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Analysis Financial Reform Battle Continues over Dodd-Frank Law

ABI Bankruptcy Brief | January 3 2013
 
  

January 3, 2013

 
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ANALYSIS: FINANCIAL REFORM BATTLE CONTINUES OVER DODD-FRANK LAW

The fate of financial reform may be decided in the coming year as congressional leaders on both sides of the aisle attempt to modify the Dodd-Frank Act, the Washington Post reported today. In the two years since Congress passed the far-reaching regulatory overhaul, lawmakers have railed against the law for either not going far enough to reform Wall Street or being too burdensome to the industry. Republicans have sought to dismantle Dodd-Frank through a series of failed bills, placing Democrats on the defensive despite their own misgivings about the law. GOP leaders tucked language into the failed “fiscal cliff” bill that would have cut automatic funding to the Consumer Financial Protection Bureau and stripped regulators of the power to unwind "too-big-to-fail" institutions. Meanwhile, the Senate unanimously passed a bill on Dec. 28 that would direct the Government Accountability Office to examine the economic benefits large banks receive for being "too big to fail." The bill, sponsored by Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.), asks the agency to study whether institutions with more than $500 billion in assets enjoy favorable pricing on their debt because of perceptions that the government will always step in to prevent their collapse. It is unclear whether the House will take up the bill in the next session, but advocates of reform are encouraged by the bipartisan support in the Senate. Read more.

MORTGAGE-FEE PLAN FACES PUSHBACK

The federal regulator of Fannie Mae and Freddie Mac is running into opposition from lawmakers, state attorneys general and consumer advocates over a proposal to raise fees on loans in five states where foreclosures take the longest, the Wall Street Journal reported today. Officials in the states—New York, New Jersey, Illinois, Connecticut and Florida—say that the proposal by the Federal Housing Finance Agency (FHFA) would unfairly punish them for taking steps to protect borrowers from wrongful foreclosures. The five states are "judicial" states where lenders must seek court approval before a foreclosure can be completed. This can make the foreclosure process take longer, and the FHFA says that the delays cause Fannie Mae and Freddie Mac to lose more money on foreclosures in those states. Read more. (Subscription required.)

ANALYSIS: RISK SEEN IN SOME MORTGAGE BONDS

After a surge in bonds backed by mortgages on commercial properties, some investors are finding cracks in the foundations, the Wall Street Journal reported today. Investors flocked to these bonds, which are made up of pools of loans linked to properties such as shopping malls and hotels, because of the relatively high yields they offered. But that demand has sent prices soaring, and yields tumbling to record lows. As well, some investors remain worried that defaults on these loans remain at historically high rates. In November, 9.71 percent of commercial-mortgage loans tied to these securities were at least 30 days delinquent, according to data provider Trepp. Delinquency rates were below 1 percent in October 2008. Nevertheless, investors are buying both older bonds, which were issued when underwriting standards were looser, as well as new ones. Sales of such bonds rose 46 percent to $44 billion in 2012, according to data provider Commercial Mortgage Alert. Richard Hill, a strategist at RBS Securities in Stamford, Conn., forecasts sales will rise to $65 billion in 2013, the highest since the record high of $228 billion in 2007. Read more. (Subscription required.)

ABA: CONSUMERS PAYING DOWN DEBT DESPITE OBSTACLES

The American Bankers Association said today that consumers continued to pay down debt in the third quarter of 2012, but slow job growth and the expiration of a tax cut could mean it will become more difficult to repay loans, Reuters reported. The composite ratio's delinquency rate fell to 2.16 percent of all accounts in the third quarter from 2.24 percent in the second quarter, the ABA said. Bank card delinquencies, which are not part of the composite, fell to 2.75 percent during the quarter, the lowest level since 1994, the group said. Read more.

COMMENTARY: WHAT IS INSIDE AMERICA'S BANKS?

Though the nation's political leaders and bankers have made efforts over the past four years to save the financial industry, clean up the banks, and reform regulation in order to restore trust and confidence in the American financial system, more work is still needed, according to a commentary in the latest edition of the Atlantic Monthly. Banks today are bigger and more opaque than ever, and they continue to behave in many of the same ways they did before the 2008 crash, according to the commentary. According to Gallup, back in the late 1970s, three out of five Americans said that they trusted big banks “a great deal” or “quite a lot.” Since the financial crisis of 2008, trust has evaporated as fewer than one in four respondents in June 2012 told Gallup that they had faith in big banks—a record low. A recent survey by Barclays Capital found that more than half of institutional investors did not trust how banks measure the riskiness of their assets. When hedge-fund managers were asked how trustworthy they find “risk weightings”—the numbers that banks use to calculate how much capital they should set aside as a safety cushion in case of a business downturn—about 60 percent of those managers answered 1 or 2 on a five-point scale, with 1 being “not trustworthy at all.” None of them gave banks a 5. At the heart of the problem is a worry about the accuracy of banks’ financial statements. Accounting rules have proliferated as banks, and the assets and liabilities they contain, have become more complex. Yet the rules have not kept pace with changes in the financial system, according to the commentary. Read the full commentary.

OUTLOOK FOR 2013 RESTRUCTURINGS, PROVIDED BY BLOOMBERG BRIEF

Read what leading restructuring professionals are saying about the coming activity predicted for the retail, real estate, financial services and energy industries this year. Also explore a comprehensive 2012 bankruptcy year-in-review with charts, tables and data. The report is provided as an exclusive to ABI members by our partners at Bloomberg Brief. To download your copy of the “Bloomberg Brief Bankruptcy & Restructuring 2012 Review & 2013 Outlook” report, please click here.

For more on the 2013 bankruptcy outlook, be sure to watch Bloomberg Law Bankruptcy Columnist Bill Rochelle’s latest video post.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: VIEIRA V. ANDERSON (IN RE BEACH FIRST NATIONAL BANCSHARES INC.; 4TH CIR.)

Summarized by Jennifer Lyday of Womble Carlyle Sandridge & Rice, LLP

The Court of Appeals for the Fourth Circuit affirmed the district court's judgment, which dismissed the trustee's complaint for negligence and breach of fiduciary duty against the former officers and directors of a now bankrupt bank because the trustee did not have standing to bring the derivative claims under FIRREA as the right to pursue such claims belongs to the FDIC, regardless of whether the FDIC wishes to pursue the claims.

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: COULD 2013 SEE LEHMAN BEING PUT BACK TOGETHER AGAIN?

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog features experts offering their predictions for 2013, including the possible reconstitution of Lehman Brothers.

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

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

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Pension Proposal Aims to Ease Future Burden on States and Cities

ABI Bankruptcy Brief | July 9, 2013
 
  

July 9, 2013

 
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  NEWS AND ANALYSIS   

PENSION PROPOSAL AIMS TO EASE FUTURE BURDEN ON STATES AND CITIES

Sen. Orrin Hatch (R-Utah), the senior Republican on the Senate Finance Committee, is set to introduce legislation that would allow states and cities to exit the pension business while still giving public workers the type of benefits they want, the New York Times DealBook blog reported today. It involves a tax-law change that would enable governments to turn their pension plans over to life insurers. Big players like MetLife and Prudential, to cite just two, might thus step into shoes now occupied by the likes of CalPERS, California’s giant state pension system. Any such change would be voluntary, said Hatch, who along with Senate Finance Committee Chairman Max Baucus (D-Mont.) is committed to working on a tax overhaul package this year, and the public-pension change could be one part of that. Working with insurers would not suddenly make trillions of dollars appear, but Hatch said that it would make costs more predictable and protect both retirees and taxpayers. The proposal “does not include an explicit or implicit government guarantee,” he said. Read more.

ANALYSIS: FINANCIAL CRISIS JUST A SYMPTOM OF DETROIT'S WOES

As officials in Detroit negotiate urgently with creditors and unions in a last-ditch effort to spare Detroit from plunging into the largest municipal bankruptcy in the nation’s history, residents say that the city has worse problems than its estimated $18 billion debt, the New York Times reported today. The Detroit police’s average response time to calls for the highest-priority crimes this year was 58 minutes, officials now overseeing the city say. The department’s recent rate of solving cases was 8.7 percent, far lower, the officials acknowledge, than rates in cities like Pittsburgh, Milwaukee and St. Louis. Kevyn D. Orr, the state-appointed emergency financial manager for Detroit, has said that the chances of filing for bankruptcy, a possibility that could be decided as early as this month, stand at 50-50. The prospect of a bankruptcy filing — a move that is extremely rare for cities and one that has never happened to an American city as populous as Detroit, with about 700,000 people — worries some residents. They say they fear that bankruptcy would add more stigma to a city that has contracted alarmingly in the decades since it was the nation’s fourth largest, starting in the 1920s, and that it might worsen already bare-bones services. Read more.

CFTC WEIGHS DELAY OF SWAPS RULES

Commodity Futures Trading Commission Chair Gary Gensler is proposing to partially delay controversial cross-border derivatives rules slated to go into effect Friday, the Wall Street Journal reported today. The move is an about-face for Gensler, who previously refused to delay a requirement that U.S. banks operating abroad comply with U.S. swaps rules, despite mounting pleas from fellow commissioners, lawmakers and overseas policy makers. Gensler now is floating a compromise that would implement some provisions almost immediately and delay others until the end of the year. The agency may vote as soon as Friday on the rules, which require that firms trading derivatives hold more capital and post collateral to a clearinghouse that secures the deal. Gensler's proposal comes after a tense meeting last week with Treasury Secretary Jacob Lew and Securities and Exchange Commission Chairman Mary Jo White. Lew pressed Gensler and White to better coordinate adoption and implementation of U.S. swaps rules. Lew has received complaints from policy makers and others about a lack of coordination between U.S. and foreign governments. Read more. (Subscription required.)

DODD-FRANK EXECUTIVE PAY RULE STILL IN LIMBO AMID PUSHBACK FROM CORPORATE AMERICA

Soon after Congress in 2010 approved the largest overhaul of financial regulation in generations, the Securities and Exchange Commission moved to enforce a provision requiring companies to disclose how much more their chief executives made than other employees, the Washington Post reported on Sunday. The agency just had to write a rule telling firms how to comply, but nearly three years later, the rule remains unfinished, with no sign of when it will be done. Within six months of the law’s passage in 2010, SEC staffers had circulated an early blueprint for the pay rule. They set a deadline for completing it by the end of 2011. The public was outraged over runaway executive compensation, and the pay disclosure seemed relatively straightforward, at least compared with many of the law’s other requirements. What the agency did not count on was the resistance mounted by big business. A lobbying campaign waged by business executives and the nation’s most prominent corporate associations undercut the momentum and effectively brought the agency’s work on the rule to a standstill. The efforts of business groups to influence the SEC’s work was especially effective because of their success in pressing a court challenge to another part of the financial overhaul legislation — in essence, an extension of their lobbying efforts. The threat of additional lawsuits has hung over the discussion between lobbyists and agency officials about the pay rule, and some opponents have warned that the agency could be sued again if it enforces it. Read more.

DELAWARE-ONLY BYLAWS ON SHAREHOLDER SUITS TO CHANGE LEGAL LANDSCAPE

A recent ruling in Delaware is poised to change the landscape in big-ticket corporate litigation—to the delight of many companies and the likely chagrin of some shareholders, the Wall Street Journal reported yesterday. Chancellor Leo Strine of the Delaware Court of Chancery late last month ruled that corporate boards may adopt bylaws requiring that most shareholder lawsuits against the companies be filed in Delaware. The ruling effectively gives the thousands of businesses incorporated in Delaware home-field advantage in shareholder suits. The Delaware Chancery Court, one of the country's most influential business courts, doesn't use juries and is regarded as relatively business friendly compared with other courts. Forcing shareholders to sue in Delaware—and only Delaware—is a way to forestall a wave of lawsuits getting filed in several courts every time a merger or other major corporate action is announced. Roughly 300 corporations have adopted Delaware-only provisions in recent years to stem a rising tide of multicourt shareholder litigation. Mergers and acquisitions, in particular, have provided fodder for suits outside of Delaware, with shareholder plaintiffs demanding jury trials in a variety of states to challenge deals. Read more. (Subscription required.)

MAKE SURE TO PRE-ORDER ABI'S NEWEST PUBLICATION UNDERSTANDING ORDINARY: A PRIMER ON FINANCIAL AND ECONOMIC CONSIDERATIONS FOR ORDINARY COURSE DEFENSES TO PREFERENCE ACTIONS

Understanding Ordinary: A Primer on Financial and Economic Considerations for the Ordinary Course Defenses to Bankruptcy Preference Actions provides practitioners and others exposed to bankruptcy preference matters with an overview of bankruptcy preference basics, as well as a detailed discussion of the ordinary course of business defense – both between parties and within industries. Nearly every chapter includes a legal note written by an expert in the field, and the book is replete with charts that help illustrate many of the book's concepts. The 168-page softbound publication will ship in late July. To pre-order, please click here (be sure to log-in to receive ABI member pricing).

NEW ABI LIVE WEBINAR ON JULY 15 TO FOCUS ON THE § 1111(b) ELECTION, PLAN FEASIBILITY AND CRAMDOWN ISSUES

Utilizing a case study, ABI's panel of experts will explore issues surrounding a lender’s decision on whether or not to make an election under § 1111(b), plan feasibility and voting. The abiLIVE panel will also walk attendees through the necessary mathematical analyses used to analyze these issues. The webinar will take place on July 15 from 1-2:15 p.m. ET. Special ABI member rate available! Click here to register.

ABI GOLF TOUR UNDERWAY; NEXT STOP IS THE NORTHEAST BANKRUPTCY CONFERENCE ON FRIDAY

The next stop for the ABI Golf Tour is the famed Newport National course in Newport, R.I., in conjunction with the Northeast Bankruptcy Conference on July 12. Final scoring to win the Great American Cup—sponsored by Great American Group—is based on your top three scores at seven scheduled ABI events, so play as many as you can before the tour wraps up at the Winter Leadership Conference in December. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! There's no charge to register or participate in the Tour.

ABI IN-DEPTH

NORTON JUDICIAL EXCELLENCE AWARD NOMINATIONS OPEN

Nominations are now open for the 8th Annual Judge William L. Norton Judicial Excellence Award, to be presented during the ABI luncheon at the annual meeting of the National Conference of Bankruptcy Judges on Nov. 1, 2013. The award is presented by ABI and Thomson Reuters each year to the current or retired bankruptcy judge whose career embodies the same continued dedication and outstanding contributions to the insolvency community as the award’s namesake, Judge Norton. Nominations are considered by a committee made up of representatives from the Norton treatise and past ABI presidents. Nomination forms are available from Clay Mattson at Thomson Reuters (clay.mattson@thomsonreuters.com).

NEW ABI "BANKRUPTCY IN DEPTH" ON-DEMAND CLE PROGRAM LOOKS AT PRINCIPLES OF PROPERTY OF THE ESTATE: DEMYSTIFYING EQUITABLE INTERESTS

In this 90-minute seminar, Profs. Andrew Kull of Boston University School of Law and Scott Pryor of Regent University School of Law provide an in-depth analysis of a legal principle that has become, in their words, "a long-lost area of the law": § 541 of the Bankruptcy Code. Seeking to demystify what is meant by "property of the estate" and, in particular, the distinction between legal or equitable interests of the debtor in property, Kull and Pryor describe the legal entanglements that ensue when legal title belongs to one person but the equitable title belongs to someone else. The cost of the seminar, which includes written materials and qualifies for 1.5 hours of CLE, is $95. To order or to learn more, click here.

ASSOCIATES: ABI'S NUTS & BOLTS ONLINE PROGRAMS HELP YOU HONE YOUR SKILLS WHILE SAVING ON CLE!

Associates looking to sharpen their bankruptcy knowledge should take advantage of ABI's special offer of combining general, business or consumer Nuts & Bolts online programs. Each program features an outstanding faculty of judges and practitioners explaining the fundamentals of bankruptcy, offering procedures and strategies tailored for both consumer and business attorneys. Click here to get the CLE you need at a great low price!

NEW CASE SUMMARY ON VOLO: RYAN V. U.S. (IN RE RYAN; 7TH CIR.)

Summarized by Penelope Bach of Sulaiman Law Group

The Seventh Circuit Court of Appeals affirmed the decision of the the bankruptcy court holding that the bankruptcy court's interpretation of § 506(d) as stated in Dewsnup v. Timm (502 U.S. 410 (1992)) applies in chapter 13 cases as well as chapter 7 cases.

There are more than 900 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: SUPREME COURT TO CONSIDER WHETHER STERN ALLOWS WAIVER OR CONSENT

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post takes a closer look in at Executive Benefits Insurance Agency v. Arkison, No. 12-1200, which was granted certiorari on June 24. The post said that the Supreme Court has set the stage to flesh out the practical impact of Stern v. Marshall because it squarely raises the issue of whether a party can waive its right to insist on a trial before an Article III tribunal and the related question of whether consent is permissible.

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

When will the dowward trend of consumer bankruptcy filings turn around?

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

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  CALENDAR OF EVENTS
 

2013

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

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- Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization
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- Detroit Consumer Bankruptcy Conference
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Final Report of the ABIs Ethics Task Force Provides Guidance to Both Consumer and Business

ABI Bankruptcy Brief | April 25 2013
 
  

April 25, 2013

 
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  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.

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: 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!

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.

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.

INSOL INTERNATIONAL

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

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NEXT EVENTS:

 

 


NYCBC 2013
May 15, 2013
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ASM 2013
May 16, 2013
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COMING UP

 

 

 

ASM 2013
May 21-24, 2013
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ASM 2013
May 29, 2013
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ASM 2013
June 7, 2013
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ASM 2013
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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NE 2013
July 11-14, 2013
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ASM 2013
July 18-21, 2013
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MA 2013
Aug. 8-10, 2013
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  CALENDAR OF EVENTS
 

2013

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
- ABI Live Webinar: Consumer Class Actions
     May 29, 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.


 
 
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Restructuring Experts Recession Did Not Improve Corporate Governance

ABI Bankruptcy Brief | February 5 2013
 
  

February 12, 2013

 
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  NEWS AND ANALYSIS   

RESTRUCTURING EXPERTS: RECESSION DID NOT IMPROVE CORPORATE GOVERNANCE

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

PRIVATE EQUITY BRACING FOR BUYOUT-BOOM SHAKEOUT

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

REPORT: SEC'S REVOLVING DOOR HURTS ITS EFFECTIVENESS

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

SPECULATIVE BETS PROVE RISKY AS SAVERS CHASE PAYOFF

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

COMMENTARY: QUIETLY KILLING A CONSUMER WATCHDOG

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

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

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

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

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

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

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

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

Eric E. Walker of Perkins Coie LLP (Chicago)

Click here to register!

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

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

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

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

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

ABI IN-DEPTH

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

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

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

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

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

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

Summarized by David Hercher of Miller Nash LLP

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

There are more than 750 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: CASE FOCUSES ON A COMMERCIAL LANDLORD'S CLAIM FOR INDEMNIFICATION

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

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

ABI Quick Poll

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

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

INSOL INTERNATIONAL

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

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NEXT EVENT:

 

 

 

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

 

 

 

COMING UP:

 

 

 

ACBPIKC 2013
Feb. 20-22, 2013
Register Today!

 

 

 

 

9th Annual Wharton Restructuring and Distressed Investing Conference
Feb. 22, 2013
Register Today!

 

 

 

 

 

Paskay 2013
March 7-9, 2013
Register Today!

 

 

 

 

 

BBW 2013
March 22, 2013
Register Today!

 

 

 

 

 

"Nuts and Bolts" Program at ASM- A Must for Junior Professionals or Those New to Bankruptcy Practice
April 18, 2013
Register Today!

 

 

 

 

 

ASM 2013
April 18-21, 2013
Enter code "LOVEASM50" at checkout to save $50 on a new registration this week!
Register Today!

 

 

 

 

 

ASM 2013
May 16, 2013
Register Today!

 

 

 

 

ASM 2013
May 21-24, 2013
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ASM 2013
June 7, 2013
Register Today!


 
   
  CALENDAR OF EVENTS
 

2013

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

     February 22, 2013 | Philadelphia, Pa.

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


  

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

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

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


 
 
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Analysis Troubled Home Equity Loans Loom on the Horizon

ABI Bankruptcy Brief | July 17, 2012
 
  

July 17, 2012

 
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  NEWS AND ANALYSIS   

ANALYSIS: TROUBLED HOME EQUITY LOANS LOOM ON THE HORIZON

Even a strong recovery is unlikely to rescue many homeowners who are struggling under the weight of multiple mortgages, the New York Times reported today. At Wells Fargo, for example, in the quarter ended March 31, nearly 44 percent of the bank's home equity borrowers paid only the minimum amount due. The Office of the Comptroller of the Currency published in its spring 2012 "Semiannual Risk Perspective" that almost 60 percent of all home equity line balances would start requiring payments of both principal and interest between 2014 and 2017. The amounts owed in these lines of credit climb significantly in coming years. While $11 billion in home equity lines are starting to require principal and interest payments this year, the amount jumps to $29 billion by 2014, the office said. That is followed by a surge to $53 billion in 2015 and $73 billion in 2017. For 2018 and beyond, it is $111 billion. The properties backing many of these loans are no longer worth the amounts borrowed on them. In the first quarter of 2012, the top four banks held $295.1 billion in revolving residential lines of credit, according to Amherst Securities. Using data from the Federal Reserve, Amherst said that Bank of America held $101.4 billion; Wells Fargo, $93.3 billion; JPMorgan Chase, $84.4 billion; and Citigroup, $15.9 billion. As a result, the risks to borrowers cited in the comptroller's office report will also be faced by their lenders. Read more.

"UNDERWATER" MORTGAGE REFINANCING GROWS, BUT CRITICS PRESS FOR MORE ASSISTANCE

The number of homeowners refinancing their mortgages under a revamped federal program grew in May, but critics are still pressing a federal regulator to do more, the Wall Street Journal reported today. For the first five months of 2012, more than 78,000 homeowners who owe more than 105 percent of their property's value have refinanced using the government’s Home Affordable Refinance Program (HARP). That was up from about 60,000 in all of 2011, the Federal Housing Finance Agency said in a report yesterday. In May alone, 21,605 homeowners who owe more than 105 percent of their home's current value completed refinances through HARP. That was up from 15,371 in April and only 4,168 in May 2011. However, relatively few homeowners who are deeply "underwater"—meaning they owe more on their properties than their homes are worth—have completed the refinancing process. Only about 11,000 homeowners who owe more than 125 percent of their home's value have refinanced under HARP to date. Those numbers may rise further since a method to package those loans into mortgage-backed securities became available on June 1. Nevertheless, critics and analysts note that some of the biggest lenders are only refinancing their existing borrowers. They also say that the HARP rules make it hard for borrowers to refinance their loans with new lenders, causing consumers to pay higher-than-necessary rates. Read more. (Subscription required.)

ANALYSIS: NEBRASKA, NOT CALIFORNIA, IS THE OVERALL LEADER OF MUNICIPAL COLLAPSES

Quirks in local, state and federal law have made Nebraska home to almost one-fifth of the more than 220 chapter 9 bankruptcies filed in the U.S. since 1981, according to a nationwide review of federal court records, Bloomberg News reported yesterday. California, with more than 20 times Nebraska's population, is second, followed by Texas and Alabama. California may soon add to its total, as San Bernardino is considering whether to seek court protection this week. The main difference between Nebraska and other states is the kind of governmental bodies that file for bankruptcy: No town, city or county has sought court protection in the state. All 45 of Nebraska’s chapter 9 cases were by special tax districts, most of them owned by residential subdivision developers who used property-tax revenue to pay for streets, sewers and other infrastructure. Read more.

HSBC EXECUTIVES GRILLED IN U.S. SENATE AMID MONEY LAUNDERING ALLEGATIONS

HSBC Holdings Plc executives were grilled by lawmakers over claims that bank affiliates gave terrorists, drug cartels and criminals a portal into the U.S. financial system by failing to guard against money laundering, Bloomberg News reported today. Irene Dorner, president and chief executive officer of HSBC North America Holdings Inc., and other executives appeared in front of the Senate's Permanent Subcommittee on Investigations today at a hearing following the panel’s 335-page report that described a decade of compliance failures by Europe's biggest bank. One of the executives, David Bagley, HSBC's head of group compliance, said at the hearing that he would resign. London-based HSBC enabled drug lords to launder money in Mexico, did business with firms linked to terrorism and concealed transactions that bypassed U.S. sanctions against Iran, Senate investigators said in the report. "The problem here is that some international banks abuse their U.S. access," Senator Carl Levin (D-Mich.), who heads the subcommittee, said at the start of the hearing. “The end result is that the U.S. affiliate can become a sinkhole of risk for an entire network of bank affiliates and their clients around the world playing fast and loose with U.S. rules." Read more.

Click here to read the prepared witness testimony.

CAPITAL ONE SEES CREDIT CARD DELINQUENCIES INCREASE IN JUNE

Capital One Financial Corp. said that delinquencies at its U.S. credit card business rose in June, reversing a four-month decline, while charge-offs eased, MarketWatch.com reported yesterday. Capital One's 30-day delinquency rate for U.S. credit cards edged up to 3.16 percent last month from 3.14 percent in May, according to a filing with the Securities and Exchange Commission. At its international credit card business, the rate increased to 4.84 percent from 4.83 percent a month earlier. Auto-loan delinquencies fell to 5.55 percent from 5.76 percent. Read more.

ABI IN-DEPTH

“SUBJECTING BUSINESS PROJECTIONS TO SCRUTINY IN VALUATION DISPUTES” WEBINAR TO BE HELD ON JULY 30!

Reassembling the speakers from the highest-rated panel at the New York City Bankruptcy Conference this year, ABI will be holding a live webinar on July 30 at 11 a.m. ET titled, "Subjecting Business Projections to Scrutiny in Valuation Disputes." Panelists include:

  • Moderator David Pauker of Goldin Associates, LLC (New York)
  • Martin J. Bienenstock of Proskauer (New York)
  • David M. Hillman of Schulte Roth & Zabel LLP (New York)
  • Bankruptcy Judge Robert E. Gerber (S.D.N.Y.)

The panel will address:

  • How much deference should management projections be accorded?
  • How do you determine whether projections are unrealistically optimistic or pessimistic?
  • What is the relevance of "market consensus?"
  • How do management’s incentives impact projections?

The webinar is available to ABI members for $75 and is approved for 1.0 CLE hours in Calif., Ga., Hawaii, Ill., N.Y. (approved jurisdiction policy) S.C. and Texas. CLE approval is pending in Del., Fla., Pa. and Tenn. To register, please click here.

LATEST CASE SUMMARY ON VOLO: PEARSON EDUCATION, INC. V. ALMGREN (8TH CIR.)

Summarized by Sarah Smegal of Bartlett Hackett Feinberg P.C.

The Eighth Circuit Court of Appeals affirmed the orders of the bankruptcy court striking the appellants' demand for a jury trial on the amount of damages in relation to copyright infringement claims and denying an award of attorney's fees sought pursuant to 17 U.S.C. Sect. 505.

More than 550 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: REACTIONS TO THE CREDIT CARD SETTLEMENT

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post looks at reactions to a proposed deal, announced late on Friday, that would transfer almost $7.5 billion from the credit card networks to merchants. In exchange for that payoff, Visa and MasterCard will get a wide-ranging release from future litigation.

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

ABI Quick Poll
The anti-modification rule for home mortgages in chapter 13 should be repealed, subjecting mortgage debts to bifurcation like any other secured claim.

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

IS YOUR ABI MEMBERSHIP PROFILE CURRENT?

Keeping a current profile will allow you to benefit from one of ABI's most important services - networking. When you update your profile, you are putting your most valuable information in the membership directory. Be sure to include your areas of expertise, firm information, education and join any other committees that are of interest. Click here to update your profile.

INSOL INTERNATIONAL

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

  

 

NEXT EVENT:

 

SE 2012
July 25-28, 2012
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COMING UP

 

MA 2012
August 2-4, 2012
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SE 2012
Sept. 13-14, 2012
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SW 2012
Sept. 13-15, 2012
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NYU 2012
Sept. 19-20, 2012
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NABMW 2012
Oct. 4, 2012
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SE 2012
Oct. 5, 2012
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SE 2012
Oct. 5, 2012
Register Today!

 

 

SE 2012
Oct. 8, 2012
Register Today!

 

 

SE 2012
Oct. 18, 2012
Register Today!

 
   
  CALENDAR OF EVENTS
 

July
- Southeast Bankruptcy Workshop
     July 25-28, 2012 | Amelia Island, Fla.
-Valuation Webinar, July 30 at 11 a.m. ET

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

September
- Complex Financial Restructuring Program
     September 13-14, 2012 | Las Vegas, Nev.
- Southwest Bankruptcy Conference
     September 13-15, 2012 | Las Vegas, Nev.
- 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization
     September 19-20, 2012 | New York, N.Y.


  

October
- Nuts & Bolts for Young and New Practitioners - KC
     October 4, 2012 | Kansas City, Mo.
- Midwestern Bankruptcy Institute Program, Midwestern Consumer Forum
     October 5, 2012 | Kansas City, Mo.
- Bankruptcy 2012: Views from the Bench
     October 5, 2012 | Washington, D.C.
- Chicago Consumer Bankruptcy Conference
     October 8, 2012 | Chicago, Ill.
- International Insolvency and Restructuring Symposium
     October 18, 2012 | Rome, Italy

 
 
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Analysis Firms in Chapter 11 Face Fast Trip to Auction Block

ABI Bankruptcy Brief | January 15 2013
 
  

January 15, 2013

 
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  NEWS AND ANALYSIS   

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

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

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

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

RECOVERY IN U.S. SAVING 8 MILLION UNDERWATER HOMEOWNERS

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

401(k) BREACHES UNDERMINING RETIREMENT SECURITY FOR MILLIONS

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

REPORT: RANKS OF WORKING POOR INCREASING

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

E-FILING AND THE EXPLOSION IN TAX-RETURN FRAUD

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

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

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

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

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

Register today!

ABI IN-DEPTH

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

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

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

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

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

Eric E. Walker of Perkins Coie LLP (Chicago)

Click here to register!

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

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

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

There are more than 700 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: PARALLELS BETWEEN THE SUBPRIME MORTGAGE LOAN AND STUDENT LOAN CRISES

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

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

ABI Quick Poll

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

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

INSOL INTERNATIONAL

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

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NEXT WEEK:

 

 

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

 

 

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

2013

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

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


  

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

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

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


 
 
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CFPB Provides Guidance on Mortgage Servicing Rules

ABI Bankruptcy Brief | October 3, 2013
 
  

October 15, 2013

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

CFPB PROVIDES GUIDANCE ON MORTGAGE SERVICING RULES

The Consumer Financial Protection Bureau (CFPB) today released a bulletin and interim final rule to provide greater clarity to the market concerning mortgage servicing rules that take effect in January 2014, according to a CFPB release. The clarifications address communications with consumers who have filed for bankruptcy or invoked certain protections under the Fair Debt Collection Practices Act. In January 2013, the CFPB issued rules to establish stronger protections for struggling homeowners, including those facing foreclosure. Several observers suggested that the rule may conflict with the automatic stay and other debtor protections. To read the CFPB's bulletin released today, please click here.

To read the interim final rule, please click here.

The abiWorkshops series' inaugural program, "Risky Times for Secured Lenders and Servicers," on Nov. 6 will cover the new CFPB mortgage servicing rules. Attend in person or via live webstream!

PATIENTS MIRED IN COSTLY CREDIT FROM DOCTORS

In dentists' and doctors' offices, hearing aid centers and pain clinics, American health care is forging a lucrative alliance with American finance, according to a New York Times report yesterday. A growing number of health care professionals are urging patients to pay for treatment not covered by their insurance plans with credit cards and lines of credit that can be arranged quickly in the provider's office. The cards and loans, which were first marketed about a decade ago for cosmetic surgery and other elective procedures, are now proliferating among older Americans, who often face large out-of-pocket expenses for basic care that is not covered by Medicare or private insurance. The American Medical Association and the American Dental Association have no formal policy on the cards, but some practitioners refuse to use them, saying that they threaten to exploit the traditional relationship between provider and patient. Doctors, dentists and others have a financial incentive to recommend the financing because it encourages patients to opt for procedures and products that they might otherwise forgo because they are not covered by insurance. It also ensures that providers are paid upfront -- a fact that financial services companies promote in marketing material to providers. Many of these cards initially charge no interest for a promotional period, typically six to 18 months, an attractive feature for people worried about whether they can afford care. But if the debt is not paid in full when that time is up, costly rates -- usually 25 to 30 percent -- kick in. If payments are late, patients face additional fees and, in most cases, their rates increase automatically. The higher rates are often retroactive, meaning that they are applied to patients' original balances, rather than to the amount they still owe. Read more.

For further analysis, be sure to read a recent post on ABI's Blog Exchange examining the benefits and pitfalls of medical credit cards.

SHUTDOWN LIKELY TO PROLONG FED'S STIMULUS

The government shutdown and debt-ceiling fight are clouding the outlook for the global economy and markets, but they are bringing clarity to one area: The Federal Reserve is now likely to keep its foot on the monetary gas pedal even longer to offset damage from the standoff, the Wall Street Journal reported yesterday. Two weeks into the shutdown, it is becoming clearer that economic growth will be at least a little slower. Businesses and consumers are less confident about the economy's near-term course than they were before the shutdown started. And the most closely watched official gauges of economic activity -- the government reports suspended by the shutdown -- will be unlikely to provide reliable readings for months. The latest events in Washington, D.C., make Fed officials appear judicious in their decision last month to keep their $85 billion-a-month bond-buying program unchanged despite widespread market expectations of a pullback. Read more. (Subscription required.)

COMMERCIAL-PROPERTY LENDING BEGINS TO RAMP UP

Many U.S. banks are starting to see new growth from the old business of commercial real estate loans, the Wall Street Journal reported today. As of June 30, U.S. banks had $991.2 billion in total commercial real estate loans, up 3.3 percent from a year earlier, according to research firm SNL Financial. JPMorgan Chase & Co. on Friday reported that outstanding commercial-real-estate loans rose to $61.5 billion in the third quarter, a 12 percent increase from a year earlier. Dolben Co., a developer of apartment complexes in the New England and mid-Atlantic regions, has seen more banks willing to bid on loans for projects in the past two years than immediately following the recession, said Deane Dolben, president of the Woburn, Mass.-based company. The growth and optimism are a turnaround from the slump caused when banks were hammered during the financial crisis as construction loans made during the real-estate boom began to sour. Total commercial real estate loans outstanding by U.S. banks declined to $950 billion in 2011, a 25 percent plunge from 2008, according to SNL Financial. Read more. (Subscription required.)

ANALYSIS: BUYOUT FIRMS COMBING U.S. FOR FUNDS TO INVEST

Across the country, nearly 2,000 private-equity firms are making pitches to state retirement systems, corporate pension funds and wealthy investors in the hope of raising nearly three-quarters of a trillion dollars for their next, new funds -- more than what was raised over the last two years combined, the New York Times DealBook blog reported yesterday. Huge buyout funds raised large sums during the golden age of private equity that went on a frenzied acquisition spree between 2005 and 2007. Using vast amounts of borrowed money, they bought big and small companies, often at sky-high prices. That sequence turned out to be a recipe for disaster when the financial crisis erupted in 2008. Buyout funds that started to invest in 2006, for instance, have been among the industry's worst performing. The median internal rate of return after fees is 8.2 percent, according to the research firm Preqin, the lowest since it started tracking buyout performance in 1980 and about half the average for the previous five years. Read more.

ABI LAUNCHES SIXTH ANNUAL WRITING COMPETITION FOR LAW STUDENTS

Law school students are invited to submit a paper between now and March 4, 2014 for ABI's Sixth Annual Bankruptcy Law Student Writing Competition. ABI will extend a complimentary one-year membership to all students who participate in this year's competition. Eligible submissions should focus on current issues regarding bankruptcy jurisdiction, bankruptcy litigation, or evidence issues in bankruptcy cases or proceedings. The first-place winner, sponsored by Invotex Group, Inc., will receive a cash prize of $2,000 and publication of his or her paper in the ABI Journal. The second-place winner, sponsored by Jenner & Block LLP, will receive a cash prize of $1,250 and publication of his or her paper in an ABI committee newsletter. The third-place winner, sponsored by Thompson & Knight LLP, will receive a cash prize of $750 plus publication of his or her paper in an ABI committee newsletter. For competition participation and submission guidelines, please visit http://papers.abi.org.

RISKY TIMES FOR SECURED LENDERS AND SERVICERS TO BE FOCUS OF FIRST ABI WORKSHOP PROGRAM- ATTEND IN PERSON OR VIA LIVE WEBSTREAM!

You will not want to miss the abiWorkshops series' inaugural program, "Risky Times for Secured Lenders and Servicers." The program is cosponsored by TMA (Chesapeake), IWIRC (D.C./Greater Maryland) and RMA (Potomac), and will be held on Nov. 6 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 6 program include:

- Living with the New CFPB Mortgage Servicing Rules
- Business Lending: Navigating What Lies Ahead
- Business Lending: Recent Legal Developments

For more information or to register for the "Risky Times for Secured Lenders and Servicers" abiWorkshop on Nov. 6, please click here.

EXPERTS TO EXAMINE STUDENT LENDING AND BANKRUPTCY AT ABI WORKSHOP PROGRAM ON NOV. 15

Experts will tackle the hot topic of student lending issues in bankruptcy on the abiWorkshops series' new program, "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" The program will be held on Nov. 15 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 15 program include:

- Student Lending Today: Who Borrows, How Much, Delinquency & Default Trends
- Repayment Options: Income Based Repayment and New Lender/Servicer Programs
- Litigation under Sect. 523(a)(8): What Proofs Are Needed? Evidence Demonstration

For more information or to register for the "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" abiWorkshop on Nov. 15, please click here.

ABI GOLF TOUR UNDERWAY; LAST STOP FOR 2013 IS WINTER LEADERSHIP CONFERENCE IN DECEMBER

The 7th and final stop for the 2013 ABI Golf Tour is on Dec. 5 at the Trump National Golf Club, held in conjunction with ABI’s Winter Leadership Conference. Final scoring to win the Great American Cup — sponsored by Great American Group — is based on your top three scores from the seven ABI events. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! A 22-handicapper won the tour event at July’s Southeast Bankruptcy Workshop. There's no charge to register or participate in the Tour.

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: UTNEHMER V. CRULL (IN RE UTNEHMER; 9TH CIR.)

Summarized by Hilda Montes de Oca of the U.S. Bankruptcy Court for the Central District of California

Applying California partnership law, the Ninth Circuit Bankruptcy Appellate Panel reversed the bankruptcy court because it erred when it decided that a partnership existed between the debtor defendant and plaintiff creditor based upon the terms of a loan agreement. As there was no partnership, the debtor owed no fiduciary obligations to the creditor. The BAP further found that the bankruptcy court used the wrong mens rea standard for defalcation. As a result, the bankruptcy court erred in determining that debtor's debt to creditor was excepted from discharge as a defalcation by a fiduciary pursuant to § 523(a)(4).

There are more than 1,000 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: FURTHER EXAMINATION OF MEDICAL CREDIT CARDS

The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent blog post further examines the benefits and pitfalls of the growing trend of medical credit cards.

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

Does the bankruptcy court's Section 105 power enable it to surcharge the debtor's exempt property?

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

INSOL INTERNATIONAL

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

2013

October
- International Insolvency & Restructuring Symposium
    Oct. 25, 2013 | Berlin, Germany

November
- abiWorkshop: "Risky Times for Secured Lenders and Servicers"
   Nov. 6, 2013 | Alexandria, Va.
- Complex Financial Restructuring Program
   Nov. 7, 2013 | Philadelphia, Pa.
- Corporate Restructuring Competition
   Nov. 7-8, 2013 | Philadelphia, Pa.
- Detroit Consumer Bankruptcy Conference
   Nov. 11, 2013 | Detroit, Mich.
-abiWorkshop: "You Can't Discharge Student Loans in Bankruptcy - Or Can You?"
   Nov. 15, 2013 | Alexandria, Va.

  



- Delaware Views from the Bench
   Nov. 25, 2013 | Wilmington, Del.

December
- Winter Leadership Conference
    Dec. 5-7, 2013 | Rancho Palos Verdes, Calif.
January
- Western Consumer Bankruptcy Conference
    Jan. 20, 2014 | Las Vegas, Nev.
- Rocky Mountain Bankruptcy Conference
    Jan. 23-24, 2014 | Denver, Colo.


 
 
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