Consumer Debt

CREDIT CARD BORROWERS STILL PAYING THEIR BILLS ON TIME

Customers of the largest credit card issuers predominantly continued to pay their bills on time in July, Dow Jones Newswires reported yesterday. Credit card lending in particular has been a bright spot for big banks since the recession ended because consumers have made paying their monthly bills a priority and been more hesitant to carry large balances. That has allowed lenders to boost earnings by setting aside less money to cover potential loan losses, and it more recently led some banks to loosen their loan criteria, according to the financial services unit of credit bureau TransUnion. On Tuesday, TransUnion said that the national credit card delinquency rate fell to 0.63 percent in the second quarter from 0.73 percent in the first quarter. Major credit card issuers including Discover Financial Services, Bank of America Corp. and Capital One Financial Corp. said yesterday that their portfolios continued to improve in July, with delinquency rates and net charge-offs falling for most. Read more.

WEEKLY UNEMPLOYMENT CLAIMS RISE

The number of U.S. workers filing applications for jobless benefits rose last week, though the overall trend suggests that the labor market has improved slightly since early this summer, the Wall Street Journal reported today. Initial jobless claims increased by 2,000 to a seasonally adjusted 366,000 in the week ended Aug. 11, the Labor Department said today. Claims for the week ending Aug. 4 were revised up to 364,000 from an initially reported 361,000. The four-week moving average of claims fell by 5,500 to 363,750, the lowest level since the end of March. Read more. (Subscription required.)

NO CRIMINAL CASE IS LIKELY IN LOSS AT MF GLOBAL

A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives, the New York Times DealBook blog reported yesterday. After 10 months of stitching together evidence on the firm's demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear. The hurdles to building a criminal case were always high with MF Global, which filed for bankruptcy in October after a huge bet on European debt unnerved the market. This week James Giddens, the MF Global liquidating trustee, said he would assist plaintiffs attorneys in civil suits against Jon Corzine and other top executives. But a lack of charges in the largest Wall Street blowup since 2008 is likely to fuel frustration with the government's struggle to charge financial executives. Just a few individuals – none of them top Wall Street players – have been prosecuted for the risky acts that led to recent failures and billions of dollars in losses. Read more.

REPORT: MUNICIPAL BONDS NOT AS SAFE AS ONCE THOUGHT

The Federal Reserve Bank of New York released a report yesterday saying that municipal bonds, widely seen as one of the safest investments, actually default more often than most people realize, the New York Times reported today. The economists said that the widely held belief that municipal bonds almost never default is based on only a narrow slice of the market — the safest part, consisting of bonds that are graded by the main ratings agencies when brought to market. When the researchers looked at a much broader sample, which included unrated bonds, they found there have been about 36 times as many municipal defaults over the past 40 years as conventional wisdom suggests. For example, Moody’s Investors Service has reported that from 1970 to 2011, there were only 71 municipal bond defaults. However, the Fed report counted 2,521 defaults in that time. Read more.

Click here to read the Federal Reserve Bank of New York's report.

In related news, barely half of U.S. states allow their local governments to file for bankruptcy, but Fitch Ratings said that it will continue to factor in the probability of a chapter 9 filing for all tax-supported local debt it rates, Reuters reported yesterday. Fitch added a new section on the legal and structural framework of debt in its criteria for rating U.S. local government bonds supported by taxes, highlighting growing concerns for municipal bankruptcies and explaining its views of the ties between local and state governments. Only 24 out of 50 states currently allow local governments to file for bankruptcy, "but Fitch believes that in an extreme case..the state would make the legal provisions necessary to file," it said. For decades, bankruptcies in the $3.7 trillion municipal bond market were rare. There have been nine chapter 9 municipal bankruptcy filings so far this year, compared with 13 in all of 2011. Read more.

REGISTRATION NOW OPEN FOR THE 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 at this year's conference 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. Click here to register!

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: U.S. V. CARVER (6TH CIR.)

Summarized by Nicholas Miller of Neal, Gerber & Eisenberg, LLP

In affirming the lower court's ruling, the Sixth Circult held that (1) convictions for concealing assets and making a false statement under oath in bankruptcy would stand because evidence showed that the defendant (Carver) knowingly failed to disclose to the bankruptcy court a valuable wine collection and knowingly and falsely stated that he had sold the collection before the petition date; (2) Carver's sentence was procedurally reasonable because the district court properly calculated the amount of damage and number of victims caused by his crimes; and (3) his sentence was substantively reasonable because the district court, in fact, gave him a below-Guidelines sentence.

There are more than 600 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: BUSTING THE MYTH OF GLASS STEAGALL

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post argues that restoring Glass-Steagall would be a remedy that is much like the Volcker rule: simple to say, hard to do.

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 Twombly/Iqbal rule for pleading ‘plausible’ claims has been applied too stringently in dismissing avoidance actions for failure to state a claim.

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

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

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

INSOL INTERNATIONAL

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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

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

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

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

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

REPORT: BANKRUPTCY BIDDER PROTECTIONS CLIMBED IN 2012

A report from Morgan Joseph TriArtisan LLC, an investment bank that focuses on the middle market, found that bankruptcy bidder protections hit their highest level in recent years, the Wall Street Journal Bankruptcy Beat blog reported today. The report found that the average amount of bidder protections a company offered its lead bidder last year was 4.4 percent of the purchase price, while average bidder protections between 2008 and 2011 hovered between 3.5 and 3.7 percent. (They were a low 2.6 percent in 2007, before the economic downturn hit.) Bidder protections include the break-up fee that a company pays its stalking-horse bidder, as well as expense reimbursements, which cover the legal and due-diligence fees a stalking horse incurs as it puts its bid together. The average break-up fee last year was 3.7 percent of the purchase price compared to 2.5-2.9 percent in prior years, while the average expense reimbursement was 2.3 percent versus a past range of 0.4-1.6 percent. Read the full report.

COMMENTARY: A BETTER WAY TO END "TOO BIG TO FAIL"

Big banks and their defenders insist that the changes proposed in the Terminating Bailouts for Taxpayer Fairness Act—which would require them to boost the value of their stock and other equity to 15 percent of the value of their total assets—are unnecessary and would have dangerous consequences for the U.S. economy and our financial competitiveness, according to a commentary by Prof. David Skeel in today's Wall Street Journal. Both of these claims are wrong, according to Skeel, but in making them, the banks have accidentally pointed the way to a far more promising strategy for finally ending "too big to fail." Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.) introduced the Terminating Bailouts for Taxpayer Fairness Act on April 24, which would require U.S. financial institutions with more than $500 billion in assets to substantially increase their "equity capital." The banks further insist that Brown-Vitter would force them to cut back their lending to businesses just as the U.S. economic recovery is getting underway, and to shed assets to create the required 15 percent capital buffer. But as Bank of England's Robert Jenkins has argued, it is a widely held myth that banks reduce lending simply because capital obligations are increased. Still, according to Skeel, the giant banks' concerns do suggest a friendly amendment to Brown-Vitter: Rather than force them to fit the same 15 percent capital mode, why not let them choose either to comply with Brown-Vitter's capital requirements, or to downsize to a specific maximize size within five years of the enactment of the legislation? Read the full commentary. (Subscription required.)

LEGISLATION AIMS TO ENSURE MEDICAL-DEBT ACCURACY IN CREDIT REPORTS

Rep. Gary Miller (R-Calif.) on May 24 introduced legislation to give consumers more time to ensure that only accurate medical debt is reported to credit bureaus, according to a press release from Miller's office. H.R. 2211, the "Accuracy in Reporting Medical Debt Act," aims to ensure that consumers have ample time to resolve medical billing questions and potential errors before medical debt can be reported to the credit bureaus. The Accuracy in Reporting Medical Debt Act would delay the ability of a debt collector to report medical debt to a credit bureau if the consumer notifies the debt collector that:

• the consumer is continuing to work with an insurance company;

• the consumer did not know that the debt existed; or

• the consumer has applied for financial assistance.

To read the full copy of H.R. 2211, please click here.

COMMENTARY: SHADES OF 2007 BORROWING

American investors have taken out more margin loans than ever before, indicating that speculative investing has grown among retail investors, reaching levels that in the past indicated that the market was getting to unsustainable levels and might be in for a fall, according to a commentary in Saturday's New York Times. The amount owed on loans secured by investments rose to $384 billion at the end of April, according to data compiled by the Financial Industry Regulatory Authority (FINRA). It was the first time the total had surpassed the 2007 peak of $381 billion, a peak that was followed by the Great Recession and credit crisis. The latest total of borrowing amounts to about 2.4 percent of GDP, a level that in the past was a danger signal. Rising margin debt was once seen as a primary indicator of financial speculation, and the Federal Reserve controlled the amount that could be borrowed by each investor as a way to dampen excess enthusiasm when markets grew frothy. But the last time the Fed adjusted the margin rules was in 1974, when it reduced the down payment required for stocks to 50 percent of the purchase price from 65 percent. That came about during a severe bear market. Read more.

ABI WEBSITE (ABI.ORG) WILL BE DOWN THIS WEEKEND FOR SCHEDULED MAINTENANCE

From 10 p.m. ET on Friday, June 7, through Sunday evening, June 9, the ABI homepage (abi.org) will be down for scheduled maintenance. During this period, members will not be able to access certain features, including registering for conferences, printing and viewing CLE certificates, and purchasing publications. Other ABI sites, like Search.abi.org, Volo.abi.org, Journal.abi.org, law.abi.org, blogs.abi.org and news.abi.org, will be operational during this time, but users may experience limited functionality. ABI intends to limit this downtime as much as possible. If you have any questions, please email [email protected].

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!

ABI GOLF TOUR UNDERWAY; NEXT STOP IS CENTRAL STATES BANKRUPTCY WORKSHOP IN JUNE

Rob Schwartz and Scott Gautier are tied at 34 Stableford Points atop the closely bunched leaderboard after the ABI Golf Tour's first stop at Lake Presidential Golf Club. Next up for the Tour is the famed Bear course at the Grand Traverse Resort at the Central States Bankruptcy Workshop on June 14. 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, and women are most welcome.

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: FADEL V. DCB UNITED LLC (IN RE FADEL; 9TH CIR.)

Summarized by Mark Hudson of Schian Walker PLC

The Ninth Circuit BAP affirmed the bankruptcy court's granting of relief from the automatic stay to permit a purchaser at a foreclosure sale to pursue a forcible detainer action against the debtor in state court and denying motion for reconsideration.

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: FURTHER EXAMINATION OF THE SUPREME COURT'S RULING IN BULLOCK V. BANKCHAMPAIGN

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post provides further examination of the Supreme Court's ruling on May 13 in the case of Bullock v. BankChampaign, N.A.

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

ABI Quick Poll

Bankruptcy courts should 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.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

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
- Charity Golf Tournament
     June 14, 2013 | City of Industry, Calif.

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.
- Southwest Bankruptcy Conference
    August 22-24, 2013 | Incline Village, Nev.

September
- ABI Endowment Golf & Tennis Outing
    Sept. 10, 2013 | Maplewood, N.J.
- ABI Endowment Baseball Game
    Sept. 12, 2013 | Baltimore, Md.
- Bankruptcy 2013: Views from the Bench
    Sept. 27, 2013 | Washington, D.C.

October
- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum
    Oct. 4, 2013 | Kansas City, Mo.
- ABI Endowment Football Game
    Oct. 6, 2013 | Miami, Fla.

November
- Detroit Consumer Bankruptcy Conference
   Nov. 11, 2013 | Detroit, Mich.

December
- ABI/St. John’s Bankruptcy Mediation Training
    Dec. 8-12, 2013 | New York

VALIDITY OF CFPB AT STAKE IN LEGAL CHALLENGE

A law firm sued by the Consumer Financial Protection Bureau (CFPB) over its treatment of struggling homeowners may be the first to contest the validity of Richard Cordray's status as the agency's director after a D.C. Circuit ruling invalidating three presidential appointees installed as recess appointments, Bloomberg News reported today. Gary Kurtz, a lawyer representing the Gordon Law Firm of Los Angeles, said that he sent a letter on Jan. 29 to the Bureau asking for a negotiated settlement of the six-month-old case in light of a federal court ruling that declared unconstitutional so-called recess appointments similar to Cordray's. Absent a settlement with Gordon, the Bureau risks a court challenge that could become a test case for its authority in the wake of its recess-appointment ruling. In its July 17 complaint against the firm, the CFPB said that Gordon took up-front fees to help homeowners facing foreclosure, then did "little or nothing" for them. White House Press Secretary Jay Carney said last week that the court ruling has no bearing on the CFPB. Read more.

REPORT: 2012 FORECLOSURES UP IN 57 PERCENT OF U.S. METRO AREAS

RealtyTrac reported today that U.S. foreclosure activity last year increased on an annual basis in 57 percent of the nation's metropolitan areas with a population of 200,000 or more, MarketWatch.com reported today. However, foreclosure activity during 2012 decreased from 2010, when foreclosures peaked in most markets, in 85 percent of the 212 markets tracked in the report. The report found that foreclosure activity last year fell in 12 of the U.S.'s 20 largest metropolitan areas, with the biggest declines in Phoenix, San Francisco and Detroit. Despite double-digit percentage decreases in foreclosure activity in 2012 from the prior year, California cities accounted for the four highest metro foreclosure rates, according to the report. Florida cities made up eight of the 20 highest metro foreclosure rates. Read more.

ANALYSIS: POST-LEHMAN, THE PUSH FOR GLOBAL FINANCIAL PROTECTION STALLS

Five years after the collapse of Lehman Brothers, a global push to tighten financial regulation around the world has slowed in the face of a tepid recovery and a tough industry lobbying effort, the Washington Post reported yesterday. Important progress has been made as banks in the United States and Europe have socked away capital to guard against a fresh economic downturn, and evolving rules may force them to split off some of their riskier operations. But the post-Lehman goal -- of a global scheme that would immunize the financial system from another large-scale shock -- remains incomplete. Big banks, insurers and other financial giants remain intact and "too big too fail" by some experts' arguments. Tools to guard against dangerous bubbles in the value of property or other assets are not yet in place, and there is no agreement on how countries should coordinate the failure of a globally important financial company. Implementation of basic banking rules in major nations has fallen behind schedule. Finishing the job "is going to take many years," International Monetary Fund chief economist Olivier Blanchard said last week. "It is conceptually very difficult, politically very difficult." Read more.

SENATORS QUESTION U.S. PENALTIES AGAINST WALL STREET BANKS AS TOO SOFT

A bipartisan pair of lawmakers on Tuesday questioned the Justice Department's prosecution of large financial institutions, raising concerns that recent settlements have fallen short of holding Wall Street accountable for wrongdoing, the Washington Post reported yesterday. Sens. Sherrod Brown (D-Ohio) and Charles E. Grassley (R-Iowa) sent a letter to Attorney General Eric H. Holder Jr. asking for a detailed explanation of the department's procedures for going after financial crime. Penalties in settlements have been disproportionately low relative to company profits and the costs imposed on consumers, investors and the market, they said. "The nature of these settlements has fostered concerns that 'too big to fail' Wall Street banks enjoy a favored status, in statute and in enforcement policy," the senators wrote in the letter. Critics say multimillion-dollar fines imposed on mega­banks are tantamount to a slap on the wrist as long as no senior executives are behind bars. Prosecutors, however, contend that they must be prudent in doling out justice so as not to cripple institutions whose failure could jeopardize the stability of the financial markets. Read more.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY” VIDEO: JUNK DEBT INTEREST RATES AT 30-YEAR LOW

Interest rates for junk debt reached a 30-year low in the last week, as Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss on their new video. Click here to watch.

NOW AVAILABLE FOR PRE-ORDER FROM ABI'S BOOKSTORE: A PRACTICAL GUIDE TO BANKRUPTCY VALUATION

ABI's latest title, A Practical Guide to Bankruptcy Valuation, helps both practitioners and students navigate the complex task of valuing a bankrupt or other financially distressed business, and provides practical guidance on the selection and application of valuation approaches, methods and procedures. Interspersed with helpful charts and hypothetical examples (some based on real cases), the book describes the generally accepted approaches for valuing the assets and securities of a financially troubled business. Written by Robert F. Reilly of Willamette Management Associates, Inc. (Chicago) and Dr. Israel Shaked of The Michel-Shaked Group (Boston), who have a combined 75 years of experience in the valuation field, A Practical Guide to Bankruptcy Valuation lays a solid foundation for those seeking a better understanding of valuation within the bankruptcy context. Click here to pre-order your copy today!

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

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

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

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

Register today!

ABI IN-DEPTH

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

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

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

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

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

• Eric E. Walker of Perkins Coie LLP (Chicago)

Click here to register!

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

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

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

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

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

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

Summarized by George Spathis of Horwood Marcus & Berk

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

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: WILL THE PAYDAY LOAN BE REINVENTED?

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. While several tech startups have made short-term credit the focus of their business models, a recent post asks whether such a previously frowned-upon product could ever achieve mainstream acceptance.

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.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

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.

NEW STUDENT LOAN RULES ADD PROTECTIONS FOR BORROWERS

The U.S. Department of Education has created new rules that will bolster borrower protections for federal education loans, the New York Times reported today. The new regulations will make it easier for distressed borrowers to get out of default and repay their loans, said Pauline Abernathy, vice president of the nonprofit Institute for College Access and Success, which supported the changes. More than 600,000 federal student loan borrowers who began repaying their debts in 2010 defaulted on their loans by 2012, according to federal data. Almost half -- 46 percent -- attended for-profit colleges, which also had higher average default rates than other schools: For-profit schools had an average default rate of almost 22 percent compared with about 15 percent for borrowers across all colleges. Under federal law, those who are in default on federal student loans may "rehabilitate" them by making nine on-time payments in amounts that are "reasonable and affordable." Rehabilitation lets the borrower get out of default and become eligible for further federal student aid. Some private debt collectors under contract with the government, however, were failing to offer payments that former students could afford, instead offering to allow payments based, for instance, on a percentage of the borrower's total debt. Such payments increased the commissions paid to collection agencies, but were often unworkable for borrowers. In its final rules, the Education Department requires that borrowers who want to rehabilitate loans must first be offered a payment amount similar to what would be offered under the federal income-based repayment program. That option, meant to help borrowers who have high debt in relation to income, caps a borrower's monthly payments at 15 percent of his or her monthly income. Read more.

For further analysis of student loan debt and bankruptcy, ABI has a new book and a workshop next Friday, Nov. 15, dedicated to this important issue.

ABI's newest publication, Graduating with Debt: Student Loans under the Bankruptcy Code, examines issues surrounding bankruptcy and student loan debt. Profs. Daniel A. Austin of Northeastern University (Boston) and Susan E. Hauser of North Carolina Central University School of Law (Durham, N.C.) looked at different types of student loans and loan-forgiveness programs, delinquency and default, and administrative and nonjudicial remedies for borrowers having trouble repaying their loans. For more information on Graduating with Debt, please click here.

ABI will also be hosting a workshop on Nov. 15 titled "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" Featured speakers at the Workshop include David Bergeron of the Center for American Progress (Washington, D.C.), Bankruptcy Judge Laurel Isicoff (S.D. Fla.; Miami) and Prof. Susan E. Hauser of North Carolina Central University (Durham, N.C.), co-author of Graduating with Debt. The program will last from 9:30 a.m. to 3:30 p.m. ET, and you can attend in person (66 Canal Center Plaza, Suite 600, Alexandria, Va. 22314) or via live webstream. For more information or to register to attend, please click here.

MORTGAGE DELINQUENCIES REACH 5-YEAR LOW

The share of U.S. mortgages that are seriously delinquent fell to a five-year low as job gains have been helping borrowers keep up with payments while rising home prices have been enabling others to sell, Bloomberg News reported today. The percentage of home loans that are more than 90 days behind or in the foreclosure process fell to 5.65 percent in the third quarter from 7.03 percent a year earlier, the Mortgage Bankers Association said in a report today. That is the lowest rate since the third quarter of 2008, when it was 5.17 percent. Fewer Americans are falling behind on their payments as the economy stabilizes and property values rise across the country. The jobless rate in September fell to 7.2 percent, the lowest level since November 2008. Median U.S. home prices rose 12.5 percent in the third quarter from a year earlier, the National Association of Realtors said yesterday. Cities hurt worst by the foreclosure crisis, such as Las Vegas, Atlanta and Sacramento, California, had the biggest increases. Read more.

LEW SAID TO WARN BANKS OF TOUGHER VOLCKER RULE

Treasury Secretary Jacob J. Lew warned chief executive officers of top U.S. banks in a private meeting last month that the final Volcker rule ban on proprietary trading would be tougher than Wall Street expects, Bloomberg News reported today. At the meeting, Lew told industry leaders that he has been encouraging regulators to make provisions of the Volcker rule more stringent. The bank executives, members of the Financial Services Forum, left the meeting concerned that the final rule would be more restrictive on their trading business than previously indicated. This week, regulators are putting the final touches on the rule, which could be released as soon as Dec. 10. That timeframe would put regulators on track to meet the administration's self-imposed deadline to complete the rule by the end of the year. Administration officials have signaled that one provision that will be more restrictive than the rule's first draft is its exemption for trades conducted as hedges against other risks. The revised rule is expected to require hedges to be taken against individual positions and limit broader hedges against a bank's entire portfolio. The change came in response to JPMorgan Chase & Co.'s "London Whale" trades, which cost the bank $6.2 billion in 2012 and were described by bank officials as portfolio hedging. Read more.

SMALL LENDERS CAUTIOUSLY RAMP UP FEES

Small lenders have been raising fees in recent months in order to offset the triple economic threat of low interest rates, tepid loan growth and increasing compliance costs that is squeezing the banking industry, the Wall Street Journal reported today. While large banks can push into more lucrative businesses, small lenders offer fewer products and services that can offset low profit margins in their core business. For them, fee increases are the best way to add revenue in a difficult environment. Small banks, however, must carefully weigh their choices so that they don't alienate their customer base. U.S. banks of all sizes collected $8.39 billion in fees on deposit accounts in the second quarter, according to the Federal Deposit Insurance Corp., up from $8.21 billion in the first quarter. Credit unions also are bringing in more fees, posting an increase of $1.87 billion in the second quarter compared with $1.79 billion in the first quarter, according to the National Credit Union Administration, which regulates more than 6,600 of the nonprofit lenders. Read more. (Subscription required.)

NEXT WEEK: EXPERTS TO EXAMINE STUDENT LENDING AND BANKRUPTCY AT ABI WORKSHOP PROGRAM

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

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

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

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

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

NEW ABILIVE WEBINAR LOOKS AT HOW TO HIRE THE RIGHT FINANCIAL ADVISORS

ABI's Financial Advisors & Investment Banking Committee is proud to present the next abiLIVE webinar, "How to Hire the Right Financial Advisors," on Dec. 11 from 1-2:15 p.m. ET. The program will provide attendees with an overview and basic understanding of the different types of financial advisors that may be relevant for in- and out-of-court cases. Topics include:

- The different types of financial advisors available;
- The benefits and limitations for each category of advisor; and
- How to select the right advisor for the job.

Speakers on the webinar include:

-Daniel F. Dooley of MorrisAnderson (Chicago)

-Gregory S. Hays of Hays Financial Consulting LLC (Atlanta)

-Ivan Lehon of Ernst & Young (New York)

-Allen Soong of Deloitte CRG (Los Angeles)

• Teri Stratton of Piper Jaffray & Co. (El Segundo, Calif.)

Registration is $75 for ABI members/$175 for non-members. Have a number of colleagues that would like to participate? Take advantage of group pricing for ABI members: register 5 or more and the registration cost drops to $60 per person!

Click here for more information and to register.

ABI IN-DEPTH

RENEW YOUR ABI MEMBERSHIP BY DEC. 31 AND SAVE!

Beginning in January 2014, ABI will institute its first dues increase to the regular dues rate in six years. The $20 increase will ensure that ABI can continue to provide you with the latest and most effective tools available in insolvency information and education. You can lock in 2013 rates, and additional discounts, for up to three years by using a multi-year renewal option (save $75!). You can also save 10 percent on future dues by opting into the automated dues program. To renew your membership and save, please go to renew.abi.org.

ETHICS CLE AVAILABLE! NEW "BANKRUPTCY IN DEPTH" VIDEO PREVIEWS UPCOMING SUPREME COURT BANKRUPTCY CASES

Available now for purchase from ABI's eLearning Center (http://cle.abi.org) is a new "Bankruptcy In Depth" video featuring ABI Resident Scholar Kara Bruce and Eric Brunstad of Dechert LLP (Hartford, Conn.) previewing the bankruptcy cases that the Supreme Court will consider during its 2013 term. Brunstad, who has argued many cases before the Court and is an expert in bankruptcy appellate practice, discusses in depth Law v. Siegel, which questions whether the court may use its general equitable authority under §105 of the Bankruptcy Code to surcharge a debtor's exempt assets, and Executive Benefits Insurance Agency v. Arkison (In re Bellingham), which will address the bankruptcy court's authority to adjudicate Article III matters. He also provides a candid view of what it is like to argue a case before the Court and an in-depth analysis of the issues involved with the upcoming cases. Available for the member price of $75, ABI will also seek 1.25 hours of ethics CLE credit in 60-minute-hour states and 1.5 hours of credit in 50-minute-hour states for this program. This online CLE program is presumptively approved in CA, DE, FL, GA, HI, IL, NV, NJ, NY (Approved Jurisdiction Policy), RI and SC. Credit hours granted are subject to approval from each state, which has not been determined. To purchase the new "Bankruptcy In Depth" video, please click here.

ABI LAUNCHES SIXTH ANNUAL WRITING COMPETITION FOR LAW STUDENTS

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

NEW CASE SUMMARY ON VOLO: SHELTON V. CITIMORTGAGE INC. (IN RE SHELTON; 8TH CIR.)

Summarized by Michael Tamburini of Commercial Law Group P.A.

The Eighth Circuit ruled that a secured creditor's lien is not void solely due to the fact that the secured creditor filed an untimely claim.

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: CAN BANKRUPTCY HELP SOLVE STUDENT LOAN DEBT EVEN IF THE DEBT IS NON-DISCHARGEABLE?

The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. Bankruptcy Code § 523(a)(8) provides that unless the debtor can show "undue hardship," student loans will survive discharge.

Further analysis of student loans and bankruptcy will be the focus of the Nov. 15 abiWorkshop. For more information or to register, please click here.

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

ABI Quick Poll

Can litigant consent enable the bankruptcy court to enter final judgment in a matter which, after Stern, falls outside the court's constitutional authority?

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

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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2013

November
- 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.
-abiLIVE Webinar
    Dec. 11, 2013

January
- Western Consumer Bankruptcy Conference
    Jan. 20, 2014 | Las Vegas, Nev.
- Rocky Mountain Bankruptcy Conference
    Jan. 23-24, 2014 | Denver, Colo.

February
- Caribbean Insolvency Symposium
    Feb. 6-8, 2014 | San Juan, P.R.