBAMACARE COULD FURTHER REDUCE CONSUMER BANKRUPTCY FILINGS, ACCORDING TO EXPERT
After the Supreme Court last week upheld the Obama administration’s health care reform, Prof. Daniel Austin of Northeastern University Law thinks that further decreases in consumer bankruptcy filings could be a result of the reform, the Wall Street Journal reported yesterday. In a 2014 study, Prof. Austin dug into personal bankruptcy filings to figure out what happened after Massachusetts lawmakers made health insurance mandatory in 2005. He found that Massachusetts residents who filed for bankruptcy protection now have considerably less medical debt compared to the rest of the country. The typical Massachusetts person or couple who filed in 2013 had $3,041 in medical debt, while people everywhere else had an average of $8,594 in medical debt. With the Obamacare reforms upheld, Prof. Austin thinks the same trend could be seen nationally. "It absolutely should show a reduction in bankruptcies [filed] due to medical debt," Prof. Austin said. Read more. (Subscription required.)
EDITORIAL: PUERTO RICO NEEDS DEBT RELIEF
Federal lawmakers have to allow Puerto Rico's public corporations, such as its electric utility and highway authority, to restructure their $25 billion in debt in bankruptcy court, according to an editorial in today's New York Times. A bill to change the bankruptcy law has been introduced in the House, but has not advanced because of opposition from some hedge funds. As for the remaining $47 billion in the island’s debt, Puerto Rico Gov. Alejandro Garcia Padilla is asking creditors to give Puerto Rico more time to pay back those bonds. Even though doing so would hurt, investors would lose far more money if the island stopped paying its debt altogether, a step that would lead to a long legal battle, according to the editorial. In exchange for debt relief, investors and Congress should press Puerto Rico to make significant regulatory reforms. Garcia Padilla should make it easier to do business on the island by reducing the time it takes to get government permits and register property, which takes much longer on the island than it does in the states, according to the World Bank's Doing Business report. Read the full editorial.
NEW FRAUD AND FORENSICS BOOK AVAILABLE FOR PRE-ORDER IN ABI'S BOOKSTORE!
Now available for pre-order in the ABI Bookstore is Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case. Cases such as Madoff and Enron have hinged on the ability of talented investigators to uncover the truth amidst layers of fraud, and this book highlights the areas of specialty, challenge and reward for forensic accountants and the professionals who work with them in commercial fraud cases. Written by members of ABI's Commercial Fraud Committee among other noted professionals, Fraud and Forensics provides a broad and deep look at the challenges faced in the course of a commercial fraud matter, as well as the tools available to help identify, unwind and prove fraudulent transactions. This book will also assist both forensic accountants and the professionals who work with them to sift through the fine details while creatively considering all of the possibilities to fit together the pieces of a fraud puzzle. Click here to pre-order. (Book to be shipped in mid- to late July; make sure to log in to obtain the ABI member price).
NEXT WEDNESDAY: ABI LIVE WEBINAR ON JULY 8 TO EXAMINE CHAPTER 11 REFORM COMMISSION'S RECOMMENDATIONS ON PROFESSIONAL FEES AND EXPENSES
Don't miss the abiLIVE webinar on July 8 examining the Chapter 11 Reform Commission's recommendations on professional fees and expenses. The panel will discuss the recommended reforms that provide for more effective oversight, as well as alternative fee structures consistent with professionals' ethical obligations under the Code of Professional Responsibility. The webinar is hosted by ABI's Ethics & Professional Compensation Committee. Click here to register.
ABI WORKSHOP TO FEATURE BANKRUPTCY JUDGES EXAMINING COMMISSION RECOMMENDATIONS ON RESOLVING COURT SPLITS
The 2015 Bankruptcy Judges Roundtable, an ABI Workshop, will take place at ABI headquarters on Aug. 4 to examine the Chapter 11 Reform Commission's recommendations on resolving court splits. The Commission identified more than 30 splits in case law on important bankruptcy issues. Attend the program from 3:00-4:30 p.m. ET in person or via live webstream to hear five bankruptcy judges discuss the recommendations and issues surrounding the court splits. Speakers on the program are Bankruptcy Judges Dennis R. Dow (D. Mo.), Bruce A. Harwood (D. N.H.), Barbara J. Houser (N.D. Texas), C. Ray Mullins (N.D. Ga.) and Eugene R. Wedoff (N.D. Ill.). ABI will seek 1.5 hours of general CLE credit in 60-minute-hour states and 1.5 hours of credit in 50-minute-hour states for the program. A networking reception will follow from 5-7 p.m. ET for in-person attendees, and registration for just the reception is also available. Click here to register.
NEW CASE SUMMARY ON VOLO: HART V. BANK OF AMERICA HOME LOANS (IN RE HART: 9TH CIR.)
Summarized by Joel Newell of Lane & Nach, P.C.
The debtor did not have standing based on the related loan documents, and to the extent that the debtor had an interest in a claim against Bank of America, the claim belonged to the chapter 7 estate; therefore, the debtor did not have standing to pursue the adversary proceeding against Bank of America.
There are more than 1,700 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: EXAMINATION OF SEC RULE PROPOSAL ON CLAWBACK OF EXECUTIVE COMPENSATION
A recent blog post examined the SEC rule proposal directing national exchanges and associations to establish listing standards requiring companies to develop and implement clawback policies on executive compensation.
To read more on this blog and all others on the ABI Blog Exchange, please click here.
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"Ethics - Chapter 11 Commission Recommendations on Professional Fees and Expenses"
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