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