|NEWS AND ANALYSIS
EXPERTS EXAMINE SUPREME COURT'S BAKER BOTTS RULING AND POTENTIAL IMPLICATIONS FOR PROFESSIONAL FEES
ABI held a media teleconference today featuring experts discussing the Supreme Court's decision in Baker Botts, LLP v. ASARCO, LLC. The Supreme Court on June 15 ruled (6-3) in Baker Botts that Sect. 330(a)(1) of the Bankruptcy Code does not permit bankruptcy courts to award fees to Sect. 327(a) professionals for defending fee applications. Experts on today's teleconference examined the decision and how it could affect professional fees and fee litigation going forward. Speakers on today's call included:
- Former Bankruptcy Judge Judith Fitzgerald (W.D. Pa.; Pittsburgh)(ret.), an attorney at Tucker Arensberg (Pittsburgh)
- Robert J. Keach, a shareholder at Bernstein, Shur, Sawyer & Nelson (Portland, Maine) and co-chair of ABI's Chapter 11 Reform Commission
- Prof. Lawrence Ponoroff, the Samuel M. Fegtly Chair in Commercial Law at, and former Dean of, the University of Arizona James E. Rogers College of Law (Tucson, Ariz.).
- Moderator Gregory W. Werkheiser, a partner in Morris, Nichols, Arsht & Tunnell LLP's Business Reorganization & Restructuring Group (Wilmington, Del.).
Click here to listen to the recording of today's teleconference.
STUDY: BANKRUPTCY EXAMINERS RARELY APPOINTED
A new study from Temple University Beasley School of Law found that examiners appointed to investigate bankrupt companies are used in only a fraction of chapter 11 cases, despite language in the Bankruptcy Code that appears to make examiners mandatory often, Dow Jones Daily Bankruptcy Review reported yesterday. The study found that the decision to appoint an examiner isn't related to the presence of allegations like pre-bankruptcy incompetence or fraud, as was intended. Rather, the timing of the request and location of the case are the determining factors, according to the study.
Study authors Jonathan C. Lipson and Christopher Fiore Marotta concluded that "bankruptcy examination is a failure" because of the rarity with which it's employed. Examiners have been appointed most notable, in mega-cases like Lehman Brothers, Residential Capital LLC and recently in Caesars Entertainment Operating Co. The report built on prior research that extended data to 2010 from a previous look at cases between 1991 and 2007. The research found that of 1,225 small and large bankruptcy cases, examiners were sought in only 8.5 percent, or 104 cases, and appointed in only 4 percent, or 48. The Final Report of ABI's Commission to Study the Reform of Chapter 11 proposed replacing examiners with "a more flexible 'estate neutral'" that could also serve as a mediator and facilitator, providing more efficiency in bankruptcy cases. Read more. (Subscription required.)
For further analysis of the study, please click here.
Click here to read the Commission's proposal on an "estate neutral" (starting on p. 32).
ANALYSIS: BANKS FEELING PINCH FROM DECLINING OVERDRAFT FEES
Long a cash cow for banks, overdraft fees are shrinking fast thanks to tighter regulation and moves by firms to make policies more customer-friendly, the Wall Street Journal reported today. More large banks are waiving certain overdraft fees, capping the number of times customers can incur the charges and processing transactions in the order they occur rather than by the dollar amount. The changes are hitting the bottom line, analysts say. Overdraft charges have been on the downswing for a few years, but new data suggest they are declining at a more rapid pace. Banks, credit unions and other financial institutions took in $30.6 billion in overdraft-fee revenue, based on annualized first-quarter data of more than 12,000 institutions to be released Wednesday by Moebs Services Inc., an economic-research firm in Lake Forest, Ill. That is down 4 percent from 2014, the biggest such decline since 2011. Read more. (Subscription required.)
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 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, 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 that 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).
REGISTER FOR FREE: NEXT THURSDAY'S ABI LIVE WEBINAR EXAMINES PRACTICAL IMPACT OF CHAPTER 11 COMMISSION RECOMMENDATIONS ON PREFERENCE REFORMS
The ABI Young and New Members and Bankruptcy Litigation Committees will present a free abiLIVE webinar on June 25 to explore the ABI Chapter 11 Reform Commission Report's recommendations regarding the preferential transfer statute in Sect. 547. This webinar will examine the rationale behind the recommendations, such as the good faith belief for filing a demand letter or preference complaint, the increase in the statutory minimum to bring a preference action, venue reform for small-dollar cases and more. Most importantly, the panel will assess the practical effects and foreseeable impact of implementing these recommendations. This webinar is a must-attend for attorneys who regularly represent creditors, liquidating trustees, and panel trustees in preference actions. Click here for more information and to register for free!
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. 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. Networking reception to 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: GRENIER V. ROBACK (IN RE GRENIER; 9TH CIR.)
Summarized by Thomas Phinney of Parkinson Phinney
The Ninth Circuit ruled that the creditor, who obtained a state court judgment against the debtor for financial elder abuse, was not entitled to summary judgment on her Sect. 523(a)(6) claim for willful and malicious injury. The creditor did not establish that the debtor's subjective intent to harm the debtor was actually litigated or necessarily decided by the state court. Thus, the bankruptcy court erred in applying issue preclusion to the judgment, and the matter was remanded for trial.
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: SUPREME COURT TO SETTLE EQUAL CREDIT OPPORTUNITY ACT'S SPOUSE-GUARANTOR RULE
A recent blog post reported that the Supreme Court has agreed to address a split between circuits that emerged last summer centering on whether the Equal Credit Opportunity Act permits financial institutions to require the spouse of a loan applicant to guaranty the loan.
For further analysis of the Supreme Court's decisions from the October 2014 term, be sure to visit ABI's Supreme Court page. The page features each case, including a media teleconference with experts presenting their perspectives of the decision.
To read more on this blog and all others on the ABI Blog Exchange, please click here.
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