Consumer Bankruptcy

Commentary Allow Private Education Loan Debts to Be Erased in Bankruptcy

ABI Bankruptcy Brief | December 20 2012

December 27, 2012

NEWS AND ANALYSIS

COMMENTARY: ALLOW PRIVATE EDUCATION LOAN DEBTS TO BE ERASED IN BANKRUPTCY

As total student loan debt exceeded $1 trillion in 2012, debt from student loans issued by private for-profit lenders is still not eligible to be discharged under the Bankruptcy Code, according to a commentary by Rep. Steve Cohen (D-Tenn.) in yesterday's edition of U.S. News & World Report. Private for-profit student loans often lack consumer protections and typically have variable interest rates with no caps, exorbitant fees, and hidden charges, according to Cohen. Private lenders do not deserve protection under the Bankruptcy Code because the "undue hardship" provision, first enacted in 1976, was intended to protect the taxpayer dollars that fund federal student loan programs, according to Cohen. "Yet Congress, in 2005, extended this protection to for-profit educational lenders, even though no taxpayer money was at stake," Cohen writes. He introduced H.R. 2028, the "Private Student Loan Bankruptcy Fairness Act," which would allow private education loan debts to once again be erased in bankruptcy just like other types of debts. "By restoring bankruptcy dischargeability, my legislation will ensure that lenders only make prudent loans and will encourage private lenders to work with financially distressed borrowers to modify loan terms," according to Cohen. Read the full commentary.

ANALYSIS: DO OR DIE FOR FOUR RETAILERS

While 2013 will be a tough year for retailers due to the tepid economic recovery, Best Buy, J.C. Penney, RadioShack and Sears face a critical 12 months, the Wall Street Journal reported today. These unlucky retailers are going into the New Year with extra woes: slipping sales, questionable strategies and tight finances. Best Buy Co. has been plagued by the retail phenomenon called "showrooming," where shoppers examine products in its stores but buy online through rivals. J.C. Penney Co. has been trying to shed its image as an old-fashioned department store, but its rapid and radical makeover has left it burning through cash and struggling to attract shoppers. RadioShack Corp.'s bet on mobile phones and tablets has backfired. Sears Holdings Corp.'s sales and profits continue to slide as the department store chain has been shoring up its liquidity by selling itself off in pieces—but some of its remaining assets might be tough to unload at a time when retailing is under pressure. Read more. (Subscription required.)

CONSUMER CONFIDENCE DECREASES IN DECEMBER

Confidence among U.S. consumers declined more than forecast in December as the budget debate in Washington, D.C., soured Americans' outlook on the economy, Bloomberg News reported today. The Conference Board's index of sentiment fell to 65.1 from a revised 71.5 reading the prior month, figures from the New York-based private research group showed today. A drop in consumer expectations for the next six months to a one-year low coincides with mounting concerns about looming tax increases and government budget cuts in 2013 that threaten expansion. At the same time, employment gains, rising home values, and lower gas prices may keep spending, which accounts for about 70 percent of the economy, from foundering. Read more.

SEC GOING HIGH-TECH WITH REAL-TIME TRADE DATA

As computing power and big data have revolutionized stock trading in recent years, the Securities and Exchange Commission is trying to catch up, the Washington Post reported today. This month, the agency is in the final phases of testing software that will stream real-time trade data into its headquarters, helping regulators better grasp the market’s plumbing. The technology should go live in early 2013, at a cost of $2.5 million for the year. The SEC is still coping with the public fallout from the “flash crash” that took place on May 6, 2010, when the stock market plunged nearly 1,000 points in minutes then whipsawed back up. It took the SEC about four months to unwind the billions of orders that took place that day and issue a report of what happened. Although the SEC started collecting the data in June 2010, it could not aggregate them into a single database for analysis until three months later. The incident made the wide gulf in technical prowess between the regulators and the regulated painfully clear, prompting the SEC to explore hiring an outside firm that could gather up-to-the-minute market feeds from the public exchanges. Read more.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: IN RE SPANSION INC. (3D CIR.)

Summarized by Eduardo Glas of McCarter & English, LLP

The Third Circuit ruled that an agreement that settled litigation between Spansion and Apple at the International Trade Commision pursuant to which the debtor agreed not to sue Apple in the future over the use of flash memory products was a license, and its rejection by the debtor pursuant to 11 U.S.C. § 365 permitted Apple to elect to retain its rights as licensee under 11 U.S.C. § 365(n).

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: CALPERS SLAMS SAN BERNARDINO BANKRUPTCY AS "SHAM"

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog discusses CalPERS firing back at the city of San Bernardino and its pendency plan for operating during the Chapter 9 case, calling it “criminal” and a “sham.” Since filing for bankruptcy, the city has stopped making its biweekly payments to CalPERS. As a result, San Bernardino now owes CalPERS approximately $8 million.

For more on the San Bernardino case and chapter 9 issues, make sure to order a copy of ABI's latest publication, Municipalities in Peril: The ABI Guide to Chapter 9, Second Edition, now available for pre-order in ABI's Bookstore.

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

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

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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
- 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.

Read more about Commentary Allow Private Education Loan Debts to Be Erased in Bankruptcy

Analysis Better Lending Standards Helping to Reduce Foreclosure Starts

ABI Bankruptcy Brief | February 19 2013

February 19, 2013

NEWS AND ANALYSIS

ANALYSIS: BETTER LENDING STANDARDS HELPING TO REDUCE FORECLOSURE STARTS

While numerous foreclosure prevention efforts at the national, state and local levels, along with rising home values, have helped drop U.S. foreclosure starts to a six-year low in January, the fundamental factor driving the reduction is better lending practices, according to a Forbes.com commentary yesterday. More than 5 percent of still-active loans originated in 2006 were in some stage of foreclosure as of the fourth quarter of 2012 -- the highest foreclosure rate of any year going back to 2000. That was followed by 2007 vintage loans with a 4.75 percent foreclosure rate, 2005 vintage loans with a 3.52 percent foreclosure rate, and 2008 vintage loans with a 2.95 percent foreclosure rate. The only other loan vintage with a foreclosure rate above 2 percent was 2004, with a 2.16 percent foreclosure rate. The foreclosure rate on 2009 vintage loans dropped to 1.11 percent, and the foreclosure rate has steadily decreased on loans originated in the three years since -- all of which have foreclosure rates below 1 percent. Read more.

COMMENTARY: THE SECOND-MORTGAGE SHELL GAME

Though the federal government and 49 state attorneys general reached a $25 billion deal last February with the country's five largest mortgage servicers (Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial), it is now clear that the settlement has not worked as planned, according to a commentary in yesterday's New York Times. Banks have dragged their feet on modifying first mortgages, much less agreeing to forgive part of the principal on homes that are underwater. A lesser-known but equally grave problem is that banks have been given a backdoor mechanism to continue foreclosures at the same pace as before. The problem involves second mortgages, which millions of homeowners took out during the housing bubble. It is estimated that as much as a quarter of all mortgage debt in the U.S. is in the form of second mortgages. Some of these loans were taken out to finance home improvements, others were part of a subprime product known as an "80/20 mortgage," in which 80 percent of the purchase price was covered by a first, adjustable-rate mortgage, and the remainder by a second mortgage, often with a much higher interest rate. The second mortgages have given the banks a loophole: each dollar a bank forgives goes toward fulfilling its obligation under last year’s settlement. But many lenders have made it a point to almost exclusively modify secondary loans while all but ignoring the troubled, primary mortgages, according to the commentary. Read the full commentary.

SHIFTING STRATEGY, PROSECUTORS BUILD NEW CASES AGAINST BIG BANKS

Criticized for letting Wall Street off the hook after the financial crisis, the Justice Department is building a new model for prosecuting big banks, the New York Times DealBook Blog reported today. In a recent round of actions that shook the financial industry, the government pushed for guilty pleas, rather than just the usual fines and reforms. Prosecutors now aim to apply the approach broadly to financial fraud cases, according to officials involved in the investigations. So far, the Justice Department has extracted guilty pleas only from remote subsidiaries of big foreign banks, a move that has inflicted reputational damage but little else. The new strategy first materialized in recent settlements with UBS and the Royal Bank of Scotland, which were accused of manipulating interest rates to bolster profit. As part of a broader deal, the banks' Japanese subsidiaries pleaded guilty to felony wire fraud. Read more.

ANALYSIS: FISCAL TROUBLE AHEAD FOR MOST FUTURE RETIREES

For the first time since the 1930s, a majority of Americans are headed toward a retirement in which they will be financially worse off than their parents, jeopardizing a long era of improved living standards for the nation’s elderly, the Washington Post reported yesterday. The Great Recession and the weak recovery darkened the retirement picture for significant numbers of Americans. The economic downturn exacerbated long-term factors that were already eroding the financial standing of aging Americans: an inexorable rise in health care costs, growing debt among older Americans and a shift in responsibility from employers to workers to plan for retirement. The consequence is that the nation is facing a huge retirement savings deficit -- as much as $6.6 trillion, or about $57,000 per household, according to a U.S. Senate report. Using data on household finances collected by the Federal Reserve, the Center for Retirement Research estimates that 53 percent of American workers 30 and older are on a path that will leave them unprepared for retirement. That marks a sharp deterioration since 2001, when 38 percent of Americans were at risk of declining living standards in old age. In 1989, 30 percent faced that risk. Read more.

REGULATOR PROBES "DARK POOL" INVESTING

The Financial Industry Regulatory Authority (FINRA) in late 2012 sent examination letters to about 15 dark-pool operators seeking information such as how the trading systems handle customer orders, what they disclose to clients and whether affiliates of the pool operators have access to client trading information, the Wall Street Journal reported on Saturday. In dark-pool investing, investors post buy-and-sell orders away from the public market. Most of the letters have been returned, and the regulator is evaluating the responses, said John Malitzis, executive vice president of market regulation at FINRA. Unlike stock exchanges, which are regulated by the Securities and Exchange Commission, the trading venues in dark pools are not required to regularly tell market regulators details about how they handle orders. Dark pools have become controversial as their share of stock trading has increased. One area of concern is whether certain dark-pool clients get more information than other investors about how the venues operate, giving them an edge, said Malitzis. "We asked a lot of questions about disclosure," he said. "We're trying to get a sense of what firms are doing and how they're doing it." Read more. (Subscription required.)

LIVE STREAM AVAILABLE FOR THURSDAY'S CHAPTER 11 COMMISSION HEARING AT VALCON 2013

For those not able to attend the VALCON 2013 conference starting tomorrow in Las Vegas, there will be a live webstream of Thursday's Chapter 11 Commission field hearing looking at valuation issues. The hearing will take place from 2-4 p.m. PT (5-7 p.m. ET) and will be streamed live at http://commission.abi.org.

JUST ADDED FOR APRIL! ABI 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!

EXPLORE CURRENT ISSUES FOR FINANCIAL ADVISORS IN BANKRUPTCY CASES AND MORE 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
• 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!

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: BLACK V. BONNIE SPRINGS FAMILY LTD. PARTNERSHIP (IN RE BLACK; 9TH CIR.)

Summarized by Tom Phinney of Parkinson Phinney

The Ninth Circuit BAP affirmed the summary judgment in favor of the creditor, which excepted debts from discharge under § 523(a)(6) based on the preclusive effect of a Nevada state court judgment for abuse of process, nuisance and "oppression."

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: S CORPORATION MAY NOT PAY SHAREHOLDERS' POST-PETITION TAX OBLIGATIONS

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. Finding that it would violate the absolute priority rule, the U.S. Bankruptcy Court for the Western District of North Carolina in In re Carolina Internet Ltd. held that an insolvent S corporation may not pay post-petition taxes on behalf of its shareholders because a corporation’s creditors have priority over its shareholders, according to a recent blog post.

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.

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TOMORROW:

Feb. 20-22, 2013
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9th Annual Wharton Restructuring and Distressed Investing Conference
Feb. 22, 2013
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March 7-9, 2013
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March 22, 2013
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NEW WEBINAR!
April 10, 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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April 18-21, 2013
Enter code "LOVEASM50" at checkout to save $50 on a new registration this week!
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May 15, 2013
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May 16, 2013
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May 21-24, 2013
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June 7, 2013
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June 13-16, 2013
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CALENDAR OF EVENTS

2013

February
- 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
- 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.

Read more about Analysis Better Lending Standards Helping to Reduce Foreclosure Starts

Creditor Lawsuit Could Undo Auto Bailout Force GM into Bankruptcy

ABI Bankruptcy Brief | October 9, 2012

October 9, 2012

NEWS AND ANALYSIS

CREDITOR LAWSUIT COULD UNDO AUTO BAILOUT, FORCE GM INTO BANKRUPTCY

A backroom deal negotiated by General Motors during the auto bailout to fulfill the Obama administration's demand for a quick bankruptcy could be reversed, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009, according to a report in the Washington Free Beacon yesterday. As GM teetered on the edge of bankruptcy in June 2009, it cut a $367 million "lock-up agreement" with several major creditors in order to prevent its Canadian subsidiary from going under. The move spared the subsidiary from fulfilling the $1 billion debt it owed the creditors—major hedge funds—ensuring that GM would not have to face bankruptcy courts in two nations, which could have delayed the company’s recovery. "Many U.S. creditors waived their rights to object because the government wanted to push through the bailout for political reasons," risk analyst Chris Whalen said. "If they had continued through normal channels, they could have easily been in bankruptcy for five years." "When I approved the sale agreement and entered the sale approval order, I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs,” Bankruptcy Judge Robert Gerber said in July. “It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all." Industry experts say that GM should be very concerned with the judge’s reaction to the deal. More is at stake than the roughly $1 billion that “old GM’s” spurned creditors are seeking, according to industry observers. Judge Gerber may have to reopen the entire bailout, and that, according to bankruptcy experts, could unravel the entire settlement. Read more.

U.S. CHARGES 530 PEOPLE IN MORTGAGE PROBE WITH $1 BILLION IN LOSSES

Attorney General Eric Holder said today that the U.S. brought charges against 530 people over mortgage schemes that cost homeowners more than $1 billion, Bloomberg News reported. More than 73,000 homeowners were victims of various frauds for which charges were filed during a year-long crackdown, including "foreclosure rescue schemes" that take advantage of those who have fallen behind on payments, the Justice Department said. Typical schemes involved promises to homeowners that foreclosures could be prevented by payment of a fee, according to the statement. As part of the schemes, "investors" purchase the mortgage or the titles of homes are transferred to those taking part in the fraud, resulting in homeowners losing their property, the department said. Read more.

COURT SAYS CONGRESS CANNOT BLOCK PAY HIKES FOR JUDGES

The U.S. Court of Appeals for the Federal Circuit in a 10-2 decision on Friday found that Congress cannot revoke cost-of-living adjustments promised to federal judges in the Ethics Reform Act of 1989, reversing the court's holding to the contrary in 2001, the National Law Journal reported yesterday. Six current and retired federal judges sued over Congress' decision to block cost-of-living adjustments in the past and whether legislation passed after the court's 2001 decision overrode provisions of the 1989 law. In the Oct. 5 decision, the court found that Congress had violated the Compensation Clause of the Constitution, which aims to protect judicial independence by limiting the ability of the other branches of government from reducing judges' salaries. If Congress wanted to amend the 1989 law, the judges wrote, it could, but not in a way that affected any sitting judges. Read more.

WALL STREET REGULATOR RAMPS UP ENFORCEMENT

The Commodity Futures Trading Commission (CFTC), once considered a toothless regulator, brought a record number of enforcement cases over the past year as fines soared, the New York Times DealBook blog reported on Friday. The agency said on Friday that it levied $585 million in sanctions during its 2012 fiscal year, which ended Sept. 30, up from $450 million the year before. The surge in fines is largely tied to one case. In June, the British bank Barclays agreed to pay $200 million to the agency for trying to manipulating a crucial interest rate. Read more.

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.

SHOW YOUR SUPPORT FOR STEVEN GOLICK, A COLLEAGUE AND ABI LEADER

Our friend Steven Golick (Osler Hoskin & Harcourt LLP, Toronto) is facing a medical crisis. He has been diagnosed with a serious brain tumor, requiring complex surgery and treatment. Steven’s spirits are very strong and he and his family remain optimistic, but he can use our support. A prominent international restructuring attorney and an ABI member since 1994, Steven is also a founding member of the ABI house band, the Indubitable Equivalents. Because the band is important to Steven, his fellow band-mates have organized a new Blog site for Steven's friends and colleagues to show their love and support at this critical time. Please click on this link to share your thoughts with many others, and post as often as you'd like.

ABI IN-DEPTH

LAST CHANCE TO GET YOUR TICKET FOR TOMORROW’S PLAYOFF GAME TO SEE THE ST. LOUIS CARDINALS TAKE ON THE WASHINGTON NATIONALS IN D.C.!

Only a few tickets remain to the ABI Endowment's special event at Nationals Park tomorrow at 1 p.m. ET to see the St. Louis Cardinals take on the Washington Nationals in Game 3 of the National League Division Series. For $400, you will receive a game ticket to a luxury suite, food and open bar. Don't miss playoff baseball in Washington, D.C.! Click here to register!

Sponsorships Are also Available!
Stand out from the crowd and sponsor this historic playoff event! Bring a client; tickets included with your sponsorship. All sponsorships are tax deductible. Click here for details.

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 [email protected].

LATEST CASE SUMMARY ON VOLO: LIQUIDATORS OF LEHMAN BROTHERS AUSTRALIA LTD. V. LEHMAN BROTHERS SPECIAL FINANCING INC. (IN RE LEHMAN BROTHERS HOLDINGS INC.; 2D CIR.)

Summarized by Janice Grubin of Todtman, Nachamie, Spizz & Johns, P.C.

The Second Circuit vacated and remanded the judgment of the district court and reinstated the appeal for consideration of the bankruptcy court order denying intervention on the merits. Given that (1) denials of intervention are generally considered to be final appealable orders in the non-bankruptcy context, (2) the bankruptcy standard for finality is more flexible than other civil litigation and (3) the pragmatic approach is required by the instant circumstances, the Circuit held that the bankruptcy court's denial of the appellants' motions to intervene was a final, appealable order.

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: PINNACLE UNIONS BALK AT AIRLINE'S ATTEMPTS TO SCRAP CONTRACT

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post reported on how Pinnacle Airlines Corp.'s thousands of pilots and flight attendants are objecting to the airline’s bid to scrap their contracts, a move the regional carrier says is necessary to exit bankruptcy protection.

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.

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LAST CHANCE!

ABI ENDOWMENT EVENT: WASHINGTON NATIONALS PLAYOFF GAME!

Oct. 10, 2012
1 p.m. ET
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COMING UP:

ABI YOUNG AND NEW MEMBERS COMMITTEE “TRENDING ISSUES: EXAMINERS AND SELECT PLAN CONFIRMATION ISSUES” WEBINAR
Oct. 15, 2012
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Oct. 16, 2012
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Oct. 18, 2012
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ABI/ST. JOHN'S "BANKRUPTCY AND RACE: IS THERE A RELATION?" SYMPOSIUM
Oct. 19, 2012
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ABI'S PROGRAM AT NCBJ'S ANNUAL MEETING
Oct. 26, 2012
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Nov. 7, 2012
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4TH ANNUAL PROFESSIONAL DEVELOPMENT PROGRAM
Nov. 9, 2012
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Nov. 12, 2012
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Nov. 29 - Dec. 1, 2012
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Dec. 4-8, 2012
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Jan. 24-25, 2013
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Feb. 17-19, 2013
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CALENDAR OF EVENTS

October
- ABI Endowment Event: Nationals Playoff Game
     October 10, 2012 | Washington, D.C.
- "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.

Read more about Creditor Lawsuit Could Undo Auto Bailout Force GM into Bankruptcy

First Quarter Bankruptcy Filings Fall 16 Percent from 2012 Commercial Filings Drop 27 Percent

April 4, 2013

NEWS AND ANALYSIS

FIRST QUARTER BANKRUPTCY FILINGS FALL 16 PERCENT FROM 2012, COMMERCIAL FILINGS DROP 27 PERCENT

Total bankruptcy filings in the United States decreased 16 percent in the first calendar quarter (Jan. 1 - March 31) of 2013 from the same period in 2012, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 263,516 in the first quarter of 2013, down from the 314,832 filings registered in the first calendar quarter of 2012. Total commercial filings for the first three months of 2012 were 11,521, representing a 27 percent decrease from the 15,869 filings during the same period in 2012. The 251,995 total noncommercial filings recorded in the first calendar quarter of 2013 represented a 16 percent decrease from the 2012 total of 298,963. Click here to read the full ABI press release.

Click here to access the March 2013 bankruptcy filing data charts.

NEW BANKRUPTCY CLAIMS TRANSFER FEE TO TAKE EFFECT MAY 1

Federal bankruptcy courts will institute a new $25 fee for filing evidence of claims transfers, transactions in which bankruptcy claims are sold by one creditor to another, usually as part of a speculative investment, according to a release today by the Administrative Office of the U.S. Courts. The fee, approved last September by the Judicial Conference of the United States, will take effect May 1. The fee will be assessed by bankruptcy courts on each individual claim or partial claim that is transferred, and it must be paid by the creditor that files evidence of the transfer (typically the claim transfer form) with the courts. Debtors filing for bankruptcy will not be affected by the fee. The fee must be paid by credit card, using Pay.gov, when the claims transfer is filed with the courts' Case Management/Electronic Case Files system, or by whatever means is designated by the court if the claims transfer is not filed electronically. Read more.

OBAMA ADMINISTRATION PUSHES BANKS TO MAKE HOME LOANS TO PEOPLE WITH WEAKER CREDIT

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place, the Washington Post reported yesterday. President Obama's economic advisers and outside experts say the nation's housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession. In response, administration officials say that they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default. Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default. Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today's low interest rates, among other steps. Read more.

In related news, the improving job market is lifting incomes and helping families repair credit scores, expanding the pool of eligible buyers and providing additional firepower to the housing recovery, Bloomberg News reported yesterday. About 7 million mortgageholders have had to leave their homes since 2007 because of foreclosure or a short sale, in which a property is sold for less than is owed, according to RealtyTrac. More than 1 million of them are now eligible for mortgages backed by the Federal Housing Administration, which requires a three-year waiting period and a minimum 3.5 percent down payment, said Mark Zandi, chief economist for Moody’s Analytics Inc. While many Americans will be blocked from buying because of insufficient credit, savings and income, eligible households will expand to nearly 2 million by the end of 2014, Zandi said. Read more.

ANALYSIS: AS BUSINESS LENDING INCREASES, CONCERNS EMERGE ABOUT PROFIT

The recent uptick in bank business lending is starting to flash some warning signs that banks are making loans to businesses at rates that are so low they may end up being unprofitable, the New York Times DealBook blog reported yesterday. A recent survey by the Federal Reserve shows that American banks are charging an average of just 2.83 percent on commercial and industrial loans, down from 3.4 percent a year earlier. Banks of all sizes are participating in this resurgence, including smaller banks, which managed to avoid many of the excesses of the credit boom of the last decade. Extraordinarily low interest rates have breathed life into several markets where companies go to borrow. Last year, companies issued nearly $360 billion of junk bonds in the U.S., according to Dealogic. Less noticed was the increase in commercial and industrial loans at American banks. They added $174 billion of such loans in 2012, a 13 percent increase from the prior year, according to figures from the Fed. Read more.

GAO: 401(K) COMPANIES OFTEN MISLEAD ACCOUNT-HOLDERS

Money management firms frequently offer workers misleading and self-serving information about how to handle their retirement savings when they change jobs, according to a Government Accountability Office report released yesterday, the Washington Post reported. Departing workers are often encouraged to roll their accounts into individual retirement accounts (IRAs) run by the firms that already manage their retirement money, even when it would be best for the outgoing employees to keep their money in a 401(k), the GAO investigation concluded. Having workers move their money into IRAs typically allows money management companies to harvest bigger fees for handling the retirement money, the report said. The GAO had undercover investigators call 30 money management firms posing as workers about to change jobs in an effort to learn how money managers market their services. In seven cases, they were given incorrect information, including that moving their money into an IRA would be "free," even though workers would incur ongoing fees by opening the accounts. The GAO also reviewed the websites of 10 large firms and found that five incorrectly said that their IRAs were free. Read more.

LATEST ABI PODCAST EXAMINES BANKRUPTCY VALUATION ISSUES

ABI's latest podcast features ABI Resident Scholar Prof. Scott Pryor speaking with Dr. Israel Shaked of The Michel-Shaked Group (Boston) and Robert F. Reilly of Willamette Management Associates Inc. (Chicago), authors of a new ABI publication, A Practical Guide to Bankruptcy Valuation. Shaked and Reilly discuss their book and other issues involved in the complex task of valuing a bankrupt or financially distressed business. Click here to listen to the podcast.

For more information or to purchase A Practical Guide to Bankruptcy Valuation, please click here.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: STOCKTON MAY WIN THE BATTLE, BUT LOSE THE WAR

Although Stockton, Calif. established the right to be in a chapter 9 municipal bankruptcy, the judge warned the city that victory may be short-lived if bondholders prove that pensioners must take a haircut along with other unsecured creditors. The latest Bloomberg bankruptcy video with Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle examines the issue. Click here to watch.

TOMORROW! DON’T MISS THE ABI LIVE WEBINAR – "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.

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!

Make sure to register today!

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: ARROYO V. SCOTIABANK DE PUERTO RICO (IN RE ARROYO; 1ST CIR.)

Summarized by William Amann of Craig, Deachman & Amann PLLC

The First Circuit ruled that a chapter 7 debtor lacked standing to appeal because he could not demonstrate that either (1) a reasonable possibility existed that a surplus would exist if the order on appeal was denied or (2) the appealed order adversely affected his discharge.

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: FURTHER EXAMINATION OF STOCKTON'S ONGOING CHAPTER 9 CASE

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post takes a closer look at Stockton, Calif.'s chapter 9 case, which was allowed to continue after Bankruptcy Judge Christopher Klein on Monday issued a bench ruling finding that Stockton is an eligible debtor and therefore entitled to remain in bankruptcy.

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 at ABI’s regular 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 be randomly 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, which 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.

ABI Quick Poll

The scope of protection of "financial contracts" in bankruptcy should be rolled back to what it was before BAPCPA expanded it in 2005.

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

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TOMORROW:

April 5, 2013
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COMING UP

April 10, 2013
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April 18, 2013
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April 18-21, 2013
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May 15, 2013
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May 16, 2013
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May 21-24, 2013
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June 7, 2013
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June 13-16, 2013
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July 11-14, 2013
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July 18-21, 2013
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SWEETEST BANKRUPTCY CONFERENCE ON EARTH: JOIN ABI FOR THE 9TH ANNUAL MID-ATLANTIC BANKRUPTCY WORKSHOP AT THE HISTORIC HOTEL HERSHEY!
Aug. 8-10, 2013
Register Today!

CALENDAR OF EVENTS

2013

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.

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.

August
- Mid-Atlantic Bankruptcy Workshop
August 8-10, 2013 | Hershey, Pa.

Read more about First Quarter Bankruptcy Filings Fall 16 Percent from 2012 Commercial Filings Drop 27 Percent

Percentage of Homes in Foreclosure Drops Nationwide

ABI Bankruptcy Brief | January 24 2013

January 24, 2013

NEWS AND ANALYSIS

PERCENTAGE OF HOMES IN FORECLOSURE DROPS NATIONWIDE

The percentage of homes in foreclosure dropped nationwide last month, although the percentage of borrowers behind on their payments increased slightly, the Los Angeles Times reported today. In a sign of continued recovery in the housing market, about 3.44 percent of mortgages were in some stage of the foreclosure process in December, according to Lender Processing Services Inc., a mortgage and consumer loan processing firm. That represents a nearly 2 percent decline from November and a roughly 18 percent drop-off from a year earlier. The percentage of mortgages that are 30 days or more past due stood at 7.17 percent last month, a 0.74 percent increase from November, LPS reported. Still, that rate declined 9 percent when compared with the same month in 2011. Read more.

COMMENTARY: BANK REFORM TAKES ONE FLAWED STEP FORWARD

While the Financial Accounting Standards Board (FASB) issued a draft of a new rule to change the way banks build reserves against losses on loans, the proposed rule is flawed conceptually and in its application, according to a Wall Street Journal commentary by Eugene A. Ludwig, CEO of the Promontory Financial Group and former Comptroller of the Currencey, and Paul Volcker, former chairman of the Federal Reserve System and namesake of the Volcker Rule included in the Dodd-Frank Act. It is a positive sign, according to the commentary, that the FASB recognizes that its existing rules on the Allocation for Loan and Lease Losses may have worsened the 2008 financial crisis. These rules limited bank reserves to those that are already "incurred." This all but ensures that banks' rainy day funds will be too skinny, particularly in periods when credit markets are under stress. The FASB's draft proposal to reform these rules incorporates what is known as the "Current Expected Credit Loss Model." It is meant to expand reserves to reflect losses that are expected over the life of the loan, and it is a big improvement over the existing regime. But as it stands, the proposal could create risks for the financial system as it could hurt small banks and their customers, according to the commentary. In an effort to ensure that everything is "auditable," the proposal ties the loan-loss reserve to what the accounting profession will decide is an acceptable "model." While the proposal is well-intentioned and makes clear that various models can be used, this model-driven approach is dangerous. Click here to read the full commentary. (Subscription required.)

FINANCIAL CRISIS SUIT SUGGESTS MORGAN STANLEY KNEW OF BAD INVESTMENTS

Hundreds of pages of internal Morgan Stanley documents, released publicly last week in a case against Morgan Stanley brought by a Taiwanese bank, shed much new light on what bankers knew at the height of the housing bubble and what they did with that knowledge, the New York Times DealBook blog reported today. The lawsuit concerns a $500 million collateralized debt obligation called Stack 2006-1, created in the first half of 2006. The documents suggest a pattern of behavior larger than this one deal: People across the bank understood that the American housing market was in trouble. They took advantage of that knowledge to create and then bet against securities and then also to unload garbage investments on unsuspecting buyers. Morgan Stanley is fighting the lawsuit, contending that the buyers were sophisticated clients and could have known what was going on in the subprime market. Read more.

LIBOR SUIT LIST SHOWS BARCLAYS PROBE SPANNED NY TO TOKYO

Barclays Plc senior executives, dozens of traders and the bank’s chief economist were all identified by regulators in a probe into interest-rate rigging that spanned continents, according to documents released in the U.K.’s first Libor-manipulation lawsuit, Bloomberg News reported today. Barclays is being sued by affiliates of Guardian Care Homes Ltd. that claim that an interest-rate swap should be annulled because it is linked to Libor, which Barclays tried to rig. Judge Julian Flaux in London rejected a bid by a group of employees identified in the Libor documents to prevent their names from being published ahead of a trial later this year. Among those identified in connection with the case were former Chief Executive Officers Robert Diamond and John Varley, and Jerry Del Missier, the bank’s former chief operating officer. The list of names, which Judge Flaux in London said had to be turned over to Guardian, was compiled from evidence that Barclays provided in the regulatory probes that led a 290 million-pound fine ($457.5 million) in June. Read more.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: AMR MAKE-WHOLE OPINION VULNERABLE ON APPEAL

The case of the week on the Bloomberg bankruptcy video is the decision by Bankruptcy Judge Sean Lane who concluded that American Airlines is not obliged to pay several hundred million dollars in make-whole premiums even though debt would be repaid before maturity. Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss how Lane's adverse ruling evidently was expected by the debt holders who believe the result may be better on appeal, if the dispute does not become moot in the meantime. Click here to watch.

CURRENT ISSUES FOR FINANCIAL ADVISORS IN BANKRUPTCY CASES 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:

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: MASSACHUSETTS DEPT. OF UNEMPLOYMENT ASSISTANCE V. OPK BIOTECH LLC (IN RE PBBPC INC.; 1ST CIR.)

Summarized by Hale Yazicioglu, Bartlett Hackett Feinberg P.C.

The First Circuit BAP, adopting the expansive definition of “interest” in § 363(f) of the Bankruptcy Code, held that “interest” in § 363(f) includes all obligations that may flow from ownership of property, including the right to tax the purchaser of the debtor’s assets at the same high rate imposed on the debtor. The First Circuit BAP first evaluated its jurisdiction on appeal and found that the bankruptcy court order approving the stipulation entered into between the parties effectively terminated the litigation, and therefore was a final judgment from which the parties could appeal to the BAP.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: THIRD CIRCUIT REJECTS WAIT-AND-SEE VALUATION APPROACH AND ACCEPTS LIENSTRIPPING IN § 506(a)

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines In re Heritage Highgate, Inc., in which the Third Circuit held that the fair market value of property as of the confirmation date controls whether or not a lien is fully secured. Additionally, the court held that lienstripping is permissible in a chapter 11 reorganization.

ABI'S INDUBITABLE EQUIVALENTS: TELL US A TUNE AND WE'LL SING YOU THAT SONG!

ABI's Indubitable Equivalents need your help: Tell us your favorite Rock and Roll tune - that elusive classic that takes you back, makes your feet tap, your head bang, and your horns come out! If we pick your song, you get widespread promotion by the band and you'll receive a free CD of IE’s greatest hits!

To enter, log onto www.abiband.com or “like” the Band’s Facebook page.

The fine print: No purchase necessary. You can enter as many times as you want. Multiple winners will be selected. Winners will be announced on the IE website and on Facebook. Entry deadline: January 31.

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.

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NEXT EVENT:

Feb. 7-9, 2013
Register Today!

COMING UP:

ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
Feb. 19, 2013
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Feb. 20-22, 2013
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March 7-9, 2013
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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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April 18-21, 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
- Annual Spring Meeting
April 18-21, 2013 | National Harbor, Md.

Read more about Percentage of Homes in Foreclosure Drops Nationwide

May Bankruptcy Filings Fall 11 Percent from 2011 Commercial Filings Drop 21 Percent

ABI Bankruptcy Brief | June 5, 2012

June 5, 2012

NEWS AND ANALYSIS

MAY BANKRUPTCY FILINGS FALL 11 PERCENT FROM 2011, COMMERCIAL FILINGS DROP 21 PERCENT

Total bankruptcy filings in the United States for May 2012 decreased 11 percent compared to the previous year, according to data provided by Epiq Systems, Inc. May bankruptcy filings totaled 109,392, down from the 122,836 filings registered in May 2011. Total commercial filings for May 2012 were 5,259, representing a 21 percent decrease from the 6,631 filings during the same period in 2011. The 104,133 total noncommercial filings for May represented a 10 percent drop from the May 2011 noncommercial filing total of 116,205. “Households have reduced their spending and businesses are benefiting from sustained low interest rates,” said ABI Executive Director Samuel J. Gerdano. “Expect a continued drop in bankruptcy filing rates as families and businesses reinforce their balance sheets and cut costs.” Total commercial chapter 11 filings also decreased in May. Overall, the May total commercial chapter 11 filing total of 682 represented a 6 percent decrease from May 2011’s total of 722, but a 3 percent increase over the April 2012 total of 660. Click here to read the press release.

ANALYSIS: PRIVATE STUDENT LOAN RATES NEARLY EQUAL RATES OF CREDIT CARDS

Unlike the federal student-loan program, which lets consumers borrow at fixed rates directly from the government, private loans from at least 30 banks and other private lenders feature mostly variable rates that can be more than twice what some people pay in the U.S. program, according to a Bloomberg News analysis yesterday. Some private student loans carry rates as high as 10.25 percent. Loans from banks and other private lenders make up about 15 percent of the $1 trillion in outstanding student debt, according to an estimate by Mark Kantrowitz, who runs FinAid.org, a website about college grants and loans. About 2.9 million students have private loans, according to the most recent federal data analyzed by The Institute for College Access and Success, an Oakland, Calif.-based nonprofit group. Private-lending practices are drawing the government’s attention as Congress and the Obama administration look to help students avoid predatory, high-interest loans. "Like mortgages before the financial crisis, many borrowers took on private student-loan debt with terms and conditions they didn’t fully understand," said Rohit Chopra, the student-loan ombudsman at the Consumer Financial Protection Bureau, a federal agency studying the private-loan market. Recent graduates "are now fighting to stay afloat because these loans don’t always have the same repayment options as federal student loans," he said. Read more.

For more on student debt, be sure to listen to ABI’s latest podcast featuring scholars examining issues related to student loans and bankruptcy.

ROMNEY VOWS QUICK EXIT FROM GM STAKE

Republican Presidential candidate Mitt Romney believes President Barack Obama is holding on to the government's stake in General Motors to avoid an embarrassing financial loss before the election, and says he would sell the stock quickly if he wins the White House, the Detroit News reported today. As part of the government's GM bailout, the U.S. Treasury still holds a 26 percent stake in the Detroit automaker, and has been sitting on that share for 35 months. At GM's closing price yesterday of $21.11 a share, the government would lose $16 billion on its $49.5 billion bailout. Last month, Tim Massad, the assistant Treasury secretary who oversees the GM stake, said that the government has no timetable for selling its GM stock. Read more.

FINRA CALLS FOR MORE CONFLICT-OF-INTEREST CURBS FOR ANALYSTS AND INVESTMENT BANKERS

A Wall Street regulator is pushing to extend conflict-of-interest curbs to include analysts and investment bankers who work in the giant market for debt offerings, the Wall Street Journal reported today. Such controls already exist for Wall Street firms dealing with stocks, but the Financial Industry Regulatory Authority (FINRA) plans to submit by year-end proposed rules for debt. The rules could force firms to build firewalls between investment bankers who pitch debt offerings and research analysts who follow companies issuing the debt. The rules would require Securities and Exchange Commission approval. Read more. (Subscription required.)

FREDDIE MAC ANNOUNCES LOWER MODIFICATION INTEREST RATE

Freddie Mac announced on Friday that starting July 1, the GSE's Standard Modification interest rate will come down from 5 percent to 4.625 percent, DSNews.com reported yesterday. The Standard Modification is for borrowers who do not qualify for the government’s Home Affordable Modification Program (HAMP). The modification makes payments more affordable by lowering a borrower’s principal and interest payments by at least 10 percent. The modification includes a trial period, as does HAMP, to ensure that borrowers can maintain modified mortgage payments. The Freddie Mac Standard Modification is part of the Servicing Alignment Initiative, which is an effort to create consistency in how delinquent GSE loans are serviced. Read more.

ABI PODCAST FEATURES SCHOLARS EXAMINING STUDENT DEBT AND BANKRUPTCY

The latest ABI podcast features Profs. Daniel Austin of Northeastern University School of Law and G. Marcus Cole of Stanford Law School talking with ABI Resident Scholar David Epstein about current issues surrounding educational debt and bankruptcy. Click here to access the podcast

TOMORROW! WEBINAR TO EXAMINE HOW TO HANDLE AN ADMINISTRATIVELY INSOLVENT ESTATE

Panelists from one of the top-rated sessions at the 2011 Winter Leadership Conference are going to reconvene for an ABI and West LegalEd Center webinar on June 6 titled, "Handling the Administratively Insolvent Estate: What to Do When Your Chapter 11 Goes South." (Note the change of date: This program will now take place on June 6 rather than the previous date of June 5.) CLE credit will be available for the webinar, which will last from 11 a.m. - 12:30 p.m. ET.

Speakers include:

• Robert J. Feinstein of Pachulski Stang Ziehl & Jones LLP (New York)
• Cathy Rae Hershcopf of Cooley LLP (New York)
• Robert L. LeHane of Kelley Drye & Warren LLP (New York)

Robert J. Keach of Bernstein Shur (Portland, Maine) will be the moderator for the webinar.

The webinar costs $115, and purchase provides online access for 180 days. If you are purchasing a live webcast, you will receive complimentary access to the on-demand version for 180 days once it becomes available. Click here for more information.

ABI IN-DEPTH

WEBINAR ON JUNE 26 TO EXAMINE SUPREME COURT'S RULING IN RADLAX CASE

Having already examined the oral argument in a previous ABI media teleconference, panelists will reconvene for an ABI and West LegalEd Center webinar on June 26 to discuss last week's Supreme Court ruling in RadLAX Gateway Hotel LLC v. Amalgamated Bank. CLE credit will be available for the webinar, which will be held from 2:00-3:30 p.m. ET.

Experts on the program include:

• David Neff of Perkins Coie LLP (Chicago), the counsel of record for petitioner RadLAX Gateway Hotel LLC and participant in the argument.
• Jason S. Brookner of Andrews Kurth LLP (New York), whose article was cited in the brief for the respondent.
• Prof. Charles Tabb, the Alice Curtis Campbell Professor of Law at the University of Illinois College of Law, who recently published a paper titled "Credit Bidding, Security, and the Obsolescence of Chapter 11."

ABI Resident Scholar David Epstein will be the moderator for the webinar.

The webinar costs $115 and purchase provides online access for 180 days. If you are purchasing a live webcast, you will receive complimentary access to the on-demand version for 180 days once it becomes available. Click here for more information.

LATEST CASE SUMMARY ON VOLO: WHITE V. COMMERCIAL BANK AND TRUST CO. (IN RE WHITE; 8TH CIR.)

Summarized by Tony Bisconti of Bienert, Miller & Katzman

Reversing the bankruptcy court's order denying the debtors' motion to avoid Commercial Bank's judicial lien, the Eighth Circuit BAP held that because both debtors' property would be exempt under Arkansas law in the absence of Commercial Bank's judicial lien, the lien was avoidable, and the fact that at the time the judicial lien became fixed the debtors held title to the subject property by tenancy by the entirety, but subsequently created a tenancy in common, did not change the fact that the lien was avoidable. The BAP also held that the appeal of the bankruptcy court's order granting Commercial Bank relief from the automatic stay was moot.

More than 500 appellate opinions are summarized on Volo typically within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: MORE ON THE SIGNING OF THE TEMPORARY BANKRUPTCY JUDGESHIP EXTENSION ACT

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new post features further details on the "Temporary Bankruptcy Judgeship Extension Act of 2011," (Pub. L. No. 112-121) which was signed by the President on May 25.

ABI Quick Poll
First-day orders authorizing full and immediate payment of the claims of ‘critical vendors’ should be prohibited; all pre-petition unsecured creditors should be subjected to the same rules. Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

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TOMORROW!

ABI'S "Handling the Administratively Insolvent Estate- What to Do When Your Chapter 11 Goes South" Webinar
June 6, 2012
Register Today!

COMING UP

June 7-10, 2012
Last Chance to Register!

July 12-15, 2012
Register Today!

July 25-28, 2012
Register Today!

ABI'S Webinar to Discuss the Supreme Court's Forthcoming Ruling in RadLAX Gateway Hotel LLC v. Amalgamated Bank
June 26, 2012
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August 2-4, 2012
Register Today!

Sept. 13-15, 2012
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Sept. 13-14, 2012
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Oct. 5, 2012
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Oct. 8, 2012
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CALENDAR OF EVENTS

June
- ABI's "Handling the Administratively Insolvent Estate- What to Do When Your Chapter 11 Goes South" Webinar
     June 6, 2012
- Central States Bankruptcy Workshop
     June 7-10, 2012 | Traverse City, Mich.
- ABI Webinar Examining the Supreme Court's Ruling in the RadLAX Case
     June 26, 2012

July
- Northeast Bankruptcy Conference and Northeast Consumer Forum
July 12-15, 2012 | Bretton Woods, N.H.
- Southeast Bankruptcy Workshop
July 25-28, 2012 | Amelia Island, Fla.

August
- Mid-Atlantic Bankruptcy Workshop
August 2-4, 2012 | Cambridge, Md.

September
- Southwest Bankruptcy Conference
September 13-15, 2012 | Las Vegas, Nev.
- Complex Financial Restructuring Program
September 13-14, 2012 | Las Vegas, Nev.

October
- 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.

Read more about May Bankruptcy Filings Fall 11 Percent from 2011 Commercial Filings Drop 21 Percent

Final Report of the ABIs Ethics Task Force Provides Guidance to Both Consumer and Business

ABI Bankruptcy Brief | April 25 2013

April 25, 2013

NEWS AND ANALYSIS

FINAL REPORT OF ABI’S ETHICS TASK FORCE PROVIDES GUIDANCE TO BOTH CONSUMER AND BUSINESS BANKRUPTCY PROFESSIONALS

The ABI National Ethics Task Force released its final report at ABI’s 31st Annual Spring Meeting to provide recommendations for both consumer and business practitioners for uniform ethical standards in bankruptcy practice. Funded by ABI’s Anthony H.N. Schnelling Endowment Fund, the Task Force formulated a set of uniform ethical standards on a variety of bankruptcy-related matters, including use of conflicts counsel, employment of counsel and necessary disclosures, competency standards, and fiduciary duties of counsel for the debtor in possession (DIP).

The Ethics Task Force was established in 2011 by then-ABI President Geoffrey L. Berman of Development Specialists Inc. (Los Angeles) to address ethics problems encountered by bankruptcy professionals and judges as state ethics rules do not always fit with the realities of bankruptcy practice. The Task Force formed committees, surveyed bankruptcy professionals, academics and judges, and examined recent case law to focus on seven recommendations:

1. proposed amendments to Bankruptcy Rule 2014 governing the hiring of bankruptcy professionals, including greater disclosure provisions for conflicts and connections;

2. duties of counsel for a debtor in possession as fiduciary and responsibilities to the estate;

3. framework for pre-approval of terms for retention and compensation under 11 U.S.C. § 328 to provide efficiency and clarity to courts in bankruptcy professional employment applications;

4. use of conflicts counsel in business reorganization cases, especially in large or complicated cases that may present significant conflicts;

5. best practices for limited services representation in consumer bankruptcy cases;

6. competency for debtors’ counsel in business and consumer cases; and

7. report on best practices on creditors’ committee solicitation.

Profs. Nancy B. Rapoport of the UNLV William S. Boyd School of Law (Las Vegas) and Lois R. Lupica of the University of Maine School of Law (Portland, Maine) served as reporters and said that while the report provides an ethical guide to all in the bankruptcy profession, new bankruptcy lawyers in particular should make sure they review the final report. "The findings and recommendations within the report are essential for new bankruptcy attorneys to absorb," Lupica said.

To read the ABI Ethics Task Force Final Report, please click here.

REPORT: DISCLOSURE OF INSIDER PAY MURKY IN A FEW CHAPTER 11 CASES

A Wall Street Journal analysis released today found that in 250 chapter 11 cases over the past five years, 19 companies tried to keep the details of insider pay secret, and 17 were successful at doing so. When Reader's Digest first ventured into bankruptcy in the summer of 2009, the multimillion-dollar payouts to top executives that showed up in court filings sparked outrage from employees facing layoffs and retirees staring down benefit cuts. Less than four years later, the publisher is now back in chapter 11, but how much its insiders were paid is not in the public record. RG Steel, whose collapse last year put thousands out of work, identified its top executives only as "Employee A" through "Employee G" when listing what it paid insiders. New York law firm Dewey & LeBoeuf LLP navigated bankruptcy without identifying the firm's top earners. Media giant Tribune Co. didn't reveal the names of insiders who collected $268 million the same year a leveraged buyout put the company on the path to bankruptcy. Read more. (Subscription required.)

DOWN PAYMENT RULES ARE AT THE HEART OF THE MORTGAGE DEBATE

While making home buyers put more money down seemed like an easy fix to prevent the excesses of the housing market, the issue is up for debate as the housing market starts to return and the subprime mess fades from memory, the New York Times DealBook blog reported yesterday. Lenders and consumer advocates — rarely on the same side of the issue — are now cautioning against down payment requirements. They argue that such restrictions could limit lending, and prevent lower-income borrowers from buying homes. They also contend that the new mortgage rules put in place this year will do enough to limit foreclosures, making down payment requirements somewhat superfluous. Regulators want to protect borrowers and promote homeownership. But they also want to encourage lending and insulate the financial system from future shocks. Read more.

ANALYSIS: HOW THE WHEELS CAME OFF FOR FISKER AUTOMOTIVE

The near-collapse of Anaheim, Calif.-based Fisker Automotive Inc.—it missed a loan payment on Monday, earlier dismissed most of its staff and has hired bankruptcy advisors—comes as affluent buyers have turned away from the once-promising startup and falling gasoline prices have chipped away at demand for electric cars, the Wall Street Journal reported yesterday. Barring a last-minute rescue, the company’s dissolution also represents one of the most prominent failures of the government's use of public funds to wean American industry from fossil fuels—and of how that government backing pushed Fisker to reach too far. At its peak, tiny Fisker received one of the largest U.S. venture capital payouts ever. Its founders raised more than $1 billion from highly regarded Silicon Valley venture funds including Kleiner Perkins Caufield & Byers. Its biggest single investor, though, was the U.S. In 2009, the Obama administration's interest in cultivating electric cars got the untested Fisker loans totalling $529 million, more than the company had initially requested, and an amount that encouraged private backers to chip in more funds. But despite its wealthy backers, Fisker had plenty of problems. Troubles with suppliers and regulatory requirements added months to the release of the company's first car, the Karma. Although engineers expressed concerns that the software that ran the Karma's display screens and phone connections was not ready, the Karma was released to customers. The company said that its problems were similar to those that would be expected of any new model. In May 2011, the Obama administration, under pressure from critics of its alternative energy spending and after the high-profile failure of U.S.-backed solar panel maker Solyndra LLC, froze disbursements to Fisker, citing delays in the Karma's rollout. Read more. (Subscription required.)

NEW ABI LIVE WEBINAR ON MAY 29 WILL FOCUS ON CLASS ACTIONS IN BOTH BUSINESS AND CONSUMER CASES

Class action lawsuits in both chapter 11 and 13 cases are becoming more prevalent. Are you wondering whether your clients’ WARN Act claims would be better pursued against a debtor company in a class action adversary proceeding or in a class proof of claim, or both? If your client has been sued in a debtor’s consumer class action adversary proceeding, do you know the best defenses against class certification? ABI's panel of experts will explore the potential benefits and pitfalls of class actions by creditors against debtor companies in chapter 11 cases and by debtors/trustees against creditors in chapter 13 cases by highlighting recent appellate and bankruptcy court decisions on May 29 from 1-2:15 p.m. ET. Special ABI member rate available! Click here to register.

ABI MEMBERS WELCOME TO ATTEND INSOL'S LATIN AMERICAN REGIONAL SEMINAR ON JUNE 13 IN SAO PAULO

ABI members are encouraged to attend INSOL’s Latin American regional seminar in São Paulo, Brazil, on June 13. The one-day seminar has been organized by INSOL in association with TMA Brasil to cover current cross-border insolvency and restructuring topics. The seminar is designed to be interactive and to allow the attendees to discuss and debate about practical issues with speakers who are leading players in the insolvency and restructuring field and with experience in insolvency proceedings involving different countries. The seminar will benefit from simultaneous translation in English, Portuguese and Spanish. For more information and to register, please click here.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: IN RE RODRIGUEZ (3D CIR.)

Summarized by Thomas Horan of Womble Carlyle Sandridge & Rice LLP

Because a chapter 13 plan confirmation order may be revoked only if such order was procured by fraud, the Third Circuit ruled that absence of such fraud prevents the court from reconsidering the plan confirmation order under Rule 60(b) of the Federal Rules of Civil Procedure, made applicable in a bankruptcy case by Rule 9014 of the Federal Rules of Bankruptcy Procedure.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: WILL THE NEXT WAVE OF CHAPTER 9 FILINGS BE FROM PUBLIC HOSPITALS?

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new blog post examines the possibility of a wave of chapter 9 filings by public hospitals.

For further analysis on bankruptcy filings and distress by hospitals, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition, from ABI's Bookstore!

TEE OFF ON THE ABI GOLF TOUR!

ABI now offers conference registrants the option to participate in the ABI Golf Tour. The Tour kicked off at ABI’s Annual Spring Meeting and will take place concurrently with most conference golf tournaments. It 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 at ABI’s regular conference events, Tour participants will "play their own ball" in stroke play format. 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 be randomly 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, which 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 and early leader board.

ABI Quick Poll

Bankruptcy courts should implement constructive trusts in any case where applicable state law would recognize them.

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

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NEXT EVENTS:

May 15, 2013
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May 16, 2013
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COMING UP

May 21-24, 2013
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May 29, 2013
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June 7, 2013
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June 13-16, 2013
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INSOL’s Latin American Regional Seminar in São Paulo, Brazil
June 13, 2013
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July 11-14, 2013
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July 18-21, 2013
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Aug. 8-10, 2013
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CALENDAR OF EVENTS

2013

June
- Memphis Consumer Bankruptcy Conference
     June 7, 2013 | Memphis, Tenn.
- Central States Bankruptcy Workshop
     June 13-16, 2013 | Grand Traverse, Mich.
- INSOL’s Latin American Regional Seminar
     June 13, 2013 | São Paulo, Brazil

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.

August
- Mid-Atlantic Bankruptcy Workshop
August 8-10, 2013 | Hershey, Pa.

Read more about Final Report of the ABIs Ethics Task Force Provides Guidance to Both Consumer and Business

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

ABI Bankruptcy Brief | February 5 2013

February 5, 2013

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:

ABI IN-DEPTH

• 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: 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.

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.

ABI Quick Poll

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

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THURSDAY:

Feb. 7-9, 2013
Register Today!

COMING UP:

ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
Feb. 19, 2013
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Feb. 20-22, 2013
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9th Annual Wharton Restructuring and Distressed Investing Conference
Feb. 22, 2013
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March 7-9, 2013
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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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April 18-21, 2013
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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.

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

U.S. Personal Bankruptcies Set to Drop Again According to Fitch Ratings

ABI Bankruptcy Brief | February 4, 2014

February 6, 2014

NEWS AND ANALYSIS

U.S. PERSONAL BANKRUPTCIES SET TO DROP AGAIN, ACCORDING TO FITCH RATINGS

Fitch Ratings issued a report today stating that personal bankruptcy filings are on track to achieve a fourth straight year of declines, Reuters reported today. Fitch projects 2014 filings to fall another 8-10 percent, following the 12 percent drop in 2013 filings. After that, the report says that the pace of improvement is likely to level off. "Banks will continue to ease underwriting standards and open up access to larger credit lines to consumers," said Fitch Managing Director Michael Dean. Filings closed slightly above the one million mark after falling 12 percent, or 145,759, to 1,011,732 from 1,157,491 in 2012. Read more.

To review the latest filing trends, including January 2014's numbers, please click here.

ANALYSIS: WELCOME RELIEF FOR HOMEOWNERS, UNTIL THE TAX BILL ARRIVES

While JPMorgan Chase will be able to write off the $1.5 billion in debt relief it must give homeowners to satisfy the terms of a recent settlement, the homeowners who receive the help will have to treat it as taxable income, resulting in whopping tax bills for many families who have just lost their homes or only narrowly managed to keep them, the New York Times reported yesterday. A tax exemption for mortgage debt forgiveness, put in place when the economy began to falter in 2007, was allowed to expire on Dec. 31, leaving hundreds of thousands of struggling homeowners in financial limbo even as the Obama administration has tried to encourage such debt write-downs. The tax exemption was intended to help homeowners who are underwater, and according to real estate data service CoreLogic, there are still more than 6.4 million households underwater. The number of people using the mortgage debt-relief exemption has increased every year, reaching almost 100,000 in 2011, the most recent year for which the IRS has figures. That number could be far greater for 2013, when there were more than a quarter-million short sales, according to Daren Blomquist of RealtyTrac, who estimates that those families received an average debt reduction of roughly $37,000. If the exemption had not been in place, that would have translated to an extra $9,250 tax bill for those in the 25 percent bracket. Read more.

RETAILERS TO CONGRESS: THERE'S NO END IN SIGHT FOR CREDIT CARD BREACHES

A Target executive warned Congress that credit card breaches, such as the one that affected up to 110 million of its customers, are going to become very common and there may be that little retailers can do to shield shoppers for now, the Washington Post reported yesterday. "The unfortunate reality is that we suffered a breach, and all businesses -- and their customers -- are facing increasingly sophisticated threats from cyber criminals," Target Chief Financial Officer John J. Mulligan told lawmakers at a Senate Judiciary Committee hearing on Tuesday. "In fact, recent news reports have indicated that several other companies have been subjected to similar attacks." Real change would require all the actors in the payment card system -- merchants, banks that issue credit cards and the card networks -- to work together to replace the plastic in our wallets with something more sophisticated, such as a card with a computer chip. "Updating payment card technology and strengthening protections for American consumers is a shared responsibility and requires a collective and coordinated response," Mulligan said. Read more.

AMERICANS BOOST SPENDING ON REMODELING

Americans are spending lavishly again to upgrade their homes, an indication that they remain confident about the long-term prospects for the recovery of the housing market despite recent signs of weakness, the Wall Street Journal reported today. Homeowners spent $130 billion on remodeling projects last year, according to data released Monday by the U.S. Census Bureau. That was up 3.1 percent from 2012 and was the largest amount of home-remodeling spending since 2007, the year that the housing downturn began. Permits for remodeling jobs in the U.S. rose 5.1 percent last year from 2012, the largest increase since 2010, when the figures began their rebound from a 10-year low, according to permit-tracking company BuildFax. Home-equity lending -- which sank to its lowest level of the past 10 years in 2010 -- jumped 18 percent last year to $123.4 billion, according to estimates by Moody's Analytics. According to real estate data firm CoreLogic, two-thirds of all U.S. homeowners had at least 20 percent equity in their homes as of last year's third quarter, up from 53.2 percent two years earlier. Read more. (Subscription required.)

PUBLIC COMMENT PERIOD ENDS NEXT WEEK FOR PROPOSED AMENDMENTS TO THE FEDERAL RULES OF BANKRUPTCY PROCEDURE

The Judicial Conference Advisory Committee on Bankruptcy Rules has proposed amendments to the Federal Rules of Bankruptcy Procedure and Official Forms, and requested that the proposals be circulated to the bench, bar, and public for comment. On August 15, 2013, the public comment period opened for the proposed amendments to Bankruptcy Rules 2002, 3002, 3007, 3012, 3015, 4003, 5005, 5009, 7001, 9006, and 9009 and Official Forms 17A, 17B, 17C, 22A-1, 22A-1Supp, 22A-2, 22B, 22C-1, 22C-2, 101, 101A, 101B, 104, 105, 106Sum, 106A/B, 106C, 106D, 106E/F, 106G, 106H, 106Dec, 107, 112, 113, 119, 121, 318, 423 and 427. The public comment period closes on February 15, 2014. For more information, please click here.

To access the online comment site for the proposed amendments, please click here.

PURCHASE EITHER THE CONSUMER OR BUSINESS EDITION OF THE BEST OF ABI 2013 AND RECEIVE A FREE ADDITIONAL TITLE!

To make room for new books in 2014, ABI is having a special Bookstore clearance sale. Now, when you buy either Best of ABI 2013: The Year in Business Bankruptcy or The Year in Consumer Bankruptcy, you can choose a free book from a select list of ABI publications. You'll be able to make your selection when you click "Buy Now" on either edition of the Best of ABI 2013. To purchase the Best of ABI 2013: The Year in Business Bankruptcy, please click here.

Make your selection when you click "Buy Now" on either edition of the Best of ABI 2013. To purchase the Best of ABI 2013: The Year in Consumer Bankruptcy, please click here.

LOOKING FOR A REPLAY OF THE "BACK TO BASICS" WEBINARS? CHECK OUT ABI'S CLE SITE!

The final installment of ABI's "Back to Basics" live webinar series, hosted by the Young and New Members Committee, was held last week, and you now have the opportunity to access the programs at your convenience! The three webinars in the series, an examination of financial statements and operating reports, using financial documents as evidence and issues surrounding bankruptcy and hedge funds, are now posted to ABI's e-Learning website. Let a trusted CLE provider help get your associates up to speed.

ABI'S SIXTH ANNUAL LAW STUDENT WRITING COMPETITION DEADLINE APPROACHING

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.

DETROIT EMERGENCY MANAGER KEVYN ORR TO KEYNOTE ABI'S 32ND ANNUAL SPRING MEETING ON APRIL 25

Kevyn Orr, emergency manager to the city of Detroit, will provide the keynote at the Friday Luncheon at ABI's 32nd Annual Spring Meeting at the JW Marriott in downtown Washington, D.C. The conference, taking place April 24-27, 2014, 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. The Annual Spring Meeting offers 18.25/22 hours of CLE/CPE credit, along with ethics credit totaling 3.25/4 hours. In addition, committee sessions will drill down on topics covered in the larger sessions to provide you with the most practical and varied CLE/CPE experience ever. Also featured will be a special half-day optional event sponsored by ABI and the FCBA titled "The Intersection of the FCC and Bankruptcy Law."

Sessions at the 2014 Annual Spring Meeting include:

- 18th Annual Great Debates
- Where the Work Is (and Isn't)
- The Ever-Changing Role of Committees
- Large Complex Trusts: A General Motors Case Study
- Municipal Bankruptcies
- Use of Governmental Assistance Programs in Chapter 13
- The Financial Professional's Role in Out-of-Court Restructurings and Dissolutions
- Civility in the Restructuring Profession
- Union Contracts
- Student Loan Update
- Social Media: What You Don't Know Can Hurt You
- The § 363 Sale Process from a Transactional Perspective

The conference kicks off with an Opening Reception at the Smithsonian's National Museum of the American Indian, offering a truly D.C. experience. Optional events include a golf tournament at Westfields Golf Club, a Washington Nationals vs. San Diego Padres baseball game and an evening at the Kennedy Center with the National Symphony Orchestra.

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: CLARK V. ZWANZIGER (IN RE ZWANZIGER; 10TH CIR.)

Summarized by Michael Cooley of Akin Gump Strauss Hauer & Feld LLP

Emphasizing the fact that issue preclusion generally applies to a decision on the merits of an issue that has been actually litigated, the Tenth Circuit held that issue preclusion does not apply to a final determination in district court that a party has waived an issue. Sharply dissenting, Judge Holloway emphasized the equitable nature of issue preclusion, and concluded there was no reason to relieve the plaintiff from the effect of his procedural error in the original district court litigation.

There are more than 1,200 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: WHAT PERCENTAGE GETS PAID BACK IN A CHAPTER 13 BANKRUPTCY?

The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent post looks at how to calculate what percentage of debts are going to get paid back to creditors if a consumer files for chapter 13 bankruptcy.

ABI Quick Poll

The Bankruptcy Code permits a debtor to artificially impair a class for cramdown purposes.

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INSOL INTERNATIONAL

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 43 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:

Hedge Fund Legend David Tepper to Keynote- Register Today!

COMING UP

Detroit Emergency Manager Kevyn Orr to Keynote- Register Today!

CALENDAR OF EVENTS

2014

February
- VALCON14
Feb. 26-28, 2014 | Las Vegas, Nev.

March
- Bankruptcy Battleground West
March 11, 2014 | Los Angeles, Calif.
- Alexander L. Paskay Memorial
Bankruptcy Seminar
March 13-15, 2014 | Tampa, Fla.

April
- Annual Spring Meeting
April 24-27, 2014 | Washington, D.C.

May
- Credit & Bankruptcy Symposium
    May 1-2, 2014 | Uncasville, Conn.
- New York City Bankruptcy Conference
    May 15, 2014 | New York, N.Y.
- Litigation Skills Symposium
    May 20-23, 2014 | Dallas, Texas

June
- Central States Bankruptcy Workshop
June 12-15, 2014 | Lake Geneva, Wis.

Read more about U.S. Personal Bankruptcies Set to Drop Again According to Fitch Ratings

Analysis Nearly a Third of Companies that Filed for Chapter 11 Did Not Disclose Plans in Advance

ABI Bankruptcy Brief | November 6 2012

November 8, 2012

NEWS AND ANALYSIS

ANALYSIS: NEARLY A THIRD OF COMPANIES THAT FILED FOR CHAPTER 11 DID NOT DISCLOSE PLANS IN ADVANCE

More than two dozen companies in the past five years did not disclose chapter 11 bankruptcy preparations to investors, according to a Wall Street Journal analysis of regulatory filings. The companies, including Eastman Kodak Co. and American Airlines parent AMR Corp., refrained from warning investors about potentially seeking chapter 11 protection from creditors despite facing dire financial straits or, in some cases, hiring restructuring advisers to make the preparations. Some of the firms only disclosed later in court documents that they had laid the groundwork for the filings in advance. The law is murky in this area: Federal securities laws and regulations do not require disclosure of bankruptcy preparations in most circumstances, even though such information could be deemed "material" to investors, according to securities-law specialists. The Financial Accounting Standards Board is working on proposing a rule that would require executives under certain circumstances to be responsible for disclosing issues related to a company's ability to continue as a going concern. Under current rules, auditors determine whether companies must make that sort of disclosure. The "going concern" disclosure is separate from other general bankruptcy-preparation notifications a company could choose to make. Read more. (Subscription required.)

U.S. CONSUMER CREDIT EXPANDS IN SEPTEMBER

Federal Reserve data released yesterday showed that U.S. consumer credit grew $11.36 billion in September, although Americans appeared to use their credit cards more sparingly, Reuters reported yesterday. So far this year, overall consumer credit has expanded in eight of nine months. Nonrevolving credit, which includes student and auto loans, rose $14.27 billion in September. Student loans made by the government rose 27.9 percent in the 12 months through September, slightly less than the 12-month growth posted through August. The figures also showed a contraction in revolving credit, which mostly measures credit card use. That category dropped to $2.90 billion in September. Read more.

TARIFFS UPHELD, BUT MAY NOT HELP U.S. SOLAR INDUSTRY'S STRUGGLES

Though the U.S. International Trade Commission decided yesterday to uphold tariffs of about 24 to 36 percent on most solar panels imported from China, the action might not do much to aid the financially struggling U.S. solar panel industry, according to a report from today's New York Times. Domestic solar manufacturers said that the duties, to be in place for five years, would make up for unfair business practices by Chinese companies that had harmed the domestic market and allow homegrown companies to hire more workers and thrive. Because the duties apply to panels made of Chinese-produced solar cells, Chinese companies are already avoiding the duties by assembling their panels from cells produced elsewhere, like Taiwan, even if the cell components come from China. The case is also unlikely to have much effect on the central market dynamic that analysts say is driving companies out of business: oversupply. About a dozen panel makers in the United States have gone bankrupt or closed factories since the start of last year. "There have been a few bankruptcies and a few plant closures and so on, but at this point it's just a drop in the bucket," said Shayle Kann, the head of GTM Research, a unit of Greentech Media. Read more.

VIDEO AND PREPARED WITNESS STATEMENTS FROM THE CHAPTER 11 COMMISSION'S 11/3 HEARING NOW AVAILABLE

The video recording of ABI's Chapter 11 Reform Commission’s hearing on 11/3 at TMA's annual conference is now available. Additionally, prepared witness statements can also be downloaded. Click here to watch the video and access the prepared witness statements.

The next public hearing will be Thursday, Nov. 15, at the CFA Annual Convention in Phoenix. For future Commission hearings, please click here: http://commission.abi.org/.

MEMBERS ENCOURAGED TO WEIGH IN ON REAPPOINTMENT OF BANKRUPTCY JUDGE JUDITH WIZMUR

The current 14-year term of office for Judith H. Wizmur, U.S. Bankruptcy Judge for the District of New Jersey at Camden, is due to expire on Sept. 4, 2013. The U.S. Court of Appeals for the Third Circuit is considering the reappointment of the judge to a new 14-year term of office. Members of the bar and the public are invited to submit comments for consideration by the Court of Appeals regarding the reappointment of Bankruptcy Judge Wizmur. All comments should be directed to one of the following addresses: by e-mail at [email protected] or by mail to the Office of the Circuit Executive, 22409 U.S. Courthouse, 601 Market St., Philadelphia, PA 19106-1790. Comments must be received no later than noon on Monday, December 3, 2012.

ABI IN-DEPTH

ELECTION ANALYST AND AUTHOR LARRY SABATO TO DISSECT THE 2012 ELECTION RESULTS AT ABI’S 24TH ANNUAL WINTER LEADERSHIP CONFERENCE!

Don't miss ABI's 24th Annual Winter Leadership Conference, taking place Nov. 29 - Dec. 1 at the JW Marriott Starr Pass Resort & Spa in Tucson, Ariz. This year's conference will feature insights from some of the top insolvency and restructuring experts on issues confronting the profession in 2013, including four specialized tracks geared toward business, consumer, financial advisor and professional development. The featured keynote speaker will be election analyst and author Larry Sabato. ABI's Great Debates a field hearing of ABI’s Commission to Study the Reform of Chapter 11 and 10 committee educational sessions will also be taking place at the conference. Panel sessions include:

Business Track:
• Fraudulent Conveyance Litigation from Soup to Nuts
• Pushing the Envelope
• The Role of the Hedge Fund in Corporate Restructurings: White Knight or Villain?
• Social Networking and Bankruptcy Issues

Financial Advisors Track
• Advising the Corporate Entity
• How to Create Value for the Estate from Your First Client Meeting until Entry of a Final Decree

Consumer Track
• From Infants to Toddlers: Bankruptcy Rules 3001 and 3002.1 Experience First-Year Growing Pains
• The National Mortgage Settlement: How Will It Affect Consumer Bankruptcy Cases?

Professional Development Track
• Litigation Skills: Mock Expert Examination
• “I'm Shocked—Shocked!—to Find that Unethical Conduct Is Going On in Here!”: A Tale of Ethics in Bankruptcy

The conference will also include a final night dinner featuring impressionist, comedian and singer Jeff Tracta, and the sounds of ABI's rock-n-roll band, the Indubitable Equivalents. Register by Monday to save $50 on your registration!

TUCK SCHOOL OF BUSINESS WINS NINTH ANNUAL CORPORATE RESTRUCTURING COMPETITION

A team from Tuck School of Business at Dartmouth College won the Bettina M. Whyte Trophy at the Ninth Annual ABI Corporate Restructuring Competition, held Nov. 1-2 at the University of Pennsylvania Wharton School of Business in Philadelphia. The second-year MBA student winners also shared a $6,000 cash prize. Students from the University of Chicago Booth School of Business won the second-place award of $3,500, while a team from the University of Virginia Darden School of Business received the $2,500 prize for third place. Click here to read the full press release.

LATEST CASE SUMMARY ON VOLO: MICHIGAN STATE UNIVERSITY V. ASBESTOS SETTLEMENT TRUST (IN RE THE CELOTEX CORP.; 11TH CIR.)

Summarized by Jeffrey Snyder of Bilzin Sumberg Baena Price & Axelrod LLP

The Eleventh Circuit ruled that although a district court, at its discretion, may review interlocutory judgments and orders of a bankruptcy court pursuant to 28 U.S.C. §158(a), a court of appeals only has jurisdiction over final judgments and orders entered by a district court or bankruptcy appellate panel sitting in review of a bankruptcy court pursuant to 28 U.S.C. §158(d).

There are nearly 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: SECOND CIRCUIT ADOPTS DEFERENTIAL ABUSE OF DISCRETION STANDARD OF REVIEW FOR EQUITABLE MOOTNESS APPEALS

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines how the U.S. Court of Appeals for the Second Circuit, in R2 Investments v. Charter Communications, Inc., recently affirmed the dismissal of an appeal from the confirmation order in the bankruptcy of cable company Charter Communications, concluding that the deferential abuse of discretion standard of review was applicable.

ABI Quick Poll

Despite the "free and clear" language of Sect. 363(f), purchasers of assets in 363 sales may still be liable for injuries to unidentifiable future claimants. (In re Grumman Olson Indus, SDNY).

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

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TOMORROW:

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

MONDAY:

Nov. 12, 2012
Register Today!

COMING UP:

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

Dec. 4-8, 2012
Register Today!

Jan. 21, 2013
Register Today!

Jan. 24-25, 2013
Register Today!

Feb. 7-9, 2013
Register Today!

Feb. 17-19, 2013
Register Today!

Feb. 20-22, 2013
Register Today!

CALENDAR OF EVENTS

November
- 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
- 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.

Read more about Analysis Nearly a Third of Companies that Filed for Chapter 11 Did Not Disclose Plans in Advance

Consumer Bankruptcy

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