FOLLOWING COURT RULING, CONGRESSMAN URGES PASSAGE OF LEGISLATION TO GRANT PUERTO RICO CHAPTER 9
Following yesterday's decision by the U.S. Court of Appeals for the First Circuit affirming a Feb. 6 decision by the U.S. District Court for the District of Puerto Rico that the "Puerto Rico Corporations Debt Enforcement and Recovery Act" is preempted by the Bankruptcy Code, Puerto Rico Resident Commissioner Pedro Pierluisi called on Congress to act on his legislation to grant the territory access to chapter 9. "The Court of Appeals has concluded that 'Congress preserved to itself that power to authorize Puerto Rican municipalities to seek chapter 9 relief.' This means that Puerto Rico has one option and one option only, namely to 'turn to Congress for recourse,'" Pierluisi said in a press release. In February, he introduced H.R. 870, the Puerto Rico Chapter 9 Uniformity Act, which seeks state-like treatment for Puerto Rico under chapter 9. A companion bill will soon be filed in the Senate. Read more.
COMMENTARY: THREAT OF PAY "CLAWBACKS" MAY BE AS POWERFUL AS RECOVERIES
The Securities and Exchange Commission and the Bank of England recently proposed rules that provide for a much more aggressive approach to recover corporate bonuses than the current rules adopted under the Sarbanes-Oxley Act, according to a commentary yesterday on the New York Times DealBook blog. Like most such efforts, however, the regulators' new rules are at best only a small step, unlikely to change significantly how most executives operate. But, if nothing else, they will draw attention in the C-suite, so the benefit may be more in the perception of a potential threat through compensation clawbacks than the amount of any actual recoveries. Mary Jo White, the S.E.C. chairwoman, said that the proposed rules would result in increased accountability and would benefit investors and the markets. The Bank of England, along with the Financial Conduct Authority, issued rules in June that require banks and financial firms operating in Britain to adopt rules for recovering bonuses from an executive who "participated in, or was responsible for, conduct which resulted in significant losses to the firm." The clawback period can be extended up to 10 years when a bank has been notified that it is under investigation. The British rules are far tougher than any in the United States. But they are limited to banks and financial firms and do not apply to other large companies that can engage in financial misconduct that could significantly affect investors and the markets, according to the commentary. Read more.
ANALYSIS: MASS UNEMPLOYMENT, LOWERED WAGES THE NEW "NORMAL" ECONOMY
Even after another month of strong hiring in June and a sinking unemployment rate, pay is sluggish and many part-timers can't find full-time work, according to an Associated Press analysis on Saturday. Many economists think these trends will persist for years despite steady job growth. "The Fed may recognize that this is a new labor-market normal, and it will begin to normalize monetary policy," said Patrick O'Keefe, an economist at accounting and consulting firm CohnReznick. Thursday's monthly jobs report from the government showed that employers added a solid 223,000 jobs in June and that the unemployment rate fell to 5.3 percent from 5.5 percent in May. However, the percentage of Americans in the workforce -- defined as those who either have a job or are actively seeking one -- dropped to 62.6 percent, a 38-year low, from 62.9 percent. (The figure was 66 percent when the recession began in 2007.) Fewer job-holders typically means weaker growth for the economy. The growth of the labor force slowed to just 0.3 percent in 2014, compared with 1.1 percent in 2007. Read more.
LATEST ABI PODCAST FEATURES AUTHOR DISCUSSING CREDIT BIDDING ISSUES AND CASES
ABI's latest podcast features ABI Deputy Executive Director Amy Quackenboss speaking with Paul Hage, a co-author of ABI's Credit Bidding in Credit Bidding in Bankruptcy Sales: A Guide for Lenders, Creditors, and Distressed-Debt Investors. Hage, a partner in Jaffe Raitt Heuer & Weiss (Southfield, Mich.), co-chair of ABI's Unsecured Trade Creditors Committee and a coordinating editor for the ABI Journal, talks about the book and examines issues and cases (Fisker, Free Lance-Star, etc.) surrounding credit bidding in bankruptcy. Click here to listen.
MISS THE SPECIAL PRESENTATION AT ABI'S CROSS-BORDER PROGRAM FOCUSING ON BRAZIL'S PETROBAS SCANDAL AND ECONOMIC DISTRESS? WATCH NOW!
ABI's Cross-Border Program on June 18 featured a special Bloomberg "Eye on Bankruptcy" Presentation featuring Bloomberg's Bill Rochelle, Fabio Vassel of Banco Brasil Plural and Luis DeLucio of Alvarez & Marsal discussing the Brazilian Petrobras bribery and corruption scandal. The case has had wide-ranging effects on Brazilian companies, from the criminal prosecution of corporate executives and government officials to open-ended prohibitions on future contracts with Petrobras and, in some instances, fines of millions of reals. Watch the video and to gain insight on how the current economic and political landscape is likely to impact Brazilian companies, lenders and investors in the years to come.
TOMORROW: ABI LIVE WEBINAR EXAMINES CHAPTER 11 REFORM COMMISSION'S RECOMMENDATIONS ON PROFESSIONAL FEES AND EXPENSES
Don't miss tomorrow's abiLIVE webinar 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: ELLMANN V. BAKER (IN RE BAKER; 6TH CIR.)
Summarized by Laura Bartell of Wayne State University School of Law
Affirming the district court, the Court of Appeals held that the Supreme Court's decision in Law v. Siegel, 134 S. Ct. 1188 (2014), limits the bankruptcy court's power to disallow claimed exemptions on the basis of debtor misconduct, and that the trustee waived his objection to the timeliness of the amendments to the bankruptcy schedules.
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: PUERTO RICO PREEMPTION REDUX: BACK TO YOU, CONGRESS
A recent blog post examines the U.S. Court of Appeals for the First Circuit's decision to uphold the U.S. District Court's Feb. 6 ruling that the Puerto Rico Recovery Act is preempted by the Bankruptcy Code.
To read more on this blog and all others on the ABI Blog Exchange, please click here.
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