Mortgage

DELINQUENT PAYMENTS EDGE UP FOR CREDIT CARD ISSUERS

JPMorgan Chase, Discover Financial Services, American Express Co. and Capital One Financial Corp. each reported higher delinquency rates for September in regular monthly filings with the Securities and Exchange Commission, Dow Jones Newswires reported today. Delinquency rates, typically measured as a percentage of loans for which borrowers are at least 30 days late on a payment, have fallen drastically since the financial crisis as consumers have been cautious about taking on new debt and card issuers have purged troubled accounts from their books. Analysts have predicted that this progress will begin to diminish, though, since there is little room for the rates to fall further and as some banks get back into subprime lending. Read more.

COMMENTARY: CFPB'S RECENT PROPOSAL DOES NOT GO FAR ENOUGH TO ADDRESS FORECLOSURE ABUSES

The Consumer Financial Protection Bureau's (CFPB) recent proposal to regulate the foreclosure process is a disappointment as it retreats from many existing requirements, according to a New York Times editorial today. The CFPB's proposal does not impose any meaningful standards for loan modifications beyond those already required by various federal programs and agreements, many of which will expire in the future and none of which apply to the entire industry, according to the editorial. In place of concrete standards, the bureau’s proposal largely relies on procedural reforms, like requiring servicers to establish reasonable policies for managing paperwork and answering phone calls from borrowers, to contact borrowers at an early stage of delinquency, and to adhere to deadlines for responding to borrowers who need help. What is needed, according to the editorial, are requirements to make sure that all borrowers facing hardship are considered for loan modifications according to specific, publicly available criteria, and that loans are modified for all eligible borrowers. Read more.

OBAMA, ROMNEY SQUARE OFF ON AUTO BAILOUT IN FINAL DEBATE

In their third and final presidential debate ahead of the Nov. 6 election, President Obama said that if Mitt Romney's position on the $85 billion federal auto bailout had been in place, the U.S auto industry would have ceased to exist, the Detroit News reported today. Romney rejected Obama's claims, saying that he would not have allowed Detroit's Big Three automakers to liquidate. In his November 2008 New York Times column titled "Let Detroit Go Bankrupt," Romney said that he would support some aid but only after a bankruptcy filing. "The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk," he wrote. Click here to read more.

Click here to read Romney's op-ed that appeared in the New York Times in 2008.

LATEST ABI PODCAST FEATURES EXPERTS LOOKING AT U.S./MEXICO CROSS-BORDER INSOLVENCY ISSUES

In advance of ABI's Inaugural Mexico Restructuring Symposium on Nov. 7 in Mexico City, ABI Executive Director Sam Gerdano speaks with panelists Richard J. Cooper of Cleary, Gottlieb, Steen & Hamilton LLP (New York) and Thomas S. Heather of Heather & Heather (Mexico City). Cooper and Heather provide a preview of their panel's discussion about similarities and differences between insolvency laws in the U.S. and Mexico. Click here to listen to the podcast.

SHOW YOUR SUPPORT FOR STEVEN GOLICK, A COLLEAGUE AND ABI LEADER FACING MAJOR SURGERY TODAY

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

ABI IN-DEPTH

MEMBERS WILL NOT WANT TO MISS ABI'S PROGRAM AT NCBJ'S ANNUAL MEETING ON FRIDAY

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

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

ABI's Chapter 11 Reform Commission will also be holding a public hearing on Friday from 2:30-4:30 p.m. PT at the San Diego Marriott. For further information, please contact ABI Executive Director Samuel J. Gerdano at [email protected].

LATEST CASE SUMMARY ON VOLO: HADDAD V. ALEXANDER, ZELMANSKI, DANNER & FIORITTO, PLLC (6TH CIR.)

Summarized by Scott J. Whitacre

In a nonbankruptcy debt-collection matter, the Sixth Circuit reversed the district court and held that a condominium association assessment was a “debt” regulated by the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.) where the owner purchased the condominium as a residence and used it as such for 13 years but later leased it out to others.

There are more than 650 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: SIXTH CIRCUIT FIRST COURT OF APPEALS TO ADDRESS FRAUDULENT TRANSFERS IN LIGHT OF STERN

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post found that in deciding Onkyo Electronics v. Global Technovations Inc. (In re Global Technovations Inc.), the U.S. Court of Appeals for the Sixth Circuit became the first court of appeals to considered whether, following the Supreme Court’s decision in Stern v. Marshall, a bankruptcy court has jurisdiction to enter a final judgment on a fraudulent transfer action. The Sixth Circuit held that the bankruptcy court in question had jurisdiction to enter a final judgment on a fraudulent transfer because the creditor had filed a proof of claim. The holding, however, implied that the Sixth Circuit would not have held that the bankruptcy court had such authority if the creditor had not filed a proof of claim.

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

Section 523(a)(8) should be amended to allow private student loans to be discharged in bankruptcy.

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

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

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

INSOL INTERNATIONAL

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

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October
- ABI Program at NCBJ's Annual Conference
     October 26, 2012 | San Diego, Calif.
- ABI Endowment Event at Peter Max Gallery
     October 29, 2012 | New York, N.Y.

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

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

2013

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

February
- Caribbean Insolvency Symposium
     February 7-9, 2013 | Miami, Fla.
- Kansas City Advanced Consumer Bankruptcy Practice Institute
     February 17-19, 2013 | Kansas City, Mo.
- VALCON 2013
     February 20-22, 2013 | Las Vegas, Nev.

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

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

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

STATES, PRIVATE PLAINTIFFS PRESS SUIT AGAINST WALL STREET REFORM LAW

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

COMMENTARY: BLEEDING THE BORROWER DRY

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

REPORT: YOUNG ADULTS RETREAT FROM PILING UP DEBT

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

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

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

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

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

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

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

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

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

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

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

ABI IN-DEPTH

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

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

• Prof. Daniel A. Austin of Northeastern University School of Law (Boston)
  
  
• Edward "Ted" M. King of Frost Brown Todd LLC (Louisville, Ky.)
  
  
• Craig Zimmerman of the Law Offices of Craig Zimmerman (Santa Ana, Calif.)

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

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

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

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

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

Summarized by Michael Tamburini of Polsinelli Shughart, PC

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

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: ASSIGNMENT OF RENTS: GOVERNMENT BENEFIT CARDS CAN OPEN DOORS TO BANKING SYSTEM

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

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

ABI Quick Poll

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

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

INSOL INTERNATIONAL

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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

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

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

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

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

JUDGE'S RULING ON DODD-FRANK ACT BEEFS UP PROTECTION FOR WHISTLEBLOWERS

U.S. District Judge J. Paul Oetken bolstered protection for corporate whistleblowers yesterday by ruling the Dodd-Frank law gave retroactive protection to employees of subsidiaries, not just people who work directly for the parent companies, Reuters reported yesterday. The decision concerned the Sarbanes-Oxley Act of 2002, adopted in the wake of Enron Corp's collapse the prior year, which helped protect employees of publicly-traded companies against retaliation for whistleblowing. Dodd-Frank amended that law in July 2010, as part of a series of financial reforms, to show that employees of subsidiaries should also be protected from any reprisals by their companies. Judge Oetken yesterday said that the Dodd-Frank amendments should apply retroactively to cases that predated Dodd-Frank, being "a clarification of Congress's intent" concerning whistleblowers. Read more.

In related news, the House Financial Services Capital Markets and Government Sponsored Enterprises held a hearing today titled "The Impact of Dodd-Frank on Customers, Credit, and Job Creators." To view the witness list and prepared witness testimony, please click here.

The House Financial Services Financial Institutions and Consumer Credit Subcommittee will hold a hearing tomorrow at 10 a.m. ET titled "The Impact of Dodd-Frank’s Home Mortgage Reforms: Consumer and Market Perspectives." Click here for more information.

CONSUMER BORROWING INCREASED IN MAY, PROPELLED BY CREDIT CARD BORROWING

Consumer borrowing rose by $17.1 billion in May from April, the Federal Reserve said yesterday, according to the Associated Press. The gain drove total borrowing to a seasonally adjusted $2.57 trillion, nearly matching the all-time high reached in July 2008. Borrowing has increased steadily over the past two years, but most of the gains have been driven by auto and student loans, which rose to a record level of $1.7 trillion in May. Consumers cut back sharply on credit card debt during the recession and immediately after, but that changed in May when the measure of credit card debt jumped by $8 billion. Still, the level of debt for that category increased to only $870 billion, or 2.2 percent above the post-recession low hit in April 2011. The category had totaled more than $1 trillion before and shortly after the recession began. Read more.

ANALYSIS: PRICE OF USING CREDIT CARDS MAY RISE

Merchants may soon begin imposing a surcharge each time a customer pays with a credit card, a practice Visa Inc. and MasterCard Inc. currently prohibit, the Wall Street Journal reported today. Retailers have long pushed for the right to charge extra to customers who pay with plastic versus cash, saying that the practice would help defray their costs for accepting credit and debit cards. Merchants pay transaction fees on each card swipe. But Visa and MasterCard, which operate the world's largest card-payment networks, ban the practice in the U.S. as part of rules they require retailers to follow to accept their cards. That ban is expected to be eliminated or altered, though, under a potential settlement of long-standing lawsuits retailers have brought against the card networks and numerous banks that issue their cards. Read more. (Subscription required.)

COMMENTARY: COMMERCIAL MORTGAGES SHOW DEPTH OF BAD LOAN SECURITIZATIONS

The first of the commercial real estate mortgages that were securitized in 2007 have started to come due, and it is becoming clear just how bad many of the loans were, according to a commentary in Friday's New York Times. The time when investors were most eager to buy, according to the commentary, turns out to have been the worst time to do so. Commercial mortgages — unlike residential ones — are seldom issued for periods of longer than 10 years, and often for as little as five. Many require no principal repayments during that period but call for the entire amount to be repaid in a balloon payment at the end of the loan. "Only 28 percent of the loans from 2007 due to mature in 2012 managed to pay off in full," said Manus Clancy, the senior managing director at Trepp L.L.C., which monitors the commercial mortgage market. Other loans in those securitizations were for seven or 10 years, so new waves of losses may arrive in 2014 and again in 2017. Read more.

CFTC SUES PEREGRINE FINANCIAL GROUP

Federal regulators sued Peregrine Financial Group Inc. and CEO Russell Wasendorf Sr. today, alleging fraud, customer funds violations and making false statements, and the FBI began an investigation of the brokerage, the Wall Street Journal reported today. The complaint from the Commodity Futures Trading Commission comes a day after the National Futures Association, the futures industry's self-regulatory body, said that it had taken an emergency enforcement action against broker PFGBest's parent company, Peregrine Financial Group. Regulators have shut down almost all operations of futures broker PFGBest after the firm froze client accounts yesterday. Read more. (Subscription required.)

LATEST ABI PODCAST FEATURES EXPERT DISCUSSING WHAT TO EXPECT FROM STOCKTON'S CHAPTER 9 FILING

The latest podcast features ABI Executive Director Samuel J. Gerdano speaking with Lynnette R. Warman, a partner at Hunton & Williams LLP (Dallas) and ABI Vice President—Publications, about Stockton, Calif.'s recent chapter 9 filing. Warman has been following Stockton's financial distress and she discusses what can be expected for the city and its creditors in the first year of the chapter 9 filing. Click here to listen.

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: SUNBEAM PRODUCTS, INC. V. CHICAGO AMERICAN MANUFACTURING, LLC (7TH CIR.)

Summarized by Jonathan Brand of Lakelaw

The Seventh Circuit was not persuaded by Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, Inc., 756 F.2d 1043 (4th Cir. 1985), holding that when an intellectual-property license is rejected in bankruptcy, the licensee does not lose the ability to use any licensed copyrights, trademarks and patents. The court reasoned that, outside of bankruptcy, a licensor's breach does not terminate a licensee's right to use intellectual property. The same is true under §365(g). When a contract is rejected in the context of a bankruptcy, a breach is established, but the other party's rights remain in place. Therefore, Chicago American Manufacturing had the right to continue to perform under the pre-petition contract for the production of fans with the trademark of Lakewood Engineering & Manufacturing Co.

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: DREIER BANKRUPTCY DEMONSTRATES THE ENDLESS SCOPE OF CLAWBACK CLAIMS

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines the Dreier, LLP bankruptcy and the important role that clawback claims are playing in the case.

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 full-payment rule in section 1325's "hanging paragraph" for new car PMSIs should be repealed to level the playing field between car lenders and other partially and fully unsecured creditors.

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.

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

REPORT: U.S. FORECLOSURE ACTIVITY FELL IN JANUARY

RealtyTrac reported that foreclosure activity declined in January as the number of U.S. homes starting the process fell to its lowest level in more than six years, but the varying legal requirements in each state continued to influence regional markets, Reuters reported today. Foreclosure starts were filed on 64,773 homes, down 11 percent from December and down 28 percent from a year ago. It was the lowest level since June 2006. The drop in starts came as activity in California dried up after homeowner protection legislation enacted at the start of the year placed new requirements on all servicers in the state. Excluding the decline in California, foreclosure starts edged up less than 1 percent compared to December, said Daren Blomquist, vice president at RealtyTrac. Overall foreclosure activity was seen on 150,864 properties last month, down 7 percent from December. Compared to a year ago, activity tumbled 28 percent. Read more.

REGULATOR EXPLAINS DECISION TO END FLAWED FORECLOSURE REVIEW

Thomas J. Curry, the Comptroller of the Currency, shed light yesterday on his decision to scuttle an independent review of bank foreclosures, portraying the flawed process as a boon to outside consultants and a barren maze for homeowners, the New York Times DealBook blog reported yesterday. The process began in 2011 when regulators accused banks and other loan servicers of shoddy foreclosure practices. Curry, who took over the comptroller's office several months after the review started, argued that homeowners languished without payment as the review suffered from delays. The independent consultants that banks hired to run the 14-month review, however, racked up some $2 billion in charges. "It just doesn't make sense for these servicers to continue funneling money to consultants that could be better used to help distressed borrowers who have lost their homes," Curry said. His speech comes amid a growing outcry from lawmakers and housing advocates, who have questioned the regulatory oversight of the foreclosure review. Critics say that regulators should never have trusted consultants to objectively evaluate banks from which they are paid huge sums. Read more.

HOUSING INDUSTRY HOPES OBAMA LINE WILL SOFTEN MORTGAGE RULE

U.S. realtors and mortgage bankers say that they hope President Barack Obama's call for streamlined mortgage rules in his State of the Union speech on Tuesday will help them convince regulators not to set a strict minimum down payment for home loans, Bloomberg News reported yesterday. At issue is the so-called Qualified Residential Mortgage rule, which six banking regulators, including the Federal Deposit Insurance Corp. and the Federal Reserve, are aiming to complete this year. The regulators drew protests in 2011 when they released a preliminary draft requiring lenders to keep a stake in mortgages with down payments of less than 20 percent and those issued to borrowers spending more than 36 percent of their income on debt. Bankers and some consumer groups said that such a requirement would shut creditworthy borrowers out of the market. Industry participants and some lawmakers are now pressing for the regulators to align the QRM rule with another regulation with a similar name that is also aimed at preventing risky home lending: the Qualified Mortgage, or QM, rule. That guidance, issued by the Consumer Financial Protection Bureau in January, offers legal safe harbor protections to banks that issue loans to borrowers spending no more than 43 percent of their income on debt. Read more.

AUDIT FINDS HUD'S OVERSIGHT OF HOUSING-CONSTRUCTION PROGRAM LAGGING

The U.S. Department of Housing and Urban Development is still struggling to adequately monitor its construction program for the poor more than a year after Congress demanded widespread improvements in oversight and accountability, the agency's Office of the Inspector General said in an audit this week, the Washington Post reported today. Auditors pointed out that HUD has strengthened controls over its HOME Investment Partnerships Program, which was established in 1992 and delivers between $1 billion and $2 billion in annual grants to states and local jurisdictions to build, buy or renovate affordable housing. But the audit found that the agency could not demonstrate the effectiveness of field office monitoring efforts and "may have lost opportunities to obtain early warnings of potentially serious problems." HUD countered that its monitoring is effective and that the agency "continually strives to manage its programs as effectively and efficiently as possible." Read more.

COMMENTARY: NEW YORK BUDGET DOES LITTLE TO ADDRESS COMING MUNICIPAL DISTRESS

While the specter of financial collapse looms over New York State's cities, the current budget being proposed for the state does not do enough to address its imminent municipal distress, according to a commentary by Syracuse Mayor Stephanie A. Miner in the New York Times today. Gov. Andrew M. Cuomo's proposed state budget, put forward last month, would not increase state aid to cities or do much to reform tax, pension or labor laws. Instead, it would let municipalities push payment of today's ballooning pension costs into the future, according to Miner. Labor costs are too high -- not because of salaries, but because of the rising costs of pensions and health care. City leaders and labor unions jointly negotiated these past arrangements but have not cooperated to keep them in check, according to Miner. Most public-sector unions in the state cannot legally strike; instead, unresolved labor disputes go to binding arbitration, which often leads to judgments that the cities cannot afford. Also, revenue in cities like Syracuse has plummeted, and not just because of the Great Recession. Municipal aid and school aid have been cut or have stagnated in recent years. Miner says that billions of dollars' worth of corporate tax breaks have been given away in the name of "economic development." Additionally, she finds that the model of using property taxes to finance schools, police, fire, sanitation and other services is no longer sustainable. (New York City, which has relatively low property taxes but levies a city income tax, is an exception.) For decades, once-large industrial employers like Eastman Kodak in Rochester, the Otis Elevator Company in Yonkers and the Carrier Corporation (a maker of heating and air-conditioning equipment) in Syracuse have shed jobs and closed plants. Even when unemployment -- 8.2 percent in New York State in December, compared with 7.8 percent nationally -- falls, property tax revenue will not come back, Miner predicts. Click here to read the full commentary.

VIEW BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: JUDGE RAKOFF REVERSES HIMSELF IN MADOFF CASE

When U.S. District Jed Rakoff recanted a ruling he made previously in the liquidation of Bernard L. Madoff Investment Securities Inc., the reversal was important because it allows the Madoff trustee to knock out billions of dollars in claims, as Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss on their new video. To view the video, please click here.

NEXT WEEK'S 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!

JUST ADDED FOR APRIL! ABI LIVE WEBINAR "STUDENT LOANS: BANKRUPTCY MAY NOT HAVE THE ANSWERS - BUT DOES CONGRESS?"

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

• Prof. Daniel A. Austin of Northeastern University School of Law (Boston)
  
  
• Edward "Ted" M. King of Frost Brown Todd LLC (Louisville, Ky.)
  
  
• Craig Zimmerman of the Law Offices of Craig Zimmerman Santa Ana, Calif.)

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

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: DAVENPORT V. FRONTIER BANK (IN RE DAVENPORT; 11TH CIR.)

Summarized by Lynn Hinson of Dean Mead Egerton Bloodworth Capouano & Bozarth PA

The Eleventh Circuit affirmed the district court's ruling, which affirmed the bankruptcy court's determination that a debt owed by the debtor to a bank was not dischargeable. Specifically, the debt was not dischargeable because the bank reasonably relied on the debtor's false financial statement in making a loan.

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: FURTHER ANALYSIS OF THE US AIRWAYS-AMERICAN AIRLINES MERGER

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post further examines the merger of US Airways and American Airlines, which was formally announced today.

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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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
- ABI Live Webinar: "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?"
     April 10, 2013
- "Nuts and Bolts" Program at ASM
     April 18, 2013 | National Harbor, Md.
- Annual Spring Meeting
     April 18-21, 2013 | National Harbor, Md.

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

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