FEDERAL JUDICIARY, DOJ BRACE FOR POTENTIAL GOVERNMENT SHUTDOWN
The federal judiciary and the U.S. Department of Justice are preparing for a government shutdown as Congress and the White House try to resolve their differences over government spending and the Obama administration's health care law, Legal Times reported yesterday. If Congress and the White House don't pass a continuing resolution on government funding by Oct. 1, federal courts could face widespread furloughs that will worsen an already "grave judicial crisis" from the $350 million in budget cuts that occurred earlier this year, according to a memo that the Administrative Office of the U.S. Courts sent on Tuesday. The federal courts have enough reserve funds to run as normal for two business weeks before shutting down all but essential work, U.S. District Judge John Bates, the administrative office director, wrote in a memo to the federal court system. Justice Department employees, including those in the U.S Attorney's Office in Washington, D.C., are being told that some employees would be put on furlough. Read more.
FANNIE WOOS INVESTORS AS REGULATORS EMBRACE RISK-SHARING
Fannie Mae, preparing its first sale of securities that would share the risks of homeowner defaults with bondholders, will offer better terms than in Freddie Mac's initial deal as the U.S.-backed mortgage companies seek to expand investor participation in the market, Bloomberg News reported today. Fannie Mae officials are visiting investors across the country, with stops in Boston and Cincinnati this week, as it attempts to sell $675 million of the debt at lower yields than Freddie Mac got in its $500 million offering in July. Under Fannie Mae's terms, bondholders won't suffer losses until delinquencies are higher. U.S. regulators see the notes as a way to reduce the dominance of the two government-controlled firms and assess whether they're charging enough to guarantee their traditional mortgage bonds, embracing a risk-sharing approach that may play a central role in the future of the $9.3 trillion U.S. mortgage market. Read more.
HOUSING GROUP SAYS BANK OF AMERICA DISCRIMINATES IN MINORITY COMMUNITIES
The National Fair Housing Alliance yesterday expanded its complaint against Bank of America over neglecting the maintenance and marketing of foreclosed homes in black and Latino neighborhoods, the Washington Post reported today. The complaint, filed with the Department of Housing and Urban Development a year ago, offers additional evidence and includes five new cities -- Denver, Memphis, Tenn., Las Vegas, Tucson, Ariz., and Philadelphia. All told, the advocacy group said that it has unearthed discriminatory practices in the way Bank of America handled 621 properties in 18 metropolitan areas. The allegations arose out of a year-long investigation by the alliance, which found that homes serviced by Bank of America in minority communities were far more likely than those in white areas to be left in disrepair, with broken windows, unkept yards or water damage. These homes were also less likely to have for-sale signs than ones in predominantly white neighborhoods. Read more.
IMMINENT SWAPS REGULATIONS WORRY INDUSTRY
Banks, brokers and investors are warning of potential turmoil in a major part of the derivatives market on Oct. 2, when new U.S. rules kick in governing how instruments known as swaps are traded, the Wall Street Journal reported today. The Bank for International Settlements estimates that there are $633 trillion of swaps outstanding. The new regulations, which were mandated as part of the Dodd-Frank financial regulation law and are being implemented by U.S. regulators, are meant to make the swaps market more transparent and prevent a repeat of the 2008 financial crisis, when the market was thrown into upheaval. Under the new rules, most swaps must be transacted through registered venues, routed through central clearinghouses and reported to data warehouses known as trade repositories, where regulators can find all the information they need on possible emerging risks to the system. Industry officials are waging a vigorous last-ditch lobbying campaign aimed at persuading the Commodity Futures Trading Commission to delay the rules. They argue that the new standards have been applied too quickly and could throw the market into disarray. Read more. (Subscription required.)
SEC TO GET TOUGHER ON FRAUD
Securities and Exchange Commission Chairman Mary Jo White said today that U.S. regulators will seek fraud charges against more individuals and pursue larger fines for corporations that commit wrongdoing, the Wall Street Journal reported. White outlined her goals for boosting the SEC's enforcement division, fleshing out an agenda that already includes making companies and individuals admit wrongdoing as a condition of settling certain cases. "We need to be certain our settlements have teeth, and send a strong message of deterrence," White said. She said that the agency wouldn't be bound solely by guidance it released in January 2006, which suggested that the agency would think twice before imposing big penalties on firms if the penalties harm the company's shareholders. Read more. (Subscription required.)
BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: UNPRECEDENTED ACTIONS BY TWO DISTRICT JUDGES
Two federal district judges tied for Judge of the Week on the video with Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle. District Judge Lynn N. Hughes in Houston took a case entirely away from the bankruptcy judge rather than hear an appeal. Meanwhile, District Judge Jed Rakoff wrote an opinion sitting on the appeals court in a case involving Bernard Madoff's fraud, where in substance he told himself how to rule in another Madoff case he's hearing as a district judge. Watch here.
ABI'S UNSECURED TRADE CREDITORS COMMITTEE INVITES YOU TO TAKE PART IN ITS OCT. 2 DISCUSSION: CONSIDERATIONS ARISING OUT OF CLAIM-TRANSFER TRANSACTIONS
Members are encouraged to join ABI's Unsecured Trade Creditors' Committee in a discussion on Oct. 2 at 4 p.m. ET about considerations that arise out of claim-transfer transactions. Bankruptcy claim transfers are an active part of the bankruptcy process in today's marketplace, and for this reason, the Judicial Conference of the United States imposed a new fee on each transfer, effective May 1, 2013. The moderator for the call, Neil B. Glassman of Bayard, P.A. (Wilmington, Del.), will lead a discussion focusing on the steps in a claim-sale transaction, standard provisions in the transaction documents, developments in the industry, and tricks and traps creditors' counsel can avoid. If you would like to participate on the committee call, please contact Martha Cannon at [email protected]
ABILIVE WEBINAR NEXT WEEK LOOKS AT THE INTERSECTION OF INTELLECTUAL PROPERTY AND BANKRUPTCY: KODAK, NORTEL AND OTHER CASES
IP experts will shed light on the mysteries of understanding IP law and navigating the often puzzling sales processes, drawing from their experiences in Nortel, Kodak and other important cases, in an abiLIVE webinar on Oct. 3 from 1:00-2:15 p.m. ET. Speakers will include David Berten (Global IP Law Group, LLC; Chicago), Pauline K. Morgan (Young Conaway Stargatt & Taylor, LLP; Wilmington, Del.), Cassandra M. Porter (Lowenstein Sandler LLP; Roseland, N.J.), Kelly Beaudin Stapleton (Alvarez & Marsal; New York) and Christopher Burton Wick (Hahn Loeser & Parks LLP; Cleveland). To register, click here.
ABI LAW REVIEW/ST. JOHN'S SYMPOSIUM ON OCT. 4 TO EXAMINE HEDGE FUNDS IN BANKRUPTCY- FREE PROGRAM!
ABI Law Review and St. John's School Law Center for Bankruptcy Studies invite members to attend the Fall 2013 "Hedge Funds in Bankruptcy" Symposium on Oct. 4 The free program will be held at St. John's School of Law in Queens, N.Y., from 9 a.m. to 2:30 p.m. ET. Distinguished scholars and professionals in the hedge fund and bankruptcy fields will discuss the growing role that hedge funds now play in the bankruptcy process and to assess the desirability of maintaining, expanding, limiting, or otherwise changing this role by means of changes in bankruptcy law, policy or practice. While there is no fee to attend the symposium, advance registration is required. To register, please complete and submit the online registration form.
FIRST ABI WORKSHOP PROGRAM LOOKS AT RISKY TIMES FOR SECURED LENDERS AND SERVICERS! ATTEND IN PERSON OR VIA LIVE WEBSTREAM
You will not want to miss the abiWorkshops series' inaugural program, "Risky Times for Secured Lenders and Servicers." The program is cosponsored by TMA (Chesapeake), IWIRC (D.C./Greater Maryland) and RMA (Potomac), and will be held on Nov. 6 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 6 program include:
- Living with the New CFPB Mortgage Servicing Rules
Business Lending: Navigating What Lies Ahead
- Business Lending: Recent Legal Developments
For more information or to register for the "Risky Times for Secured Lenders and Servicers" abiWorkshop on Nov. 6, please click here.
ABI GOLF TOUR UNDERWAY; LAST STOP FOR 2013 IS WINTER LEADERSHIP CONFERENCE IN DECEMBER
The 7th and final stop for the 2013 ABI Golf Tour is on Dec. 5 at the Trump National Golf Club, held in conjunction with ABI’s Winter Leadership Conference. Final scoring to win the Great American Cup sponsored by Great American Group is based on your top three scores from the seven ABI events. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! A 22-handicapper won the tour event at July’s Southeast Bankruptcy Workshop. There's no charge to register or participate in the Tour.
NEW CASE SUMMARY ON VOLO: SMITH V. STATE OF MISSOURI (IN RE ZACHARY A. SMITH; 8TH CIR.)
Summarized by Benjamin Ellison of the U.S. Bankruptcy Court for the Western District of Washington
The Eighth Circuit Court of Appeals affirms the prior court rulings, denying contempt. It does so on three bases: (1) the Rooker-Feldman doctrine precludes consideration; (2) the appellant prison's post-bankruptcy incarceration costs constitute post-petition obligations, not subject to discharge; and (3) the Missouri Incarceration Reimbursement Act does not violate the Supremacy Clause of the U.S. Constitution.
There are more than 1,000 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: DISCOVERY OF LOSS-SHARE PAYMENTS IN LITIGATION
The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent blog post found that financial institutions seeking to challenge discovery relating to loss-share agreements and payments from the FDIC should be able to do so on the grounds of relevance. A second argument against such discovery, according to the post, is based on the public policy underlying loss-share agreements.
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.
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