BILL WOULD REPLACE U.S. LOAN DEFAULT RATES WITH REPAYMENT METRIC
Sens. Orrin Hatch (R-Utah) and Jeanne Shaheen (D-N.H.) yesterday introduced legislation that would overhaul a key way the government holds colleges accountable for student outcomes and also create a new risk-sharing program, InsideHigherEd.com reported today. The bill would get rid of the government's student loan default rates and replace them with a student loan repayment rate. Instead of tracking whether a college's former students default on their federal loans three years after the loans become due, under the bill the government would look at whether former students are making progress in repaying their debt (defined as reducing the principal loan balance by at least one dollar). Colleges with loan-repayment rates more than 10 percent below the national average over a three-year period would lose access to federal aid. In addition, the bill would create a risk-sharing program in which colleges have to pay the federal government a share of the total federal loan dollars that their former students are not successfully repaying. The precise threshold would be adjusted according to the unemployment rate in any given year. Read more.
COMMENTARY: FREE PUERTO RICO
Puerto Rico has begun to default on its bond payments for the first time since it became part of the United States 117 years ago, according to an op-ed in today's New York Times. If it fails to make interest payments on its $72 billion public debt, pension funds across the U.S. may be unable to meet their payment obligations. Even a simple debt restructuring -- in the unlikely event bondholders agreed to it -- would not solve Puerto Rico's fiscal problems, according to the op-ed. With a population of 3.6 million, every person on the island would need to pay $1,400 a year -- 9 percent of Puerto Rico’s per-capita income -- just to cover this year’s $5 billion principal and interest payments on the debt. The only way to fix Puerto Rico's long-standing issues, according to the op-ed, would be the gradual transition to independence in order to allow both island and mainland to adjust to a sovereign and self-sustaining Republic of Puerto Rico. Read more.
The August ABI Journal features an exclusive commentary from Puerto Rico's representative in Congress, Resident Commissioner Pedro R. Pierluisi. He outlines Puerto Rico's problems and how his legislation, H.R. 870, works to address them by authorizing chapter 9 for the territory. Click here to read the commentary in the August ABI Journal.
CALIFORNIA GUARDS MUNI BUYERS FROM BANKRUPTCY WITH DIBS ON TAXES
California Governor Jerry Brown last month signed into law a measure clarifying that tax revenue backs the general obligations of schools, cities and other local issuers, a step that some of the state's school systems see as a way to boost their credit rank and lower debt costs, Bloomberg News reported yesterday. While rating companies haven’t acted on the law, investors have taken notice. The extra yield that buyers demand on some San Diego school debt has shrunk to the lowest in more than three months. Bonds of the Los Angeles Unified School District have also gained. Even though the issuers are solidly investment-grade, bondholders welcome the added security after Detroit's record-setting bankruptcy and as Puerto Rico moves toward a historic restructuring. "It eliminates a lot of uncertainty in the market," said Frances Lewis, director of research in Princeton, N.J., at MacKay Municipal Managers, which oversees $13 billion. The law, which takes effect in January, specifies that voter-approved general obligations of school districts and municipalities are backed by a lien on property-tax revenue. While California statutes could have already been read as having that protection, it hasn't been explicitly stated. The measure solidifies prioritizing holders of the bonds, Michael Zezas, chief municipal strategist at Morgan Stanley in New York, said in a July 27 research note. General obligations from California issuers, excluding the state, total around $131 billion, according to data compiled by Bloomberg that includes the full value of zero-coupon bonds at maturity. Read more.
NOW AVAILABLE FOR REPLAY ON ABI'S CLE SITE: BANKRUPTCY JUDGES ROUNDTABLE EXAMINING COMMISSION RECOMMENDATIONS ON RESOLVING COURT SPLITS
Not able to attend/watch Tuesday's 2015 Bankruptcy Judges Roundtable to examine the Chapter 11 Reform Commission's recommendations on resolving court splits? Watch it and earn CLE at your convenience as video of the Roundtable is now available on ABI's CLE site! The Roundtable features four bankruptcy judges discussing the Commission's recommendations and issues surrounding court splits identified in its Final Report. You will have the opportunity to earn 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. Click here to order the online video.
ABI WANTS TO SEE YOU IN PHOENIX THIS DECEMBER FOR THE WINTER LEADERSHIP CONFERENCE!
Join ABI on Dec. 3-5, 2015, at the historic Arizona Biltmore in downtown Phoenix for the 27th Annual Winter Leadership Conference. This can’t-miss event is always a member favorite and this year will be no exception! There will be topics designed for consumer and business practitioners, as well as financial advisors. Earn up to 12/14 hours of CLE/CPE credit and 2.75/3 hours of ethics, and enjoy a plethora of social and networking events.
Highlights from the conference include:
Optional events, including a golf tournament, kayaking, tennis, horseback riding and much more
Great Debates on chapter 11 plans, whether a bankruptcy judge can disband a creditors’ committee and must a creditor file a proof of claim
BAPCPA Consumer Issues: 10-Year Anniversary Special
Nine joint committee sessions, provided by ABI's 18 committees
A live Bloomberg "Eye on Bankruptcy" luncheon presentation
A special Casino Night!
A judges’ roundtable on hot-button issues
Early-bird registration ends Oct. 2 so be sure to register to take advantage of the savings!
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ABI thanks Donlin, Recano & Co. for its generous sponsorship of the ABI Events app.
ON-DEMAND VIDEO COURSE HELPS YOU PREPARE FOR THE ABC BOARD CERTIFICATION TEST!
Achieving American Board Certification (ABC) means you have met the rigorous, objective standards of a top professional in the areas of bankruptcy and/or creditors' rights. The ABC Exam is the essential step in this process, and this 5-part on-demand course will prepare you for the test. This intro video explains the benefits of ABC certification, the steps in the process and what to expect in the exam. The full exam prep course will qualify for 6 hours of CLE credit (where permitted for online learning), including 1 hour of ethics. The course is $295 for ABI members; $395 for non-members. The non-member $395 fee also includes 1 year of ABI Membership (a $295 value). Click here for more information and to purchase the course.
NEW CASE SUMMARY ON VOLO: IN RE CHARLES EDWARD TAYLOR II (7TH CIR.)
Summarized by Kevin Baum of Baum & Bailey P.C.
Affirming the district court, the Seventh Circuit first held that the appeal was not moot even though the debtor had entered into a settlement agreement with one of the appellees because the other appellees would not consent to the settlement agreement, and therefore, the discharge injunction would remain in place, the purported settlement would only provide partial relief, and the underlying dispute that gave rise to the disputed orders would remain unresolved. Next, turning to the merits of the appeal, the Seventh Circuit held that the bankruptcy court abused its discretion by issuing the contempt order, damages order and judgment, finding that (i) the appellees did not violate the statutory discharge or plan injunctions by filing a motion in a state probate court seeking to ratify an assignment of a judgment against the debtor to one of the appellees because the ratification motion did not seek to collect, recover, prosecute or satisfy the judgment against the debtor, and (ii) the ratification order was not an impermissible collateral attack on the bankruptcy court's dismissal order because the bankruptcy court's dismissal order was not in conflict with the state probate court's ratification order.
There are more than 1,800 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: CLOSER EXAMINATION OF 50 CENT'S BANKRUPTCY FILING
A recent blog post took a closer look at the assets and liabilities submitted in bankruptcy court by Curtis Jackson III, known as rapper "50 Cent."
To read more on this blog and all others on the ABI Blog Exchange, please click here.
ATTENDING AN ABI CONFERENCE? MAXIMIZE YOUR EXPERIENCE WITH THE OFFICIAL ABI EVENTS APP!
With this interactive mobile app, you can:
- View a complete listing of ABI events - View the full schedule for specific ABI conferences, including all educational sessions and networking and optional events - Access conference educational materials - Access maps of meeting spaces and get information about the hotels and host cities - View ABI conference exhibitors and sponsors - Create your own profile, message other conference attendees, post photos and - View up-to-the-minute schedule changes for ABI conferences - Access information from previous ABI conferences
Everything you need to attend ABI events is a few taps away: Download the ABI Events app today!
ABI thanks Donlin, Recano & Co. for its generous sponsorship of the ABI Events app.
INSOL INTERNATIONAL
INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 23 member associations worldwide with more than 9,800 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.
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UPCOMING EVENTS:
41st Lawrence P. King & Charles Seligson Workshop on Bankruptcy and Business Reorganization Sept. 16-17, 2015
Register Today!
20th Annual Views from the Bench Conference Oct. 9, 2015 Register Today!
