HOME VACANCIES FALL IN CITIES HIT HARDEST BY FORECLOSURES
Trulia Inc. has reported that the home-vacancy rate is falling in U.S. cities such as Las Vegas and Phoenix that were hit hardest by the housing crisis, Bloomberg News reported today. San Jose, Calif., led the declines among metropolitan areas, with a 24.1 percent drop in the number of empty homes and apartments this year through mid-July, according to Trulia, a real estate information company in San Francisco. It was followed by Las Vegas, Denver, the California areas of Bakersfield and Orange County, Seattle and Phoenix. Falling vacancies, based on an analysis of homes where the U.S. Postal Service delivered no mail for at least 90 days, indicate a gain in the number of new occupants, caused by population growth and more household formation, Trulia Chief Economist Jed Kolko said. Home prices rose for a third consecutive month in May in the 20 U.S. cities tracked by the S&P/Case-Shiller index, according to a July 31 report. U.S. apartment rents rose the most in five years in the second quarter as shrinking vacancies allowed landlords to charge more, research firm Reis Inc. (REIS) said on July 5. Read more.
COMMENTARY: REGULATE, DON'T SPLIT UP, HUGE BANKS
While Sanford I. Weill, the mastermind behind the creation of Citigroup, last week called for the dismantling of megabanks, the bank merger frenzy that Weill set off in the late 1990s was not the proximate cause of the 2008 financial crisis, according to an op-ed by Steven Rattner, a former counselor to the Treasury secretary, in today's New York Times. None of the institutions that toppled like dominoes in 2008 — the investment banks Bear Stearns and Lehman Brothers, the mortgage-finance giants Fannie Mae and Freddie Mac, the insurance company American International Group — were commercial banks, according to Rattner. Nor was the concentration of our banking system, which is less centralized than those in Britain, France, Germany, Italy, Japan, Switzerland and many other countries. What brought our financial system to its knees, according to Rattner, was poor management that expanded the banks' portfolios and activities too aggressively without sufficient risk controls, enabled by lax oversight by regulators. Many of those excesses were concentrated in the housing sector, where a now-legendary bubble formed without regulators or industry leaders recognizing it, according to the op-ed. When the bubble inevitably deflated, in 2007, the weakest institutions imploded with it, and systemic risks were exposed. Only with billions of government money — much of it now recouped — was the system saved. The Dodd-Frank Act was passed and includes a rule, proposed by the former Fed chairman Paul A. Volcker, that forbids banks to gamble with insured deposits. We should focus on putting this and other new regulations into effect, and devising better ways to deal with financial giants — not distractions like Weill's call for reinstating an outmoded concept like Glass-Steagall Act, according to Rattner. Read the full op-ed.
MICHIGAN UNVEILS DEMOLITION PLAN FOR PORTIONS OF DETROIT
Michigan's governor unveiled a new urban policy today aimed at jumpstarting the demolition of thousands of vacant and abandoned homes in Detroit, the Wall Street Journal reported today. Detroit, which lost a quarter of its population between 2000 and 2010, is estimated to have as many as 40,000 vacant and dangerous structures across its 139-square-mile spread. Such homes are a magnet for criminal activity and create a hazard for children walking to schools. Michigan Governor Rick Snyder (R) plans to use about $10 million of Michigan's $97 million payout from a national mortgage-settlement fund to help demolish abandoned houses that surround nine schools in three of Detroit's deteriorating communities. The state's broader role in running Detroit is the result of a power-sharing agreement struck in April—and endorsed by Detroit Mayor Dave Bing—to help the city stave off bankruptcy. Read more. (Subscription required.)
BILL PROVIDES NEW PROTECTIONS FOR ANTITRUST WHISTLEBLOWERS
Whistleblowers would get more protections for reporting criminal antitrust violations to the Department of Justice under new legislation introduced on Tuesday by Sens. Patrick Leahy (D-Vt.) and Chuck Grassley (R-Iowa ), the top members of the Senate Judiciary Committee, the Legal Times reported yesterday. The Criminal Antitrust Anti-Retaliation Act would provide a civil remedy for those who are retaliated against for reporting violations such as price-fixing, market allocation and bid-rigging, which can result in reduced competition and more overcharges for businesses and consumers. The bipartisan bill is based on the results of the General Accountability Office's 2011 study on enforcing antitrust laws, where antitrust attorneys and law professors broadly supported the addition of that remedy because it would motivate more people to come forward with evidence. The DOJ's Antitrust Division, the enforcer of antitrust laws, has relied heavily upon a leniency program to help the agency uncover and prosecute illegal cartel activity, according to the GAO report. Under that current leniency program, the first individual or company that reports its involvement in a criminal antitrust conspiracy to the Antitrust Division will avoid criminal conviction, fines and prison sentences. The bill introduced on Tuesday does not propose a rewards program for whistleblowers, which DOJ officials said could jeopardize witness credibility in criminal cases and could undermine companies' internal compliance programs. Read more.
ABI MEMBERS WELCOME TO ATTEND ABC'S FREE HALF-DAY "BANKRUPTCY: BACK TO THE FUTURE" PROGRAM IN SEPTEMBER
The American College of Bankruptcy invites you to attend a free half-day program on Sept. 28 at the IIT Chicago-Kent College of Law for a discussion of many of the challenging topics facing current bankruptcy and reorganization professionals. Topics to be addressed include recent decisions of the U.S. Supreme Court and Court of Appeals, important work of the Advisory Committee on Bankruptcy Rules, and developments in the field of bankruptcy ethics. The speakers for the program are among the nation’s leading judges, academics and bankruptcy professionals. While there is no cost to attend, seating is limited, so early reservation is suggested. To register, please click here.
For more information on the program, please contact Claudia Gunderson at [email protected] or
LATEST CASE SUMMARY ON VOLO: U.S. V. CONEY (5TH CIR.)
Summarized by Gregory Hesse of Hunton & Williams LLP
The Fifth Circuit ruled that the chapter 7 discharge that was issued in favor of the defendants did not discharge their tax obligations because the debtors' conduct violated Sec. 727(a)(1)(C).
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: THE GROWING TREND OF MIDDLE-AGED AMERICANS WITH STUDENT LOAN DEBT
The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines how middle-aged Americans are caught up in the student loan debt crisis at a growing rate.
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 Twombly/Iqbal rule for pleading ‘plausible’ claims has been applied too stringently in dismissing avoidance actions for failure to state a claim.
Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
IS YOUR ABI MEMBERSHIP PROFILE CURRENT?
Keeping a current profile will allow you to benefit from one of ABI's most important services - networking. When you update your profile, you are putting your most valuable information in the membership directory. Be sure to include your areas of expertise, firm information, education and join any other committees that are of interest. Click here to update your profile.
INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 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.