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Restructuring Experts Recession Did Not Improve Corporate Governance

ABI Bankruptcy Brief | February 5 2013
 
  

February 12, 2013

 
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  NEWS AND ANALYSIS   

RESTRUCTURING EXPERTS: RECESSION DID NOT IMPROVE CORPORATE GOVERNANCE

The Great Recession taught businesses some valuable lessons, but a recent survey found that restructuring experts do not think companies learned enough about changing their corporate governance practices, the Wall Street Journal reported today. In its 2013 Outlook Survey of restructuring experts, advisory firm AlixPartners said that slightly less than half of the 98 professionals questioned believe corporate governance is better now than it was before the recession. Corporate governance breakdowns have indeed been a major factor in several bankruptcies of the past few years, including the collapse of MF Global Holdings Ltd. and the massive fraud at Peregrine Financial Group Inc. Despite those events, more than two-thirds of the restructuring professionals who think corporate governance is worse said that it was because of liquidity oversight. When asked which sectors might face increases in distressed situations, the restructuring gurus picked industries facing scrutiny in Washington, D.C. Forty-one percent of those surveyed picked health care, up from just 20 percent last year. The restructuring experts also expect an uptick in distressed situations at energy companies, along with aerospace and defense. Read more. (Subscription required.)

PRIVATE EQUITY BRACING FOR BUYOUT-BOOM SHAKEOUT

The private-equity industry, comprised of nearly 4,500 firms with $3 trillion in assets, is bracing for a shakeout that has been brewing since the collapse of credit markets choked off a record leveraged-buyout binge, Bloomberg News reported today. Firms that attracted an unprecedented $702 billion from investors from 2006 to 2008 must replenish their coffers for future deals and avoid a reduction in fee income when the investment periods on those older funds run out, typically after five years. As many as 708 firms face such deadlines through 2015, according to London-based researcher Preqin Ltd. Many firms are suffering from below-average profits on their boom-period funds, and top executives from Carlyle Group LP co-founder David Rubenstein to Blackstone Group LP President Tony James say that future returns will be far more modest than those investors got used to in the past. As investors gravitate to the best-performing managers and cut loose others, 10 to 25 percent of the firms may find themselves without fresh money. Read more.

REPORT: SEC'S REVOLVING DOOR HURTS ITS EFFECTIVENESS

The Project on Government Oversight, a nonprofit watchdog group long critical of the SEC's revolving door, released a study yesterday highlighting a pattern of SEC alumni going to bat for Wall Street firms, the New York Times DealBook blog reported yesterday. The report, similarly skeptical of Wall Street lawyers joining the SEC, cites recent enforcement cases and scuttled money market regulations to underscore its concerns. "Former employees of the Securities and Exchange Commission routinely help corporations try to influence SEC rule-making, counter the agency's investigations of suspected wrongdoing, soften the blow of SEC enforcement actions, block shareholder proposals and win exemptions from federal law," the report says. Read more.

SPECULATIVE BETS PROVE RISKY AS SAVERS CHASE PAYOFF

Regulators across the country are confronting a wave of investor fraud that is saddling retirement savers with steep losses on complex products that until a few years ago were pitched only to the most sophisticated investors, the New York Times reported yesterday. The victims are among the millions of Americans whose mutual funds and stock portfolios plummeted in the wake of the financial crisis, and who started searching for ways to make better returns than those being offered by bank deposits and government bonds with minuscule interest rates. Tens of thousands of them put money into speculative bets promoted by aggressive financial advisers. The investments include private loans to young companies like television production firms and shares in bundles of commercial real estate properties. Those alternative investments have now had time to go sour in big numbers, state and federal securities regulators say, and are making up a majority of complaints and prosecutions. "Since the crisis, we've seen more and more people reaching out into different types of exotic investments that are a big concern to us," said William F. Galvin, the Massachusetts secretary of the commonwealth. Last Wednesday, Galvin's office ordered one of the nation's largest brokerage firms, LPL Financial, to pay $2.5 million for improperly selling the real estate bundles, known as nontraded REITs, or real estate investment trusts, to hundreds of state residents from 2006-09, in some cases overloading clients' accounts with them. Read more.

COMMENTARY: QUIETLY KILLING A CONSUMER WATCHDOG

Having failed to block the creation of the Consumer Financial Protection Bureau (CFPB) in the 2010 Dodd-Frank financial reform bill, Senate Republicans are now trying to take away its power by filibuster, and they may well succeed, according to a New York Times editorial today. Under the Dodd-Frank law, most of the CFPB's regulatory powers -- particularly its authority over nonbanks like finance companies, debt collectors, payday lenders and credit agencies -- can be exercised only by a director. Knowing that, Republicans used a filibuster to prevent President Obama's nominee for director, Richard Cordray, from reaching a vote in 2011. Obama then gave Cordray a recess appointment, but a federal appeals court recently ruled in another case that the Senate was not in recess at that time because of the Republicans' tactics. That opinion, if upheld by the Supreme Court, is likely to apply to Cordray as well, which could invalidate the rules the bureau has already enacted. The president has renominated Cordray, but Republicans have made it clear that they will continue to filibuster to block his confirmation. Earlier this month, 43 Senate Republicans wrote a letter to the president vowing to block any nominee until "key structural changes" are made, including a bipartisan commission to run the bureau instead of one director, and congressional control of its appropriations. Other bank regulators, like the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, are not subject to the appropriations process, as a shield against political interference. Congress does, however, control the budgets of the Securities and Exchange Commission and the Commodity Futures Trading Commission, and House Republicans have voted to strip those agencies of money needed to regulate derivatives and curb abuses. Read the full editorial.

ANALYSIS: S&P'S TOXIC AAA RATINGS OF MORTGAGE DEBT HAD FAR-REACHING EFFECTS

Institutions throughout the financial services industry felt the effects of the damages inflicted when S&P allegedly inflated rankings of mortgage debt that contributed to the biggest financial crisis since the Great Depression, according to a Bloomberg News analysis yesterday. As a result, the Justice Department sued New York-based S&P and parent McGraw-Hill Cos. last week. The world's leading financial institutions suffered more than $2.1 trillion of writedowns and losses after soaring U.S. mortgage defaults caused the credit crunch. Some of the biggest losers were banks, including Citigroup and Bank of America Corp., which created and purchased collateralized debt obligations. Many of these investments -- created by packaging mortgage-backed bonds, derivatives and other CDOs and dividing them into new securities with varying degrees of risk -- imploded within a year after they were sold, even though they had pristine credit ratings. Smaller financial institutions were also ruined by mortgage-backed debt. Western Federal Corporate Credit Union failed after its executives employed an improperly "aggressive investment strategy" that had no limits on highly rated mortgage bonds, according to a regulatory report on its collapse. Read more.

ABI LIVE WEBINAR: REVISITING RADLAX AND HALL – NEW LEGAL AND PRACTICAL IMPACT OF THE DECISIONS

See why this was the top-rated panel at the ABI Winter Leadership Conference last month! Join the expert panel on Feb. 19 from 12:00-1:15pm EST as they summarize and discuss the legal impact and practical implications of the Supreme Court’s 2012 decisions in Radlax and Hall. Participants include:

Susan M. Freeman of Lewis and Roca LLP (Phoenix)

Adam A. Lewis of Morrison & Foerster LLP (San Francisco)

• Prof. Charles J. Tabb of the University of Illinois College of Law (Champaign, Ill.)

Eric E. Walker of Perkins Coie LLP (Chicago)

Click here to register!

POWER TO VETO BANKRUPTCY SALES AMONG ISSUES TO BE EXAMINED AT ABI'S 31ST ANNUAL SPRING MEETING

The 2013 Annual Spring Meeting, to be held April 18-21, 2013, at the Gaylord National Resort and Convention Center in National Harbor, Md., features a roster of the best national speakers, while the depth and scope of topics offer something for everyone. Specifically, four concurrent workshops will cover various “tracks,” including programs for attorneys in commercial cases, a track for restructuring professionals, a track of professional development programming and a track dealing solely with consumer issues. More than 16 hours of CLE/CPE is offered in some states, along with ethics credit totaling 3 hours, making the cost only about $50 per credit. In addition, committee sessions will drill down on other topics to provide you with the most practical and varied CLE/CPE experience ever. Sessions include:

- 17th Annual Great Debates
- Mediation: An Irrational Approach to a Rational Result
- Creditors' Committees and the Role of Indenture Trustees and Related Issues
- Current Issues for Financial Advisors in Bankruptcy Cases
- The Individual Conundrum: Chapter 7, 11 or 13?
- Real Estate Issues in Health Care Restructurings
- Law Firm Bankruptcies
- How to Be a Successful Expert
- The Ethical Compass: Multiple Ethical Schemes Applicable to Financial Advisors
- Chapter 9s, Nonprofits and Other Nontraditional Restructuring Processes
- And much more!

The Spring Meeting will also feature a field hearing of the ABI Commission to Study the Reform of Chapter 11, a report from the ABI Ethics Task Force, a luncheon panel discussion moderated by Bill Rochelle of Bloomberg News, and a Final Night Gala Dinner featuring a concert by Joan Jett and the Blackhearts!

Enter code "LOVEASM50" at checkout to save $50 on a new registration this week! Click here to register today!

ABI IN-DEPTH

DON'T MISS THE 9TH ANNUAL WHARTON RESTRUCTURING AND DISTRESSED INVESTING CONFERENCE ON FEB. 22!

The University of Pennsylvania's Wharton School of Business will be holding the 9th Annual Wharton Restructuring and Distressed Investing Conference on Feb. 22 at the Hyatt at The Bellevue in Philadelphia. The theme of this year's conference is “Health of Nations: Distress, Recovery or Revival?” It will offer a unique opportunity to hear from a distinguished gathering of keynote speakers and panelists in their discussion of the current economic climate and issues of debt, investing, and restructuring across the globe. To register, please click here.

NEW BANKRUPTCY PROFESSIONALS: DON'T MISS THE NUTS AND BOLTS PROGRAM AT ABI'S ANNUAL SPRING MEETING! SPECIAL PRICING IF YOU ARE AN ASM REGISTRANT!

An outstanding faculty of judges and practitioners explains the fundamentals of bankruptcy in a one-day Nuts and Bolts program on April 18 being held in conjunction with ABI's Annual Spring Meeting. Ideal training for junior professionals or those new to this practice area!

The morning session covers concepts all bankruptcy practitioners need to know, and the afternoon session splits into concurrent tracks, focusing on consumer and business issues. The session will include written materials, practice tip sessions with bankruptcy judges, continental breakfast and a reception after the program. Click here to register!

LATEST CASE SUMMARY ON VOLO: LEAVITT V. FINNEY (IN RE FINNEY; 9TH CIR.)

Summarized by David Hercher of Miller Nash LLP

The Ninth Circuit ruled that because the chapter 13 debtor received a chapter 7 discharge in a prior case commenced during the four-year period before the current petition date, she was not entitled to a discharge in the current chapter 13 case, even though the first case was commenced under chapter 13 and converted to chapter 7 before discharge.

There are more than 750 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: CASE FOCUSES ON A COMMERCIAL LANDLORD'S CLAIM FOR INDEMNIFICATION

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines the case of In re Mervyn's Holdings, LLC, in which the U.S. Bankruptcy Court for the District of Delaware held that a claim arising from an indemnification provision, in a non-residential commercial lease, which was rejected post-petition, was entitled to administrative priority pursuant to § 365(d)(3) of the Bankruptcy Code.

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

After Stern, bankruptcy courts do not have the constitutional authority to enter final judgments on fraudulent conveyance claims.

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 37 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.

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NEXT EVENT:

 

 

 

ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
Feb. 19, 2013
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COMING UP:

 

 

 

ACBPIKC 2013
Feb. 20-22, 2013
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9th Annual Wharton Restructuring and Distressed Investing Conference
Feb. 22, 2013
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Paskay 2013
March 7-9, 2013
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BBW 2013
March 22, 2013
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"Nuts and Bolts" Program at ASM- A Must for Junior Professionals or Those New to Bankruptcy Practice
April 18, 2013
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ASM 2013
April 18-21, 2013
Enter code "LOVEASM50" at checkout to save $50 on a new registration this week!
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ASM 2013
May 16, 2013
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ASM 2013
May 21-24, 2013
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ASM 2013
June 7, 2013
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  CALENDAR OF EVENTS
 

2013

February
- ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
     February 19, 2013
- VALCON 2013
     February 20-22, 2013 | Las Vegas, Nev.
- 9th Annual Wharton
Restructuring and Distressed Investing Conference

     February 22, 2013 | Philadelphia, Pa.

March
- 37th Annual Alexander L. Paskay Seminar on Bankruptcy Law and Practice
     March 7-9, 2013 | St. Petersburg, Fla.
- Bankruptcy Battleground West
     March 22, 2013 | Los Angeles, Calif.


  

April
- "Nuts and Bolts" Program at ASM
     April 18, 2013 | National Harbor, Md.
- Annual Spring Meeting
     April 18-21, 2013 | National Harbor, Md.

May
- "Nuts and Bolts" Program at NYCBC
     May 15, 2013 | New York, N.Y.
- New York City Bankruptcy Conference
     May 16, 2013 | New York, N.Y.
- Litigation Skills Symposium
     May 21-24, 2013 | Dallas, Texas

June
- Memphis Consumer Bankruptcy Conference
     June 7, 2013 | Memphis, Tenn.


 
 
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Ninth Circuit Holds Bankruptcy Courts Lack Authority to Enter Final Judgment in Fraudulent Conveyance Actions

ABI Bankruptcy Brief | December 4 2012
 
  

December 4, 2012

 
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  NEWS AND ANALYSIS   

NINTH CIRCUIT HOLDS BANKRUPTCY COURTS LACK AUTHORITY TO ENTER FINAL JUDGMENT IN FRAUDULENT CONVEYANCE ACTIONS

In a decision issued today in Executive Benefits Insurance Agency v. Arkison (In re Bellingham Insurance Agency, Inc., Case No. 11-35162), the Ninth Circuit held that bankruptcy courts lack authority to enter final judgment in fraudulent conveyance actions against nonclaimants. Relying upon the U.S. Supreme Court's decision in Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989) and Stern v. Marshall (131 S. Ct. 2594 (2011), the appellate court noted that the public rights exception to the rule of Article III adjudication does not encompass federal-law fraudulent conveyance claims, even though Congress designated such claims as core proceedings. Instead, bankruptcy courts have the power to hear fraudulent conveyance cases and submit reports and recommendations to the district court. The panel also held that the right to a hearing in an Article III court is waivable, and that the nonclaimant defendant in this case, by not objecting earlier on in the case, consented to the bankruptcy judge's adjudication of the fraudulent conveyance claim. To view a summary of the decision and read the full text of the opinion, visit ABI's VOLO here.

ANALYSIS: FINANCIALLY SICK FIRMS OFTEN GRANT BONUSES IN MONTHS BEFORE BANKRUPTCY FILING

More than 1,600 insiders—executives and others controlling a company—received bonuses, salaries, fees and other compensation totaling more than $1.3 billion in the months before their companies filed for chapter 11, according to a Wall Street Journal analysis of more than 80 bankruptcy cases over the past five years. Financially ailing companies such as Hostess Brands often pay bonuses and other compensation to executives and private-equity owners before filing for bankruptcy protection. Hostess's bankruptcy judge said during a Nov. 29 hearing that the payments "will definitely be looked at" as he approved the company's request to start liquidating and laying off more than 18,000 employees. Hostess was exploring a potential bankruptcy filing in July 2011 when its board voted to boost the salary of its chief executive and other high-level officers, according to creditors. Five months later, it filed for chapter 11, its second bankruptcy filing in a decade. Financially ailing companies often pay bonuses and other compensation to executives, directors and private-equity owners in the months before filing for bankruptcy protection. Federal law prevents "retention" bonuses paid to such "insiders" after a bankruptcy case is filed but not before. Read more. (Subscription required.)

OBAMA RECESS APPOINTMENTS FACE FIRST APPEALS COURT TEST

President Barack Obama’s authority to make appointments without U.S. Senate approval is being considered by an appeals court for the first time in a test of so-called pro-forma sessions set up by Republican lawmakers, Bloomberg News reported on Saturday. To prevent Obama from appointing officials after Congress started a holiday break last December, House and Senate Republicans refused to adopt a resolution to formally adjourn. Congressional Republicans opposed to the powers granted the Consumer Financial Protection Bureau were seeking to block the president from appointing former Ohio Attorney General Richard Cordray as the new agency’s first head, having refused a confirmation vote since he was nominated in July. Obama also appointed Cordray on Jan. 4. His appointment is being contested in a Washington, D.C., lawsuit while the validity of the president's naming of three National Labor Relations Board members on Jan. 4 has been raised in at least three other cases. Read more.

COMMENTARY: THE MORTGAGE CHALLENGE

The biggest economic policy error of President Obama's first term was the failure to address foreclosures effectively, according to a New York Times editorial on Sunday. By favoring the voluntary cooperation of banks in reducing monthly payments for hard-pressed borrowers, Obama’s policies did more to shield the banks from losses than to help homeowners and stabilize the market. Recent signs of a housing recovery aside, nearly three million loans are now in or near foreclosure, according to Moody’s Analytics. In addition, some five million borrowers who are current in their payments have high-rate mortgages that they have not refinanced, in part because of excessive bank fees. In all, nearly 12 million borrowers collectively owe $600 billion more on their mortgages than their homes are worth, a loss of wealth and a load of debt that make a strong and steady economic recovery all but impossible. The question now is whether Obama will use his second term to push through effective mortgage reform, according to the editorial. A first test of his resolve will be the swift nomination of a new director for the agency that oversees Fannie Mae and Freddie Mac, the government-controlled mortgage companies that own or back most mortgages. While new leadership at Fannie Mae and Freddie Mac is a key to more relief, the push for more help also could be strengthened through support of legislation that would expand refinancings and principal reductions. A sound mortgage-relief agenda, according to the editorial, also requires an enforcement plan. Read more.

COMMENTARY: BANKRUPTCY FOR DETROIT LOOMS AS UNIONS AND THE CITY COUNCIL RESIST REFORM

Michigan lawmakers have kept Detroit on life support for the past six months and may need to do so indefinitely barring a miraculous economic recovery, according to a Wall Street Journal editorial today. The city will run out of cash this month unless the state releases $30 million in bond proceeds, which are being held in escrow under a consent agreement that council members reluctantly approved in April. The rescue package ties $137 million in state aid to reforms and lets Mayor Dave Bing redo labor contracts. The city has already drawn $40 million from the state and may soon be cut off since council members last month rejected a contract for a legal firm to advise the mayor, a condition of further aid. Read more. (Subscription required.)

STUDENT-LOAN COLLECTION TARGETED FOR OVERHAUL IN CONGRESS

Congress will consider overhauling debt collection in the $100 billion-a-year U.S. student loan program, replacing it with automatic withdrawals from borrowers' paychecks tied to their income, Bloomberg News reported today. Rep. Tom Petri (R-Wis.) plans to introduce legislation as soon as this week that would require employers to withhold payments from wages in the same way they do taxes. Payments would be capped at 15 percent of borrowers’ income after basic living expenses. The bill follows growing concern about the burden of $1 trillion in outstanding student loans, which now exceed credit- card debt. Under the new system, the government would no longer need to hire private debt-collection companies and charge fees that add as much as 25 percent to borrowers' loan balances, leaving defaulted former students even deeper in the hole. Read more.

In related news, Rep. George Miller (D-Calif.), the ranking Democrat on the House Education Committee, is looking into student-loan practices by private lenders that he says resemble the runaround homeowners were given by mortgage lenders, CongressDaily reported yesterday. He is asking the Government Accountability Office to examine problems reported by student borrowers and has asked Sallie Mae Inc., Wells Fargo, the Pennsylvania Higher Education Assistance Agency, and Citigroup for information on their practices.

For more on the issue of student loan practices, be sure to listen to ABI’s latest podcast.

LATEST ABI PODCAST FEATURES STUDY ON STUDENT LOAN DISCHARGES AND THE UNDUE HARDSHIP STANDARD

The latest ABI Podcast features ABI Resident Scholar Susan Hauser speaking with Jason Iuliano, the author of "An Empirical Assessment of Student Loan Discharges and the Undue Hardship Standard." Iuliano, a graduate of Harvard Law School and currently a Ph. D. candidate at Princeton University, discusses the methodology of his study and a few of the conclusions that can be drawn from it about student loan discharges and the undue hardship standard in bankruptcy. Click here to listen.

ABI IN-DEPTH

ABI'S INTERACTIVE BANKRUPTCY CODE AND RULES SITE UPDATED TO INCLUDE AMENDMENTS EFFECTIVE DEC. 1

ABI's Bankruptcy Code and Rules site has been updated with all proposed amendments to Federal Rules of Bankruptcy Procedure 1007, 2015, 3001, 7054 and 7056 that took effect Dec. 1. Use the most current Code and Rules by going to http://law.abi.org/.

WEBCASTS NOW AVAILABLE OF CHAPTER 11 COMMISSION EVENTS, CONCERT DEDICATED TO ABI MEMBER STEVEN GOLICK

Looking to learn about ABI’s Chapter 11 Commission’s efforts in 2013? Catch the final 2012 public hearing of the Commission? Listen to a concert by ABI’s Indubitable Equivalents dedicated to Steven Golick? Follow the links below to access the webstreams of these recent events:

• ABI's media teleconference held Dec. 3: "Teleconference to Look at Chapter 11 Commission to Date: What Have We Learned?" Click here.

• Final public hearing of ABI's Commission to Study the Reform of Chapter 11 that took place on Nov. 30 at ABI’s Winter Leadership Conference. Click here.

• Performance of ABI’s Indubitable Equivalents dedicated to ABI member, leader and band mate, Steven Golick, who has recently undergone successful surgery to remove a brain tumor. Watch the concert at www.abiband.com.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: SUPREME COURT SEEKS VIEW OF SOLICITOR GENERAL IN BANKRUPTCY EXEMPTION CASE

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog explores the decision by the U.S. Supreme Court yesterday to ask the U.S. solicitor general to provide perspective on whether a bankruptcy court has the power to levy a financial charge against a chapter 7 debtor's residential property, which he has claimed falls under the homestead exemption (Stephen Law v. Alfred Siegel, No. 12-5196, U.S. Sup.).

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.

LATEST BLOOMBERG LAW VIDEO: BILL ON BANKRUPTCY- PATRIOT COAL CASE KICKED FROM MANHATTAN TO ST. LOUIS

The decision sending the Patriot Coal Corp. reorganization to St. Louis will focus debate on the near impossibility of convincing a judge in New York or Delaware to send a bankruptcy somewhere else, as Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss on their new video. Click here to watch.

ABI Quick Poll

A licensee of a trademark has the right to retain the license even when a debtor rejects the underlying contract creating the license. (Sunbeam Products, 7th Cir.)

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 37 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.

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Jan. 21, 2013
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Jan. 24-25, 2013
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Feb. 7-9, 2013
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Feb. 17-19, 2013
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ACBPIKC 2013
Feb. 20-22, 2013
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March 22, 2013
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  CALENDAR OF EVENTS
 

2013

January
- Western Consumer Bankruptcy Conference
     January 21, 2013 | Las Vegas, Nev.
- Rocky Mountain Bankruptcy Conference
     January 24-25, 2013 | Denver, Colo.

February
- Caribbean Insolvency Symposium
     February 7-9, 2013 | Miami, Fla.


  


- Kansas City Advanced Consumer Bankruptcy Practice Institute
     February 17-19, 2013 | Kansas City, Mo.
- VALCON 2013
     February 20-22, 2013 | Las Vegas, Nev.

March
- Bankruptcy Battleground West
     March 22, 2012 | Los Angeles, Calif.


 
 
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January Bankruptcy Filings Decrease 11 Percent from Previous Year Commercial Filings Fall 26 Percent

ABI Bankruptcy Brief | February 5 2013
 
  

February 5, 2013

 
home  |  newsroom  |  chart of the day  |  blogs  |  bankruptcy code and rules  |  statistics  |  legislative news  |  volo
  NEWS AND ANALYSIS   

JANUARY BANKRUPTCY FILINGS DECREASE 11 PERCENT FROM PREVIOUS YEAR, COMMERCIAL FILINGS FALL 26 PERCENT

Total bankruptcy filings in the United States decreased 11 percent in January over last year, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 78,471 in January 2013, down from the January 2012 total of 88,028. Consumer filings declined 10 percent to 74,743 from the January 2012 consumer filing total of 83,022. The total commercial filings in January 2013 also decreased to 3,728, representing a 26 percent decline from the 5,006 business filings recorded in January 2012. Total commercial chapter 11 filings experienced the largest decrease as they fell 36 percent from the 749 commercial chapter 11 filings in January 2012 to 479 filings in January 2013. Read more.

ANALYSIS: REGULATIONS LEADING COMPANIES TO SHIFT FROM PUBLIC TO PRIVATE DEBT ISSUANCES

A tectonic shift is under way in how companies raise money--and it will have a profound impact on U.S. investors and markets, according to an analysis in yesterday's Wall Street Journal. According to the Securities and Exchange Commission's most recent estimates, businesses have been raising more funds through private transactions than through debt and equity offerings registered under the securities laws and offered to the general public. Overall public debt and equity issuances fell by 11 percent between 2009 and 2010, to $1.07 trillion, while private issues rose by 31 percent, to $1.16 trillion. This shift, which has been driven by the rising costs of public-market participation and regulation, will likely accelerate when the SEC implements reforms in the Jumpstart Our Business Startups Act, which the president signed into law last April. The crowdfunding provisions in the JOBS Act are intended to democratize investment opportunities using the Internet and have attracted the most public attention. Experts anticipate a paradigm shift in how companies raise money, as they increasingly shun the highly regulated, costly and volatile public markets in favor of now deeper and more efficient private markets. Read more. (Subscription required.)

For further insights, be sure to read "'Crowdfunding' a Chapter 11 Plan" in the February edition of the ABI Journal.

MUNICIPAL DEFAULT RISK AT 18-MONTH LOW AS CONFIDENCE CLIMBS

Investor confidence in U.S. municipal debt is at its highest level since 2011, buoyed by local governments showing the fewest defaults since at least 2009 while revenue recovers to pre-recession levels, Bloomberg News reported yesterday. It cost the annual equivalent of as little as $172,000 last week to protect $10 million of munis for 10 years through credit-default swaps, according to Markit Group Ltd. data compiled by Bloomberg. That is the cheapest since July 2011. The price of swaps for California, which had its credit upgraded last week for the first time in six years after forecasting a surplus, also set an 18-month low. The declining price shows investors in the $3.7 trillion muni market view that the three bankruptcy filings last year by California cities were isolated events that are running counter to the state's trend of improving its finances. Defaults fell the past two years, running counter to the jump forecast in 2010 by banking analyst Meredith Whitney, chief executive officer of Meredith Whitney Advisory Group. Read more.

For more on municipal defaults, distress and chapter 9 filings, be sure to pick up a copy of ABI's Municipalities in Peril: The ABI Guide to Chapter 9, Second Edition, available now in ABI’s Bookstore.

ANALYSIS: "TOO BIG TO FAIL" MAY BE TOO HARD TO FIX AMID CALLS TO CURB BANK GROWTH

Top U.S. bank regulators and lawmakers are pushing for action to limit the risk that the government again winds up financing the rescue of one or more of the nation's biggest financial institutions, according to a Bloomberg News analysis yesterday. Officials leading the debate, including Federal Reserve Governor Daniel Tarullo, Dallas Fed President Richard Fisher and Senator Sherrod Brown (D-Ohio), share the view that the 2010 Dodd-Frank Act failed to curb the growth of large banks after promising in its preamble to "end too big to fail." Strategies under consideration include capping the size of big banks, making them raise more capital, discouraging mergers and requiring that financial firms hold specified levels of long-term debt to convert into equity in a failure. JPMorgan's 2012 trading loss of more than $6.2 billion from a bet on credit derivatives raised questions anew about whether the largest institutions have grown too complex to oversee effectively. That loss is among events that "have proven 'too big to fail' banks are also too big to manage and too big to regulate," Brown said. "The question is no longer about whether these megabanks should be restructured, but how we should do it." Brown and fellow Banking Committee member David Vitter (R-La.) are considering legislation that would impose capital levels on the largest banks higher than those agreed to by the Basel Committee on Banking Supervision and the Financial Stability Board, which set global standards. Brown also plans to reintroduce a bill he failed to get included in Dodd-Frank or passed in the last Congress that would cap bank size and limit non-deposit liabilities. Read more.

COMMENTARY: DESPITE REORGANIZATIONS, SCANT SIGNS OF CHANGE IN AIRLINE INDUSTRY

Airlines rarely seem to use chapter 11 as an opportunity to try something new, even though a reorganization presents an ideal time to alter their business practices, according to a commentary yesterday by Prof. Stephen J. Lubben of Seton Hall Law in the New York Times DealBook blog. Not long after the Bankruptcy Code was enacted in 1978, major airlines began filing bankruptcy, beginning with classic cases like Eastern Airlines and Pan Am. More recently, major airlines have followed one of two main paths in their reorganization cases. Some sell themselves to another airline. TWA's last chapter 11 case, when it sold its assets under § 363 of the Code to American, is a good example. The other path is to reorganize as a stand-alone entity. Under this approach, the airline imposes some pain on shareholders, employees and creditors, but otherwise comes out the other side essentially the same company as it was before bankruptcy. Airlines find themselves in bankruptcy often, much like the railroads of an earlier age, as they have high fixed costs and are highly sensitive to economic conditions. Read the full commentary.

JUSTICE DEPARTMENT ACCUSES CRIME RING OF $200 MILLION CREDIT CARD FRAUD

The Justice Department said that an international crime ring created thousands of fake identities to obtain tens of thousands of credit cards and steal more than $200 million, Bloomberg News reported today. Charges against 18 people were unsealed today in federal court in Newark, N.J., where U.S. Attorney Paul Fishman said that the scam was "one of the largest credit card fraud schemes ever uncovered" by the Justice Department. The conspirators created thousands of false identities and credit profiles, burnished their creditworthiness, and took large loans that were never repaid, according to the U.S. Federal Bureau of Investigation arrest complaint. Millions of dollars were wired overseas to Pakistan, India, the United Arab Emirates, China, Romania, Japan and Canada, the FBI claims. Read more.

LAW FIRM BANKRUPTCIES AMONG TOPICS TO BE EXAMINED AT ABI'S 31ST ANNUAL SPRING MEETING

The 2013 Annual Spring Meeting, to be held April 18-21, 2013, at the Gaylord National Resort and Convention Center in National Harbor, Md., features a roster of the best national speakers, while the depth and scope of topics offer something for everyone. Specifically, four concurrent workshops will cover various “tracks,” including programs for attorneys in commercial cases, a track for restructuring professionals, a track of professional development programming and a track dealing solely with consumer issues. More than 16 hours of CLE/CPE is offered in some states, along with ethics credit totaling 3 hours, making the cost only about $50 per credit. In addition, committee sessions will drill down on other topics to provide you with the most practical and varied CLE/CPE experience ever. Sessions include:

• 17th Annual Great Debates
• Mediation: An Irrational Approach to a Rational Result
• Creditors’ Committees and the Role of Indenture Trustees and Related Issues
• Current Issues for Financial Advisors in Bankruptcy Cases
• The Individual Conundrum: Chapter 7, 11 or 13?
• The Power to Veto Bankruptcy Sales
• Real Estate Issues in Health Care Restructurings
• How to Be a Successful Expert
• The Ethical Compass: Multiple Ethical Schemes Applicable to Financial Advisors
• Chapter 9s, Nonprofits and Other Nontraditional Restructuring Processes
• And much more!

The Spring Meeting will also feature a field hearing of the ABI Commission to Study the Reform of Chapter 11, a report from the ABI Ethics Task Force, a luncheon panel discussion moderated by Bill Rochelle of Bloomberg News, and a Final Night Gala Dinner featuring a concert by Joan Jett and the Blackhearts!

Register today!

ABI IN-DEPTH

ABI LIVE WEBINAR: REVISITING RADLAX AND HALL – NEW LEGAL AND PRACTICAL IMPACT OF THE DECISIONS

See why this was the top-rated panel at the ABI Winter Leadership Conference last month! Join the expert panel on Feb. 19 from 12:00-1:15pm EST as the summarize and discuss the legal impact and practical implications of the Supreme Court’s 2012 decisions in Radlax and Hall. Participants include:

Susan M. Freeman of Lewis and Roca LLP (Phoenix)

Adam A. Lewis of Morrison & Foerster LLP (San Francisco)

• Prof. Charles J. Tabb of the University of Illinois College of Law (Champaign, Ill.)

Eric E. Walker of Perkins Coie LLP (Chicago)

Click here to register!

DON'T MISS THE 9TH ANNUAL WHARTON RESTRUCTURING AND DISTRESSED INVESTING CONFERENCE ON FEB. 22!

The University of Pennsylvania's Wharton School of Business will be holding the 9th Annual Wharton Restructuring and Distressed Investing Conference on Feb. 22 at the Hyatt at The Bellevue in Philadelphia. The theme of this year's conference is “Health of Nations: Distress, Recovery or Revival?” It will offer a unique opportunity to hear from a distinguished gathering of keynote speakers and panelists in their discussion of the current economic climate and issues of debt, investing, and restructuring across the globe. To register, please click here.

NEW BANKRUPTCY PROFESSIONALS: DON'T MISS THE NUTS AND BOLTS PROGRAM AT ABI'S ANNUAL SPRING MEETING! SPECIAL PRICING IF YOU ARE AN ASM REGISTRANT!

An outstanding faculty of judges and practitioners explains the fundamentals of bankruptcy in a one-day Nuts and Bolts program on April 18 being held in conjunction with ABI's Annual Spring Meeting. Ideal training for junior professionals or those new to this practice area!

The morning session covers concepts all bankruptcy practitioners need to know, and the afternoon session splits into concurrent tracks, focusing on consumer and business issues. The session will include written materials, practice tip sessions with bankruptcy judges, continental breakfast and a reception after the program. Click here to register!

LATEST CASE SUMMARY ON VOLO: IN RE PORAYKO (7TH CIR.)

Summarized by George Spathis of Horwood Marcus & Berk

A recent ruling by the Seventh Circuit found that a checking account constitutes "personal property" that remains within the "control" of the account's holder, and therefore is subject to a citation lien under Illinois law.

There are more than 750 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: REFLECTING ON THE LESSONS LEARNED FROM MAMMOTH LAKES' CHAPTER 9 CASE

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines some of the lessons learned from the chapter 9 filing of Mammoth Lakes, Calif.

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

After Stern, bankruptcy courts do not have the constitutional authority to enter final judgments on fraudulent conveyance claims.

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 37 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.

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ACBPIKC 2013
Feb. 7-9, 2013
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ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
Feb. 19, 2013
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ACBPIKC 2013
Feb. 20-22, 2013
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9th Annual Wharton Restructuring and Distressed Investing Conference
Feb. 22, 2013
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Paskay 2013
March 7-9, 2013
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BBW 2013
March 22, 2013
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"Nuts and Bolts" Program at ASM- A Must for Junior Professionals or Those New to Bankruptcy Practice
April 18, 2013
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ASM 2013
April 18-21, 2013
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ASM 2013
May 16, 2013
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  CALENDAR OF EVENTS
 

2013

February
- Caribbean Insolvency Symposium
     February 7-9, 2013 | Miami, Fla.
- ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
     February 19, 2013
- VALCON 2013
     February 20-22, 2013 | Las Vegas, Nev.
- 9th Annual Wharton
Restructuring and Distressed Investing Conference

     February 22, 2013 | Philadelphia, Pa.


  

 

March
- 37th Annual Alexander L. Paskay Seminar on Bankruptcy Law and Practice
     March 7-9, 2013 | St. Petersburg, Fla.
- Bankruptcy Battleground West
     March 22, 2013 | Los Angeles, Calif.

April
- "Nuts and Bolts" Program at ASM
     April 18, 2013 | National Harbor, Md.
- Annual Spring Meeting
     April 18-21, 2013 | National Harbor, Md.

May
- New York City Bankruptcy Conference
     May 16, 2013 | New York, N.Y.


 
 
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Analysis Firms in Chapter 11 Face Fast Trip to Auction Block

ABI Bankruptcy Brief | January 15 2013
 
  

January 15, 2013

 
home  |  newsroom  |  chart of the day  |  blogs  |  bankruptcy code and rules  |  statistics  |  legislative news  |  volo
  NEWS AND ANALYSIS   

ANALYSIS: FIRMS IN CHAPTER 11 FACE FAST TRIP TO AUCTION BLOCK

More companies that wind up in bankruptcy court are facing a stark demand from their banks: Sell yourself now, the Wall Street Journal reported yesterday. Digital Domain Media Group Inc., a special-effects company founded by director James Cameron to work on "Titanic" and other films, filed for chapter 11 protection in September; its lenders gave it a window of just 12 days to find a buyer or risk losing its bankruptcy financing. Lenders gave RG Steel LLC less than two months to sell its steel plants, and ATP Oil & Gas Corp. is scrambling to find a buyer to avoid defaulting on its bankruptcy loan. Most companies that file for bankruptcy these days have debts that far exceed their assets, according to experts. That means they probably won't be able to pay off their lenders in full, let alone more-junior creditors like suppliers, no matter how long they stay in bankruptcy proceedings. As a result, banks and other lenders, who often are owed millions of dollars and get claims on any sale proceeds, are using their clout to press for a speedy sale. Read more. (Subscription required.)

COMMENTARY: U.S. SHOULD NOT HAND OVER BATTERY TECHNOLOGY TO CHINA

Unless the U.S. government acts quickly, over a decade’s worth of advanced American technology is about to be handed to the Chinese at a creditors' sale in the A123 bankruptcy case, according to a commentary by former Congressman Ike Skelton and Duncan Hunter in yesterday's U.S. News and World Report. Under the decision of a federal bankruptcy judge, the company whose patents comprise the cutting edge of this technology, A123 Systems Inc., will soon become the property of China's Wanxiang Group, a leading Chinese manufacturer, for the relative bargain price of $250 million. Like all sales of critical technology to foreign entities, the bankruptcy court's auction is subject to approval by a powerful but obscure federal interagency panel known as the Committee on Foreign Investment in the United States. Wangxiang has sought to win approval of the deal by agreeing to split off A123 Systems' existing military contracts to an American corporation. The trade secrets and patents that would be controlled by the Wanxiang Group, according to the commentary, resulted from a decade of trial and error by some of America's scientists, with much of the work funded by U.S. taxpayers. Read more.

RECOVERY IN U.S. SAVING 8 MILLION UNDERWATER HOMEOWNERS

As housing prices have recovered, the number of underwater borrowers fell by almost 4 million last year to 7 million, according to JPMorgan Chase & Co. (JPM), and that number could drop to 4 million within 2 years, Bloomberg News reported today. The housing market is rebounding faster than anyone thought possible, according to Blackstone Group LP's global head of real estate Jonathan Gray, as the Federal Reserve buys mortgage bonds to keep rates near record lows and investors sop up a diminishing supply of properties for sale. JPMorgan analysts led by John Sim estimate that the price growth last year was responsible for a drop of almost 4 million in underwater borrowers. The number of homeowners that owe more on their mortgages than their properties are worth may fall to 4 million by the end of 2015, according to Sim. Foreclosure starts dropped 28 percent in November from a year earlier, data provider Lender Processing Services Inc. wrote in a report this week. Read more.

401(k) BREACHES UNDERMINING RETIREMENT SECURITY FOR MILLIONS

A large and growing share of American workers are tapping their retirement savings accounts for non-retirement needs, raising broad questions about the effectiveness of one of the most important savings vehicles for old age, the Washington Post reported today. More than one in four American workers with 401(k) and other retirement savings accounts uses them to pay current expenses, new data show. The withdrawals, cash-outs and loans drain nearly a quarter of the $293 billion that workers and employers deposit into the accounts each year, undermining already-shaky retirement security for millions of Americans. Fresh data from Vanguard, one of the nation’s largest 401(k) managers, show a 12 percent increase in the number of workers who took loans against their retirement accounts or withdrew money outright since 2008. Overall, about a third of American households participate in 401(k)-type accounts, which hold a combined $3.5 trillion in assets. But a large portion of that money does not make it to retirement. A recent study by Boston College’s Center for Retirement Research found that the typical household approaching retirement age has an average of $120,000 in retirement savings, enough for roughly a $7,000-a-year annuity. Read more.

REPORT: RANKS OF WORKING POOR INCREASING

A new report released today by the Working Poor Families Project found that nearly a third of the nation’s working families earn salaries so low that they struggle to pay for their necessities, the Washington Post reported today. Analyzing 2011 data from the Census Bureau’s American Community Survey, the report said that 32 percent of working families earned salaries that put them below double the poverty threshold, which was $45,622 for a family of four. That percentage has crept up from 28 percent in 2007, the year the recession began. And 37 percent of the nation’s children — 23.5 million — were part of working poor families in 2011, the report said, up from 33 percent in 2007. Read more.

E-FILING AND THE EXPLOSION IN TAX-RETURN FRAUD

Tax-identity theft exploded to more than 1.1 million cases in 2011 from 51,700 in 2008, the Wall Street Journal reported today. The Treasury Inspector General for Tax Administration last summer reported discovering an additional 1.5 million potentially fraudulent 2011 tax refunds totaling in excess of $5.2 billion. One possible source of identity theft is due to American taxpayers, urged on by the IRS, filing their income-tax returns electronically and arranging for refunds to be directly deposited into bank accounts. E-filing is appealing because it provides an electronic postmark confirmation that the return was filed on time. When it is combined with direct deposit, a refund can arrive in as little as seven days. In 2012, 80 percent of individual returns were e-filed, fulfilling an initial goal Congress set in 1998. The result is an automated system in which the labor burden is transferred to the taxpayer. Tax return fraud can come in the form of tax-identity theft, refund fraud, or return-preparer fraud and is difficult to prosecute. With e-filing, evidence of fraud is difficult to find. There are no signed tax forms, envelopes or fingerprints, and e-filing promises quick refunds. Read more. (Subscription required.)

TAKE AN IN-DEPTH LOOK AT CREDITORS' COMMITTEES AND THE ROLE OF THE INDENTURE TRUSTEES AT ABI'S 31ST ANNUAL SPRING MEETING

The 2013 Annual Spring Meeting, to be held April 18-21, 2013, at the Gaylord National Resort and Convention Center in National Harbor, Md., features a roster of the best national speakers, while the depth and scope of topics offer something for everyone. Specifically, four concurrent workshops will cover various “tracks,” including programs for attorneys in commercial cases, a track for restructuring professionals, a track of professional development programming and a track dealing solely with consumer issues. More than 16 hours of CLE/CPE is offered in some states, along with ethics credit totaling 3 hours, making the cost only about $50 per credit. In addition, committee sessions will drill down on other topics to provide you with the most practical and varied CLE/CPE experience ever. Sessions include:

• 17th Annual Great Debates
• Mediation: An Irrational Approach to a Rational Result
• Current Issues for Financial Advisors in Bankruptcy Cases
• The Individual Conundrum: Chapter 7, 11 or 13?
• The Power to Veto Bankruptcy Sales
• Real Estate Issues in Health Care Restructurings
• Law Firm Bankruptcies
• How to Be a Successful Expert
• The Ethical Compass: Multiple Ethical Schemes Applicable to Financial Advisors
• Chapter 9s, Nonprofits and Other Nontraditional Restructuring Processes
• And much more!

The Spring Meeting will also feature a field hearing of the ABI Commission to Study the Reform of Chapter 11, a report from the ABI Ethics Task Force, a luncheon panel discussion moderated by Bill Rochelle of Bloomberg News, and a Final Night Gala Dinner featuring a concert by Joan Jett and the Blackhearts!

Register today!

ABI IN-DEPTH

ABI LIVE WEBINAR: REVISITING RADLAX AND HALL – NEW LEGAL AND PRACTICAL IMPACT OF THE DECISIONS

See why this was the top-rated panel at the ABI Winter Leadership Conference last month! Join the expert panel on Feb. 19 from 12:00-1:15pm EST as the summarize and discuss the legal impact and practical implications of the Supreme Court’s 2012 decisions in Radlax and Hall. Participants include:

Susan M. Freeman of Lewis and Roca LLP (Phoenix)

Adam A. Lewis of Morrison & Foerster LLP (San Francisco)

• Prof. Charles J. Tabb of the University of Illinois College of Law (Champaign, Ill.)

Eric E. Walker of Perkins Coie LLP (Chicago)

Click here to register!

LATEST CASE SUMMARY ON VOLO: GLAZER V. CHASE HOME FINANCE LLC (6TH CIR.)

Summarized by Michael Coury of Butler Snow O'Mara Stevens, & Cannada PLLCs

The Sixth Circuit affirmed the trial court's finding that the mortgage servicer was not a debt collector under the Fair Debt Collection Practices Act and that a subservicer who attempts to collect debts owed to another [from a debtor] that was not in default at the time it was obtained by the servicer is exempt from the definition of "debt collector" under 28 U.S.C. Sec. 1692a(6). The Court also affirmed the trial court's denial of plaintiff's motion to amend as untimely where it was filed four months after discovery of new evidence and after the magistrate had already recommended dismissal of the claim against the subservicer.

There are more than 700 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: PARALLELS BETWEEN THE SUBPRIME MORTGAGE LOAN AND STUDENT LOAN CRISES

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new post examines similarities between the subprime mortgage loan crisis that caused the 2008 financial downturn and the current student loan crisis.

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

After Stern, bankruptcy courts do not have the constitutional authority to enter final judgments on fraudulent conveyance claims.

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 37 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.

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NEXT WEEK:

 

 

WCBC 2013
Jan. 21, 2013
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ACBPIKC 2013
Jan. 24-25, 2013
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COMING UP:

 

 

ACBPIKC 2013
Feb. 7-9, 2013
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ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
Feb. 19, 2013
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ACBPIKC 2013
Feb. 20-22, 2013
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Paskay 2013
March 7-9, 2013
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BBW 2013
March 22, 2013
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ASM 2013
April 18-21, 2013
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  CALENDAR OF EVENTS
 

2013

January
- Western Consumer Bankruptcy Conference
     January 21, 2013 | Las Vegas, Nev.
- Rocky Mountain Bankruptcy Conference
     January 24-25, 2013 | Denver, Colo.

February
- Caribbean Insolvency Symposium
     February 7-9, 2013 | Miami, Fla.
- ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
     February 19, 2013


  

- VALCON 2013
     February 20-22, 2013 | Las Vegas, Nev.

March
- 37th Annual Alexander L. Paskay Seminar on Bankruptcy Law and Practice
     March 7-9, 2013 | St. Petersburg, Fla.
- Bankruptcy Battleground West
     March 22, 2013 | Los Angeles, Calif.

April
- Annual Spring Meeting
     April 18-21, 2013 | National Harbor, Md.


 
 
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Report Big Banks Engaging in Payday Lending

ABI Bankruptcy Brief | March 21 2013
 
  

March 21, 2013

 
home  |  newsroom  |  chart of the day  |  blogs  |  bankruptcy code and rules  |  statistics  |  legislative news  |  volo
  NEWS AND ANALYSIS   

REPORT: BIG BANKS ENGAGING IN PAYDAY LENDING

A new report from the Center for Responsible Lending found that some of the nation's largest banks are providing short-term loans with interest rates of up to 300 percent, driving borrowers into a cycle of debt, the Washington Post reported today. The study that was released today gives an updated look at the perils of advance-deposit loans offered by Wells Fargo, U.S. Bancorp, Regions Bank, Fifth Third Bank, Guaranty Bank and Bank of Oklahoma. Researchers looked at a sample of 66 direct-deposit advances over a 12-month period. Critics say that the structure of advance-deposit loans promotes a cycle of debt. Account holders typically pay up to $10 for every $100 borrowed, with the understanding that the loan will be repaid with their next direct deposit. If the deposited funds are not enough to cover the loan, the bank takes whatever money comes in, triggering overdraft fees and additional interest. Banks contend that they are offering a vital service to customers at more reasonable price points than storefront lenders, who often charge twice as much as banks. The Consumer Financial Protection Bureau has supervisory and enforcement authority for storefront and bank payday lenders with more than $10 billion in assets. The bureau issued a request for comment last year to gauge consumer and industry concerns. Read more.

In related news, a New York Times editorial today found that even though JPMorgan Chase has instituted new policies intended to shield customers from predatory lenders, which can charge up to 500 percent in interest, banks should be doing more to protect their customers. State and federal banking officials also need to expedite their investigations into the relationship between banks and predatory lenders, according to the editorial, with the aim of developing industrywide regulations that protect the public. New rules that go into effect at JPMorgan in May will limit the overdraft fees charged to customers in situations where the lender tries to collect a payment multiple times. Banks could adopt common practices that would allow customers to close their accounts at any time and deny lenders access to automatic payments in states where predatory loans are illegal. Read more.

JUSTICE DEPARTMENT PROBING BANKS' ROLE IN FRAUD BY CUSTOMERS

The U.S. Justice Department is examining the role financial institutions play in fraud schemes perpetrated by bank customers offering deceptive products, Reuters reported yesterday. Attorneys and investigators in the DOJ's Civil Division are examining banks' possible role in assisting scammers who offer questionable payday loans, false offers of debt relief, fraudulent health care discount cards and phony government grants, according to Michael Bresnick, who heads the department's Financial Fraud Enforcement Task Force. That task force has been focused on pursuing the type of misconduct that fueled the financial crisis, but the new priorities suggest that investigators are looking beyond those cases into other types of financial misconduct that extends to different industries, from payday lending to auto loans. Read more.

WITH FREDDIE MAC SUIT, BANKS FACE BILLIONS MORE IN LIBOR CLAIMS

The fallout from the manipulation of the London interbank offered rate (Libor) has already cost banks $2.5 billion in penalties, but that sum pales in comparison to payouts that will come from private lawsuits, the New York Times DealBook blog reported yesterday. Any finding of liability could be compounded because of the potential for any award to be tripled under the antitrust laws. The latest salvo comes from mortgage finance company Freddie Mac, which has filed a lawsuit in the Federal District Court in Alexandria, Va. It asserts that the company was harmed by collusive activity among the banks that lowered the benchmark interest rate. And where Freddie Mac goes, Fannie Mae, its larger sibling, usually follows, so we can expect it to file a suit seeking damages from Libor manipulation. The three regulatory settlements to date – with Barclays, UBS and the Royal Bank of Scotland — provide much of the evidence Freddie Mac relies on in its complaint. Among the documents now public is a litany of e-mails demonstrating just how the banks worked to lower their Libor submissions to benefit their trading positions and make themselves appear stronger during the height of the financial crisis. Read more.

COMMENTARY: THE PROBLEM WITH "TOO BIG TO FAIL" BANKS

The real issue with "too big to fail" financial institutions resides in the government-provided incentives for banks to get inefficiently big in the first place, according to a commentary in yesterday's Wall Street Journal. In the absence of such incentives, according to the commentary, the risk-averse funding on which banks thrive would not be available to allow banks to create sprawling credit portfolios impossible for regulators or investors in the marketplace to assess. Modern governments, as long as they are assuming the risks of the financial system, find it convenient to have those risks concentrated in a few very large, very handy institutions. A lean solution would be to require banks to hold Treasury paper against their insured deposits, according to the commentary. Those experts who prefer solutions like higher capital requirements maintain that the business of banks would survive, forcing banks to rely more on equity than debt to finance their activities. If so, then experts should also consider that equity markets might erect new business models to finance small businesses and credit-worthy consumers if government-insured deposits were no longer available at all to underwrite such risks. Read the full commentary. (Subscription required.)

ANALYSIS: SYNTHETIC CDOs MAKING COMEBACK

Derivatives that pool credit-default swaps to make magnified bets on corporate debt, popularized in the last credit bubble, are making a comeback as investors search farther afield for alternatives to bonds at record-low yields, Bloomberg News reported yesterday. Citigroup Inc. is among several banks that have sold as much as $1 billion of synthetic collateralized debt obligations (CDOs) this year, following $2 billion in all of 2012, according to estimates from the New York-based lender. Trading in tranches of indexes that use a similar strategy to juice yields rose 61 percent in the past month. Synthetic credit, which amplified the financial crisis five years ago, is enticing investors after corporate-bond yields dropped to less than half the 20-year average. Read more.

LATEST ABI PODCAST EXAMINES EFFECTIVENESS OF CURRENT FINANCIAL EDUCATION PROGRAMS

The latest ABI podcast features ABI Resident Scholar Prof. Scott Pryor speaking with Prof. Lauren Willis of Loyola Law School talking about the effectiveness of current financial education programs. Willis discusses the strengths and weaknesses of current financial education programs and what improvements can be made going forward. Click here to listen to the podcast.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: WHY IS KODAK'S STOCK SOARING?

Despite Eastman Kodak Co. stock shooting up dramatically in a week's time, investors might not have the same long-term profitable outcome that owners of American Airlines shares enjoyed, as Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss on their new video. Click here to watch the video.

DON'T MISS ACB'S FREE EVENT TOMORROW, "THE AUTO BANKRUPTCIES: CHECKING THE REARVIEW MIRROR," ON MARCH 22!

ABI members are encouraged to register for the American College of Bankruptcy's "The Auto Bankruptcies: Checking the Rearview Mirror" on March 22 at Boston College Law School in Newton, Mass. The afternoon event will feature key players looking back at the events that led to GM and Chrysler being placed into bankruptcy and the lessons that have been learned from the cases. Panelists include:

Corinne Ball of Jones Day (New York), who served as lead bankruptcy counsel to Chrysler.

Matthew A. Feldman of Willkie Farr and Gallagher LLP (New York), who served as chief legal advisor to the Obama administration's Task Force on the Auto Industry.

• Hon. Arthur J. Gonzalez, a Senior Fellow at New York University School of Law and formerly the Chief Bankruptcy Judge for the U.S. Bankruptcy Court for the Southern District of New York, who presided over the Chrysler chapter 11 proceedings.

Harvey R. Miller of Weil, Gotshal & Manges LLP (New York), who served as lead bankruptcy counsel to GM.

The moderator will be Mark N. Berman of Nixon Peabody LLP (New York).

Registration for the afternoon event is free, so be sure to sign up today before it reaches capacity!

HOTEL BLOCK FOR ABI'S ANNUAL SPRING MEETING ALMOST SOLD OUT! REGISTER TODAY!

The hotel block at the Gaylord National Resort and Convention Center in National Harbor, Md., is almost sold out for ABI’s 2013 Annual Spring Meeting! Held April 18-21, 2013, ASM features a roster of the best national speakers, while the depth and scope of topics offer something for everyone. Specifically, four concurrent workshops will cover various “tracks,” including programs for attorneys in commercial cases, a track for restructuring professionals, a track of professional development programming and a track dealing solely with consumer issues. More than 16 hours of CLE/CPE is offered in some states, along with ethics credit totaling 3 hours, making the cost only about $50 per credit. In addition, committee sessions will drill down on other topics to provide you with the most practical and varied CLE/CPE experience ever. Sessions include:

• 17th Annual Great Debates
• Mediation: An Irrational Approach to a Rational Result
• Creditors’ Committees and the Role of Indenture Trustees and Related Issues
• Current Issues for Financial Advisors in Bankruptcy Cases
• The Individual Conundrum: Chapter 7, 11 or 13?
• The Power to Veto Bankruptcy Sales
• Real Estate Issues in Health Care Restructurings
• How to Be a Successful Expert
• The Ethical Compass: Multiple Ethical Schemes Applicable to Financial Advisors
• Chapter 9s, Nonprofits and Other Nontraditional Restructuring Processes
• And much more!

The Spring Meeting will also feature a field hearing of the ABI Commission to Study the Reform of Chapter 11, a report from the ABI Ethics Task Force, a luncheon panel discussion moderated by Bill Rochelle of Bloomberg News, and a Final Night Gala Dinner featuring a concert by Joan Jett and the Blackhearts!

Make sure to register today!

ABI IN-DEPTH

TEE OFF ON THE NEW ABI GOLF TOUR!

Starting with the Annual Spring Meeting, ABI will offer conference registrants the option to participate in the ABI Golf Tour. The Tour will take place concurrently with all conference golf tournaments. The Tour is designed to enhance the golfing experience for serious golfers, while still offering a fun networking opportunity for players of any ability. As opposed to the format used in the regular ABI conference events, Tour participants will "play their own ball." They will be grouped on the golf course separately from other conference golf participants and will typically play ahead of the other participants, expediting Tour play. Tour participants will randomly be grouped in foursomes, unless otherwise requested of the Commissioner in advance of each tournament. Prizes will be awarded for each individual Tour event, which are sponsored by Great American Group. The grand prize is the "Great American Cup," also sponsored by Great American Group, and will be awarded to the top player at the end of the Tour season. Registration is free. Click here for more information and a list of 2013 ABI Golf Tour event venues.

NEW BANKRUPTCY PROFESSIONALS: DON'T MISS THE NUTS AND BOLTS PROGRAM AT ABI'S ANNUAL SPRING MEETING! SPECIAL PRICING IF YOU ARE AN ASM REGISTRANT!

An outstanding faculty of judges and practitioners explains the fundamentals of bankruptcy in a one-day Nuts and Bolts program on April 18 being held in conjunction with ABI's Annual Spring Meeting. Ideal training for junior professionals or those new to this practice area!

The morning session covers concepts all bankruptcy practitioners need to know, and the afternoon session splits into concurrent tracks, focusing on consumer and business issues. The session will include written materials, practice tip sessions with bankruptcy judges, continental breakfast and a reception after the program. Click here to register!

LATEST CASE SUMMARY ON VOLO: STAKER V. JUBBER (IN RE STAKER; 10TH CIR.)

Summarized by Geoffrey Miller from the U.S. Bankruptcy Court for the District of Arizona

Dismissing the appeals of the bankruptcy court's orders remanding two quiet title actions to state court, the Tenth Circuit BAP held that the appeals were moot and that the debtors lacked the requisite standing to appeal the bankruptcy court's orders.

There are more than 800 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: EXAMINATION OF PENSION AND OPEB LIABILITIES FACING MUNICIPALITIES

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines two of the largest issues facing municipalities today: underfunded pensions and unfunded "other" post-employment obligations (OPEB).

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

Who will win the NCAA basketball tournament?

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 37 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.

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TOMORROW:

 

 

BBW 2013
March 22, 2013
Register Today!

 

 

 

 

 

COMING UP

 

 

 

BBW 2013
April 5, 2013
Register Today!

 

 

 

 

 

BBW 2013
April 10, 2013
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ASM NAB 2013
April 18, 2013
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ASM 2013
April 18-21, 2013
Register Today!

 

 

 

 

 

NYCBC 2013
May 15, 2013
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ASM 2013
May 16, 2013
Register Today!

 

 

 

 

ASM 2013
May 21-24, 2013
Register Today!

 

 

 

 

ASM 2013
June 7, 2013
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ASM 2013
June 13-16, 2013
Register Today!

 

 

 

 

 

NE 2013
July 11-14, 2013
Register Today!

 

 

 

 

 

ASM 2013
July 18-21, 2013
Register Today!


 
   
  CALENDAR OF EVENTS
 

2013

March
- Bankruptcy Battleground West
     March 22, 2013 | Los Angeles, Calif.
- ACB's Free Event, "The Auto Bankruptcies: Checking the Rearview Mirror" Program
     March 22, 2013 | Newton, Mass.

April
- ABI Live Webinar: "Legacy Liabilities : Dealing with Environmental, Pension, Union and Similar Types of Claims"
     April 5, 2013
- ABI Live Webinar: "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?"
     April 10, 2013
- "Nuts and Bolts" Program at ASM
     April 18, 2013 | National Harbor, Md.
- Annual Spring Meeting
     April 18-21, 2013 | National Harbor, Md.


  

 

May
- "Nuts and Bolts" Program at NYCBC
     May 15, 2013 | New York, N.Y.
- ABI Endowment Cocktail Reception
     May 15, 2013 | New York, N.Y.
- New York City Bankruptcy Conference
     May 16, 2013 | New York, N.Y.
- Litigation Skills Symposium
     May 21-24, 2013 | Dallas, Texas

June
- Memphis Consumer Bankruptcy Conference
     June 7, 2013 | Memphis, Tenn.
- Central States Bankruptcy Workshop
     June 13-16, 2013 | Grand Traverse, Mich.

July
- Northeast Bankruptcy Conference and Northeast Consumer Forum
     July 11-14, 2013 | Newport, R.I.
- Southeast Bankruptcy Workshop
     July 18-21, 2013 | Amelia Island, Fla.


 
 
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Fed Governor Put Cap on Big Financial Firms

ABI Bankruptcy Brief | October 11, 2012
 
  

October 11, 2012

 
home  |  newsroom  |  chart of the day  |  blogs  |  bankruptcy code and rules  |  statistics  |  legislative news  |  volo
  NEWS AND ANALYSIS   

FED GOVERNOR: PUT CAP ON BIG FINANCIAL FIRMS

A top Federal Reserve official yesterday called on Congress to consider capping the size of the nation's financial firms, marking one of the most high-profile challenges to the way Wall Street does business, The Wall Street Journal reported yesterday. In a Philadelphia speech, Fed governor Daniel Tarullo recommended curbing banks' growth by putting a limit on their nondeposit liabilities, which are sources of funding for operations that go beyond consumer deposits. The idea takes direct aim at the biggest U.S. banks, including J.P. Morgan Chase & Co., Bank of America Corp., Goldman Sachs and Citigroup Inc., all of which rely heavily on such funding. Firms outside of this tier make much greater use of regular deposits. Tarullo, who drives much of bank policy-making at the Fed, is the highest-ranking regulatory official to call for limiting the size of banks. Even though the chance of congressional action depends in part on the outcome of November's election, the concept also fits into a growing chorus from across the political spectrum. Critics have voiced concern that the nation's largest financial institutions are too big to fail and pose too great a risk to the U.S. financial system. Tarullo's suggestion would cap banks' nondeposit liabilities—which are usually some form of debt, such as short-term borrowings—at a fixed percentage of the U.S. economy, a number he didn't specify. He also warned that the Fed should block any merger or acquisition this group of big banks attempts to make. If larger banks continue to expand, Tarullo said in Wednesday's speech, the market perception will increase that certain of them are "too big to fail," meaning that the federal government would rescue them rather than risk rocking the financial system. Click here to read the full article.

U.S. MORTGAGE FRAUD INITIATIVE DATA INCLUDED OLDER CASES

The Obama administration announced that a yearlong crackdown on mortgage fraud netted charges against 530 suspects in the year ending Sept. 30. However, the list included cases filed as many as two years before U.S. Attorney General Eric Holder said the initiative began, Bloomberg News reported today. Holder said at a news conference in Washington, D.C., on Tuesday that the initiative ran from Oct. 1, 2011 to Sept. 30, 2012, and resulted in "285 federal criminal indictments and informations against 530 defendants for allegedly victimizing more than 73,000 American homeowners—and inflicting losses in excess of $1 billion." A sampling of cases incorporated in the data Holder cited shows those numbers includes cases filed as early as 2009. Cases filed before the start of the initiative were included because some type of "law enforcement action" occurred during the yearlong period, according to William Carter, a spokesman for the Federal Bureau of Investigation. Those actions could include indictments, convictions and sentencings, he said. The "Distressed Homeowner Initiative" was spearheaded by the FBI, which began to recognize a sharp increase in fraud aimed at struggling homeowners in the years following the 2008 housing crisis. The information used to compile the results from the initiative came from an FBI survey of the agencies involved in the Mortgage Fraud Working Group. Click here to read the full article.

WHAT TO DO WITH AMERICA'S 14 MILLION VACANT HOMES?

With all the numbers hinting at a housing market recovery, it's a good time to take a look at the challenge of what to do with the millions of homes in America that nobody seems to want, The Wall Street Journal reported on Tuesday. As of the end of June, there are just over 132.7 million housing units in America, and 10.6 percent of them—more than 14 million—are vacant year-round. That number includes everything from holiday homes to places in the temporary purgatory between being rented or sold and new occupants moving in. But at one end of that spectrum are nearly 4 million homes that aren't just sitting unsold or unrented—they're not even on the market. While vacant properties are broadly decreasing in number as more are sold or rented, that final "other" number—places simply not on the market and not being used for anything—has actually increased in the last year. These vacant homes are bad news for all involved, depressing property values around them, falling into disrepair, and often attracting higher crime rates and other social problems. Places where private investors will likely do much of the heavy lifting include areas like Phoenix, where a boom-era oversupply of new homes is gradually being bought up at low prices and turned into rental units. But other towns prone to longer-term decline will need to simply tear buildings down. And for that, land banks—government or nonprofit entities that own, manage and dispose of vacant land—have a role to play. Click here to read the full article.

JOBLESS CLAIMS IN U.S. FALL TO FOUR-YEAR LOW

Fewer Americans than forecast filed first-time claims for unemployment benefits last week, which may reflect difficulty adjusting the data for seasonal swings at the start of a new quarter, Bloomberg News reported today. Applications for jobless benefits dropped 30,000 to 339,000 in the week ended Oct. 6, the fewest since February 2008, Labor Department figures showed today. Economists had forecast 370,000 claims, according to the median estimate in a Bloomberg survey. At the same time, the cooling of the global economy and a lack of clarity on U.S. fiscal policy are acting as hurdles for faster gains in employment. The report "is consistent with a labor market that is gradually getting better," said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Conn., who had predicted a decline in claims. "Layoffs are at a low level and don't seem to be going anywhere. Hiring is still very muted." Click here to read the full article.

U.S. GROWTH EXPECTED TO BE SLOW INTO 2013

The unemployment rate registered a dramatic 0.5 percentage-point drop over the past two months, but economists don't expect that pace of decline to continue, the Wall Street Journal reported today, citing its latest forecasting survey. "The general trend in the unemployment rate is lower, and this should continue to be true as long as the economy grows along the profile we project," said Joseph LaVorgna at Deutsche Bank. "However, the cumulative five-tenths decline over the past two months appears to be overdone." It is expected that the jobless rate will still be at 7.8 percent by June of next year, matching the September figure released last week. The reason for the stagnation in the job market is expectations for lackluster economic growth during the rest of 2012 and into 2013. Economists say they don't see the U.S. falling back into recession and for the most part believe that the economy will grow above 3 percent in 2013. But about two-thirds of the respondents say the risks remain more to the downside than upside. Click here to read the full article.

WATCH COMMISSION HEARING LIVE NEXT WEEK!

ABI's Commission to Study the Reform of Chapter 11 will hold a public hearing on Wednesday, October 17, at the LSTA Annual Conference in New York. The event will be live webcast beginning at 3:15 p.m. ET at the Commission's website (commission.abi.org).

ABI MEMBERS CAN RECEIVE A DISCOUNT ON THEIR PURCHASE OF A DEBTOR WORLD

A Debtor World, published by Oxford University Press, contains a collection of contributions about the societal implications of private debt from top scholars at the 2008 Debt Symposium sponsored by ABI and hosted by the University of Illinois College of Law. The essays comprising this volume are authored by dozens of leading U.S. and international academics who have written about debt or issues related to debt in a wide range of disciplines including law, sociology, psychology, history, economics and more. The collection explores debt as neither a problem nor a solution but as a phenomenon, and promotes the exchange of knowledge to better comprehend why consumers and businesses decide to borrow money. It explores what happens to businesses and consumers under heavy debt loads, and what legal norms and institutions societies need in order to encourage the efficient use of debt while promoting a greater understanding of the global phenomenon of increased indebtedness and societal dependence. To order your copy and receive an ABI member discount, please click here and enter promo code "31256" when making your purchase. The discount expires 12/31.

ABI IN-DEPTH

MEMBERS WILL NOT WANT TO MISS ABI'S PROGRAM AT NCBJ'S ANNUAL MEETING ON OCT. 26

Members planning to attend the 86th Annual NCBJ Annual Conference in San Diego from Oct. 24-27 will not want to miss the exciting line-up scheduled for the ABI program track on Oct. 26. In addition to roundtable discussions on the hottest consumer and business bankruptcy topics, ABI will be hosting a ticketed luncheon that will feature the presentation of the 7th Annual Judge William L. Norton, Jr. Judicial Excellence Award and entertainment by Apollo Robbins, a sleight-of hand artist, security consultant and self-described gentleman thief. Click here to register for the Conference.

To view the list of ABI programs on Oct. 26 and the full NCBJ Annual Conference schedule, please click here.

ABI's Chapter 11 Reform Commission will also be holding a public hearing on Oct. 26 from 2:30-4:30 p.m. PT at the San Diego Marriott. Interested parties have the opportunity to submit testimony at the hearing. For further information, please contact ABI Executive Director Samuel J. Gerdano at sgerdano@abiworld.org.

LATEST CASE SUMMARY ON VOLO: WILLIAMS V. KING (IN RE KING; BAP 8TH CIR.)

Summarized by Lars Fuller of Baker and Hostetler LLP

The Eighth Circuit BAP affirmed an order of the U.S. Bankruptcy Court for the Western District of Missouri denying a motion to reconsider an order awarding sanctions and directing a creditor to dismiss a claim pending in state court as violating the debtor's chapter 7 discharge. The bankruptcy court had first granted a motion for sanctions against the appellants, then denied the appellants' motion to reconsider. The appellants appealed both the order for sanctions and the order denying the motion to reconsider. The BAP indicated that the appeal of the motion for sanctions was likely untimely, but the timeliness was not necessary for disposition, given the affirmation of the bankruptcy court's order on the merits and the timely appeal of the denial of the motion to reconsider.

There are more than 650 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: LETTING YOUR CREDITORS SUE YOU

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post raises the notion of debtors allowing creditors to sue them, rather than the debtors filing for bankruptcy, as a way to deal with debt.

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

Bankruptcy courts should adopt formal loss mitigation procedures to facilitate the negotiation of residential mortgage modifications for consumer debtors.

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

HAVE YOU TUNED IN TO BLOOMBERG LAW'S VIDEO PODCASTS?

Bloomberg Law's video podcasts feature top experts speaking about current bankruptcy topics. The podcasts are available via Bloomberg Law's YouTube channel so that you can access the programs from your computer or device of your choice! Click here to view the Bloomberg Law video podcasts.

INSOL INTERNATIONAL

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 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.

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NEXT EVENT

 

ABI YOUNG AND NEW MEMBERS COMMITTEE “TRENDING ISSUES: EXAMINERS AND SELECT PLAN CONFIRMATION ISSUES” WEBINAR
Oct. 15, 2012
Register Today!

 

COMING UP:

 

SE 2012
Oct. 16, 2012
Register Today!

 

SE 2012
Oct. 18, 2012
Register Today!

 

ABI/ST. JOHN'S "BANKRUPTCY AND RACE: IS THERE A RELATION?" SYMPOSIUM
Oct. 19, 2012
Register Today!

 

ABI'S PROGRAM AT NCBJ'S ANNUAL MEETING
Oct. 26, 2012
Register Today!

 

MEXICO 2012
Nov. 7, 2012
Register Today!

 

4TH ANNUAL PROFESSIONAL DEVELOPMENT PROGRAM
Nov. 9, 2012
Register Today!

 

SE 2012
Nov. 12, 2012
Register Today!

 

SE 2012
Nov. 29 - Dec. 1, 2012
Register Today!

 

MT 2012
Dec. 4-8, 2012
Register Today!

 

ACBPIKC 2013
Jan. 24-25, 2013
Register Today!

 

ACBPIKC 2013
Feb. 17-19, 2013
Register Today!

 
   
  CALENDAR OF EVENTS
 

October
- "Trending Issues: Examiners and Select Plan Confirmation Issues" Webinar
October 15, 2012
- ABI/Bloomberg Distressed Lending Conference
October 16, 2012 | New York, N.Y.
- International Insolvency and Restructuring Symposium
     October 18, 2012 | Rome, Italy
- ABI/St. John's "Bankruptcy and Race: Is There a Relation?" Symposium
     October 19, 2012 | Queens, N.Y.
- ABI Program at NCBJ's Annual Conference
     October 26, 2012 | San Diego, Calif.

November
- U.S./Mexico Restructuring Symposium
     November 7, 2012 | Mexico City, Mexico
- Professional Development Program
     November 9, 2012 | New York, N.Y.

  

 

- Detroit Consumer Bankruptcy Conference
     November 12, 2012 | Detroit, Mich.
- Winter Leadership Conference
     November 29 - December 1, 2012 | Tucson, Ariz.

December
- Forty-Hour Bankruptcy Mediation Training
     December 4-8, 2012 | New York, N.Y.

2013

January
- Rocky Mountain Bankruptcy Conference
     January 24-25, 2013 | Denver, Colo.

February
- Kansas City Advanced Consumer Bankruptcy Practice Institute
     February 17-19, 2013 | Kansas City, Mo.


 
 
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February Bankruptcy Filings Decrease 21 Percent from Previous Year Commercial Filings Fall 29 Percent

ABI Bankruptcy Brief | March 5 2013
 
  

March 5, 2013

 
home  |  newsroom  |  chart of the day  |  blogs  |  bankruptcy code and rules  |  statistics  |  legislative news  |  volo
  NEWS AND ANALYSIS   

FEBRUARY BANKRUPTCY FILINGS DECREASE 21 PERCENT FROM PREVIOUS YEAR, COMMERCIAL FILINGS FALL 29 PERCENT

Total bankruptcy filings in the United States decreased 21 percent in February over last year, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 82,285 in February 2013, down from the February 2012 total of 104,537. Consumer filings declined 21 percent to 78,611 from the February 2012 consumer filing total of 99,378. Total commercial filings in February 2013 decreased to 3,674, representing a 29 percent decline from the 5,159 business filings recorded in February 2012. Total commercial chapter 11 filings also decreased 21 percent, to 609 filings in February from the 756 commercial chapter 11 filings recorded in February 2012.

While bankruptcies were down from a year ago, February’s bankruptcy filings trended upward from January. Total bankruptcy filings for the month of February represented a 5 percent increase over the 78,565 total filings registered in January 2013. The total noncommercial filings for February also represented a 5 percent increase from the January 2013 noncommercial filing total of 74,831. Although the February commercial filing total represented a 2 percent decline from the January 2013 commercial filing total of 3,734, February commercial chapter 11 filings represented a 27 percent increase when compared to the 481 filings the previous month. Read the ABI press release.

STATES, PRIVATE PLAINTIFFS PRESS SUIT AGAINST WALL STREET REFORM LAW

The plaintiffs that are challenging the constitutionality of the Wall Street reform law and the leadership of the Obama administration's new consumer protection agency are fighting to keep alive a suit in Washington, D.C., federal district court, the Legal Times reported on Friday. The private plaintiffs, including advocacy group Competitive Enterprise Institute and Texas-based State National Bank of Big Spring, on Feb. 27 responded to the U.S. Justice Department's effort to end the litigation. The 11 states that have joined the suit include Texas, South Carolina, Oklahoma, Michigan, and Ohio. The attorneys for the private plaintiffs, including O'Melveny & Myers partner Gregory Jacob and C. Boyden Gray, said in their court papers that the plaintiffs have presented sufficient evidence that the Dodd-Frank Wall Street Reform and Consumer Protection Act gave "unchecked and unprecedented powers" to federal agencies, including the newly created Consumer Financial Protection Bureau (CFPB). The states that joined the lawsuit are only challenging the government's ability to liquidate the largest banks, not the composition of the CFPB. Read more.

COMMENTARY: BLEEDING THE BORROWER DRY

Though 15 states have banned predatory, high-interest loans that payday lenders commonly use to pillage low-income borrowers, offshore lenders increasingly get around state laws by issuing predatory loans over the Internet, according to an editorial in yesterday's New York Times. About 12 million borrowers turn to payday lenders each year. A new study by the Pew Charitable Trusts found that only about 14 percent of borrowers can afford to take enough out of their monthly budget to repay the average payday loan. Instead, average borrowers carry a debt for five months, during which time they pay repeated fees to renew the loan. By the fifth month, someone who borrowed $375 will have paid about $520 in interest alone. Many also resort to borrowing from additional payday lenders. Not surprisingly, payday borrowers are more likely than others to default on credit card debt, to file for bankruptcy or to lose their bank accounts because of abuse of overdraft privileges. A bill pending in the Senate known as the Safe Lending Act would require all online lenders to comply with state laws that provide stronger consumer protections than the federal statutes. It would establish once and for all that payday loan borrowers have the right to stop lenders from raiding their bank accounts. State and federal regulators also need to prohibit banks from giving payday lenders access to the automatic payment system in states where predatory, high-interest loans are illegal. Read the full editorial.

REPORT: YOUNG ADULTS RETREAT FROM PILING UP DEBT

Young people are racking up larger amounts of student debt than ever before, but fresh data suggest they are becoming warier of other kinds of borrowing: Total debt among young adults dropped in the last decade to the lowest level in 15 years, the Wall Street Journal reported today. A typical young U.S. household—defined as one led by someone under age 35—had $15,000 in total debt in 2010, down from $18,000 in 2001 and the lowest since 1995, according to a recent Pew Research Center report and government data. Total debt includes mortgage loans, credit cards, auto lending, student loans and other consumer borrowing. In addition, fewer young adults carried credit card balances, and 22 percent did not have any debt at all in 2010—the most since government tracking began in 1983. Read more. (Subscription required.)

ANALYSIS: MOST BIG M&A DEALS FACED LEGAL CHALLENGES IN 2012

A study released by Cornerstone Research on Thursday found that it was rare for a merger or acquisition deal in 2012 to escape legal challenges from shareholders, Corporate Counsel reported on Friday. Nearly 96 percent of M&A deals valued at more than $500 million and 93 percent of those valued at more than $100 million engendered suits, according to Cornerstone's report titled, "Shareholder Litigation Involving Mergers and Acquisitions." On average, the report found that deals attracted more than 4.8 suits per transaction, with some filed within hours after an announcement. The average time between announcement of a deal and commencement of a legal challenge was 14 days, the report said. Read more.

DON’T MISS THE ABI LIVE WEBINAR ON APRIL 5 - "LEGACY LIABILITIES: DEALING WITH ENVIRONMENTAL, PENSION, UNION AND SIMILAR TYPES OF CLAIMS"

A panel of experts has been assembled for a webinar on April 5 from 1-2:15 p.m. ET to discuss environmental and pension liabilities, the statutory schemes under which these liabilities arise and the key players involved. Are non-monetary environmental claims dischargeable? Do post-petition expenditures for environmental cleanup constitute administrative expenses? When can an employer terminate a pension plan in bankruptcy, what is the process and what are the consequences? Learn the answer to these questions and more from the comfort of your own office. Special ABI member rate is available! Register here as this webinar is sure to sell out.

ABI'S ANNUAL SPRING MEETING: CONSUMER PROGRAMMING WITH CROSS-OVER APPEAL

With four session tracks looking at issues geared toward chapter 11 restructurings, financial advisors, professional development and consumer bankruptcy, a number of sessions at ABI's Annual Spring Meeting have cross-over appeal for both consumer and business practitioners. Sessions include:

The Appellate Process: This distinguished panel will explore recent issues in appellate practice that are of interest to both consumer and business practitioners, including the ability to bypass intermediary appellate courts and take appeals directly to the circuit courts.

Consumer Class Actions: This panel will explore the potential benefits and pitfalls of class actions by debtors/trustees against creditors in chapter 13 cases, which are highlighted by two recent decisions of the Fifth Circuit. Many of the issues discussed during this panel will be useful in business cases as well.

The Individual Conundrum - Chapter 7, 11 or 13?: Deciding on the appropriate chapter for a high net worth individual contemplating a bankruptcy filing can be a daunting task. This panel will explore the considerations that guide the practitioner in advising individual clients in making this decision.

To register for the Annual Spring Meeting and to see the full schedule of program tracks and events, please click here.

ABI IN-DEPTH

MARK YOUR CALENDARS FOR APRIL 10 TO TAKE PART IN ABI’S LIVE WEBINAR "STUDENT LOANS: BANKRUPTCY MAY NOT HAVE THE ANSWERS – BUT DOES CONGRESS?"

Do not miss the "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?" webinar presented by ABI's Consumer Bankruptcy Committee on April 10 from noon-1:15 ET. ABI's panel of experts will provide an overview of the student loan industry, examine the numbers behind and causes of student loan debt, and discuss federal loan programs as well as federal consolidation and forgiveness programs. Faculty on the webinar includes:

  • Prof. Daniel A. Austin of Northeastern University School of Law (Boston)

  • Edward "Ted" M. King of Frost Brown Todd LLC (Louisville, Ky.)

  • Craig Zimmerman of the Law Offices of Craig Zimmerman (Santa Ana, Calif.)

CLE credit will be available for the webinar. This webinar is sure to sell out; register now for the special ABI member rate of $75!

NEW BANKRUPTCY PROFESSIONALS: DON'T MISS THE NUTS AND BOLTS PROGRAM AT ABI'S ANNUAL SPRING MEETING! SPECIAL PRICING IF YOU ARE AN ASM REGISTRANT!

An outstanding faculty of judges and practitioners explains the fundamentals of bankruptcy in a one-day Nuts and Bolts program on April 18 being held in conjunction with ABI's Annual Spring Meeting. Ideal training for junior professionals or those new to this practice area!

The morning session covers concepts all bankruptcy practitioners need to know, and the afternoon session splits into concurrent tracks, focusing on consumer and business issues. The session will include written materials, practice tip sessions with bankruptcy judges, continental breakfast and a reception after the program. Click here to register!

LATEST CASE SUMMARY ON VOLO: PAUL V. ALLRED (IN RE PAUL; 8TH CIR.)

Summarized by Michael Tamburini of Polsinelli Shughart, PC

The BAP affirmed the order of the bankruptcy court concluding that the debtor had abandoned the subject property as his homestead, and therefore was not permitted to claim a homestead exemption on it.

There are more than 750 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: ASSIGNMENT OF RENTS: GOVERNMENT BENEFIT CARDS CAN OPEN DOORS TO BANKING SYSTEM

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. Cards preloaded with unemployment insurance, child support, food stamps and other government benefits can be viewed as potential bank accounts, waiting to be opened by people with the fewest quality opportunities to connect to the financial mainstream, according to a recent blog post.

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

As a result of the RadLAX decision, the right to credit-bid will likely chill bidding at auctions, as potential purchasers may be dissuaded from participating in the bidding process.

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 37 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.

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THURSDAY:

 

 

 

Paskay 2013
March 7-9, 2013
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COMING UP

 

 

 

 

BBW 2013
March 22, 2013
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BBW 2013
April 5, 2013
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BBW 2013
April 10, 2013
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BBW 2013
April 18, 2013
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ASM 2013
April 18-21, 2013
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NYCBC 2013
May 15, 2013
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ASM 2013
May 16, 2013
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ASM 2013
May 21-24, 2013
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ASM 2013
June 7, 2013
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ASM 2013
June 13-16, 2013
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  CALENDAR OF EVENTS
 

2013

March
- 37th Annual Alexander L. Paskay Seminar on Bankruptcy Law and Practice
     March 7-9, 2013 | St. Petersburg, Fla.
- Bankruptcy Battleground West
     March 22, 2013 | Los Angeles, Calif.

April
- ABI Live Webinar: "Legacy Liabilities : Dealing with Environmental, Pension, Union and Similar Types of Claims"
     April 5, 2013
- ABI Live Webinar: "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?"
     April 10, 2013
- "Nuts and Bolts" Program at ASM
     April 18, 2013 | National Harbor, Md.
- Annual Spring Meeting
     April 18-21, 2013 | National Harbor, Md.


  

 

May
- "Nuts and Bolts" Program at NYCBC
     May 15, 2013 | New York, N.Y.
- ABI Endowment Cocktail Reception
     May 15, 2013 | New York, N.Y.
- New York City Bankruptcy Conference
     May 16, 2013 | New York, N.Y.
- Litigation Skills Symposium
     May 21-24, 2013 | Dallas, Texas

June
- Memphis Consumer Bankruptcy Conference
     June 7, 2013 | Memphis, Tenn.
- Central States Bankruptcy Workshop
     June 13-16, 2013 | Grand Traverse, Mich.


 
 
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Fitch Some Past Chapter 11 Filers Again at Risk of Default

ABI Bankruptcy Brief | August 23, 2012
 
  

August 23, 2012

 
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  NEWS AND ANALYSIS   

FITCH: SOME PAST CHAPTER 11 FILERS AGAIN AT RISK OF DEFAULT

US Airways Group Inc. and Great Atlantic & Pacific Tea Co. top a list of companies that restructured under chapter 11 but remain at risk of another default in the future, according to a new report by Fitch Ratings, Dow Jones Daily Bankruptcy Review reported yesterday. Fitch analysts Sharon Bonelli and Michael Simonton identified 31 companies that have defaulted in the past, whether via a bankruptcy filing, debt exchange or missed bond payment. Five publishing companies made the list, putting that industry most at risk of default. Building products companies came in second, with four in all. Read more. (Subscription required.)

COMMENTARY: A QUICK END TO TARP MEANS A SMALLER PAYOFF FOR TAXPAYERS

The federal government still holds investments in hundreds of small banks around the country in the Troubled Asset Relief Program (TARP), and in an effort to wind down TARP, the government is trying to sell off its holdings of preferred stock of the remaining smaller banks, according to a commentary yesterday in the New York Times DealBook blog. The problem, according to the commentary, is that the Treasury Department is not getting great bids on some of the bank paper, even on the shares of banks with strong profits and strong capital. When the government sold its holdings in MetroCorp Bancshares of Houston this month, the bank itself bought back most of it – at 98 cents on the dollar. Wilshire Bancorp of Los Angeles bought back its paper at 94 cents on the dollar. The Treasury Department sold preferred shares of Ohio-based First Defiance at 96 cents, and Peoples Bancorp of North Carolina at 93 cents. While all of these small banks are regarded as healthy, the taxpayers take the loss, according to the commentary. Read more.

FHFA: SECOND QUARTER U.S. HOUSING PRICES INCREASED MOST SINCE 2005 IN SECOND QUARTER

The Federal Housing Finance Agency (FHFA) reported that U.S. house prices jumped 1.8 percent in the second quarter from the previous three months, fueled by record-low mortgage rates and tight inventory, Bloomberg News reported today. The seasonally adjusted increase was the biggest since the fourth quarter of 2005, the FHFA said. Prices climbed 3 percent from a year earlier. The number of Americans who owed more than their homes were worth fell by about 400,000 in the second quarter, according to a report today by Zillow Inc. Read more.

MASSACHUSETTS FORECLOSURE PREVENTION ACT SIGNED INTO LAW

Massachusetts Governor Deval Patrick (D) on August 3, 2012, signed into law Massachusetts’ Foreclosure Prevention Law, according to a recent post on the Massachusetts Real Estate Law blog. The new law makes significant changes to existing foreclosure practices in Massachusetts, and also attempts to clean up the recent turmoil surrounding defective foreclosure titles after the U.S. Bank v. Ibanez and Eaton v. FNMA rulings. Provisions of the new law include:

• New requirement that mortgage assignments be recorded
• New mandatory requirement to offer loan modifications and mediation to qualified borrowers
• New Eaton foreclosure affidavit confirming ownership of note/mortgage loan
• Protection for third party buyers of foreclosed properties

The new Massachusetts law goes into effect on Nov. 1, 2012. Click here to read the full text of the law.

COMMENTARY: GOVERNMENT STILL FRUSTRATED BY GMAC

Among the companies that were bailed out by the federal government during the financial crisis, perhaps the most intractable is the company formerly known as the General Motors Acceptance Corp. (GMAC), according to a commentary in the New York Times DealBook blog yesterday. GMAC was the financial arm of General Motors, and in the years leading up to the financial crisis, it was also GM's most profitable unit. In 2005, desperate to raise cash, General Motors sold a 51 percent stake in GMAC to the private equity firm Cerberus Capital Management. During the financial crisis, however, the only way that GMAC staved off collapse was thanks only to a government infusion of $17.2 billion. The company was renamed Ally Financial and the Treasury Department now owns 73.8 percent of Ally, with Cerberus retaining an 8.7 percent stake. Almost since that time, the Treasury Department has wanted to rid itself of its Ally stake, according to the commentary. Ally filed for an initial public offering in March 2011, but it has so far languished in the face of a weak market and concerns over Ally itself. The Treasury Department has been paid back about $5.7 billion and still controls the company through its stock ownership and appointment of a majority of Ally's directors. Despite lingering concerns about Ally, the automobile sales market is recovering and Ally's auto finance operations turned a profit last year. But Ally is still suffering from legacy debts, according to the commentary primarily concentrated in its ResCap unit. Despite having “General Motors” as part of its former title, the company did not just finance automobiles, but was also one of the largest subprime housing lenders through its ResCap subsidiary. Read more.

ANALYSIS: BUYOUTS BOOM, BUT NOT LIKE 2007

Private-equity buyouts are back but with a twist—they are smaller and less flashy than in past booms, according to an analysis in today's Wall Street Journal. Emboldened by a flurry of activity, private-equity executives say that the buyout market is crawling back from the doldrums of the financial crisis, when the debt that fueled such deals disappeared and potential sellers were put off by low valuations. Private-equity firms have snapped up $64.7 billion worth of U.S. companies since January, the highest amount year-to-date since 2007, according to data provider Dealogic. Experts cite a range of reasons, from relatively inexpensive financing to a push by troubled European banks to sell assets. Activity could cool off for the rest of the year amid uncertainty over the global economy and the U.S. presidential election, according to experts. And unlike in 2007, a blockbuster year for private equity that witnessed a bevy of large buyouts for household names, the current targets are smaller and lesser known. Read more. (Subscription required.)

DON'T MISS THE "WHEN IS AN INDIVIDUAL CHAPTER 11 THE BEST FIT?" WEBINAR ON SEPT. 27!

Chapter 11 can offer significant relief for certain individuals who need a restructuring of their finances. Learn when and how to use this tool in a 75-minute live webinar on Sept. 27 at noon ET. An expert panel will guide you through a successful individual chapter 11 and discuss key issues such as plan confirmation, modification and treatment of future income and secured debt.

Panelists on the webinar include:

James F. Molleur of the Molleur Law Office (Biddeford, Maine)

John P. Fitzgerald, III, of the Office of the U.S. Trustee (Boston)

Raymond J. Obuchowski of Obuchowski & Emens-Butler, PC (Bethel, Vt.)

Jennifer Rood of Bernstein Shur (Manchester, N.H.)

This panel was the highest rated at ABI's Northeast Bankruptcy Conference in July. The webinar is available to ABI members for $75. To register, please click here.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: OKLAHOMA DEPARTMENT OF SECURITIES V. WILCOX (10TH CIR.)

Summarized by Daniel Glasser of Chipman Glasser, LLC

Reversing an earlier district court decision, the 10th Circuit held that debtors were entitled to a discharge of a claim related to debtors' unjust enrichment from proceeds of a Ponzi scheme, because such proceeds fell outside the exception in 11 U.S.C. § 523(a)(19) – judgments for the violation of securities laws. The Tenth Circuit held that the plain language of section 523(a)(19) is limited to the perpetrators of securities violations, not to debtors unjustly enriched by a third party's violation of the law. Chief Circuit Judge Briscoe, however, dissented. He disagreed with the majority’s reading of the statute and argued that at least one of the debtors was complicit in the Ponzi scheme.

There are more than 600 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: THE CONTRACTS CLAUSE VERSUS THE BANKRUPTCY CLAUSE: BANKRUPTCY COURT HOLDS BANKRUPTCY CLAUSE REIGNS SUPREME

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new blog post examines a recent decision by the Bankruptcy Court for the Eastern District of California that affirmatively held that the contracts clause did not eclipse the bankruptcy clause in the chapter 9 case of Stockton, Calif. Shortly after Stockton filed for chapter 9 protection in June, a group of retired employees commenced an adversary proceeding to prevent termination of their benefits on the theory that the contracts clause of the Constitution prevented the city from reducing retiree health benefits.

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

Client matters left unfinished at a firm when it files for bankruptcy are the property of the defunct firm.

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

HAVE YOU TUNED IN TO BLOOMBERG LAW'S VIDEO PODCASTS?

Bloomberg Law's video podcasts feature top experts speaking about current bankruptcy topics. The podcasts are available via Bloomberg Law's YouTube channel so that you can access the programs from your computer or device of your choice! Click here to view the Bloomberg Law video podcasts.

INSOL INTERNATIONAL

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 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.

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NEXT EVENTS:

SE 2012
Sept. 11, 2012
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SW 2012
Sept. 13-15, 2012
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SE 2012
Sept. 13-14, 2012
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COMING UP:

 

NYU 2012
Sept. 19-20, 2012
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"WHEN IS AN INDIVIDUAL CHAPTER 11 THE BEST FIT?" LIVE WEBINAR
Sept. 27, 2012
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NABMW 2012
Oct. 4, 2012
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SE 2012
Oct. 5, 2012
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SE 2012
Oct. 5, 2012
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SE 2012
Oct. 8, 2012
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ABI YOUNG AND NEW MEMBERS COMMITTEE “TRENDING ISSUES: EXAMINERS AND SELECT PLAN CONFIRMATION ISSUES” WEBINAR
Oct. 15, 2012
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SE 2012
Oct. 18, 2012
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MEXICO 2012
Nov. 7, 2012
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4TH ANNUAL PROFESSIONAL DEVELOPMENT PROGRAM
Nov. 9, 2012
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SE 2012
Nov. 12, 2012
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SE 2012
Nov. 29 - Dec. 1, 2012
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  CALENDAR OF EVENTS
 

September
- 7th Annual Golf and Tennis Outing
     September 11, 2012 | Maplewood, N.J.
- Complex Financial Restructuring Program
     September 13-14, 2012 | Las Vegas, Nev.
- Southwest Bankruptcy Conference
     September 13-15, 2012 | Las Vegas, Nev.
- 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization
     September 19-20, 2012 | New York, N.Y.
- "When Is an Individual Chapter 11 the Best Fit?" Live Webinar
     September 27, 2012
- American College of Bankruptcy's "Bankruptcy: Back to the Future" Program
     September 28, 2012 | Chicago, Ill.

October
- Nuts & Bolts for Young and New Practitioners - KC
     October 4, 2012 | Kansas City, Mo.
- Midwestern Bankruptcy Institute Program, Midwestern Consumer Forum
     October 5, 2012 | Kansas City, Mo.

  


- Bankruptcy 2012: Views from the Bench
     October 5, 2012 | Washington, D.C.
- Chicago Consumer Bankruptcy Conference
     October 8, 2012 | Chicago, Ill.
- "Trending Issues: Examiners and Select Plan Confirmation Issues" Webinar
     October 15, 2012
- International Insolvency and Restructuring Symposium
     October 18, 2012 | Rome, Italy

November
- U.S./Mexico Restructuring Symposium
     November 7, 2012 | Mexico City, Mexico
- Professional Development Program
     November 9, 2012 | New York, N.Y.
- Detroit Consumer Bankruptcy Conference
     November 12, 2012 | Detroit, Mich.
- Winter Leadership Conference
     November 29 - December 1, 2012 | Tucson, Ariz.


 
 
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