Bankruptcy courts on Dec. 1 will begin charging $25 to file a motion seeking to redact information from previously filed papers. One other new fee will also take effect next month, according to the Administrative Office of the U.S. Courts. The existing $157 fee to appeal a bankruptcy court ruling directly to a U.S. Court of Appeals, bypassing the district court, will increase by $50 to $207. For more information, please click here.
COMMENTARY: REGULATORS WHO KNOW LOANS BETTER THAN LENDERS
The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency recently released their 2014 report card on leveraged lending by U.S. banks. Not surprisingly, federal regulators believe they can tell a good loan from a bad loan better than the institutional loan market populated by the world's most sophisticated investors, according to a commentary in today's Wall Street Journal. Regulated banks are being told in no uncertain terms to stop arranging loans for the more risky, more leveraged borrowers, even though those loans are the most profitable and are quickly sold to investors — typically hedge funds, mutual funds and publicly owned vehicles like business development companies — not held by the banks, and so do not utilize FDIC insured deposits. Yet despite the healthy investor appetite, according to the commentary, federal banking regulators want the banks to rein in these profitable loans. The regulators made it clear in their report that they want the banks to stop arranging these loans even if there is zero risk that the banks will end up holding the loans. In essence, the regulators are making the banks be the gatekeepers for leverage in corporate America, according to the commentary. Read the full commentary. (Subscription required.)
ANALYSIS: REFINANCING BOOM EXPOSING RISKS IN U.S. PROPERTY BONDS
While landlords willing to pay penalties sometimes as large as 63 times the average fee to refinance early is a bullish sign for commercial real estate, it's less so for bond investors facing $295 billion of mortgages that are coming due over the next three years, according to a Bloomberg News analysis. That's because the securities are increasingly tied to the market's weakest properties, many of them financed during the peak of the real-estate boom in 2007, as the strongest are paid off. More property owners are jumping on a drop in financing costs and loosening terms to pay off their mortgages. That helped shrink the amount of debt maturing before the end of 2017 from $332 billion at the start of 2014, according to Bank of America data. "If you're a well-capitalized entity, you're going to do it," said Richard Hill, a debt analyst at Morgan Stanley. That could leave commercial-mortgage bond investors "holding the bag on a bunch of lower-quality loans." Properties such as skyscrapers, shopping malls, hotels and apartment complexes are attracting investors from sovereign wealth funds to insurance companies as they seek higher-yielding assets amid six years of Federal Reserve policies to hold short-term interest rates near zero. The balance of loans made before the financial crisis will likely decline further next year as borrowers rush to refinance mortgages maturing in 2016 and 2017, debt that was taken out during the two biggest years for commercial-mortgage bond issuance, according to Credit Suisse Group AG analysts led by Roger Lehman. Read more.
COMMENTARY: PROTECTING PUBLIC PENSION INVESTMENTS
Public pension funds should invest the retirement savings of government workers to secure their financial future, but across the country these funds are financing companies that privatize their own workers' jobs, according to a Washington Post commentary on Friday. Since many of these investments are funneled through private-equity companies, the problem is still largely hidden from public view. Pension trustees who are rightly concerned about these investments too often find themselves silenced by a subtle legalistic maneuver that took place six years ago last month and that could be stopped with the help of the Labor Department, according to the commentary. The retirement funds of firefighters, teachers, prison guards and others are invested in private firefighting companies, private public-school-service companies and private prisons, according to the commentary. Pension trustees justify these investments by pointing to an "interpretive bulletin" issued by the Labor Department in the waning days of George W. Bush's presidency, on Oct. 17, 2008. According to this bulletin, the statutory command that trustees act "solely in the interests of participants and beneficiaries" really means that they should act solely in the interest of "the plan." Under this plan-centric view of loyalty, trustees can invest in companies that seek to privatize their own members' jobs, focusing exclusively on the investment return to the plan. A potential remedy, according to the commentary, could be a new interpretive bulletin from the current Labor Department clarifying that when the duty of loyalty says that trustees should invest "solely in the interests of participants and beneficiaries," it means just that — not in the interests of "the plan," or anyone else. Read more.
REPORT: CFPB DEBT COLLECTION COMPLAINTS, FDCPA AND FCRA CASES INCREASE IN OCTOBER
Complaints to the Consumer Financial Protection Bureau about debt collection, as well as Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA) lawsuits, increased in October, ACAInternational.com reported yesterday. Complaints against debt collectors in October increased 4 percent over the September results, according to WebRecon's latest report on the trends. The debt collection complaints increased from 2,913 in September to 3,033 for the month of October, according to the report. There were 1,792 debt collection complaints in October 2013. In contrast to most months over the last few years, FDCPA cases in October (911) increased 13.4 percent over September (789), according to the report. FCRA cases in October increased significantly, by 22.4 percent, over September. Read more.
NEXT ABILIVE WEBINAR EXAMINES FINAL REPORT ON THE COMMISSION TO STUDY THE REFORM OF CHAPTER 11
Mark your calendar for Dec. 10 for a special abiLIVE webinar presenting the Final Report of ABI's Commission to Study the Reform of Chapter 11. The Report is the culmination of more than two years of testimony, advisory reports and deliberations. 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.
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 ON DEC. 11 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: WILLIAMSON V. MURRAY (IN RE MURRAY; 10TH CIR.)
Summarized by Bryan Robinson of the Law Offices of Bryan Robinson
The Tenth Circuit Court of Appeals affirmed the ruling of the Tenth Circuit Bankruptcy Appellate Panel and the bankruptcy court, which rejected a chapter 7 trustee's challenge to a Kansas statute permitting debtors in bankruptcy to exempt certain tax credits, often referred to as Earned Income Credits, from their bankruptcy estates.
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: CFPB-PROPOSED CHANGES TO MORTGAGE SERVICING RULES
A recent post examines the Consumer Financial Protection Bureau's (CFPB) recent proposal to add measures to its mortgage servicing rules to ensure that homeowners are treated fairly by servicers.
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
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