The Senate voted today to eliminate the use of the filibuster against most presidential nominees, a move that will break the Republican blockade of President Obama's picks to cabinet posts and the federal judiciary, the New York Times reported today. The vote was one that members of both parties had threatened for the better part of a decade, but had always stopped short of carrying out. This time, with little left of the bipartisan spirit that helped seal compromises on filibuster rule changes in the past, there was no last-minute deal to be struck as the vote was 52 to 48. Senate Majority Leader Harry Reid (D-Nev.) set the change in motion on Thursday with a series of procedural steps. Senate Minority Leader Mitch McConnell (R-Ky.) denounced Democrats for trying to "break the rules to change the rules." Tensions between the two parties have reached a boiling point in the last few weeks as Republicans repeatedly filibustered Obama's picks to the country's most important appeals court, the United States Court of Appeals for the District of Columbia Circuit. The Senate has voted on three nominees to the court in the last month. Republicans have blocked them all, saying that they would allow the president no more appointments to that court. Democrats, who filibustered their own share of Republican judicial nominees before they took control of the Senate, have said that what the minority party has done is to effectively rewrite the law by requiring a 60-vote supermajority threshold for high-level presidential appointments. Once rare, filibusters of high-level nominees are now routine. Read more.
CHANGES TO FEDERAL COURT MISCELLANEOUS FEE SCHEDULE EFFECTIVE DECEMBER 1
The U.S. Judicial Conference approved several changes to the federal court miscellaneous fee schedules that relate to bankruptcy courts and become effective on Dec. 1. Changes include:
- A new $176 fee for the filing of motions for the sale of property free and clear of liens under §363(f).
- An increase in the records retrieval fee from $53 to $64 for the first box requested from the Federal Records Center, and a new fee of $39 for each additional box requested.
The Judicial Conference also amended the fee language regarding checks returned for insufficient funds on each of the court fee schedules. The prior fee language, which applies only to "checks," was outdated, as check payments have now largely been superseded by electronic payments. Please note that there is no change to the amount of this fee. To view the notice, please click here.
ANALYSIS: THIRD CIRCUIT AFFIRMS LOWER COURT DECISION ON DEBT TRADES IN BANKRUPTCY
The U.S. Court of Appeals for the Third Circuit recently affirmed the decision of the Delaware District Court holding that bankruptcy claims are subject to disallowance under §502(d) despite their subsequent sale to a third-party, according to an analysis on Tuesday in the National Law Review. In In re KB Toys Inc., No. 13-1197 (3d Cir. Nov. 15, 2013), the Third Circuit found that the "cloud of disallowance" cannot be parted from the claim. This decision is noteworthy, according to the analysis, since it runs contrary to the New York federal district court's previous decision in the Enron chapter 11 case, which found claim disallowance as a personal disability that did not adhere to the claim. The issue in KB Toys developed between 2004 and 2007 when ASM Capital, L.P. and ASM Capital II, LLP, a national claims trader, purchased nine claims from various creditors to whom KB Toys owed money. Although it executed separate assignment agreements with the sellers, ASM found itself stuck under one umbrella when all of the sellers were successfully sued by the trustee for the estate for receiving preferences in the 90-day period prior to the bankruptcy. Unable to collect from the original claimants who were all out of business by then, the trustee sought disallowance of ASM's claims under §502(d), which provides for the disallowance of any claim of any entity that received property that is avoidable or recoverable by the bankruptcy estate. In one of the more surprising decisions of 2012, the bankruptcy court completely rejected the N.Y. District Court's decision in Enron and disallowed the ASM claims. The decision was later affirmed on appeal to the Delaware District Court and then appealed to the Third Circuit Court of Appeals. Read the full analysis.
To find the full text of the Third Circuit's opinion on this case, make sure to visit ABI's Volo site.
ACA WHITE PAPER FINDS CREDIT CARDS, MEDICAL DEBTS TOP CFPB CONSUMER COMPLAINTS
Federal Housing Finance Agency (FHFA), the U.S. regulator of Fannie Mae and Freddie Mac, is proceeding with plans to scale back their financing of apartment-building loans next year, shrinking what opponents call a critical support for rental housing, Bloomberg News reported today. The government-owned companies back about 45 percent of the multifamily market. While the size of the cuts is still undetermined, they will add to a 10 percent reduction in apartment financing the FHFA required Fannie Mae and Freddie Mac to make this year as part of a broader effort to boost private investment in housing finance. Developers, lenders and affordable-housing advocates are pushing back, saying that the move could deprive rural areas and smaller cities of rental housing that private investors may neglect. FHFA officials say Fannie Mae and Freddie Mac's multifamily footprint is still larger than their 30 percent market share before the financial crisis. The market absorbed this year's cuts "without major disruption," FHFA Acting Director Edward J. DeMarco said in a speech Oct. 24. The reductions are part of a long-term FHFA plan to create more room in housing finance for private capital. In the absence of action from lawmakers to set up a new mortgage finance system, "we will continue to take gradual steps to reduce the enterprises' exposure in this market, while maintaining a market presence," DeMarco said. Read more.
AMERICANS RECOVERING HOME EQUITY AT RECORD PACE
The number of Americans who owe more on their mortgages than their homes are worth fell at the fastest pace on record in the third quarter as prices rose, a sign supply shortages may ease as more owners are able to sell, Bloomberg News reported today. The percentage of homes with mortgages that had negative equity dropped to 21 percent from 23.8 percent in the second quarter, according to a report today from Seattle-based Zillow Inc. The share of owners with at least 20 percent equity climbed to 60.8 percent from 58.1 percent, making it easier for them to list properties and buy a new place. A shortage of inventory has forced homebuyers to compete, driving up prices and leaving some shoppers out of the market, said Thomas Lawler, a former Fannie Mae economist who now is a housing consultant. The number of homes for sale reached a low of 1.8 million in early 2013, the fewest in more than a decade, according to data from the National Association of Realtors. Read more.
YELLEN'S NOMINATION AS FED CHAIRMAN APPROVED BY SENATE BANKING COMMITTEE
Janet Yellen's nomination to be chairman of the Federal Reserve won support from the Senate Banking Committee today in a 14-8 vote, moving her bid to be the Fed's first female head to the Senate for confirmation, Bloomberg News reported today. Yellen was backed by 11 of the 12 Democrats on the banking committee, and three of the panel's Republicans. Yellen, a main architect of record Fed stimulus, indicated in her Nov. 14 confirmation hearing that she'll press on with accommodation until she sees a robust recovery. She downplayed risks that stimulus is inflating asset price bubbles, saying she doesn't see "bubble-like conditions" in stock prices. Six Senate Republicans have signaled their support for Yellen to succeed Ben S. Bernanke as chairman of the Federal Reserve, which should give her the 60 votes she needs to be confirmed by the full Senate, which may occur the week of Dec. 9. Read more.
NOW AVAILABLE FOR PRE-ORDER: BEST OF ABI 2013: THE YEAR IN BUSINESS BANKRUPTCY
Now available for pre-order in the ABI Bookstore is the Best of ABI 2013: The Year in Business Bankruptcy. This must-have reference contains the best ABI Journal articles and papers from ABI's top-rated educational seminars selected by ABI Resident Scholar Prof. Kara Bruce to cover the most important developments in business bankruptcy for 2013. The book delves into such timely topics as municipal bankruptcy, avoidance actions, intercreditor, confirmation and post-confirmation issues, jurisdiction and venue, and much more, and also features relevant case summaries drawn from ABI's Volo site (volo.abi.org). Make sure to log in to the site to get your discounted ABI member pricing. The book will ship in early December. Click here to order.
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 ABILIVE WEBINAR LOOKS AT HOW TO HIRE THE RIGHT FINANCIAL ADVISORS
ABI's Financial Advisors & Investment Banking Committee
is proud to present the next abiLIVE webinar, "How to Hire the Right Financial Advisors," on Dec. 11 from 1-2:15 p.m. ET. The program will provide attendees with an overview and basic understanding of the different types of financial advisors that may be relevant for in- and out-of-court cases. Topics include:
- The different types of financial advisors available;
- The benefits and limitations for each category of advisor; and
- How to select the right advisor for the job.
Speakers on the webinar include:
-Daniel F. Dooley of MorrisAnderson (Chicago)
-Gregory S. Hays of Hays Financial Consulting LLC (Atlanta)
-Ivan Lehon of Ernst & Young (New York)
-Allen Soong of Deloitte CRG (Los Angeles)
-Teri Stratton of Piper Jaffray & Co. (El Segundo, Calif.)
Registration is $75 for ABI members/$175 for non-members. Have a number of colleagues that would like to participate? Take advantage of group pricing for ABI members: register 5 or more and the registration cost drops to $60 per person!
Beginning in January 2014, ABI will institute its first dues increase to the regular dues rate in six years. The $20 increase will ensure that ABI can continue to provide you with the latest and most effective tools available in insolvency information and education. You can lock in 2013 rates, and additional discounts, for up to three years by using a multi-year renewal option (save $75!). You can also save 10 percent on future dues by opting into the automated dues program. To renew your membership and save, please go to renew.abi.org.
ABI LAUNCHES SIXTH ANNUAL WRITING COMPETITION FOR LAW STUDENTS
Law school students are invited to submit a paper between now and March 4, 2014 for ABI's Sixth Annual Bankruptcy Law Student Writing Competition. ABI will extend a complimentary one-year membership to all students who participate in this year's competition. Eligible submissions should focus on current issues regarding bankruptcy jurisdiction, bankruptcy litigation, or evidence issues in bankruptcy cases or proceedings. The first-place winner, sponsored by Invotex Group, Inc., will receive a cash prize of $2,000 and publication of his or her paper in the ABI Journal. The second-place winner, sponsored by Jenner & Block LLP, will receive a cash prize of $1,250 and publication of his or her paper in an ABI committee newsletter. The third-place winner, sponsored by Thompson & Knight LLP, will receive a cash prize of $750 plus publication of his or her paper in an ABI committee newsletter. For competition participation and submission guidelines, please visit http://papers.abi.org.
NEW CASE SUMMARY ON VOLO: KULAKOWSKI V. WALTON (IN RE KULAKOWSKI; 11TH CIR.)
Summarized by Tiffany DiIorio of Adams and Reese LLP
The Eleventh Circuit ruled that a bankruptcy court, in appropriate circumstances, can consider the entirety of a non-filing spouse's income in its totality of the circumstances analysis under §707(b)(3)(B).
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: UNSECURED CREDITORS' RETURNS DECREASE IN POST-BAPCPA LANDSCAPE
The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent post takes a look at ABI's new study finding that the aggregate effect of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), which was passed in part to improve creditor returns in consumer bankruptcy proceedings, has actually had the opposite effect since the Act's sweeping changes to the consumer bankruptcy landscape were instituted.
To find out more and to obtain a copy of the ABI Endowment-funded study, please click here.
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 holder of an unstayed judgment, which is subject to an ongoing appeal, can qualify as a petitioning creditor under § 303(b)(1).
Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
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