Study: Medical Bankruptcies May Not Be as Common as Thought

Study: Medical Bankruptcies May Not Be as Common as Thought

ABI Bankruptcy Brief
ABI Bankruptcy Brief
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March 22, 2018

 
ABI Bankruptcy Brief
 
 
 
 
NEWS AND ANALYSIS

Study: Medical Bankruptcies May Not Be as Common as Thought

Medical bills can push patients over the financial cliff, but a new study says this may not happen as often as previous research suggests, the Associated Press reported. A New England Journal of Medicine report released yesterday estimates that hospitalizations cause only about 4 percent of personal bankruptcies among non-elderly U.S. adults. This contrasts with previous research that pointed to medical reasons as a trigger for more than 60 percent of U.S. bankruptcies. Researchers in the new study tracked the credit reports of more than a half million adults under 65 in California who had a hospitalization between 2003 and 2007 that wasn't tied to childbirth. They found that hospitalizations clearly forced some patients into bankruptcy in the years following their stay, but it may not happen as frequently as earlier research indicated.
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Toys ‘R’ Us, iHeartMedia Haunt Buyout Firms Sitting on Trillion-Dollar Cash Pile

It has been more than a decade since private-equity firms went on a buyout binge on the eve of the financial crisis, but as the recent bankruptcies of Toys “R” Us Inc. and iHeartMedia Inc. show, many of the deals continue to haunt their owners and are forcing them to find new ways to spend a pile of cash, the Wall Street Journal reported. Private-equity firms are sitting on more than $1 trillion in uninvested capital, data provider Preqin estimates, which they will need to spend if they want to earn the hefty fees they collect on investment gains. Their problem: The most efficient way to put the money to work is on big deals, but the raft of failures of pre-crisis buyouts — including those of Caesar’s Entertainment Corp., Energy Future Holdings Corp. and now Toys “R” Us and iHeartMedia — shows how hard that is to do. So the firms are scouring the corporate landscape for other ways to deploy all that cash. There have been some large deals in recent months, but they haven’t been outright purchases for double-digit billions.
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Commentary: A CFPB Commission Will Never Fly

Critics of the Consumer Financial Protection Bureau have long pinned their hopes on converting the Consumer Financial Protection Bureau’s leadership structure from a single director to a five-member commission. But with the recently passed Senate regulatory relief bill excluding such a measure, and that bill’s fate resting in the hands of moderate Democrats opposed to changes in the CFPB’s structure, such a measure is now dead on arrival, according to an American Banker commentary. “We are a long way away from seeing any change in this regard,” said Carrie Hunt, executive vice president of government affairs and general counsel for the National Association of Federally-Insured Credit Unions. The bipartisan regulatory relief package that cleared the Senate last week lacked any changes to the CFPB. Although House Financial Services Committee Chairman Jeb Hensarling (R-Texas) wants to add more than two dozen changes to the Senate bill, moderate Democrats have said that CFPB-related additions could kill the whole bill. During a briefing with reporters before the Senate vote, Sens. Jon Tester (D-Mont.), Mark Warner (D-Va.), Heidi Heitkamp (D-N.D.), and Joe Donnelly (D-Ind.), said that if the House makes significant changes from what the Senate approves, the deal will fall apart.
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Lawsuit Funding, Long Hidden in the Shadows, Faces Calls for More Sunlight

Investors placing bets on commercial lawsuits have long operated under a veil of secrecy. But as litigation funding in the U.S. has spread to more courthouses and transformed into a billion-dollar business, plaintiffs and their faceless financiers are confronting calls for more transparency, the Wall Street Journal reported. At the urging of the U.S. Chamber of Commerce, the arm of the federal judiciary that oversees procedural rules recently decided to examine whether the court system should require all civil litigants to reveal financing deals with outsiders who have wagered on legal outcomes. The Senate Judiciary Committee also is weighing legislation that passed the House last year that would force class-action plaintiffs to reveal whether they are getting funding. Meanwhile, courts are divided over whether to order disclosure. The major players of litigation finance say that their critics are trying to chill investment in lawsuits under a banner of transparency.
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Latest ABI Podcast Examines Issues Surrounding Commercial Litigation Finance in Bankruptcy

Former ABI Resident Scholar Prof. Drew Dawson of the University of Miami School of Law talks with Ken Epstein, an investment manager and legal counsel at Bentham IMF (New York). Epstein, who will join a panel at the ABI Spring Meeting on the latest uses of litigation finance, talks about some of the effective ways litigation finance can be used in bankruptcy. Click here to listen.

For more perspectives on litigation finance, be sure to attend the "Latest Use of Litigation Finance in Insolvency Proceedings" panel at the Annual Spring Meeting. Click here to register.


Nominations Now Being Accepted for the 2018 Class of ABI's “40 Under 40” Program!

Nominations are now open for ABI's “40 Under 40” program. This program recognizes outstanding young insolvency professionals who are driven by success, motivated by challenges and are role models for their peers. If you are, or know of, a dynamic insolvency professional who is committed to growth and excellence both professionally and in your community, this is one opportunity not to be missed! Visit the website for additional details on nominations and applications.

ABI Executive Director Sam Gerdano Receives 2018 M&A Advisor Lifetime Achievement Award

ABI Executive Director Samuel J. Gerdano yesterday received the 2018 M&A Advisor Lifetime Achievement Award at the 12th Annual Turnaround Awards Gala. M&A Advisor chose Gerdano for his significant contributions to the bankruptcy and restructuring industry. “We are honored to present Samuel Gerdano with the 2018 M&A Advisor Lifetime Achievement Award,” said David Fergusson, President and Co-CEO of the M&A Advisor. “In addition to the experience and vision that Mr. Gerdano brought to the American Bankruptcy Institute, Sam has tirelessly championed, for over 25 years, the advancement of our industry through his dedication to ongoing research and study, engagement with all industry stakeholders, and the representation of the Institute’s work to the courts and our governments.” With the presentation of the 2018 M&A Advisor Lifetime Achievement Award, Gerdano joins notable insolvency industry leaders who have preceded him as lifetime and leadership award winners, including Wilbur L. Ross, Jack Butler, Robert “Steve” Miller, Harvey R. Miller, J. Scott Victor, Timothy Coleman, William Repko, Corinne Ball, Barry Ridings, Tom Lauria, Van Conway and Sheila Smith.

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BLOG EXCHANGE

New on ABI's Bankruptcy Blog Exchange: Student Loan Law Changes?

Changing student loan law has been needed for a long time, according to a recent blog post. The post examines the student debt proposal by the ABI Consumer Bankruptcy Committee made to the ABI Commission on Consumer Bankruptcy.

Click here to read the proposal.

To read more on this blog and all others on the ABI Blog Exchange, please click here.

 
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