LIVE WEBSTREAM ON SATURDAY TO COVER PREVIEW OF THE ABI CHAPTER 11 REFORM COMMISSION'S FINAL REPORT
The Final Report of ABI's Commission to Study the Reform of Chapter 11 will be previewed on Saturday, Dec. 6, during a session at ABI's Winter Leadership Conference in Palm Springs, Calif. The Report is the culmination of more than two years of testimony, advisory reports and deliberations. The session can be viewed via live webstream by going to http://commission.abi.org at 2 p.m. ET.
The final report will be available to download on the Commission site at 8 a.m. ET on Dec. 8. For ABI members in the D.C. metro area, there is very limited space available for a special press briefing that will take place at 9 a.m. ET at the National Press Club. Members interested in attending should contact ABI Public Affairs Manager John Hartgen at [email protected].
Not able to participate or view the Commission's session at the Winter Leadership Conference this weekend? ABI will be holding a special abiLIVE webinar on Dec. 10 presenting the Final Report. In this 90-minute webinar, several members of the Commission, including both co-chairs and the official reporter, will provide insight to practitioners on the key findings as submitted to Congress. Click here to register.
REPORT: MORE BORROWERS FALLING BEHIND ON CAR PAYMENTS
Experian issued a report yesterday showing that an increasing number of borrowers are falling behind on their car payments, even as the total amount of outstanding debt reaches new heights, the New York Times reported today. Experian said that the balance of loans that were 60 days delinquent increased 27 percent in the third quarter from the same period a year ago to roughly $4 billion. Signs of trouble in the market come after a significant increase in lending to people with damaged credit and limited financial means. Analysts have warned that a loosening of underwriting standards for subprime auto loans could cause widespread losses in the financial system because much of the debt has been securitized and bought by investors around the globe. Read more.
CONGRESS COULD SOON ALLOW PENSION PLANS TO CUT BENEFITS FOR CURRENT RETIREES
Congress could soon allow the benefits of current retirees to be cut as part of an agreement to address the fiscal distress confronting some of the nation's 1,400 multi-employer pension plans, the Washington Post reported today. Several unions and pension advocates opposing the move, which would be unprecedented, say that permitting financially strapped plans to cut retiree benefits would violate the central promise of traditional pensions: that they would provide a defined benefit for life. Several of the nation's large multi-employer pension plans are on a course that would leave them insolvent within a decade. If that occurred, the federal insurance fund that protects the retirement benefits of more than 10 million Americans in multi-employer plans could collapse. In a proposal made more than a year ago, a coalition of plan trustees and unions said that the only way to salvage the most distressed pension plans without a government bailout is to allow them to cut retirement benefits before they run out of money. The reductions would be voted on by the trustees of individual plans, as well as retirees, under proposals being negotiated by lawmakers. Advocates point out that the plan laid out by the coalition would leave pensioners in distressed plans with more than what they would receive from government pension insurance if their plans failed. Read more.
Recently it became clear that Detroit and Stockton, Calif., will get out of bankruptcy without eliminating their pensions and that retirees' benefits will not be cut very much, if at all, according to a commentary today on Fortune.com. Over the past decade, as the true costs of pension commitments have become clearer, many assumed that the inevitable end result of expensive pensions would be to eliminate them in bankruptcy. When Detroit and Stockton filed for bankruptcy, they assumed it was only a matter of time before retiree pensions came on the chopping block and retirees lost their pension plans. In practice, such a result is rare, according to the commentary, and it's likely to remain so. Retirement benefits enter the complex calculus of bankruptcy with several important arguments in their favor. First, retirees don't have alternative sources of income. Unlike most of the financial institutions that hold municipal bonds, retirees cannot offset their losses in Detroit with earnings from other bonds. Neither, as a practical matter, are judges likely to force 75-year old retirees to re-enter the workforce. The second reason why retirement benefits are special is because they are employee benefits. Institutions, particularly distressed institutions, recognize that they need their employees to survive. When American Airlines filed for bankruptcy, the airline was clear that it needed to reduce labor costs and proposed to do it in part by eliminating its pension plans. American's unions, however, decided not to sacrifice their former members' interests, and chose instead to make contract concessions in other ways. As a result, even though cutting retirement benefits is legal and some cuts are clearly necessary, retiree benefit cuts are usually seen as unfair. Municipalities that need cuts to reorganize will end up looking elsewhere. Read the full commentary.
CFPB'S DEC. 11 FIELD HEARING TO EXAMINE MEDICAL DEBT COLLECTION
The Consumer Financial Protection Bureau (CFPB) has announced that it will hold a field hearing on medical debt collection in Oklahoma City on Dec. 11, according to the CFPB Monitor on Tuesday. The hearing will include remarks from Director Cordray and testimony from consumer groups, industry representatives and members of the public. In May 2014, the CFPB issued a report suggesting that credit scoring models may be overly penalizing consumers with medical debts that go into collection by producing credit scores that underestimate such consumers' creditworthiness. Collection practices of hospitals and other medical providers relating to medical debts have also been the subject of CFPB scrutiny, with the CFPB indicating that more protections are needed for consumers. Read more.
ABI MEMBERS INVITED TO TRY BLOOMBERG BNA'S RECENTLY LAUNCHED BLOOMBERG LAW: BANKRUPTCY TREATISE
Bloomberg BNA welcomes ABI members to try the Bloomberg Law: Bankruptcy Treatise, an online-only resource recently launched to help attorneys consume information and conduct legal research in the fast-moving, procedurally complex area of bankruptcy. The Bankruptcy Treatise integrates the news content of Bloomberg BNA's bankruptcy news coverage with over 600 chapters and more than 13,000 pages of content and expert analysis from over 60 renowned judges, law professors and practitioners. The Bloomberg BNA editorial team, with input from outside contributors, will update the material as bankruptcy rules change and courts apply and react to them, ensuring that all aspects of federal bankruptcy law and local rules are current. Practitioners will be pleased to discover that Bloomberg Law: Bankruptcy Treatise includes expert commentary and analysis for all 92 different local rule sets throughout the country, providing unique insights across jurisdictions. For more information on Bloomberg Law: Bankruptcy Treatise and to request a free trial of Bloomberg Law, please click here.
NEXT FREE COMMITTEE TELECONFERENCE WILL BE TUESDAY'S BANKRUPTCY LITIGATION COMMITTEE CALL!
Members are encouraged to dial-in and listen to or participate on upcoming ABI Committee conference calls. While committee membership is encouraged, it is not required to join the free teleconferences. The topic for the Bankruptcy Litigation Committee's call on Dec. 9 at 4 p.m. will be "Recharacterization of Debt to Equity in Bankruptcy." The call, a follow up to the publication of an article with the same title in the latest edition of the Committee's newsletter, will be moderated by Steven S. Flores of Togut, Segal & Segal LLC (New York). If you would like to submit questions in advance, please send them to [email protected].
All committee teleconferences are free to ABI members, and registration is not required. Simply utilize the following dial-in information:
Call in: (712) 432-1500
Participant code: 692933
LAW.ABI.ORG UPDATED TO REFLECT DEC. 1 RULE CHANGES
ABI's online Bankruptcy Code and Federal Rules of Bankruptcy Procedure site, law.abi.org, is completely current with the Dec. 1 Rule changes. Some of the updates affect forum for related cases, the time period for a valid summons and attorneys fee procedures. Substantial changes were made to the Rules relating to bankruptcy appellate procedures.
USTP NOTICE OF PROPOSED RULEMAKING ON CHAPTER 11 MONTHLY OPERATING REPORTS
Section 602 of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) authorizes the U.S. Trustee Program (USTP) to issue rules requiring uniform periodic reports by debtors in possession or trustees in non-small business cases under chapter 11. The USTP just published in the Federal Register a notice of proposed rulemaking seeking public comment on the proposed rule and periodic report forms. The proposed rule is published in the Federal Register at 79 FR 66659 (Nov. 10, 2014) (to be codified at 28 C.F.R. pt. 58). The proposed rule, along with the proposed periodic report forms and instructions, may be viewed on the USTP's website. The proposed rule may also be accessed at www.regulations.gov. All public comments must be submitted on or before January 9, 2015, via www.regulations.gov. Please note that the proposed rule and forms only apply in chapter 11 cases filed by debtors that are not small businesses. Small business debtors are already required to use Official Form 25C, "Small Business Monthly Operating Report."
ABI MEMBERS WELCOME TO ATTEND TRIBUTE DINNER NEXT THURSDAY TO HONOR BANKRUPTCY JUDGE STEVEN W. RHODES
ABI members are invited to attend a tribute dinner honoring the 29 years of service of Bankruptcy Judge Steven W. Rhodes of the United States Bankruptcy Court for the Eastern District of Michigan for his commitment to the bench, bar and community. The Tribute Dinner will be held at the Roostertail on the Detroit River and is being hosted by the Bankruptcy Community to honor and celebrate Judge Rhodes' service and career. Please contact David Lerner at (248) 901-4010 for more information. To attend, please go to http://www.cbadetroit.com/events/Judge-Rhodes-USBC-Invite-and-Form.pdf
NEW CASE SUMMARY ON VOLO: UNITED STATES V. BEY (7TH CIR.)
Summarized by Bonnie Clair of Summers Compton Wells PC
The Seventh Circuit affirmed the defendant's conviction for failure to surrender to serve her sentence for bankruptcy crime on grounds that the attorney/client privilege did not prevent the admission of communications from, or testimony by, her counsel about her surrender date to prove her knowledge of the surrender date. Following the reasoning and holdings in decisions from the Second, Sixth, Ninth, Tenth and Eleventh Circuits, the court found that the privilege does not apply to communications about court dates or dates to begin serving a sentence, or testimony about those communications, because communications about public court orders do not comprise confidential legal advice.
There are more than 1,500 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: RECAP ON THE SHUTTERING OF ATLANTIC CITY CASINOS AND WHAT'S NEXT FOR THE STRUGGLING CITY
A recent blog post examines the failure of four of the Atlantic City's 12 casinos and what lies ahead for the financially struggling city.
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 single set of mandatory, uniform federal bankruptcy exemptions should be adopted.
Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
INSOL INTERNATIONAL
INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 43 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.
