JUDGE PROPOSES FAST PACE IN DETROIT BANKRUPTCY CASE
Bankruptcy Judge Steven Rhodes today set key dates in Detroit's bankruptcy case that indicate his intention to accelerate the process, the Detroit Free Press reported today. Judge Rhodes proposed an Aug. 19 deadline for all motions arguing against Detroit's eligibility for chapter 9 bankruptcy and that a trial on that question will begin Oct. 23rd. Detroit Emergency Manager Kevyn Orr asked the judge to set a one-month deadline for objections to the city's right to file for bankruptcy. The eligibility question has taken more than a year to resolve in some of the municipal bankruptcies of the last five years. Attorneys for the city have argued in court filings that they negotiated "in good faith" with the city's creditors before filing for bankruptcy. The city also argued that it is insolvent, one key criteria allowing municipalities to file for bankruptcy. Several creditors, including labor groups, have signaled they plan to challenge the city's eligibility to file for bankruptcy. The city's pension boards have accused Orr's team of failing to negotiate in good faith over changes to retiree pensions. Judge Rhodes also proposed March 1 as a deadline for the city to file a plan of adjustment. Judge Rhodes plans to consider any questions or concerns about his proposed schedule on Friday during a court hearing in Detroit. Read more.
Looking for this court document or the referenced state statutes in the Detroit bankruptcy case? The latest news stories and analysis? Audio and video of experts examining the issues of the case? ABI has all those items and more on ABI's Detroit Bankruptcy Resources webpage. As new developments break and filings are registered with the court throughout the proceeding, ABI's Detroit webpage will keep you up-to-date on the proceeding. Make sure to bookmark and regularly visit http://news.abi.org/detroit.
ANALYSIS: DETROIT BANKRUPTCY UNDERSCORES RIFT BETWEEN CITY, SUBURBS
A generations-long divide between Detroit, where the per-capita income is $15,261, and its suburbs, such as Birmingham, Mich., where it's $67,580, is raising questions about how affluence can co-exist alongside poverty, and whether urban areas with declining populations can thrive, according to a Bloomberg News analysis yesterday. Detroit became the fourth-largest U.S. city by 1950 with the growth of the auto industry, when the companies that are now General Motors Co., Ford Motor Co. and Chrysler Group LLC churned out cars. Since then, 1 million residents have left for places such as Oakland County, where the population more than tripled to 1.2 million. That county is the state's wealthiest, according to the U.S. Bureau of Economic Analysis statistics. Cities such Birmingham and Bloomfield Hills, where auto executives and former Republican presidential candidate Mitt Romney lived, are about 20 miles from Detroit. The disparity between rich and poor increased over the past decade as Detroit "got hammered" during the longest recession since the 1930s, said Kurt Metzger, director of Data Driven Detroit, a nonprofit organization that tracks social, economic and environmental indicators. Read more.
U.S. REGULATORS MOVING CAUTIOUSLY ON MORTGAGE REFORMS
U.S. bank regulators, wary of upsetting the fragile housing market, are moving cautiously in fashioning dozens of new rules to prevent reckless underwriting and other mortgage market abuses, Reuters reported yesterday. In implementing the 2010 Dodd-Frank financial reform law, regulators have said that they are sensitive to arguments from a rare alliance of both lenders and consumer groups that too-tough rules could hamper credit availability. A cooperative relationship has developed between banks and the newly created Consumer Financial Protection Bureau (CFPB), which has broad authority to regulate mortgage lending. Consumer groups and lenders said that the CFPB struck a balance with its first major mortgage rules, including a requirement released in January that lenders be able to verify that borrowers could repay loans. Since then, bank lobbyists say bureau officials remain attuned to their concerns about complying with the many new rules. In some cases, the bureau has even revisited final rules and amended technical aspects in response to banks' comments. Read more.
COMMENTARY: NOT TOO BIG TO FAIL
New rules on bank capital, recently proposed by the Federal Deposit Insurance Corp. and other bank regulators, are a welcome step toward a safer and sounder financial system, according to an editorial in yesterday's New York Times. Big banks will likely argue that the new rules will impede their ability to thrive and, in the process, harm the economy. But their profits are soaring, even as the economy is slowing down, a situation that makes their shopworn anti-regulatory argument all the more threadbare, according to the editorial. It is not the banks that need protection from regulation, but rather it is the public that needs protection from banks that are regarded as too big to fail. The new rules would require the nation's biggest banks to hold significantly more capital than is required under international agreements. Higher capital requirements are a start, according to the editorial, but tighter regulations reducing complexity and risks are also necessary, including an iron-clad Volcker Rule prohibiting excessive speculation. Read the full editorial.
CITIES BEGIN HIRING AGAIN
Cities across the U.S. are starting to hire new teachers, firefighters and police officers, as a prolonged slide in local-government employment appears to have bottomed out, four years after the recession ended, the Wall Street Journal reported today. Municipal police academies in Massachusetts are running at capacity as communities train new officers, while Minneapolis recently added nearly two dozen firefighters, ending a five-year hiring freeze. The school district for Clark County, Nev., which includes Las Vegas, is hiring 700 new teachers this year, the first sizable boost in its workforce in five years. Monthly jobs data from the Labor Department show that local governments, which make up about 65 percent of the overall government workforce, added workers in seven of the past eight months, the longest such streak in five years. So far this year, 46,000 new jobs have been created on a seasonally adjusted basis. Local-government employment through June stood at 14.08 million, the highest level in more than a year and a half, though still well below a peak of 14.61 million in mid-2008. Read more. (Subscription required.)
IN CASE YOU MISSED IT - abiLIVE WEBINAR DISCUSSING § 1111(b) ELECTION, PLAN FEASIBILITY AND CRAMDOWN ISSUES RECORDING IS NOW AVAILABLE!
If you were not able to join Monday's well-attended abiLIVE webinar examining § 1111(b), a recording of the program is now available for downloading! Utilizing a case study, ABI's panel of experts explored the issues surrounding a lender's decision on whether or not to make an election under § 1111(b), plan feasibility and voting. The abiLIVE panel also walked attendees through the necessary mathematical analyses used to examine these issues. The 90-minute recording is available for the special price of $75 and can be purchased here.
ABILIVE WEBINAR ON SEPT. 24 TO EXAMINE THE COMPLEX REQUIREMENTS AND ETHICAL DUTIES OF REPRESENTING CONSUMER DEBTORS
The abiLIVE webinar on Sept. 24 will feature a panel of experts discussing the ethical and compensation issues that can arise while representing chapter 7 and 13 debtors as well as individual chapter 11 debtors. Topics covered include client fraud and an attorney's duty to verify client information, attorney fee structures, and complex issues in individual chapter 11 cases. The panel includes perspectives from the attorneys and trustees, as well as the academic reporter for the ABI Ethics Task Force. Click here to register.
ABI GOLF TOUR UNDERWAY; NEXT STOP IS THE MID-ATLANTIC BANKRUPTCY WORKSHOP NEXT WEEK
The 5th stop for the ABI Golf Tour is the Hershey Country Club, in conjunction with next week's Mid-Atlantic Bankruptcy Workshop. Final scoring to win the Great American Cup sponsored by Great American Group is based on your top three scores at seven scheduled ABI events, so play as many as you can before the tour wraps up at the Winter Leadership Conference in December. 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 last week at Amelia Island, Fla.! There's no charge to register or participate in the Tour.
ASSOCIATES: ABI'S NUTS & BOLTS ONLINE PROGRAMS HELP YOU HONE YOUR SKILLS WHILE SAVING ON CLE!
Associates looking to sharpen their bankruptcy knowledge should take advantage of ABI's special offer of combining general, business or consumer Nuts & Bolts online programs. Each program features an outstanding faculty of judges and practitioners explaining the fundamentals of bankruptcy, offering procedures and strategies tailored for both consumer and business attorneys. Click here to get the CLE you need at a great low price!
NEW CASE SUMMARY ON VOLO: WILLMS V. SANDERSON (9TH CIR.)
Summarized by Tom Phinney of Parkinson Phinney
The Ninth Circuit held that the 60-day time limit provided in Bankruptcy Rule 4007(c) for filing a nondischargeability complaint under § 523 was improperly extended sua sponte by the bankruptcy court where (1) the creditor's motion for extension referenced §§ 727 and 707, and did not reference § 523; and (2) no cause for the extension was shown. The Ninth Circuit ordered the nondischargeability complaint dismissed with prejudice as having been untimely filed.
There are more than 900 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: WHAT HAPPENS TO A CORPORATION'S ATTORNEY/CLIENT PRIVILEGE IN BANKRUPTCY?
The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines what happens to a corporation's attorney/client privilege when the corporation files for bankruptcy.
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
A class of claims should not be considered impaired for purposes of § 1129(a)(10) if the impairment results from the plan proponents' exercise of discretion (i.e., artificial impairment) and not driven by economic need. (In re Village at Camp Bowie I LP).
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