PENSION PROPOSAL AIMS TO EASE FUTURE BURDEN ON STATES AND CITIES
Sen. Orrin Hatch (R-Utah), the senior Republican on the Senate Finance Committee, is set to introduce legislation that would allow states and cities to exit the pension business while still giving public workers the type of benefits they want, the New York Times DealBook blog reported today. It involves a tax-law change that would enable governments to turn their pension plans over to life insurers. Big players like MetLife and Prudential, to cite just two, might thus step into shoes now occupied by the likes of CalPERS, California’s giant state pension system. Any such change would be voluntary, said Hatch, who along with Senate Finance Committee Chairman Max Baucus (D-Mont.) is committed to working on a tax overhaul package this year, and the public-pension change could be one part of that. Working with insurers would not suddenly make trillions of dollars appear, but Hatch said that it would make costs more predictable and protect both retirees and taxpayers. The proposal “does not include an explicit or implicit government guarantee,” he said. Read more.
ANALYSIS: FINANCIAL CRISIS JUST A SYMPTOM OF DETROIT'S WOES
As officials in Detroit negotiate urgently with creditors and unions in a last-ditch effort to spare Detroit from plunging into the largest municipal bankruptcy in the nation’s history, residents say that the city has worse problems than its estimated $18 billion debt, the New York Times reported today. The Detroit police’s average response time to calls for the highest-priority crimes this year was 58 minutes, officials now overseeing the city say. The department’s recent rate of solving cases was 8.7 percent, far lower, the officials acknowledge, than rates in cities like Pittsburgh, Milwaukee and St. Louis. Kevyn D. Orr, the state-appointed emergency financial manager for Detroit, has said that the chances of filing for bankruptcy, a possibility that could be decided as early as this month, stand at 50-50. The prospect of a bankruptcy filing — a move that is extremely rare for cities and one that has never happened to an American city as populous as Detroit, with about 700,000 people — worries some residents. They say they fear that bankruptcy would add more stigma to a city that has contracted alarmingly in the decades since it was the nation’s fourth largest, starting in the 1920s, and that it might worsen already bare-bones services. Read more.
CFTC WEIGHS DELAY OF SWAPS RULES
Commodity Futures Trading Commission Chair Gary Gensler is proposing to partially delay controversial cross-border derivatives rules slated to go into effect Friday, the Wall Street Journal reported today. The move is an about-face for Gensler, who previously refused to delay a requirement that U.S. banks operating abroad comply with U.S. swaps rules, despite mounting pleas from fellow commissioners, lawmakers and overseas policy makers. Gensler now is floating a compromise that would implement some provisions almost immediately and delay others until the end of the year. The agency may vote as soon as Friday on the rules, which require that firms trading derivatives hold more capital and post collateral to a clearinghouse that secures the deal. Gensler's proposal comes after a tense meeting last week with Treasury Secretary Jacob Lew and Securities and Exchange Commission Chairman Mary Jo White. Lew pressed Gensler and White to better coordinate adoption and implementation of U.S. swaps rules. Lew has received complaints from policy makers and others about a lack of coordination between U.S. and foreign governments. Read more. (Subscription required.)
DODD-FRANK EXECUTIVE PAY RULE STILL IN LIMBO AMID PUSHBACK FROM CORPORATE AMERICA
Soon after Congress in 2010 approved the largest overhaul of financial regulation in generations, the Securities and Exchange Commission moved to enforce a provision requiring companies to disclose how much more their chief executives made than other employees, the Washington Post reported on Sunday. The agency just had to write a rule telling firms how to comply, but nearly three years later, the rule remains unfinished, with no sign of when it will be done. Within six months of the law’s passage in 2010, SEC staffers had circulated an early blueprint for the pay rule. They set a deadline for completing it by the end of 2011. The public was outraged over runaway executive compensation, and the pay disclosure seemed relatively straightforward, at least compared with many of the law’s other requirements. What the agency did not count on was the resistance mounted by big business. A lobbying campaign waged by business executives and the nation’s most prominent corporate associations undercut the momentum and effectively brought the agency’s work on the rule to a standstill. The efforts of business groups to influence the SEC’s work was especially effective because of their success in pressing a court challenge to another part of the financial overhaul legislation — in essence, an extension of their lobbying efforts. The threat of additional lawsuits has hung over the discussion between lobbyists and agency officials about the pay rule, and some opponents have warned that the agency could be sued again if it enforces it. Read more.
DELAWARE-ONLY BYLAWS ON SHAREHOLDER SUITS TO CHANGE LEGAL LANDSCAPE
A recent ruling in Delaware is poised to change the landscape in big-ticket corporate litigation—to the delight of many companies and the likely chagrin of some shareholders, the Wall Street Journal reported yesterday. Chancellor Leo Strine of the Delaware Court of Chancery late last month ruled that corporate boards may adopt bylaws requiring that most shareholder lawsuits against the companies be filed in Delaware. The ruling effectively gives the thousands of businesses incorporated in Delaware home-field advantage in shareholder suits. The Delaware Chancery Court, one of the country's most influential business courts, doesn't use juries and is regarded as relatively business friendly compared with other courts. Forcing shareholders to sue in Delaware—and only Delaware—is a way to forestall a wave of lawsuits getting filed in several courts every time a merger or other major corporate action is announced. Roughly 300 corporations have adopted Delaware-only provisions in recent years to stem a rising tide of multicourt shareholder litigation. Mergers and acquisitions, in particular, have provided fodder for suits outside of Delaware, with shareholder plaintiffs demanding jury trials in a variety of states to challenge deals. Read more. (Subscription required.)
MAKE SURE TO PRE-ORDER ABI'S NEWEST PUBLICATION UNDERSTANDING ORDINARY: A PRIMER ON FINANCIAL AND ECONOMIC CONSIDERATIONS FOR ORDINARY COURSE DEFENSES TO PREFERENCE ACTIONS
Understanding Ordinary: A Primer on Financial and Economic Considerations for the Ordinary Course Defenses to Bankruptcy Preference Actions provides practitioners and others exposed to bankruptcy preference matters with an overview of bankruptcy preference basics, as well as a detailed discussion of the ordinary course of business defense – both between parties and within industries. Nearly every chapter includes a legal note written by an expert in the field, and the book is replete with charts that help illustrate many of the book's concepts. The 168-page softbound publication will ship in late July. To pre-order, please click here (be sure to log-in to receive ABI member pricing).
NEW ABI LIVE WEBINAR ON JULY 15 TO FOCUS ON THE § 1111(b) ELECTION, PLAN FEASIBILITY AND CRAMDOWN ISSUES
Utilizing a case study, ABI's panel of experts will explore issues surrounding a lender’s decision on whether or not to make an election under § 1111(b), plan feasibility and voting. The abiLIVE panel will also walk attendees through the necessary mathematical analyses used to analyze these issues. The webinar will take place on July 15 from 1-2:15 p.m. ET. Special ABI member rate available! Click here to register.
ABI GOLF TOUR UNDERWAY; NEXT STOP IS THE NORTHEAST BANKRUPTCY CONFERENCE ON FRIDAY
The next stop for the ABI Golf Tour is the famed Newport National course in Newport, R.I., in conjunction with the Northeast Bankruptcy Conference on July 12. 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! There's no charge to register or participate in the Tour.
ABI IN-DEPTH
NORTON JUDICIAL EXCELLENCE AWARD NOMINATIONS OPEN
Nominations are now open for the 8th Annual Judge William L. Norton Judicial Excellence Award, to be presented during the ABI luncheon at the annual meeting of the National Conference of Bankruptcy Judges on Nov. 1, 2013. The award is presented by ABI and Thomson Reuters each year to the current or retired bankruptcy judge whose career embodies the same continued dedication and outstanding contributions to the insolvency community as the award’s namesake, Judge Norton. Nominations are considered by a committee made up of representatives from the Norton treatise and past ABI presidents. Nomination forms are available from Clay Mattson at Thomson Reuters ([email protected]).
NEW ABI "BANKRUPTCY IN DEPTH" ON-DEMAND CLE PROGRAM LOOKS AT PRINCIPLES OF PROPERTY OF THE ESTATE: DEMYSTIFYING EQUITABLE INTERESTS
In this 90-minute seminar, Profs. Andrew Kull of Boston University School of Law and Scott Pryor of Regent University School of Law provide an in-depth analysis of a legal principle that has become, in their words, "a long-lost area of the law": § 541 of the Bankruptcy Code. Seeking to demystify what is meant by "property of the estate" and, in particular, the distinction between legal or equitable interests of the debtor in property, Kull and Pryor describe the legal entanglements that ensue when legal title belongs to one person but the equitable title belongs to someone else. The cost of the seminar, which includes written materials and qualifies for 1.5 hours of CLE, is $95. To order or to learn more, click here.
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: RYAN V. U.S. (IN RE RYAN; 7TH CIR.)
Summarized by Penelope Bach of Sulaiman Law Group
The Seventh Circuit Court of Appeals affirmed the decision of the the bankruptcy court holding that the bankruptcy court's interpretation of § 506(d) as stated in Dewsnup v. Timm (502 U.S. 410 (1992)) applies in chapter 13 cases as well as chapter 7 cases.
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: SUPREME COURT TO CONSIDER WHETHER STERN ALLOWS WAIVER OR CONSENT
The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post takes a closer look in at Executive Benefits Insurance Agency v. Arkison, No. 12-1200, which was granted certiorari on June 24. The post said that the Supreme Court has set the stage to flesh out the practical impact of Stern v. Marshall because it squarely raises the issue of whether a party can waive its right to insist on a trial before an Article III tribunal and the related question of whether consent is permissible.
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
When will the dowward trend of consumer bankruptcy filings turn around?
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INSOL INTERNATIONAL
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