REPORT: CONSUMER DEBT DECREASES 14.6 PERCENT IN FIRST HALF OF 2012
Overall consumer debt fell 14.6 percent to an average of $12,986 in the first half of 2012, according to a report released today by Bills.com. The report found that credit card debt remains the most common type of consumer debt at 53 percent. Nationally, average credit card debt grew 2 percent to $5,600 in the first half of 2012, but peaked in the holiday debt period of January and February at $7,600. The number of both student loans and home loans fell slightly, as did average loan balances. The average home loan balance dropped significantly, falling 11 percent to $149,200, according to the report. The number and size of collections accounts continues to grow with 11 percent of consumers in collections and an 18 percent increase in average collection balances. Read more.
BIG-FOUR BANKS SEE MORTGAGE ORIGINATIONS CLIMB 37 PERCENT IN SECOND QUARTER
Mortgage originations at the big-four banks increased 37 percent in the second quarter from last year because of the expanded Home Affordable Refinance Program, HousingWire.com reported on Friday. Wells Fargo, JPMorgan Chase, Bank of America and Citigroup wrote $205.8 billion in new mortgages in the three months ending June 30, according to their combined financial filings. Originations also increased 7 percent from the first quarter. Wells Fargo continued to lead the way: The San Francisco-based bank wrote $131.9 billion in new loans during the quarter, more than double the originations from the same period last year. Wells Fargo said that 16 percent of those new loans came through the Home Affordable Refinancing Program. Read more.
COMMENTARY: FINDING RECOURSE WHEN INVESTORS ARE CHEATED
Whether it comes to falsifying documents or fudging an interest rate quote, many of the actors of recent financial scandals knowingly cheated in some form or another, but the federal government may need to find new ways of providing some recourse for investors who are victims of fraud, the New York Times DealBook blog reported yesterday. While the JPMorgan derivatives and the Libor scandal have led to much hand-wringing over what regulators should have done, it is Russell R. Wasendorf Sr. and the now-bankrupt futures firm Peregrine Financial Group who probably employed the most blatant forms of cheating. Wasendorf's decision to cheat, as he called it, may well send him to jail for the rest of his life while costing his customers millions of dollars. Any proposal to adopt comprehensive insurance for futures and securities investors is sure to meet significant resistance from investment firms that would have to pay for the programs. However, the commentary advocates for Congress to provide some form of safety net for investors to protect them from fraud. Read the full commentary.
TRUST IN FINANCIAL SYSTEM FALLS BACK TO 2009 LEVELS
Americans' trust in the financial system dropped in June to the lowest point since the financial crisis, the Wall Street Journal reported today. Just 21 percent of Americans trust the financial system, the fewest since March 2009, according to the latest quarterly measure by the Chicago Booth/Kellogg School Financial Trust Index released today. The overall decline was driven largely by a drop in the trust of national banks, which fell two percentage points to 23 percent. Trust in local banks rose four percentage points to 55 percent, while trust in credit unions increased five percentage points to 63 percent. Read more.
COMMENTARY: WALL STREET MAY BE TOO BIG TO REGULATE
The Barclays interest-rate scandal, HSBC's openness to money laundering by Mexican drug traffickers, and the epic blunders at JPMorgan Chase are all episodes that raise questions of whether the big banks can really be regulated, according to an op-ed in yesterday's New York Times. Some economists in and around the University of Chicago who founded the modern conservative tradition had a surprisingly different take: When it comes to the really big fish in the economic pond, some felt, the only way to preserve competition was to nationalize the largest ones, which defied regulation. One of the most important Chicago School leaders, Henry C. Simons, judged in 1934 that "the corporation is simply running away with our economic (and political) system." The central problem, then as now, according to the op-ed, was that very large corporations could easily undermine regulatory and antitrust strategies. The Nobel laureate George J. Stigler demonstrated how regulation was commonly "designed and operated primarily for" the benefit of the industries involved. And numerous conservatives, including Simons, concluded that large corporate players could thwart antitrust "break-them-up" efforts. Recent history confirms another Chicago School judgment: While a breakup might work in the short term, the most likely course is what happened with Standard Oil and AT&T, which were broken up only to essentially recombine a few decades later. Read more.
“SUBJECTING BUSINESS PROJECTIONS TO SCRUTINY IN VALUATION DISPUTES” WEBINAR TO BE HELD ON JULY 30!
Reassembling the speakers from the highest-rated panel at the New York City Bankruptcy Conference this year, ABI will be holding a live webinar on July 30 at 11 a.m. ET titled, "Subjecting Business Projections to Scrutiny in Valuation Disputes." Panelists include:
Moderator David Pauker of Goldin Associates, LLC (New York)
Martin J. Bienenstock of Proskauer (New York)
David M. Hillman of Schulte Roth & Zabel LLP (New York)
Bankruptcy Judge Robert E. Gerber (S.D.N.Y.)
The panel will address:
How much deference should management projections be accorded?
How do you determine whether projections are unrealistically optimistic or pessimistic?
What is the relevance of "market consensus?"
How do management’s incentives impact projections?
The webinar is available to ABI members for $75 and is approved for 1.0 CLE hours in Calif., Ga., Hawaii, Ill., N.Y. (approved jurisdiction policy) S.C. and Texas. CLE approval is pending in Del., Fla., Pa. and Tenn. To register, please click here.
ABI IN-DEPTH
ABI RECEIVES APPROVAL TO BECOME AN ACCREDITED NEW YORK CLE PROVIDER
The New York State Continuing Legal Education Board recently approved ABI to become an accredited New York continuing legal education (CLE) provider for live educational events. The approval is retroactive to July 2, 2012 through July 2015. Practitioners who attended ABI's Northeast Bankruptcy Conference from July 12-15 are eligible to receive New York CLE credit. If you have any questions or would like further clarifications, please contact ABI's Continuing Education Manager Jannine J. Henderson via e-mail at [email protected] or by calling 703-894-5966.
LATEST CASE SUMMARY ON VOLO: SEARCH MARKET DIRECT INC. V. JUBBER (IN RE PAIGE; 10TH CIR.)
Summarized by Neal Paul Donnelly of the U.S. Bankruptcy Court for the District of Delaware
The Tenth Circuit affirmed the lower court ruling that the confirmed chapter 11 plan was proposed in good faith and was fair and equitable. A proposed competing plan could not have been confirmed because it was not feasible, according to the court. The Tenth Circuit also ruled that the automatic stay was violated when the debtor sold an Internet domain name to a creditor after filing for bankruptcy. Turnover of the domain name to the bankruptcy estate was an appropriate remedy for the stay violation.
More than 570 appellate opinions are summarized on Volo typically 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: SEVENTH CIRCUIT'S TAKE ON § 365(n) OF THE BANKRUPTCY CODE
The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines special protections afforded to a licensee of intellectual property in a recent Seventh Circuit decision concerning § 365(n) of the Bankruptcy Code in Sunbeam Products Inc. v. Chicago American Manufacturing LLC.
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 The anti-modification rule for home mortgages in chapter 13 should be repealed, subjecting mortgage debts to bifurcation like any other secured claim.
Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
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