NEWS AND ANALYSIS
SIGTARP REPORT DETAILS "HARDEST HIT FUND" FAILURES
The "Hardest Hit Fund," which was launched by the Treasury to help families in areas stricken by the housing bust, fell short of its stated goals, a new report from Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) warns, HousingWire.com reported today. Christy Romero, special inspector general for TARP, sent an update to Congress, criticizing the handling of the Hardest Hit Fund and the toxic corporate culture still festering within certain banks. The Hardest Hit Fund started with ambitious goals, SIGTARP says, but ineffective barometers and metrics prompted states receiving the funds to substantially lower their goals. However, Tim Massad, assistant secretary for financial stability at Treasury, said that the states are innovating as they go. It also took time to get these locally run programs up and running, Massad told HousingWire. State housing finance agencies received billions of TARP funds to assist local homeowners and communities back in 2010. In all, the Treasury allocated $7.6 billion, giving 18 states and the District of Columbia permission to participate. The plan was formulated in 2010. However, as of June 30, 2013, states had spent only 22 percent, or roughly $1.7 billion of the $7.6 billion in TARP funds allocated through the Treasury, SIGTARP said. Approximately 146,356 program participants have received aid, or roughly 27 percent of the original goal. Read more.
CFTC VOTES TO DROP COURT APPEAL OF POSITION LIMITS RULE
The Commodity Futures Trading Commission voted today to abandon a court challenge of a rule designed to limit speculation in commodity markets, agreeing to drop the agency's appeal as it works to advance a revised version of the rule, the Wall Street Journal reported today. The CFTC voted to drop its appeal of a September 2012 decision tossing out the agency's "position limits" rule, which aimed to curb sharp price spikes by limiting the percentage of the market any one firm can control in certain commodities. The CFTC is working to modify the rule--authorized by the 2010 Dodd-Frank law--to address problems identified by a federal court last year, including providing further legal justification for the limits as well as a more thorough cost-benefit analysis. The agency is expected to vote on the revised rule next week. Read more. (Subscription required.)
U.S. BANKS' LEGAL TAB IS POISED TO RISE
U.S. banks have agreed to billions of dollars in mortgage-related settlements stemming from the financial crisis, but new estimates show that the total figure could still rise sharply -- to $107 billion or more -- in coming years, the Wall Street Journal reported today. The six largest U.S. banks by assets have agreed to more than $66 billion in credit crisis and mortgage-related settlements since 2010, new data from research firm SNL Financial show. After factoring in estimates by Bernstein Research for the remaining legal exposure at three of the largest banks, the overall number could balloon 62 percent above the current SNL figure. That would include JPMorgan Chase & Co.'s expected $13 billion settlement with the Justice Department and other regulators, a piece of which was announced on Friday. Excluding its expected settlement, the mortgage-litigation push has caused overall legal expenses this year at JPMorgan to nearly triple -- to $10.3 billion through September -- from $3.8 billion over the first nine months of 2012. Read more. (subscription required.)
MICROCREDIT EXPANDS IN THE U.S.
Since the financial crisis, microcredit has taken off in the United States, attracting thousands of clients who do not qualify for credit cards or traditional bank loans, the New York Times reported yesterday. Microcredit was pioneered by Grameen Bank in Bangladesh and has long aimed to ease poverty in the world's developing countries. The purpose of the loans, as conceived by Muhammad Yunus, the Nobel Prize-winning founder of Grameen Bank, is to help countless millions of poor people unlock their inner entrepreneur, to "use money to make money," as he puts it. In the U.S., microcredit has generally been defined as loans of less than $50,000 to people -- mostly entrepreneurs -- who cannot, for various reasons, borrow from a bank. Most nonprofit microlenders include services like financial literacy training and business plan consultations, which contribute to the expense of providing such loans but also, those groups say, to the success of their borrowers. Read more.
AMR, US AIRWAYS, U.S. AGREE TO MEDIATOR IN ANTITRUST CASE
American Airlines, US Airways Group Inc. and the U.S. Justice Department agreed to go to a mediator to possibly resolve the government's lawsuit seeking to block the proposed merger of the airlines, Bloomberg News reported yesterday. Both sides said in a filing yesterday in federal court in Washington, D.C., that they agreed to a mediator "suggested by the court" without providing further details. The Justice Department sued American parent AMR Corp. and US Airways in August, claiming that the planned merger, which would create the world's largest airline, would reduce competition and lead to higher prices. A status conference is set for Oct. 30. Read more.
LATEST ABI PODCAST LOOKS AT NEW LEGAL ISSUES ARISING FROM A DIOCESAN BANKRUPTCY
As the Dioceses of Gallup, N.M. and Stockton, Calif., recently were the ninth and tenth, respectively, to file for bankruptcy, ABI Resident Scholar Kara Bruce talks with Susan Boswell, a partner at Quarles & Brady LLP (Tucson, Ariz.), about 10 years of diocesan case history. Boswell provides her perspective of some of the challenges that arise in a diocesan bankruptcy from having represented the Dioceses of Tucson, San Diego, and Fairbanks, Alaska, and will be representing the diocese of Gallup, N.M. in its bankruptcy case. Click here to listen.
ATTENDING NCBJ'S 87TH ANNUAL CONFERENCE STARTING TOMORROW IN ATLANTA? DOWNLOAD THE CONFERENCE APP AND BE SURE TO ATTEND ABI'S SESSIONS!
If you are attending the National Conference of Bankruptcy Judges 87th Annual Conference in Atlanta starting tomorrow, be sure to tap into the following resources and programs:
Have you downloaded the official NCBJ Conference app for Apple iOS or the Google Android devices? Built by ABI, the app contains the conference schedule, materials, hotel map, speaker info, access to the conference Twitter feed and more. You can customize it to remind you when your favorite session is about to start.
To download the app for iOS devices from iTunes, please click here.
To download the app for Android devices from the Google Play store, please click here.
Also, ABI will be sponsoring a number of great programs on Nov. 1 at the conference:
-Topics for the ABI/NCBJ Roundtables include: Single Asset Real Estate Cases, Streamlining the Process- National Chapter 13 Plan- Good or Bad? Part 1, What to Do after the Sale? Structured Dismissals, Liquidating Trusts and Chapter 7 Conversion, Chapter 7 & Hot Topics, Current Labor and Employment Issues in Bankruptcy Cases, Where the Work Is: Does the Restructuring Profession Need to Be Restructured?, Streamlining the Process- National Chapter 13 Plan- Good or Bad? Part II, Chapter 11 Professional Issues: Proper Disclosure and Retention and Addressing the New Rules of the Road on Compensation. The programs require pre-registration through the NCBJ.
-ABI luncheon in the Imperial Ballroom from 12:45-2:30 p.m. ET featuring Prof. Jeffrey Rosensweig, global and economics forecaster and expert on global investing and business strategy.
-Hearing from 2:30-4:30 p.m. ET of ABI's Commission to Study the Reform of Chapter 11. The hearing will take place in Room A706 and will focus on corporate governance issues in bankruptcy. Witnesses set to testify at the hearing include:
- Dennis F. Dunne of Milbank, Tweed, Hadley & McCloy, LLP (New York) will testify about the role of committees in chapter 11.
- William K. Snyder of Deloitte CRG (Dallas) will testify on the role of the chief restructuring officer (CRO) in chapter 11.
- Brady C. Williamson of Godfrey & Kahn, SC (Madison, Wisc.) will testify about the use of fee examiners in corporate bankruptcy cases.
- Mark A. Gittelman of PNC Bank (Philadelphia) will testify on structural changes in the court systems, including creating a national bankruptcy court venue for mega cases.
- Prof. Anne Lawton of Michigan State University College of Law (East Lansing, Mich.) will testify about special accommodations for small and middle market cases.
- W. Clarkson McDow, U.S. Trustee (ret.) Region 4 (Columbia, S.C.) will testify about the U.S. Trustee's role in chapter 11 cases.
For more, please visit http://commission.abi.org.
- Be sure to visit ABI's booth (#5) and C.A.R.E's booth (#6) to learn about new promotions, products and more!
RENEW YOUR ABI MEMBERSHIP BY DEC. 31 AND SAVE!
Beginning in January 2014, ABI will institute its first dues increase to the regular dues rate in six years. The $20 increase will ensure that ABI can continue to provide you with the latest and most effective tools available in insolvency information and education. You can lock in 2013 rates, and additional discounts, for up to three years by using a multi-year renewal option (save $75!). You can also save 10 percent on future dues by opting into the automated dues program. To renew your membership and save, please go to renew.abi.org.
NOW AVAILABLE FOR PURCHASE; ETHICS CLE AVAILABLE! "BANKRUPTCY IN DEPTH" VIDEO PREVIEWS UPCOMING SUPREME COURT BANKRUPTCY CASES
Available now for purchase from ABI's eLearning Center (http://cle.abi.org) is the new "Bankruptcy In Depth" video featuring ABI Resident Scholar Kara Bruce and Eric Brunstad of Dechert LLP (Hartford, Conn.) previewing the bankruptcy cases that the Supreme Court will consider during its 2013 term. Brunstad, who has argued many cases before the Court and is an expert in bankruptcy appellate practice, discusses in depth Law v. Siegel, which questions whether the court may use its general equitable authority under §105 of the Bankruptcy Code to surcharge a debtor's exempt assets, and Executive Benefits Insurance Agency v. Arkison (In re Bellingham), which will address the bankruptcy court's authority to adjudicate Article III matters. He also provides a candid view of what it is like to argue a case before the Court and an in-depth analysis of the issues involved with the upcoming cases. Available for the member price of $75, ABI will also seek 1.25 hours of ethics CLE credit in 60-minute-hour states and 1.5 hours of credit in 50-minute-hour states for this program. This online CLE program is presumptively approved in CA, DE, FL, GA, HI, IL, NV, NJ, NY (Approved Jurisdiction Policy), RI, and SC. Credit hours granted are subject to approval from each state, which has not been determined. To purchase the new "Bankruptcy In Depth" video, please click here.
NEXT WEDNESDAY! RISKY TIMES FOR SECURED LENDERS AND SERVICERS TO BE FOCUS OF FIRST ABI WORKSHOP PROGRAM; ATTEND IN PERSON OR VIA LIVE WEBSTREAM
You will not want to miss the abiWorkshops series' inaugural program, "Risky Times for Secured Lenders and Servicers." The program is cosponsored by TMA (Chesapeake), IWIRC (D.C./Greater Maryland) and RMA (Potomac), and will be held on Nov. 6 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 6 program include:
- Living with the New CFPB Mortgage Servicing Rules
Business Lending: Navigating What Lies Ahead
- Business Lending: Recent Legal Developments
For more information or to register for the "Risky Times for Secured Lenders and Servicers" abiWorkshop on Nov. 6, please click here.
EXPERTS TO EXAMINE STUDENT LENDING AND BANKRUPTCY AT ABI WORKSHOP PROGRAM ON NOV. 15
Experts will tackle the hot topic of student lending issues in bankruptcy on the abiWorkshops series' new program, "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" The program will be held on Nov. 15 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 15 program include:
- Student Lending Today: Who Borrows, How Much, Delinquency & Default Trends
- Repayment Options: Income Based Repayment and New Lender/Servicer Programs
- Litigation under Sect. 523(a)(8): What Proofs Are Needed? Evidence Demonstration
For more information or to register for the "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" abiWorkshop on Nov. 15, please click here.
ABI GOLF TOUR UNDERWAY; LAST STOP FOR 2013 IS WINTER LEADERSHIP CONFERENCE IN DECEMBER
The 7th and final stop for the 2013 ABI Golf Tour is on Dec. 5 at the Trump National Golf Club, held in conjunction with ABI’s Winter Leadership Conference. Final scoring to win the Great American Cup sponsored by Great American Group is based on your top three scores from the seven ABI events. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! A 22-handicapper won the tour event at July’s Southeast Bankruptcy Workshop. There's no charge to register or participate in the Tour.
NEW ABILIVE WEBINAR LOOKS AT HOW TO HIRE THE RIGHT FINANCIAL ADVISORS
ABI's Financial Advisors & Investment Banking Committee
is proud to present the next abiLIVE webinar, "How to Hire the Right Financial Advisors," on Dec. 11 from 1-2:15 p.m. ET. The program will provide attendees with an overview and basic understanding of the different types of financial advisors that may be relevant for in- and out-of-court cases. Topics include:
- The different types of financial advisors available;
- The benefits and limitations for each category of advisor; and
- How to select the right advisor for the job.
Speakers on the webinar include:
-Daniel F. Dooley of MorrisAnderson (Chicago)
-Gregory S. Hays of Hays Financial Consulting LLC (Atlanta)
-Ivan Lehon of Ernst & Young (New York)
-Allen Soong of Deloitte CRG (Los Angeles)
• Teri Stratton of Piper Jaffray & Co. (El Segundo, Calif.)
Registration is $75 for ABI members/$175 for non-members. Have a number of colleagues that would like to participate? Take advantage of group pricing for ABI members: register 5 or more and the registration cost drops to $60 per person!
Click here for more information and to register.
ABI LAUNCHES SIXTH ANNUAL WRITING COMPETITION FOR LAW STUDENTS
Law school students are invited to submit a paper between now and March 4, 2014 for ABI's Sixth Annual Bankruptcy Law Student Writing Competition. ABI will extend a complimentary one-year membership to all students who participate in this year's competition. Eligible submissions should focus on current issues regarding bankruptcy jurisdiction, bankruptcy litigation, or evidence issues in bankruptcy cases or proceedings. The first-place winner, sponsored by Invotex Group, Inc., will receive a cash prize of $2,000 and publication of his or her paper in the ABI Journal. The second-place winner, sponsored by Jenner & Block LLP, will receive a cash prize of $1,250 and publication of his or her paper in an ABI committee newsletter. The third-place winner, sponsored by Thompson & Knight LLP, will receive a cash prize of $750 plus publication of his or her paper in an ABI committee newsletter. For competition participation and submission guidelines, please visit http://papers.abi.org.
NEW CASE SUMMARY ON VOLO: SEARS V. U.S. TRUSTEE (IN RE AFY; 8TH CIR.)
Summarized by Bruce Weiner of Rosenberg, Musso & Weiner
The Eighth Circuit affirmed the district court's holding that the appeals of the debtor's principals and of an entity related to the debtor must be dismissed. The debtor's principals appealed from an order authorizing the chapter 11 debtor to sell assets. That appeal was ordered to be dismissed because the bankruptcy court found that the buyer was a good-faith purchaser within the meaning of 11 U.S.C. § 363(m) and no stay pending appeal was granted. Once the sale was consummated, the appeal was moot, the Eighth Circuit ruled.
There are more than 1,000 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: REASONS A STRUGGLING SMALL BUSINESS OWNER SHOULD CONSULT WITH A BANKRUPTCY ATTORNEY
The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent blog post looks into reasons that a struggling small business owner should consult with a bankruptcy attorney when their business reaches a financial crossroad.
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
Can litigant consent enable the bankruptcy court to enter final judgment in a matter which, after Stern, falls outside the court's constitutional authority?
Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.
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