BANKS GIVEN TWO MORE YEARS TO MEET VOLCKER CLO STANDARDS
The Federal Reserve is giving banks an additional two years to comply with Volcker Rule standards for treatment of collateralized loan obligations after industry complaints that the requirements would lead to big losses, Bloomberg News reported yesterday. The Fed will issue two one-year extensions for banks to make their interests in CLOs conform to the trading restrictions adopted in December, pushing the deadline to July 21, 2017, according to a statement released yesterday. Banks then wouldn't be required to deduct CLO investments from tier 1 capital under the final rule until the new conformance date, the Fed said. The change is meant to address banks' complaints that divesting the CLOs would lead to millions of dollars in losses. A January adjustment by regulators in the face of an American Bankers Association lawsuit eased treatment of collateralized debt obligations backed by trust preferred securities. Read more.
CFTC'S DODD-FRANK OVERSIGHT CURTAILED IN BIPARTISAN LEGISLATION
The U.S. Commodity Futures Trading Commission would face limits on its ability to impose rules on derivatives traded overseas and on manufacturers that use swaps to hedge business risks under bipartisan congressional legislation defining the scope of the agency's powers, Bloomberg News reported today. Republicans and Democrats on the House Agriculture Committee, which has jurisdiction over the CFTC, introduced a 48-page bill that would also force the agency to assess the costs of its Dodd-Frank Act regulations and conduct a new study of high-speed trading. The legislation is typically approved once every five years. House Agriculture Committee Chair Frank D. Lucas (R-Okla.) said that the legislation "improves the efficiency and accountability of the CFTC, ensures regulations are implemented in a sensible manner, maintains the integrity of the marketplace, and guarantees our global competitiveness." The committee scheduled a meeting on April 9 to consider the legislation. The bill is co-sponsored by Reps. Collin Peterson (D-Minn.) and David Scott (D-Ga.) and Michael Conaway (R-Texas). Read more.
ANALYSIS: BILLIONS FROM ANADARKO SETTLEMENT COME AFTER DECADES OF CONTAMINATION
The record environmental deal reached last week between the federal government and Anadarko Petroleum Corp. will divide upward of $4.5 billion among more than 2,700 contaminated environmental sites across the country, many of which have been languishing during litigation over who would pay for cleanup, the Wall Street Journal reported yesterday. The rest of the settlement will pay claims by people who got sick from the pollution. It would cost up to $1.7 billion in 2005 dollars to clean up just 372 sites, according to an analysis performed by Roux Associates Inc. for the plaintiffs. The federal judge presiding over the case said it was the most thorough analysis of the costs. In Nevada, the U.S. Environmental Protection Agency has already spent more than $100 million to try to scrub a vast industrial site where Kerr-McGee Corp. made bomb components and other products dating to World War II. Chemicals and waste material were dumped into unlined ponds and off-site ditches, practices that were legal at the time, according to the EPA. But those materials leached into groundwater, contaminating systems across Nevada and into Arizona. The litigation behind the settlement is tangled. Before its oil-and-gas business was purchased in 2006 by Anadarko, Kerr-McGee separated its chemicals operation -- and related environmental obligations -- into a company called Tronox Inc. When Tronox filed for bankruptcy in 2009, its creditors sued Anadarko for fraudulently skirting cleanup liabilities. The U.S. Justice Department joined the lawsuit. Last December a bankruptcy judge ruled that Anadarko was liable for as much as $14.2 billion, which the company challenged. Last week's settlement to cut that figure to $5.15 billion remains subject to court approval. Read more. (Subscription required.)
U.S. CONSUMER BORROWING INCREASED $16.5 BILLION IN FEBRUARY
The Federal Reserve reported yesterday that consumers increased their borrowing in February on autos and student loans by the largest amount in a year, but for a second straight month, they cut back on their credit card use, the Associated Press reported yesterday. Consumer borrowing climbed $16.5 billion in February, up from a $13.5 billion gain in January, according to the Fed. The category that includes credit cards fell $2.4 billion after a $241 million drop in January. But this decline was offset by an $18.9 billion increase in borrowing in the category that covers autos and student loans, the biggest one-month gain since February 2013. The overall increase in consumer debt pushed total borrowing to a record $3.13 trillion. Read more.
LATEST ABI PODCAST EXAMINES RECENT EVENTS DEALING WITH ASBESTOS LITIGATION TRUSTS
ABI Resident Scholar Prof. Charles Tabb and Prof. S. Todd Brown of University of Buffalo (SUNY) discuss recent events concerning asbestos litigation trusts in bankruptcy. Brown, who has testified before Congress and the ABI Chapter 11 Reform Commission regarding issues related to asbestos mass torts in bankruptcy cases, discusses the recent backlash in Congress and the courts against large asbestos litigation trusts in bankruptcy proceedings. Click here to listen to the podcast.
VIDEO NOW AVAILABLE: ABI CHAPTER 11 REFORM COMMISSION REPORTER MICHELLE HARNER'S CONGRESSIONAL TESTIMONY ON CHAPTER 11
Watch video of Prof. Michelle Harner, the official reporter of the ABI Chapter 11 Reform Commission, deliver her opening testimony before the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law's hearing on March 26 titled, "Exploring Chapter 11 Reform: Corporate and Financial Institution Insolvencies; Treatment of Derivatives." Also available are the prepared witness statements from the hearing. Click here to watch Prof. Harner's testimony and read the prepared witness statements.
EXPLORE CHALLENGES THAT LIE AHEAD FOR UNITS AND TRUSTS ESTABLISHED FROM GM'S BANKRUPTCY AT SPECIAL PRESENTATION AT ABI'S ANNUAL SPRING MEETING
Watch below to find out more about what is on tap for ABI's 32nd Annual Spring Meeting at the JW Marriott in downtown Washington, D.C. The conference, taking place April 24-27, 2014, features a roster of the best national speakers, while the depth and scope of topics offer something for everyone.
NEW CASE SUMMARY ON VOLO: ADELPHIA RECOVERY TRUST V. GOLDMAN (2ND CIR.)
Summarized by Ferve Ozturk of Baker & Hostetler LLP
The Second Circuit ruled that post-confirmation trust was judicially estopped from claiming that funds transferred to a cash management system were property of the debtors because the schedules and other documents filed by the debtors in bankruptcy court treated the cash management system as property of a subsidiary.
There are more than 1,200 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: CONSIDERATION OF TAX LIENS AFTER BANKRUPTCY
A recent post on the ABI Blog Exchange looks at a few items consumers should know about tax liens after bankruptcy. 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
Even though the federal government ended up over $10 billion in the hole on the General Motors bankruptcy, the bailout was a necessary evil.
Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
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