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PBGC Says Pension Deficit Widened to Record 34 Billion

ABI Bankruptcy Brief | November 20 2012
 
  

November 20, 2012

 
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  NEWS AND ANALYSIS   

PBGC SAYS PENSION DEFICIT WIDENS TO RECORD $34 BILLION

The Pension Benefit Guaranty Corp. (PBGC) said that its deficit increased to $34 billion by the end of the most recent fiscal year, its largest ever, Dow Jones Daily Bankruptcy Review reported yesterday. As a result of plan failures, the PBGC said last week that its obligations totaled $119 billion by the end of fiscal 2012, while it has $85 billion in assets on hand to cover them. PBGC Director Joshua Gotbaum said that the agency continues its work to preserve pensions but "continuing financial deficits will ultimately threaten its ability to pay benefits." Read more. (Subscription required.)

BANKS SAY THEY HAVE GIVEN $26 BILLION IN HOMEOWNER RELIEF TO DATE

The nation's biggest banks provided more than $26 billion in relief to struggling homeowners between March 1 and Sept. 30, as part of a settlement earlier this year with state and federal officials over widespread foreclosure abuses, the Washington Post reported today. Joseph A. Smith Jr., the former North Carolina banking commissioner hired by the government to ensure the banks follow through on their promises, reported that more than 300,000 homeowners have benefitted so far, for an average of roughly $84,385 per borrower. The aid undertaken by the five banks involved in the settlement — Bank of America, JPMorgan Chase, Wells Fargo, Ally Financial and Citigroup — has taken various forms, from lowering loan balances to completing growing numbers of short sales to helping refinance many homeowners into mortgages with much lower interest rates. Each bank is responsible for providing a set amount of aid under the terms of the settlement, but different kinds of relief receive different amounts of credit. In general, banks received more credit for providing aid during the first year of the settlement and for activities such as reducing principal on loans and refinancing mortgages. Read more.

In related news, big banks are giving billions of dollars to distressed California homeowners through a landmark mortgage settlement — but mostly to get people out of their homes rather than help them stay, the Los Angeles Times reported today. Short sales should be reserved for homeowners who couldn't afford to live in a home even with a lower principal or for people who need to move, said UC Irvine law professor Katherine Porter, who was appointed by the state attorney general's office to monitor the deal. The preponderance of short sales in California may change, Porter said, as banks begin delivering other types of mandated relief, namely principal reduction. In California, the three biggest mortgage servicers — Wells Fargo & Co., Bank of America Corp. and JPMorgan Chase & Co. — promised to contribute $12 billion worth of homeowner aid. Bank of America is on the hook for the biggest portion of that agreement, $8 billion. Read more.

COMMENTARY: WHEN WILL FANNIE AND FREDDIE PAY TAXPAYERS BACK?

Fannie Mae and Freddie Mac owe American taxpayers nearly $140 billion — and there seems to be no plan on any front to pay it back, according to a commentary in yesterday's New York Times. In the midst of the housing crisis and the Great Recession in 2008, Congress agreed to spend $600 billion in public money to rescue major American banks, insurers, automakers and, yes, the GSE's — fearing an even deeper and longer recession if these companies failed. Since then, most of these bailed-out firms have paid taxpayers back, but not Fannie or Freddie. Even more remarkable than their $140 billion public debt (the money lent to the agencies minus dividends paid) is that there seems to be no active plan to reimburse taxpayers. Read more.

SHADOW BANKING GROWS TO $67 TRILLION INDUSTRY, REGULATORS SAY

The shadow banking industry has grown to about $67 trillion, $6 trillion bigger than previously thought, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight, Bloomberg news reported on Sunday. The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off-balance sheet investment vehicles, "can create systemic risks" and "amplify market reactions when market liquidity is scarce," the Financial Stability Board said in a report, which utilized more data than last year’s probe into the sector. While watchdogs have reined in excessive risk-taking by banks in the wake of the collapse of Lehman Brothers Holdings Inc. in 2008, they are concerned that lenders might use shadow banking to evade the clampdown. Read more.

ANALYSIS: MIXED RESULTS FOR SEC IN FINANCIAL CRISIS CASES

Last week was a study in contrasts in how the Securities and Exchange Commission has been able to pursue cases from the financial crisis, according to an analysis yesterday in the New York Times DealBook blog. The regulator has been successful in extracting large settlements from banks that were at the heart of the meltdown in the mortgage market, but it has not done as well in proving any significant wrongdoing by individuals. The SEC announced settlements on Friday with JPMorgan Chase and Credit Suisse over their dealings in residential mortgage-backed securities. JPMorgan will pay $296.9 million and Credit Suisse $120 million in disgorgement and penalties. But it had a much worse week in dealing with individuals accused of securities fraud as a federal jury in New York on Nov.12 largely absolved Bruce Bent Sr. and his son, Bruce Bent II, for statements they made about the money market fund they oversaw, the Reserve Primary Fund. That collapsed at the height of the financial crisis in September 2008. Read more.

OPEN PUBLIC HEARING ON CHAPTER 11 REFORM AT ABI'S WINTER LEADERSHIP CONFERENCE

ABI's Commission to Study the Reform of Chapter 11 will hold a public hearing on Friday, Nov. 30, at 11:15 a.m. (MT) during the Winter Leadership Conference in Tucson, Ariz., at the JW Marriott Starr Pass Resort. Members are welcome to provide testimony on their suggestions for ways to improve the operation of chapter 11. The hearing is the fifth in a series of public field hearings. Statements and video from all the recent hearings can be found at the Commission website at http://commission.abi.org.

Interested members should contact Sam Gerdano at sgerdano@abiworld.org for more details about in-person testimony. Those interested may also file written statements of any length for consideration by the Commission. All materials will be part of the Commission's record to be transmitted to Congress following the two-year investigation and report. Please consider this great opportunity to become part of the legal reform of the Bankruptcy Code.

LATEST ABI PODCAST EXAMINES BANKRUPTCY'S EFFECTS ON MANUFACTURING SUPPLY CHAINS

ABI’s latest podcast features ABI Resident Scholar Prof. Susan Hauser speaking with the authors of Interrupted! Understanding Bankruptcy's Effects on Manufacturing Supply Chains. John T. Gregg, Deborah L. Thorne and Patrick E. Mears of Barnes & Thornburg LLP discuss the book and the issues that arise when suppliers are unable to make deliveries of promised parts due to financial problems. Click here to listen to the podcast.

To purchase Interrupted! Understanding Bankruptcy's Effects on Manufacturing Supply Chains, please make sure to visit the ABI Book Store at http://bookstore.abi.org.

RICHMOND BAR CALLING FOR NOMINATIONS TO FILL JUDICIAL VACANCY; SUBMISSIONS MUST BE RECEIVED BY DEC. 13

The Judiciary Committee of the Richmond (Va.) Bar Association invites ABI members to submit nominations to fill a judicial vacancy in the U.S. Bankruptcy Court for the Eastern District of Virginia. The court is looking to fill the vacancy left by the retirement of Bankruptcy Judge Douglas O. Tice, Jr.

Suggestions must be in writing and should be mailed to Virginia H. Grigg, Esq., c/o Richmond Bar Association, P.O. Box 1213, Richmond, Virginia 23218 or hand-delivered to her at the Bar office located at 707 E. Main Street, Suite 1620, Richmond, VA 23219. Nominations must be received by 4:00 p.m. ET on Thursday, December 13, 2012, in order to be considered.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: HAWKS HOLDINGS LLC V. KALINOWSKI (IN RE KALINOWSKI; 10TH CIR.)

Summarized by Steven T. Mulligan of Bieging Shapiro & Barber LLP

The 10th Circuit ruled that since debtor was the de facto manager of an LLC, he stood in a fiduciary relationship to the creditor of that LLC under a New Mexico statute that created a technical trust. Since the debtor’s participation in the mismanagement of funds paid to the LLC for the construction of homes constituted defalcation, the debt was thus excepted from discharge.

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: NINTH CIRCUIT RULES POST-PETITION PAYMENTS RECEIVED BY DEBTOR ARE NOT PROCEEDS OF "PAYMENTS TO BECOME DUE"

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines a recent decision by the Ninth Circuit in LID Acquisition LLC v. Lake at Las Vegas Joint Venture, LLC (In re Lake at Las Vegas Joint Venture, LLC) affirmed the lower courts' rulings that, pursuant to §552(a) of the Bankruptcy Code, a pre-petition security agreement that gives a lender a security interest in "payments" or "future payments" does not give a lender a security interest in post-petition payments.

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

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

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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Dec. 4-8, 2012
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Jan. 21, 2013
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Feb. 20-22, 2013
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  CALENDAR OF EVENTS
 

November
- Winter Leadership Conference
     November 29 - December 1, 2012 | Tucson, Ariz.

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

2013

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


  

 

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


 
 
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Court Ruling Puts Cloud Over Consumer Financial Protection Bureau as Work Slows

ABI Bankruptcy Brief | May 23 2013
 
  

May 23, 2013

 
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  NEWS AND ANALYSIS   

COURT RULING PUTS CLOUD OVER CONSUMER FINANCIAL PROTECTION BUREAU AS WORK SLOWS

A court ruling that cast doubt on the authority of its director has hampered the U.S. Consumer Financial Protection Bureau, slowing some enforcement, impeding recruitment of a second-in-command and delaying joint ventures with the states, Bloomberg News reported yesterday. President Obama last year appointed Richard Cordray director when the Senate was not in session, the same day he made appointments to the National Labor Relations Board. The U.S. Court of Appeals in Washington on Jan. 25 concluded that the NLRB moves were unconstitutional, which could also affect Cordray. The Obama administration has appealed to the Supreme Court. House Republicans have said they will not take testimony from Cordray in the meantime. The Senate cannot move on Cordray’s renomination because Republicans will not permit an up or down vote. A Native American tribe has refused to supply information about its online lending business, claiming Cordray is not a legitimate director. In addition, candidates to be Cordray’s deputy will not pursue the job while his fate is unclear. The bureau’s plans to cooperate on enforcement with state attorneys general under the 2010 Dodd-Frank law also have not panned out, said Greg Zoeller, the attorney general of Indiana. “There has not been the gearing-up on consumer protection that I’d expected because of the cloud over the CFPB’s authority,” Zoeller, a Republican, said in an interview. The headwinds have not stopped the bureau’s work. Since it was established by Dodd-Frank, the agency has obtained $425 million in restitution for consumers and has imposed fines, including $15 million on mortgage insurers over kickbacks. The bureau has also warned banks about the consequences of discriminatory auto lending, released data on consumer complaints and published a study on payday lending. Read more.

SURVEY: NUMBER OF AMERICANS IN FORECLOSURE DOWN 25 PERCENT

Survey data by Lender Processing Services (LPS) shows that the number of Americans in the foreclosure process has fallen by almost 25 percent since April 2012, The Hill reported yesterday. Delinquency rates have also dropped, falling below 6.5 percent for the first time since July 2008. In line with LPS data, the National Association of Realtors reported yesterday that distressed homes – foreclosures and short sales – accounted for 18 percent of sales in April, down from 21 percent in March and 28 percent in April 2012. But while lower foreclosure rates are a sign that the economy and household finances are recovering, economists have blamed the dearth of foreclosures for some of the lackluster gains in the housing market recently. Existing and new home sales have both been constrained by tight inventory, according to experts, driving prices up in markets across the country and stunting a more solid recovery. Read more.

WALL STREET SEEKS DODD-FRANK CHANGES THROUGH TRADE TALKS

U.S. bankers and insurers are trying to use trade deals, which can trump existing legislation, to weaken parts of the Dodd-Frank Act designed to prevent a repeat of the 2008 financial crisis, Bloomberg News reported today. While the companies say that they are seeking agreements that preserve strong regulations and encourage economic growth, their effort is drawing fire from groups who argue that Wall Street wants to make the trade negotiations a new front in its three-year campaign to stop or alter the law. Sen. Elizabeth Warren (D-Mass.) said in a May 7 statement that there are “growing murmurs” about Wall Street’s efforts to “do quietly through trade agreements what they can’t get done in public view with the lights on and people watching.” The U.S. has embarked on three major negotiations aimed at reducing barriers to international commerce, one with the European Union covering most types of trade and investment, and a similar one with Asia-Pacific nations including Japan. A third set of talks, covering only services, is under way at the World Trade Organization. The Coalition of Service Industries, a trade association whose website lists Citigroup Inc., JPMorgan Chase & Co., American International Group Inc. and The Chubb Corp. as members, told the Office of the U.S. Trade Representative in a May 10 letter that “more compatible regulations for services” should be part of the EU deal. In separate letters on the EU and Asia-Pacific pacts, the industry coalition said that negotiators should draft rules limiting what regulators can do in the name of protecting financial stability. The letters also urged using the pacts to curb extra-territorial rules that can reach beyond U.S. borders, like ones currently being considered on financial derivatives. Read more.

COMMENTARY: WHY THE SEC NEEDS "NO-ADMIT" SETTLEMENTS

Last week, in a letter to the heads of the Securities and Exchange Commission, the Department of Justice and the Federal Reserve, Sen. Elizabeth Warren (D-Mass.) criticized the SEC practice of settling its civil litigation without requiring the defendant to admit wrongdoing, according to a commentary in today's Wall Street Journal. Warren said that this practice reduces the Wall Street regulator's leverage and forces it "to settle on terms that are much more favorable to the wrongdoer." Warren's criticism has long been shared by others on Capitol Hill and the courts who believe that "no-admit" settlements let defendants off without sufficient accountability, obscure the public record, and deprive private plaintiffs of the ability to piggyback on admissions to win monetary damage awards. In one prominent case in 2011, Judge Jed Rakoff of the district court in Manhattan took the rare step of refusing to sign off on a $285 million settlement between the SEC and Citigroup, calling it "pocket change" for the bank. That refusal has been appealed, and a decision is expected soon. The SEC and defense lawyers counter that no-admit settlements allow the agency to secure prompt and certain sanctions that are comparable to what regulators could reasonably attain through costly litigation—litigation that the SEC might actually lose. They contend that even without admissions, SEC settlements typically involve greater transparency and accountability than civil settlements by other federal agencies, some of which not only don't require an admission of wrongdoing, but actually allow the settling party to explicitly deny any wrongdoing. Read the full commentary. (Subscription required.)

LATEST BLOOMBERG VIDEO EXPLORES DEWEY CASE AND PROSPECT OF FUTURE LAW FIRM FAILURES

While failed law firms make for notoriously difficult bankruptcy cases, Dewey & LeBoeuf's time in bankruptcy court was quicker and easier than other notable law firms. Joe Samet, head of restructuring at Baker & McKenzie, and Al Togut, founding partner at Togut, Segal & Segal, talk with Bloomberg Law's Lee Pacchia about why Dewey's case went so smoothly compared to others, the prospects for other large law firm failures and how managing partners can keep their firms out of bankruptcy. Click here to watch the video.

ABI LIVE WEBINAR NEXT WEEK WILL FOCUS ON CLASS ACTIONS IN BOTH BUSINESS AND CONSUMER CASES

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

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

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

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: GENTILE V. DEGIACOMO (IN RE GENTILE; 1ST CIR.)

Summarized by Nathaniel Hull of Verrill Dana LLP

The First Circuit BAP dismissed the debtors’ appeal of a bankruptcy court order granting the chapter 7 trustee’s motion to sell real estate that was fully encumbered by a disputed lien for lack of appellate standing. The BAP concluded that the debtors failed to meet their burden of demonstrating that nullification of the sale would be likely to result in an overall surplus in the chapter 7 estate to which the debtors would become entitled once the bankruptcy case is closed.

There are nearly 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: STUDENT LOANS MAY NOW BE DISCHARGED MORE EASILY IN BANKRUPTCY IN THE 9TH CIR.

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new post examines the Ninth Circuit Court of Appeals' opinion in Hedlund v. The Educational Resources Institute, Inc. and Pennsylvania Higher Education Assistance Agency, Case 12-35258 (D.C. 6:11-cv-6281AA), suggesting that the opinion (and other pending decisions) may have made it a little easier on some student loan debtors to have their student loans discharged in bankruptcy.

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.

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May 29, 2013
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June 13-16, 2013
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June 14, 2013
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June 13, 2013
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July 18-21, 2013
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  CALENDAR OF EVENTS
 

2013

May
- ABI Live Webinar: Consumer Class Actions
     May 29, 2013

June
- Memphis Consumer Bankruptcy Conference
     June 7, 2013 | Memphis, Tenn.
- Central States Bankruptcy Workshop
     June 13-16, 2013 | Grand Traverse, Mich.
- INSOL’s Latin American Regional Seminar
     June 13, 2013 | São Paulo, Brazil
- 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
- ABI Endowment Football Game
    Oct. 6, 2013 | Miami, Fla.

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


 
 
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House Committee Approves Student Loan Fix

ABI Bankruptcy Brief | May 16 2013
 
  

May 16, 2013

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

HOUSE COMMITTEE APPROVES STUDENT LOAN FIX

Members of the Republican-led House Education and Workforce Committee approved a bill that would keep interest rates from doubling on new subsidized Stafford loans on July 1, the Associated Press reported. The GOP measure, which is opposed by House Democrats, provides lower rates immediately and for the next few years, but the plan also comes with potentially higher costs for some students in coming years. Without Congress's action, interest rates for new subsidized Stafford student loans would double from 3.4 percent to 6.8 percent on July 1. Under the proposal by the committee's chairman, Rep. John Kline (R-Minn.), student loans would be reset every year and based on 10-year Treasury notes, plus an added percentage. Using Congressional Budget Office projections, that would translate to a 5 percent interest rate on Stafford loans in 2014 but climb to 7.7 percent for loans in 2023. Read more.

Read the House Education and Workforce Committee's press release.

EDITORIAL: NEW YORK TARGETING PENSION PREDATORS

New York Gov. Andrew Cuomo (D) has done retirees and military veterans a great service by ordering New York’s top banking regulator to investigate “pension advance” firms that persuade customers to sign over all or part of their monthly pensions in exchange for immediate cash payments, according to a New York Times editorial today. The payments, advertised as advances, are, in fact, cleverly disguised loans that can carry ruinously high interest rates and eventually strip older citizens of their meager assets. By insisting that they are making advances, not loans, these firms elude state supervision, including usury laws, licensing regulations and the federal Truth in Lending Act, which requires lenders to disclose borrowing costs. These and other subterfuges have enabled the companies to ambush pensioners with “advance” loans that carry interest charges ranging from 27 percent to 106 percent, according to a review by the New York Times. Read more.

INVESTORS FLOOD INTO LOAN FUNDS

Money is flooding into funds that buy up loans to companies as some investors brace for the end of ultra-low interest rates, the Wall Street Journal reported today. The activity is adding fuel to the roaring corporate-refinancing boom by driving loan prices up, in turn pushing interest rates lower for companies rated below investment grade. Leveraged loans are again increasing in popularity among investors because the interest they pay changes with benchmark interest rates, typically quarterly. That is a major selling point amid concerns that prices of Treasurys and long-term corporate bonds will drop as the Federal Reserve pares back its support for financial markets—even though policymakers have signaled that a shift is not imminent. Yields rise as prices fall. Loan mutual funds took in $5.6 billion in April, dwarfing the combined $2.25 billion that went into Treasury bond and junk-bond funds, according to Lipper Inc. Inflows in the first four months of 2013 hit $22.4 billion, eclipsing full-year tallies for every year since 2003, when Lipper started tracking the data. Read more. (Subscription required.)

NEW SEC CHIEF MARY JO WHITE BEGINS JOB WITH PRESSURE TO TACKLE RULES

Since Mary Jo White took over as head of the Securities and Exchange Commission a month ago, Congress has pressed the former federal prosecutor to pump out long-overdue financial regulations required by the Dodd-Frank Act and rewrite key rules that govern the capital markets, the Washington Post reported today. This week, lawmakers are applying more pressure to get the job done — on their terms. The House passed a measure yesterday that gives the SEC an Oct. 31 deadline to adopt a portion of the JOBS Act, which aims to make it easier for small businesses to raise money. On Friday, another bill is scheduled to reach the House floor that would reinforce the need for the agency to do thorough cost analyses of any rules it’s considering. White yesterday tapped Keith Higgins of Ropes & Gray to head the SEC’s corporation finance division, which is heavily involved in writing the JOBS Act rules. She also named Lona Nallengara, who joined the SEC in 2011, as the agency’s chief of staff. Meanwhile, the SEC staff internally circulated a draft this month to revamp part of the money market fund industry, a plan that’s evolved over the past year. The agency has also proposed a plan for how rules governing derivatives should be applied in the global marketplace. But they are less stringent than what the Commodity Futures Trading Commission has promoted, alarming some investor advocates. Read more.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: TRUSTEES SLEEP EASY AFTER HIGH COURT RULING

Trustees of all types are sleeping easier, knowing that their liabilities for theft by a co-trustee is a debt that can be wiped out in bankruptcy as a result of a unanimous Supreme Court decision discussed by Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle on their latest video. To watch, please click here.

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

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

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

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

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: SOTO V. DORAL BANK (IN RE SOTO; 1ST CIR.)

Summarized by Samuel Ari Mushell of Americans United for Government Reform

The Bankruptcy Appellate Panel for the First Circuit affirmed the bankruptcy court's decision to dismiss the debtors' chapter 13 petition because the debtors did not comply with 521(a) of the Code. 521(a) requires debtors to submit their tax returns and payment advices to the trustee.

There are more than 800 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: BROWN-VITTER BILL A POTENTIAL CAPITAL FIX FOR TROUBLED MARKETS

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post finds that the common-sense steps taken in the "Terminating Bailouts for Taxpayer Fairness Act," introduced by Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.), will help even the playing field between community banks and big financial firms.

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.

  

 

NEXT WEEK:

 

 

LSS 2013
May 21-24, 2013
Register Today!

 

 

COMING UP

 

 

CCA Webinar 2013
May 29, 2013
Register Today!

 

 

Memphis 2013
June 7, 2013
Register Today!

 

 

CSBW 2013
June 13-16, 2013
Register Today!

 

 

Golf Tournament 2013
June 14, 2013
Register Today!

 

 

INSOL’s Latin American Regional Seminar in São Paulo, Brazil
June 13, 2013
Register Today!

 

 

NE 2013
July 11-14, 2013
Register Today!

 

 

SEBW 2013
July 18-21, 2013
Register Today!

 

 

MA 2013
Aug. 8-10, 2013
Register Today!

 

 

SW 2013
Aug. 22-24, 2013
Register Today!

 

 

NYIC Golf Tournament 2013
Sept. 10, 2013
Register Today!

 

 

Endowment Baseball 2013
Sept. 12, 2013
Register Today!

 

 

Endowment Football 2013
Oct. 6, 2013
Register Today!

 

 

40-Hour Mediation Program
Dec. 8-12, 2013
Register Today!


 
   
  CALENDAR OF EVENTS
 

2013

May
- Litigation Skills Symposium
     May 21-24, 2013 | Dallas, Texas
- ABI Live Webinar: Consumer Class Actions
     May 29, 2013

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

October
- ABI Endowment Football Game
    Oct. 6, 2013 | Miami, Fla.

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


 
 
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Report Student Borrowers Retreat from Home Buying

ABI Bankruptcy Brief | April 18 2013
 
  

April 18, 2013

 
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  NEWS AND ANALYSIS   

REPORT: STUDENT BORROWERS RETREAT FROM HOME BUYING

The Federal Reserve Bank of New York issued a report yesterday saying that Americans who borrowed to pay for school are now less likely to have a home mortgage at age 30 than those who never had student debt, a reversal of past trends, the Wall Street Journal reported today. As of late last year, roughly 22 percent of 30-year-olds with a history of student debt—either currently or in the past—owed money on a mortgage, the Fed said. That compares with 24 percent of 30-year-olds who never took out student loans. Similarly, young people with a history of student debt are less likely to have a car loan than those who did not have student loans, the report said. This marks a significant turnabout from recent history. For most of the past decade, student borrowers were much more likely to own a home or car, relative to those without student loans, because they typically were college graduates with higher incomes. But now, student debt could be among the factors holding them back, at least temporarily, the Fed report suggests. The report shows that credit scores for student borrowers have fallen sharply since the recession, likely due to higher average student-debt levels and a rise in delinquencies. Read more. (Subscription required.)

MORTGAGE RELIEF CHECKS GO OUT, ONLY TO BOUNCE

Many struggling homeowners received checks stemming from a $3.6 billion settlement with the nation’s largest banks over wrongful evictions and other abuses, only to find that the checks were bouncing, the New York Times DealBook Blog reported yesterday. It is unclear how many of the 1.4 million homeowners who were mailed the first round of payments covered under the foreclosure settlement have had problems with their checks. But housing advocates from California to New York and even regulators say that in recent days frustrated homeowners have bombarded them with complaints and questions. The mishap is just the latest setback to troubled homeowners. It took more than two years to resolve a federal investigation into foreclosure abuses, and even after the settlement was reached in January, the checks were delayed for weeks. Read more.

RISING BANK PROFITS TEMPT A PUSH FOR TOUGHER RULES

Banks have been reporting steady growth in earnings since the financial crisis, but their ballooning bottom lines could embolden lawmakers and regulators who want to introduce additional measures to overhaul the banking system, the New York Times DealBook blog reported yesterday. After the financial crisis, many officials involved in the regulatory revamping feared that tougher rules, like caps on bank assets, could destabilize the financial system and harm economic growth. It is a view that prominent bankers and lobbyists have also voiced. Despite industry opposition to the new rules, the buoyant bank profits could add to the ammunition that influential figures in Washington, D.C., are using to advocate for more radical ideas to overhaul the banks. "I hope the regulators move forward with tougher regulations," said Sheila C. Bair, a former chairwoman of the Federal Deposit Insurance Corp. and now a senior adviser at the Pew Charitable Trusts. "This wouldn’t endanger the economic recovery." Read more.

SEC TO MOVE PAST FINANCIAL CRISIS CASES UNDER CHAIRMAN WHITE

Mary Jo White, the first former prosecutor to serve as chairman of the U.S. Securities and Exchange Commission, has pledged to run a "bold and unrelenting" enforcement program at the agency charged with regulating Wall Street, Bloomberg News reported today. With financial crisis cases mostly done and some of the biggest insider-trading cases in history closed, White will have to chart a course into new areas to keep that pledge. White, who was sworn in last week, has already provided a few signals about what that cause might be. During her Senate confirmation hearing, she said that she intends to focus on high-frequency and automated trading. She has also raised questions about a drop in the number of accounting fraud cases the agency has brought in recent years. Read more.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: EASTERBROOK TURNS THE TIDE ON STUDENT LOANS

Why and when U.S.-managed hedge funds can go bankrupt in the Caribbean, but not in the U.S., is the first item discussed on the new bankruptcy video with Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle. The video ends with discussion of an opinion by U.S. Circuit Judge Frank Easterbrook, who's turning the tide against recent decisions that have left former students virtually incapable of shedding education loans in bankruptcy. Click here to watch the video.

Attending ASM? Don't miss Bloomberg's Bill Rochelle moderating the "BK 360 Revisited: ABI Past-Presidents Panel" session at lunch on Saturday from 12:30-2 p.m. ET.

 

ATTENDING ABI'S ANNUAL SPRING MEETING? MAKE SURE TO DOWNLOAD THE MOBILE APP FOR SMARTPHONES AND TABLETS!

The official Annual Spring Meeting mobile web app, sponsored by Diamond McCarthy LLP, is now available for iOS, Android and Blackberry devices! Utilize the app during ASM this week to view your personal schedule, browse what programs are taking place or search for information related to the meeting. The mobile web app stores the schedule data locally on your phone for offline access, too.

To take advantage of the ASM web app, bookmark the following address on your device’s browser: http://31stannualspringmeeting2013.sched.org/mobile

LIVE WEBSTREAMS OF THE GREAT DEBATES AND ABI'S CHAPTER 11 REFORM COMMISSION HEARING AVAILABLE TOMORROW FROM THE ANNUAL SPRING MEETING!

17TH ANNUAL GREAT DEBATES

Starting at 8:30 a.m. EST, the 17th Annual Great Debates will be streamed live at the following address: http://www.abiworld.org/debate13/

There will be three debates moderated by Jeffrey N. Pomerantz, ABI VP-Education, of Pachulski Stang Ziehl & Jones LLP (Los Angeles):

I. Past Presidents’ Debate
Resolved: The Bankruptcy Code should be revised to eliminate a debtor in possession's and trustee's ability to recover preferential transfers.

Pro: John D. Penn
Haynes and Boone LLP; Fort Worth

Con: Andrew W. Caine
Pachulski Stang Ziehl & Jones LLP; Los Angeles

II. Judicial Debate
Resolved: A claim against the debtor’s estate, transferred to a third party, should be treated the same as if in the hands of the original holder.

Pro: Hon. Arthur J. Gonzalez
New York University School of Law; New York

Con: Hon. Kevin J. Carey
U.S. Bankruptcy Court (D. Del.); Wilmington

III. Consumer Debate
Resolved: An attorney in a consumer case should be able to limit the scope of her employment.

Pro: Brian Michael Shockley
Clark & Washington, PC; Atlanta

Con: Pamela J. Griffith
Office of the U.S. Trustee; Washington, D.C.

ABI's CHAPTER 11 REFORM COMMMISSION HEARING AT 1 P.M. EST

There will also be a live webstream available on the ABI Chapter 11 Reform Commission's site (http://commission.abi.org) of the hearing tomorrow starting at 1 p.m. EST. Prepared witness testimony will also be linked to the site at that time.

Witnesses set to testify at the hearing include:

Panel I:

Wilbur L. Ross of WL Ross & Co. (New York)

Panel II (Bankruptcy Judges’ Panel):

Hon. Dennis R. Dow (W.D. Mo.)
Hon. Barbara J. Houser (N.D. Texas)
Hon. Pamela Pepper (W.D. Wis.)

Panel III:

Holly Felder Etlin of AlixPartners LLC (New York)
Daniel F. Dooley of MorrisAnderson (Chicago)
John M. Haggerty of Argus Management (Grafton, Mass.)


ABI IN-DEPTH

NEW ABI LIVE WEBINAR ON MAY 29 WILL FOCUS ON CONSUMER CLASS ACTIONS

Class action lawsuits in chapter 13 cases are becoming more prevalent. Are you wondering whether your client's claims would be better pursued in a class action? If your client is a defendant in a consumer class action, do you know what your client's best defenses are against class certification? ABI's panel of experts on May 29 from 1-2:15 p.m. ET will explore the potential benefits and pitfalls of class actions by debtors/trustees against creditors in chapter 13 cases by highlighting two recent appeals court decisions. Special ABI member rate available! Click here to register.

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

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

LATEST CASE SUMMARY ON VOLO: THOMAS V. BENDER (IN RE THOMAS; 11TH CIR.)

Summarized by Melissa Youngman of McCalla Raymer LLC

The Eleventh Circuit found no reversible error in the lower court's holding that proceeds from a post-petition real estate deal arising from a pre-petition option contract constituted property of the debtor's bankruptcy estate, pursuant to 11 U.S.C. § 541.

There are more than 800 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: SMALL BANKS WOULD BENEFIT FROM BIG-BANK BREAKUPS

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. Taking on the size of firms that put our financial system at risk is the only way to eliminate unfair competitive advantages, unleash free markets and allow community banks to thrive, 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.

TEE OFF ON THE NEW ABI GOLF TOUR!

ABI offers conference registrants the option to participate in the ABI Golf Tour. The Tour will take place concurrently with all conference golf tournaments. The Tour, which kicked off this morning at ABI’s Annual Spring Meeting, is designed to enhance the golfing experience for serious golfers while still offering a fun networking opportunity for players of any ability. As opposed to the format used at ABI’s regular conference events, Tour participants will "play their own ball." They will be grouped on the golf course separately from other conference golf participants and will typically play ahead of the other participants, expediting Tour play. Tour participants will be randomly grouped in foursomes, unless otherwise requested of the Commissioner in advance of each tournament. Prizes will be awarded for each individual Tour event, which are sponsored by Great American Group. The grand prize is the "Great American Cup," also sponsored by Great American Group, which will be awarded to the top player at the end of the Tour season. Registration is free. Click here for more information and a list of 2013 ABI Golf Tour event venues.

ABI Quick Poll

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

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

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.

  

 

TOMORROW:

 

LIVE WEBSTREAMS FROM ABI'S 31ST ANNUAL SPRING MEETING:

 

17TH ANNUAL GREAT DEBATES
Start Time: 8:30 A.M. EST

 

HEARING OF ABI'S COMMISSION TO STUDY THE REFORM OF CHAPTER 11
Start Time: 1 P.M. EST.

 

 

 

COMING UP

 

 

NYCBC 2013
May 15, 2013
Register Today!

 

 

 

 

ASM 2013
May 16, 2013
Register Today!

 

 

 

 

ASM 2013
May 21-24, 2013
Register Today!

 

 

 

ASM 2013
May 29, 2013
Register Today!

 

 

 

 

ASM 2013
June 7, 2013
Register Today!

 

 

 

 

 

ASM 2013
June 13-16, 2013
Register Today!

 

 

 

 

INSOL’s Latin American Regional Seminar in São Paulo, Brazil
June 13, 2013
Register Today!

 

 

 

 

NE 2013
July 11-14, 2013
Register Today!

 

 

 

 

 

ASM 2013
July 18-21, 2013
Register Today!

 

 

 

 

MA 2013
Aug. 8-10, 2013
Register Today!


 
   
  CALENDAR OF EVENTS
 

2013

May
- "Nuts and Bolts" Program at NYCBC
     May 15, 2013 | New York, N.Y.
- ABI Endowment Cocktail Reception
     May 15, 2013 | New York, N.Y.
- New York City Bankruptcy Conference
     May 16, 2013 | New York, N.Y.
- Litigation Skills Symposium
     May 21-24, 2013 | Dallas, Texas
- ABI Live Webinar: Consumer Class Actions
     May 29, 2013

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


  

 

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

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


 
 
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Validity of CFPB at Stake in Legal Challenge

ABI Bankruptcy Brief | January 31 2013
 
  

January 31, 2013

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

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.

  

 

NEXT EVENT:

 

 

 

ACBPIKC 2013
Feb. 7-9, 2013
Register Today!

 

 

 

COMING UP:

 

 

 

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

 

 

 

 

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

 

 

 

 

9th Annual Wharton Restructuring and Distressed Investing Conference
Feb. 22, 2013
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Paskay 2013
March 7-9, 2013
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BBW 2013
March 22, 2013
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"Nuts and Bolts" Program at ASM- A Must for Junior Professionals or Those New to Bankruptcy Practice
April 18, 2013
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ASM 2013
April 18-21, 2013
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ASM 2013
May 16, 2013
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  CALENDAR OF EVENTS
 

2013

February
- Caribbean Insolvency Symposium
     February 7-9, 2013 | Miami, Fla.
- ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
     February 19, 2013
- VALCON 2013
     February 20-22, 2013 | Las Vegas, Nev.
- 9th Annual Wharton
Restructuring and Distressed Investing Conference

     February 22, 2013 | Philadelphia, Pa.


  

 

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

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

May
- New York City Bankruptcy Conference
     May 16, 2013 | New York, N.Y.


 
 
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Commentary Allow Private Education Loan Debts to Be Erased in Bankruptcy

ABI Bankruptcy Brief | December 20 2012
 
  

December 27, 2012

 
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  NEWS AND ANALYSIS   

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

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

ANALYSIS: DO OR DIE FOR FOUR RETAILERS

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

CONSUMER CONFIDENCE DECREASES IN DECEMBER

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

SEC GOING HIGH-TECH WITH REAL-TIME TRADE DATA

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

ABI IN-DEPTH

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

Summarized by Eduardo Glas of McCarter & English, LLP

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

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: CALPERS SLAMS SAN BERNARDINO BANKRUPTCY AS "SHAM"

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

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

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

ABI Quick Poll

A licensee of a trademark has the right to retain the license even when a debtor rejects the underlying contract creating the license. (Sunbeam Products, 7th Cir.)

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

INSOL INTERNATIONAL

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

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NEXT EVENT:

 

 

WCBC 2013
Jan. 21, 2013
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COMING UP:

 

 

ACBPIKC 2013
Jan. 24-25, 2013
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ACBPIKC 2013
Feb. 7-9, 2013
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ACBPIKC 2013
Feb. 17-19, 2013
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ACBPIKC 2013
Feb. 20-22, 2013
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Paskay 2013
March 7-9, 2013
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BBW 2013
March 22, 2013
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ASM 2013
April 18-21, 2013
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  CALENDAR OF EVENTS
 

2013

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

February
- Caribbean Insolvency Symposium
     February 7-9, 2013 | Miami, Fla.
- Kansas City Advanced Consumer Bankruptcy Practice Institute
     February 17-19, 2013 | Kansas City, Mo.


  

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

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

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


 
 
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Analysis Better Lending Standards Helping to Reduce Foreclosure Starts

ABI Bankruptcy Brief | February 19 2013
 
  

February 19, 2013

 
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  NEWS AND ANALYSIS   

ANALYSIS: BETTER LENDING STANDARDS HELPING TO REDUCE FORECLOSURE STARTS

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

COMMENTARY: THE SECOND-MORTGAGE SHELL GAME

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

SHIFTING STRATEGY, PROSECUTORS BUILD NEW CASES AGAINST BIG BANKS

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

ANALYSIS: FISCAL TROUBLE AHEAD FOR MOST FUTURE RETIREES

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

REGULATOR PROBES "DARK POOL" INVESTING

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

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

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

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

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

  • Prof. Daniel A. Austin of Northeastern University School of Law (Boston)

  • Edward "Ted" M. King of Frost Brown Todd LLC (Louisville, Ky.)

  • Craig Zimmerman of the Law Offices of Craig Zimmerman (Santa Ana, Calif.)

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

EXPLORE CURRENT ISSUES FOR FINANCIAL ADVISORS IN BANKRUPTCY CASES AND MORE AT ABI'S 31ST ANNUAL SPRING MEETING

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

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

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

Click here to register today!

ABI IN-DEPTH

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

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

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

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

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

LATEST CASE SUMMARY ON VOLO: BLACK V. BONNIE SPRINGS FAMILY LTD. PARTNERSHIP (IN RE BLACK; 9TH CIR.)

Summarized by Tom Phinney of Parkinson Phinney

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

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: S CORPORATION MAY NOT PAY SHAREHOLDERS' POST-PETITION TAX OBLIGATIONS

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

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.

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TOMORROW:

 

 

 

ACBPIKC 2013
Feb. 20-22, 2013
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COMING UP:

 

 

 

 

9th Annual Wharton Restructuring and Distressed Investing Conference
Feb. 22, 2013
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Paskay 2013
March 7-9, 2013
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BBW 2013
March 22, 2013
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NEW WEBINAR!BBW 2013
April 10, 2013
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"Nuts and Bolts" Program at ASM- A Must for Junior Professionals or Those New to Bankruptcy Practice
April 18, 2013
Register Today!

 

 

 

 

 

ASM 2013
April 18-21, 2013
Enter code "LOVEASM50" at checkout to save $50 on a new registration this week!
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NYCBC 2013
May 15, 2013
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ASM 2013
May 16, 2013
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ASM 2013
May 21-24, 2013
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ASM 2013
June 7, 2013
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ASM 2013
June 13-16, 2013
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  CALENDAR OF EVENTS
 

2013

February
- VALCON 2013
     February 20-22, 2013 | Las Vegas, Nev.
- 9th Annual Wharton
Restructuring and Distressed Investing Conference

     February 22, 2013 | Philadelphia, Pa.

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

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


  

 

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

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


 
 
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Commentary Housing Prices Stabilizing Where Lenders Can Enforce Contracts

ABI Bankruptcy Brief | January 10 2013
 
  

January 10, 2013

 
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  NEWS AND ANALYSIS   

COMMENTARY: HOUSING PRICES STABILIZING WHERE LENDERS CAN ENFORCE CONTRACTS

Data from Case-Shiller, Lender Processing Services and other housing trackers suggest that the housing rebound is strongest in states where lenders can enforce contracts, according to an editorial in yesterday's Wall Street Journal. The editorial refers to the difference between "nonjudicial" states that have streamlined foreclosure procedures and the 23 "judicial" states that force lenders to go to court to enforce mortgage contracts. Prices are stabilizing in the former but still faltering in much of the latter. Housing markets cannot clear until lenders can foreclose on delinquent borrowers and prices fall far enough to attract buyers who can afford the mortgage payments, according to the editorial. Politicians and housing lobbyists decry nonjudicial foreclosure as unfair to borrowers, but every homeowner in any state has the right to challenge a foreclosure in court, regardless of whether they live in a nonjudicial state. The main difference is that in a judicial state the lender has to file a lawsuit to initiate a foreclosure, which can take months or years to settle depending on the state. Lender Processing Services estimates that the foreclosure inventory in judicial states is more than triple that of nonjudicial states. The Mortgage Bankers Association's latest National Delinquency Survey, which ended September 30, showed that of the top five states with the highest share of loans in foreclosure, four were judicial: Florida (13.04 percent), New Jersey (8.87 percent), Illinois (6.83 percent) and New York (6.46 percent). Read the full editorial. (Subscription required.)

ANALYSIS: SHORT SALES IN CALIFORNIA SURPASS SALES OF FORECLOSED HOMES

Real estate research firm DataQuick is reporting that short sales in California in recent months have surpassed sales of foreclosed homes for the first time since the start of the housing crash in 2007, the Los Angeles Times reported yesterday. The transactions now represent about a quarter of the market, a surge driven by rising home prices, government crackdowns on foreclosures and banks' increasing capacity to process the deals. Lenders have revamped short sale departments, streamlining paperwork, creating new software systems and enlisting newly formed companies as liaisons with borrowers. Some institutions are even paying homeowners sizable sums to move, similar to "cash for keys" arrangements used as an alternative to eviction in foreclosures. Bank of America pays up to $30,000 in relocation assistance for certain successful short sales. JPMorgan Chase will pay up to $35,000. Wells Fargo offers similar aid, though it declined to specify an amount. Read more.

LENDER REVIEW OF BORROWERS TIGHTENED UNDER CFPB'S NEW MORTGAGE RULES

The U.S. Consumer Financial Protection Bureau issued a rule today that for the first time forces lenders to verify borrowers’ ability to repay mortgages by confirming income and assets, Bloomberg News reported. The rule, mandated by Congress in response to lax underwriting standards before the 2008 financial crisis, will also offer some legal protection for lenders who follow guidelines for qualified mortgages. The measure also insulates issuers of qualified mortgages at prime interest rates from future lawsuits. The qualified-mortgage rule will apply to home loans in the underwriting phase, whether made by banks such as Bank of America Corp. and/or non-depository originators. The rule on repayment ability is the first in a series of rules that the CFPB will issue that will shape the post-crisis mortgage market. The bureau will unveil rules on mortgage servicing at a Jan. 17 hearing in Atlanta. Read more.

CONSUMER DEBT INCREASES ON MORE CAR, SCHOOL LOANS

The Federal Reserve issued a report on Tuesday showing that consumers increased their borrowing in November by $16 billion from October to a seasonally adjusted record of $2.77 trillion, the Associated Press reported yesterday. Borrowing that covers autos and student loans increased $15.2 billion. A category that measures credit card debt rose just $817 million. The sharp difference in the borrowing gains illustrates a broader trend that began during the Great Recession. Four years ago, Americans carried $1.03 trillion in credit card debt, an all-time high. In November, that figure was 16.5 percent lower. At the same time, student loan debt has increased dramatically. The category that includes auto and student loans is 22.8 percent higher than in July 2008. Read more.

LATEST BLOOMBERG "BILL ON BANKRUPTCY" VIDEO: FEE AGREEMENT PUTS LAW FIRM IN TRUSTEE'S SIGHTS

Law firm Kaye Scholer LLP and financial advisor Capstone Advisory Group LLC are in the sights of a U.S. Trustee aiming to claw back $12 million for an undisclosed agreement to share fees awarded in the now-completed bankruptcy of GSC Group Inc. In their latest video, Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle pose the question of whether the dispute involves a serious ethical lapse or a hypertechnical reading of an ambiguous statute. Click here to view.

CHAPTER 9s, NONPROFITS AND OTHER NONTRADITIONAL RESTRUCTURING PROCESSES AMONG TOPICS TO BE DISCUSSED 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 on Hot Business and Consumer Topics
• Mediation: The Rational Alternative
• 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
• Law Firm Bankruptcies
• How to Be a Successful Expert
• The Ethical Compass: Multiple Ethical Schemes Applicable to Financial Advisors
• Chapter 9s, Nonprofits and Other Nontraditional Restructuring Processes
• And much more!

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

Register today!

ABI IN-DEPTH

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

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

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

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

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

Eric E. Walker of Perkins Coie LLP (Chicago)

Click here to register!

LATEST CASE SUMMARY ON VOLO: ELLIOT V. SUTTON (IN RE ELLIOTT; 5TH CIR.)

Summarized by Brendan Gage, U.S. Bankruptcy Court, Eastern & Western Districts of Arkansas

Affirming the judgment of the District Court for the Western District of Louisiana, the Fifth Circuit held that a bankruptcy court may sua sponte convert a debtor’s chapter 13 case to a case under chapter 7 even when the debtor opposes conversion and moves to dismiss the case pursuant to § 1307(b).

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: EXAMINING CALPERS’ LOSS IN THE SAN BERNARDINO CHAPTER 9 CASE

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new post examines the decision of a bankruptcy judge to deny the motion of the California Public Employees’ Retirement System (CALPERS) that it filed in the bankruptcy proceedings of the city of San Bernardino to have the automatic stay lifted with respect to overdue pension payments. Bankruptcy Judge Meredith Jury based her denial partly on the city’s representations that forcing the payment of outstanding CALPERS obligations at this time would be a “death knell” for the city.

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

ABI Quick Poll

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

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

INSOL INTERNATIONAL

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

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NEXT EVENT:

 

 

WCBC 2013
Jan. 21, 2013
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COMING UP:

 

 

ACBPIKC 2013
Jan. 24-25, 2013
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ACBPIKC 2013
Feb. 7-9, 2013
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ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
Feb. 19, 2013
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ACBPIKC 2013
Feb. 20-22, 2013
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Paskay 2013
March 7-9, 2013
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BBW 2013
March 22, 2013
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ASM 2013
April 18-21, 2013
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  CALENDAR OF EVENTS
 

2013

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

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


  

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

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

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


 
 
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Listen to ABIs Teleconference Exploring Chapter 9 Trends Municipal Finance Predictions for 2013

ABI Bankruptcy Brief | January 22 2013
 
  

January 22, 2013

 
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  NEWS AND ANALYSIS   

LISTEN TO ABI’S TELECONFERENCE EXPLORING CHAPTER 9 TRENDS, MUNICIPAL FINANCE PREDICTIONS FOR 2013

ABI held a media teleconference today featuring experts explaining the history of chapter 9 bankruptcy, lessons learned from chapter 9 cases in 2012 and what the financial landscape for municipalities looks like in 2013. Speakers on the teleconference include:

• Hon. Christopher M. Klein is the Chief Bankruptcy Judge for the Eastern District of California (Sacramento) and presides over the chapter 9 case of Stockton, Calif., the largest city to file.

Juliet M. Moringiello of Widener University School of Law (Harrisburg, Pa.) is a former ABI Resident Scholar (Spring 2010 semester).

Patrick Darby of Bradley Arant Boult Cummings LLP (Birmingham, Ala.) is a co-author of ABI’s recently released Second Edition of Municipalities in Peril: The ABI Guide to Chapter 9.

Natalie Cohen of Wells Fargo Securities, LLC (New York) is well-known for her studies and articles about municipal credit risk and bond defaults.

• ABI Resident Scholar Prof. C. Scott Pryor of the Regent University School of Law (Virginia Beach, Va.) is the moderator for the program.

Click here to listen to a full replay of the teleconference.

For further insight and analysis of chapter 9 bankruptcy, order the Second Edition of Municipalities in Peril: The ABI Guide to Chapter 9. Click here to purchase.

WITH TAX ADVANTAGES LOOKING SHAKY, PRIVATE EQUITY SEEKS A NEW PATH

As the government grapples with the country's fiscal woes, the private-equity industry is grudgingly facing a new reality: Its long-held tax advantages are likely to disappear, according to a report yesterday in the New York Times DealBook blog. For years, private equity has quashed efforts to raise taxes on so-called carried-interest income, the profits partners receive as part of their compensation. Those earnings are considered capital gains, so they are taxed at a much lower rate than ordinary income. While few concede defeat publicly, the industry is rethinking its endgame. Rather than trying to stop the changes outright, lawyers and executives behind the scenes are trying to minimize the hit if it happens. In the current budget debate, tax deductions for home mortgage interest and charitable donations are on the table, along with potential cuts to Social Security and Medicare. Read more.

COMMENTARY: TAKEAWAYS FROM ZELL'S TRIBUNE FIASCO

As Tribune Co. emerges from its four-year bankruptcy tour, the deal that put it there is widely recognized as a fiasco that consumed billions of dollars, claimed thousands of jobs and degraded one of Chicago's most important institutions, according to a commentary in Crain's Chicago Business on Saturday. However, some lessons can be drawn from Sam Zell's $8.2 billion leveraged buyout in 2007 and its aftermath. Deference can be deadly, according to the commentary, as the crisis that sent Tribune directors scrambling to find a savior did not appear overnight. The company's stock had been dead in the water for years as the Internet eroded its business model. A more-engaged board would have acted sooner to scare up shareholder returns and prepare the company for a digital future. Wall Street worshiped Zell, whose real estate deals triggered geysers of banking fees. The multibillionaire's Tribune bid looked like another bonanza to Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and Merrill Lynch. But loan losses ran into the billions when Tribune tumbled into a bankruptcy reorganization that left lenders with equity stakes in a company worth far less than the amount they advanced to fund the deal. The central conceit of Zell's takeover was that a real estate magnate with no experience in newspapers or television could solve problems confounding career media executives. But Zell's plan was pretty much the same as Tribune's: hoping things get better soon. Neither he nor the radio executives he installed to run Tribune understood the forces reshaping the media industry. Read the full commentary.

NEW SECURITIES LAWS AIM TO HELP START-UPS RAISE CAPITAL

New U.S. securities laws intended to help startup companies raise money are poised to benefit real estate investors as well, allowing individuals to buy stakes in offices and other commercial buildings once off limits to them, Bloomberg News reported today. The Jumpstart Our Business Startups Act will ease restrictions on investments in closely held companies, including those set up to own commercial property, by people making less than $200,000 a year and with a net worth of less than $1 million. Before the law’s passage, such firms could market and sell shares to individuals who exceed those levels, known as accredited investors. The law, which changed parts of the Securities Act of 1933, will allow non-accredited investors to put $2,000 a year or 5 percent of their income or net worth -- whatever amount is greatest -- into closely held ventures. While the law went into effect in April 2012, property investors are not able to take advantage of it yet because proposed investor-safeguard rules are still being worked on by the SEC. The commission missed its own end-of-the-year deadline for drafting the regulations. Read more.

PROFILE: TREASURY SECRETARY NOMINEE VALUES SOCIAL SAFETY NET, COMPROMISE

While Treasury Secretary nominee Jack Lew's history aggressively advocates on behalf of programs that protect the poor, he has also been willing to make unpopular compromises out of a belief that the nation must have its financial books in order, according to a profile in today's Washington Post. Some conservatives say he has a blind obsession with providing government benefits, without care for the nation's overall finances. Some liberals say he has too often forfeited his principles in search of bipartisan deals. No senators other than Jeff Sessions (R-Ala.) and Bernard Sanders (I-Vt.) have come out against Lew's nomination to date, and prospects are favorable for Lew being confirmed by the Senate. Read more.

CURRENT ISSUES FOR FINANCIAL ADVISORS IN BANKRUPTCY CASES AT ABI'S 31ST ANNUAL SPRING MEETING

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

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

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

Register today!

ABI IN-DEPTH

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

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

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

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

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

Eric E. Walker of Perkins Coie LLP (Chicago)

Click here to register!

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

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

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

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: TAX REFUNDS IN BANKRUPTCY

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new post examines issues surrounding tax refunds and bankruptcy filings.

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

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

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

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

ABI Quick Poll

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

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

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.

  

 

THURSDAY:

 

 

ACBPIKC 2013
Jan. 24-25, 2013
Register here!

 

 

COMING UP:

 

 

ACBPIKC 2013
Feb. 7-9, 2013
Register Today!

 

 

 

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

 

 

 

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

 

 

 

Paskay 2013
March 7-9, 2013
Register Today!

 

 

 

BBW 2013
March 22, 2013
Register Today!

 

 

 

ASM 2013
April 18-21, 2013
Register Today!

 
   
  CALENDAR OF EVENTS
 

2013

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

February
- Caribbean Insolvency Symposium
     February 7-9, 2013 | Miami, Fla.
- ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions
     February 19, 2013
- VALCON 2013
     February 20-22, 2013 | Las Vegas, Nev.


  

 

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

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


 
 
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Changes in Mortgage Servicing Practices Take Effect Today

ABI Bankruptcy Brief | September 27, 2012
 
  

October 2, 2012

 
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  NEWS AND ANALYSIS   

CHANGES IN MORTGAGE SERVICING PRACTICES TAKE EFFECT TODAY

A significant element of the government’s historic settlement with big banks over foreclosure abuses takes effect today, when firms face a deadline for carrying out more than 300 changes in the way they service mortgages and treat struggling homeowners, the Washington Post reported today. Much of the attention surrounding this year’s $25 billion government settlement has focused on the banks' agreement to reduce the loan balances of some borrowers and undertake more refinancings for thousands of Americans. Although the new standards have not received as much attention, they are crucial for fixing a broken mortgage system, government officials said. The standards forbid the pervasive practice of "robo-signing," and mortgage servicers can no longer foreclose on a borrower while simultaneously negotiating a loan modification, a practice known as "dual tracking." They must provide customers with a single point of contact, rather than shuffling them around to different employees with each call. Read more.

U.S. CREDIT CARD LENDERS SHUN ADD-ONS AS CFPB CRACKS DOWN

JPMorgan Chase & Co., Bank of America Corp. and American Express Co. are among credit card lenders retreating from a $2.4 billion market as regulators seek curbs on deceptive marketing of products including debt cancellation, Bloomberg News reported today. Scrutiny from the Consumer Financial Protection Bureau (CFPB) has led to fines against banks including Capital One Financial Corp. and Discover Financial Services, prompting them to curtail sales of so-called add-ons that offer to help customers pay credit card bills if they get sick or lose their jobs, or help monitor their credit. American Express, the biggest U.S. credit-card issuer by purchases, said yesterday that it will pay $112.5 million to settle claims that it violated consumer safeguards from marketing to collections in products sold to about 250,000 customers. That case did not involve add-on products. The crackdown is CFPB Director Richard Cordray's first enforcement campaign after the Dodd-Frank Act consolidated regulation of retail financial products under one federal agency. With U.S. banks already complaining that regulation has squeezed revenue, the bureau is considering new limits on payday lending and fees for checking overdrafts, and has proposed an overhaul of mortgage practices. Read more.

COMMENTARY: MONEY MARKET MUTUAL FUNDS AND MORAL HAZARD

The wrangling over money-market mutual funds is a vivid illustration of some of the hidden costs of bailouts — in this case, the government rescue of the $2.6 trillion money-market mutual fund industry in 2008 that was so successful it took away any sense of urgency for major reform, according to a commentary in Friday’s Washington Post. Last month, SEC Chair Mary Schapiro canceled plans to move forward on a reform proposal for regulating the mutual fund industry after concluding she did not have the votes for passage of the proposal. SEC Commissioner Luis A. Aguilar had indicated he would oppose her proposal, favoring a more overarching approach to overseeing the cash-management industry. To step up pressure on the SEC, Treasury Secretary Timothy Geithner’s letter to the Financial Stability Oversight Council (FSOC), created by the Dodd-Frank Act, advocated for regulators to step up oversight of money-market mutual funds. Read the full commentary.

CALIFORNIA DAIRIES GOING BROKE DUE TO FEED, MILK PRICES

Across California, the nation's largest dairy state, dozens of dairy operators large and small have filed for bankruptcy in recent months, and many teeter on the edge of insolvency, the Associated Press reported on Saturday. Others have sold their herds or sent them to slaughter and given up on the business. Experts say California dairymen face a double hit to their operations: exorbitant feed costs and lower milk prices. The Midwest drought has led to corn and soybean costs increasing by more than 50 percent this summer, stressing dairymen from Wisconsin and Minnesota to Missouri. But in California, milk prices have also lagged behind those in the rest of the nation, exacerbating the crisis. And while milk revenues in California have soared to over $7.5 billion in 2011, making milk the top agricultural commodity, higher revenues mean little, farmers say, because it costs so much more to produce the milk. Read more.

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

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

ABI IN-DEPTH

SEE THE N.L. EAST DIVISION CHAMPION WASHINGTON NATIONALS IN THE PLAYOFFS: ABI HAS YOUR TICKET!

Don't miss playoff baseball in Washington, D.C.! Only 20 tickets are available to the ABI Endowment's special event at the Nationals first home playoff game to be played either Oct. 9 or 10 (depending on Major League Baseball scheduling). For $400, you will receive a game ticket to a luxury suite, food and open bar. Click here to register!

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

MEMBERS WILL NOT WANT TO MISS ABI'S PROGRAM AT NCBJ'S ANNUAL MEETING ON OCT. 26

Members planning to attend the 86th Annual NCBJ Annual Conference in San Diego from Oct. 24-27 will not want to miss the exciting line-up scheduled for the ABI program track on Oct. 26. In addition to roundtable discussions on the hottest consumer and business bankruptcy topics, ABI will be hosting a ticketed luncheon that will feature the presentation of the 7th Annual Judge William L. Norton, Jr. Judicial Excellence Award and entertainment by Apollo Robbins, a sleight-of hand artist, security consultant and self-described gentleman thief. Click here to register for the Conference.

To view the list of ABI programs on Oct. 26 and the full NCBJ Annual Conference schedule, please click here.

ABI's Chapter 11 Reform Commission will also be holding a public hearing on Oct. 26 from 2:30-4:30 p.m. PT at the San Diego Marriott. Interested parties have the opportunity to submit testimony at the hearing. For further information, please contact ABI Executive Director Samuel J. Gerdano at sgerdano@abiworld.org.

LATEST CASE SUMMARY ON VOLO: MATOS V. RIVERA (IN RE MATOS; 1ST CIR.)

Summarized by Guy Moss of Riemer & Braunstein LLP

As a threshold matter, the First Circuit BAP ruled that all tax refunds received by a chapter 13 debtor are property of the estate whether pursuant to 11 U.S.C. § 541(a) to the extent that they are rooted in pre-petition earnings, or 1306 to the extent that they relate to earnings from services performed by the debtor post-petition. Reversing the rulings of the bankruptcy court, the BAP next determined that an objection to the debtor's claimed exemption in the refund (defined below) did not lie because (1) the refund was property of the estate, (2) the exemption was valid on its face, and (3) the trial court incorrectly considered an alleged infirmity in plan confirmation, i.e., whether the refunds had to be devoted entirely to a plan pursuant to 11 U.S.C. §§ 1322(a)(1) and 1325(b)(1)(B), to determine the validity of an exemption. Rather, consideration of that issue arises only if and when there is an objection to the plan. The BAP reserved comment on whether such an objection to an exemption is a necessary "placeholder" to preserve the objecting party's ability to object to plan confirmation on the ground that not all future earnings and income are being devoted to plan payments.

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: PILGRIM'S PRIDE OPINION ALLOWS ENHANCEMENTS IN BANKRUPTCY, OFFERS COMPREHENSIVE OVERVIEW OF BANKRUPTCY FEES

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines the Fifth Circuit's ruling in Matter of Pilgrim's Pride Corp., No. 11-10774 (5th Cir. 8/10/12), to allow a $1 million fee enhancement to a chief restructuring officer who achieved results described as "rare and exceptional." The court rejected the argument that a recent Supreme Court opinion on fee-shifting precluded enhancements, and in the process set forth a comprehensive framework for allowance of professional fees in bankruptcy.

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 adopt formal loss mitigation procedures to facilitate the negotiation of residential mortgage modifications for consumer debtors.

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

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

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

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.

  

 

THIS WEEK:

NABMW 2012
Oct. 4, 2012
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SE 2012
Oct. 5, 2012
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SE 2012
Oct. 5, 2012
Register Today!


COMING UP:

 

SE 2012
Oct. 8, 2012
Register Today!

 

ABI YOUNG AND NEW MEMBERS COMMITTEE “TRENDING ISSUES: EXAMINERS AND SELECT PLAN CONFIRMATION ISSUES” WEBINAR
Oct. 15, 2012
Register Today!

 

SE 2012
Oct. 16, 2012
Register Today!

 

SE 2012
Oct. 18, 2012
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ABI/ST. JOHN'S "BANKRUPTCY AND RACE: IS THERE A RELATION?" SYMPOSIUM
Oct. 19, 2012
Register Today!

 

ABI'S PROGRAM AT NCBJ'S ANNUAL MEETING
Oct. 26, 2012
Register Today!

 

MEXICO 2012
Nov. 7, 2012
Register Today!

 

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

 

SE 2012
Nov. 12, 2012
Register Today!

 

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

 

MT 2012
Dec. 4-8, 2012
Register Today!

 

ACBPIKC 2013
Feb. 17-19, 2013
Register Today!

 
   
  CALENDAR OF EVENTS
 

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
- ABI/Bloomberg Distressed Lending Conference
October 16, 2012 | New York, N.Y..
- International Insolvency and Restructuring Symposium
     October 18, 2012 | Rome, Italy
- ABI/St. John's "Bankruptcy and Race: Is There a Relation?" Symposium
     October 19, 2012 | Queens, N.Y.
- ABI Program at NCBJ's Annual Conference
     October 26, 2012 | San Diego, Calif.

  

 

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

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

2013

February
- Kansas City Advanced Consumer Bankruptcy Practice Institute
     February 17-19, 2013 | Kansas City, Mo.


 
 
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