FORECLOSURE FILINGS INCREASE IN 60 PERCENT OF LARGE U.S. CITIES
RealtyTrac Inc. reported that foreclosure filings rose in almost 60 percent of large U.S. cities in the first half of 2012, indicating that many areas will have more distressed homes on the market later this year, Bloomberg News reported today. More than 1 million homes in metropolitan areas with populations of at least 200,000 received notices of default, auction or repossession, up 1.5 percent from the last six months of 2011, the Irvine, Calif.-based data provider said today. Among the 20 largest markets, Tampa, Fla., Philadelphia, Chicago and New York City had the biggest percentage increases in filings. Across the nation, one in 126 households received a foreclosure notice in the first half of the year, RealtyTrac said. Of the 212 metro areas with at least 200,000 residents, 125 cities had an increase in filings from the latter half of 2011. Read more.
DEMOCRATS PROPOSE BILL TO PROTECT WAGES, BENEFITS IN BANKRUPTCY
Congressional Democrats are proposing legislation that could double employees' and retirees' recoveries when their employers file for chapter 11 protection, Dow Jones Daily Bankruptcy Review reported yesterday. Led by Sen. Dick Durbin (D-Ill.) and Rep. John Conyers (R-Mich.), the "Protecting Employees and Retirees in Business Bankruptcies Act" introduced on July 12 would amend the Bankruptcy Code to double, to $20,000, the maximum claim for wages and benefits that workers and retirees can assert in their employers' chapter 11 cases. Rep. Conyers and Sen. Durbin have introduced similar legislation twice already, in 2007 and 2010, but neither version made it before the full House or Senate. Read more. (Subscription required.)
To read the text of the "Protecting Employees and Retirees in Business Bankruptcies Act," please click here.
COMMENTARY: BETTER DISCLOSURE FOR PRIVATE LOANS NEEDED
About two-thirds of bachelor’s degree recipients borrow to complete their educations, but only the fortunate among them rely on federal loans that offer a low, fixed-interest rate and broad consumer protections that allow them to defer payments if they lose their jobs, according to a New York Times editorial today. However, many students have to turn to private student loans that have variable interest rates and few consumer protections. A new study issued jointly last week by the Consumer Financial Protection Bureau and the Department of Education makes it clear that the government, Congress in particular, can do a better job of educating families about the significant differences between private and federal loans while making sure that colleges and lenders are up-front and honest about risks. The study's most distressing finding is that more than 40 percent of students who borrowed privately were in fact eligible to borrow from the safer and generally less costly federal program. The study says that the poor economy has made it hard for many student borrowers of private loans to meet their obligations, and many are at risk of default. At a minimum, Congress should revisit the 2005 amendments to the bankruptcy law, but it should also pass a pending bill sponsored by Sens. Richard Durbin (D-Ill.) and Tom Harkin (D-Iowa) that would require colleges and lenders to thoroughly explain borrowing options to students. Read the full editorial.
MAJOR RETAILERS OPPOSE SWIPE FEE SETTLEMENT
Many analysts considered the $7.25 billion credit card interchange fee settlement to be a significant victory for retailers, but the world's two largest retailers, Walmart and Target, have both come out against the proposed settlement, Forbes.com reported today. They join the National Association of Convenience Stores and the National Retail Federation, two organizations which immediately denounced the settlement when it was first announced on July 13. These organizations feel that the settlement has left credit card issuers with too much control over swipe fees. As part of the landmark agreement–the largest antitrust class-action settlement in history–MasterCard, Visa and major banks agreed to pay more than $6 billion to resolve accusations that they engaged in anticompetitive practices and price fixing in payment processing. In addition, credit card companies agreed to reduce swipe fees for eight months, an adjustment valued at $1.2 billion. The settlement would also allow retailers to charge higher prices to their customers for paying with credit cards. Before this settlement, the card companies prohibited retailers from adding this type of surcharge. Read more.
STATES SEEK CONGRESSIONAL ASSISTANCE TO COLLECT INTERNET SALES TAXES
More than 21 states have simplified how they collect taxes in hopes of recovering an estimated $20 billion in sales taxes that go uncollected by out-of-state online merchants every year, but the nation's governors say that they still need help from Congress, the Associated Press reported today. Speaking on behalf of the National Governors Association, Tennessee Gov. Bill Haslam (R) told the House Judiciary Committee on Tuesday that it is not fair to local businesses that online sellers are not required to collect and distribute state sales taxes for purchases made where they don't have a physical presence. Through the Streamlined Sales and Use Tax coalition, nearly 21 states are in full compliance with the laws and regulations set forth by the cooperative and have agreed to implement the policies and software technology that would make it easy for even the smallest businesses to collect and forward sales taxes across state lines. Reps. Steve Womack (R-Ark.) and Jackie Speier (D-Calif.) urged the House to pass the Marketplace Equity Act of 2011, which is co-sponsored by 48 House lawmakers from both parties. The act was in response to a 1992 Supreme Court decision that restricted states from collecting sales taxes on Internet transactions from online retailers that did not have a physical connection with the state. Read more.
LATEST ABI PODCAST EXAMINES CALIFORNIA COUNTY'S CONTROVERSIAL PROPOSAL TO USE EMINENT DOMAIN TO PROVIDE RELIEF FOR UNDERWATER HOMEOWNERS
The latest ABI podcast features ABI Executive Director Sam Gerdano talking with former ABI Resident Scholar Prof. Mark Scarberry from the Pepperdine University School of Law about a controversial proposal being considered by a few localities in California to provide relief to underwater homeowners. Officials from San Bernardino County, Calif., along with two other cities are considering a proposal to use eminent domain to reclaim underwater, but performing, mortgages to then rewrite the mortgage and lower the monthly payments. The county would then pay investors what they consider "fair value" for the mortgage. Scarberry, who continues to analyze various approaches to the foreclosure crisis, talks about the proposal and the potential legal ramifications of using eminent domain to provide relief from the foreclosure crisis. Click here to listen to the podcast.
“SUBJECTING BUSINESS PROJECTIONS TO SCRUTINY IN VALUATION DISPUTES” WEBINAR TO BE HELD ON JULY 30!
Reassembling the speakers from the highest-rated panel at the New York City Bankruptcy Conference this year, ABI will be holding a live webinar on July 30 at 11 a.m. ET titled, "Subjecting Business Projections to Scrutiny in Valuation Disputes." Panelists include:
Moderator David Pauker of Goldin Associates, LLC (New York)
Martin J. Bienenstock of Proskauer (New York)
David M. Hillman of Schulte Roth & Zabel LLP (New York)
Bankruptcy Judge Robert E. Gerber (S.D.N.Y.)
The panel will address:
How much deference should management projections be accorded?
How do you determine whether projections are unrealistically optimistic or pessimistic?
What is the relevance of "market consensus?"
How do management’s incentives impact projections?
The webinar is available to ABI members for $75 and is approved for 1.0 CLE hours in Calif., Ga., Hawaii, Ill., N.Y. (approved jurisdiction policy) S.C. and Texas. CLE approval is pending in Del., Fla., Pa. and Tenn. To register, please click here.
LATEST CASE SUMMARY ON VOLO: MORRIS V. BROWN (IN RE BROWN; 6TH CIR.)
Summarized by Robert Hillyer of Butler Snow O'Mara Stevens & Cannada PLLC
The Sixth Circuit affirmed a lower court order granting summary judgment in favor of appellee Brown dismissing the adversary complaint filed by appellants Morris and Lynch seeking determination that Brown's debt to them was nondischargeable under 11 U.S.C. § 523(a)(6).
More than 570 appellate opinions are summarized on Volo typically 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: MORTGAGE MODIFICATIONS IN BANKRUPTCY HELP HOMEOWNERS
The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post advocates for more bankruptcy courts to start using the Mortgage Modification Mediation Program first started by Judge Robert Drain in the Southern District of New York.
Strong opinions on mortgage modification in bankruptcy proceedings? Make sure to vote on ABI's latest Quick Poll below!
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 The anti-modification rule for home mortgages in chapter 13 should be repealed, subjecting mortgage debts to bifurcation like any other secured claim.
Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
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