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Consumer Commission Recommendations Provide Blueprint for Needed Legislative Changes for Economic Relief, Chapter 13 Trustees Write in ABI Journal

Alexandria, Va. — The final recommendations of the ABI Commission on Consumer Bankruptcy proposes potential solutions for what needs to be done to stimulate the economy, provide debtors with fresh starts, and ensure that creditors receive what debtors can afford to pay, according to an article in the November ABI Journal. “Throughout the COVID-19 pandemic, Congress considered and passed a few quick fixes to the Bankruptcy Code to help stimulate the economy,” Chapter 13 Trustees Linda Gore (Gadsden, Ala.) and Brad Caraway (Birmingham, Ala.) write in their article, “Chapter 13 Legislative Change Is Needed for Economic Relief.” “However, last year Congress also obtained a report from the ABI Commission on Consumer Bankruptcy that proposed beneficial and more meaningful bankruptcy reform. Further changes need to be proposed and passed to give people hope of recovering from the current crisis.”

Gore and Caraway highlighted that the economy and financial state of debtors has changed in the 15 years since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was passed and enacted into law. “BAPCPA has failed to produce many of the expected results as envisioned at the time of its passage, perhaps due to the various provisions placed in the legislation,” they write. “And now, the economy and workforce are being ravaged by the stresses created as a result of the steps taken to cope with the COVID-19 pandemic.” Gore and Caraway said that by making it more difficult for debtors to file and get a meaningful fresh start (due to restrictions on filing, the debt limits or the type of debts deemed nondischargeable), “debtors are hindered — if not prevented — from rejoining the economy as tax-paying consumers.”

Gore and Caraway examined a few of the recommendations proposed by the Consumer Commission report that they think would help stimulate the economy, provide debtors with fresh starts, and ensure that creditors receive what debtors can afford to pay:   
 

  • Student Loans: “The student loan suggestion by the ABI Commission recognizes that recent graduates should be required to pay back their student loans. However, they recommend that student loans be discharged if they were made by an entity other than a governmental unit, incurred by someone who did not receive the education, being paid through a five-year chapter 13 plan or first became payable more than seven years before the filing of a chapter 7 case.”
     
  • Chapter 13 Debt Limits: “The ABI Commission also recommended that the debt limits for chapter 13 case eligibility be increased. This is especially needed due to the large student loan amounts that some potential debtors are carrying.”
     
  • Elimination of Pre-Petition Counseling: “The ABI Commission advocates for an elimination of pre-petition counseling for chapter 13 debtors but supports the continuation of the requirement for a post-petition financial-management course. The discontinuation of what has become known as the “ticket in” counseling session is to lower costs, eliminate unnecessary time requirements and allow greater access to the bankruptcy courts.”
     
  • Reducing the Required Documents for Below-Median Debtors: “The ABI Commission endorses reducing the required documentation the below-median-income debtors are required to produce to establish the numbers used in their means test calculations. If less work is required, less fees for attorneys would be incurred, which would save money for the debtors. This would help to eliminate unnecessary costs for the poorest of debtors.”
     
  • Emergency Fund: “Working from the premise that many chapter 13 cases fail due to an unexpected expense or emergency, the ABI Commission proposes that chapter 13 debtors be encouraged and permitted to maintain a reserve to address unanticipated expenses.” Gore and Caraway point out that there are several bankruptcy jurisdictions that currently allow a bankruptcy emergency fund.

To obtain your copy of “Chapter 13 Legislative Change Is Needed for Economic Relief,” please contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or [email protected].

To stay up to date on the COVID-19 pandemic, be sure to bookmark ABI’s Coronavirus Resources for Bankruptcy Professionals website (abi.org/covid19). To obtain a copy of the ABI Commission on Consumer Bankruptcy’s Final Report, please visit https://consumercommission.abi.org/.

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/education-events.

 

Dilemmas for Landlords During COVID-19 Pandemic, Sale of Health Care Assets and Cross-Border Issues Among the Topics to Be Discussed at ABI's Winter Leadership Conference on December 3-4

Alexandria, Va. – For the safety of our speakers and attendees during the COVID-19 pandemic, ABI’s annual Winter Leadership Conference has been converted to an innovative online format for 2020. Experts will speak on key issues facing the profession now and heading into 2021 as 13 plenary and concurrent sessions will be held on the afternoons of December 3 and 4, and will include ample networking on both days. Attendees will be able to take part in the conference from the comfort of their home or office while earning up to 8.75/10.5 hours of CLE/CPE credit, including 1.25/1.5 hours of ethics.

Sessions at the Winter Leadership Conference include:

  • Hot Topics with Bill Rochelle
  • Anatomy of a Pharmaceutical Bankruptcy Case
  • Money Talks: Getting Retained and Paid (Ethically) by the Bankruptcy Estate
  • Witness Preparation: A Roundtable Discussion
  • Peace Bridge, or Bridge of Sighs: Cross-Border Mediation of Insolvency-Related Disputes
  • “Too Many Hats”: The Peculiar Problems and Challenges that Arise When an Equity Sponsor/Secured Lender Is DIP Lender/Stalking-Horse Buyer in a Chapter 11 Case
  • A Catch-22: Dilemmas for Landlords in the Era of COVID-19
  • Judicial Round-and-Round
  • But I’m Afraid of Needles: The Sale of Health Care Assets, sponsored by BakerHostetler
  • Consumer Commission Report: Top 10 Wish List
  • Opportunities and Challenges Associated with Early-in-the-Case § 363 Sales
  • Do This, Not That: Ethics Roundtable
  • Navigating Distressed Investing, Sales and Technology: Protecting Your Sale Process, Your Investments and Your Hide

The ABI Endowment will also be holding a special virtual wine tasting event on the evening of December 2 to benefit The Anthony H.N. Schnelling Endowment Fund. Sponsored by Cozen O'Connor, Polsinelli and SSG Capital Advisors LLC, the event features four premium small-batch wines chosen by America’s first Master Sommelier Eddie Osterland.

For more information about the conference, please click here. Members of the press that would like to attend the Consumer Bankruptcy Forum should contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or [email protected]

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/calendar-of-events.

 

ABI's International Insolvency Forum Next Week to Feature Conversation with President Bill Clinton, Sessions Examining the Implications for Global Restructurings During COVID-19 Pandemic and More

Alexandria, Va. – Insolvency experts from around the world will virtually gather to provide their insights on key issues and timely topics pertaining to international practice at ABI’s 2020 International Insolvency Forum. The three-day online conference brings together ABI’s annual International Insolvency & Restructuring Symposium partners — International Insolvency Institute (III), American College of Bankruptcy, TMA Europe, INSOL and IWIRC — and ABI's annual Cross-Border Insolvency Program. Highlighting the event will be President Bill Clinton, 42nd President of the United States, discussing the current political landscape with Bill Brandt of Development Specialists, Inc. Experts will be examining the global restructuring landscape and provide an outlook on the year ahead. The Forum will be a "one-stop shop" for attendees looking for technical sessions covering current international insolvency issues and light-hearted networking opportunities — all from the comfort of their home or office! This program is eligible for up to 10.75/12.5 hours of general CLE/CPE credit.

Ian G. Williams of Williams Consulting International (London) is the chair of the Forum, and the program co-chairs are E. Patrick Shea of Gowling WLG LLP (Toronto) and Dr. Annerose Tashiro, ABI Vice President-International Affairs, of Schultze & Braun GmbH (Achern, Germany).

Sessions for the International Insolvency Forum include:

  • One Year into COVID-19: What Are the Implications for Restructurings Around the Globe in 2021?
  • Arbitration for Cross-Border Insolvency
  • Follow The Money: Bankruptcy as a Tool to Fight Fraud and Recover Assets
  • Emerging from the COVID-19 Disruption: The Need for a National Emergency Restructuring Entity
  • The New Europe: The Reality of Working Together
  • Troubled Non-U.S. Airlines Landing in Chapter 11: The Inside Story
  • Addressing COVID—Local Reactions to a Global Pandemic
  • Cross-Border Communication - Getting the Message Across

For more information about the program, please click here. Members of the press that would like to attend the International Insolvency Forum should contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or [email protected]

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/calendar-of-events.

 

Total Bankruptcy Filing Drop 41 Percent in October from Last Year, Commercial Chapter 11 Filings Increase 4 Percent

Alexandria, Va. Total U.S. bankruptcy filings in October decreased 41 percent from last year, according to data provided by Epiq Systems, Inc. The 40,209 total filings in October 2020 were down from the 67,858 filings registered in October 2019. The 37,688 consumer filings in October 2020 also represented a 41 percent decrease from last year’s consumer total of 64,279. Overall commercial filings in October 2020 totaled 2,521 filings, down 30 percent from the 3,579 filings in October 2019. Commercial chapter 11 filings increased slightly as the 550 filings in October 2020 were up 4 percent over the 530 recorded in October 2019. Throughout 2020, more than one-half of the commercial chapter 11 filings have been related filings by subsidiaries within a corporate group.

"Families and businesses are faced with increasing financial challenges due to the COVID-19 pandemic and growing debt loads," said ABI Executive Director Amy Quackenboss. “The expiration of government relief programs, high unemployment and a difficult financial outlook for many sectors will likely lead to filings increasing in early 2021.”

Total bankruptcy filings in October 2020 represented a 1 percent increase from the 39,713 total filings in September. The 37,688 consumer filings in October represented a 2 percent increase from September’s consumer total of 37,030. October 2020 business filings decreased 6 percent to 2,521 from September’s business total of 2,683. The 550 commercial chapter 11 filings recorded in October 2020 represented a 27 percent decrease from the 749 commercial chapter 11 filings in September.

The average nationwide per capita bankruptcy filing rate in October was 1.78 (total filings per 1,000 per population), a slight decrease from the filing rate of 1.81 during the first nine months of 2020. Average total filings per day in October 2020 were 1,915, a decrease of 38 percent from the 3,084 total daily filings in October 2019. States with the highest per capita filing rates (total filings per 1,000 population) in October 2020 were:

1. Alabama (4.00)

2. Delaware (3.71)

3. Tennessee (3.54)

4. Mississippi (3.01)

5. Nevada (2.99)

ABI has partnered with Epiq in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media. Epiq is a leading provider of managed technology for the global legal profession. To view the full monthly statistical tables provided by Epiq, be sure to visit ABI’s Newsroom.

ABI’s COVID-19 Resources website is continually being updated for bankruptcy professionals and the public to access essential information and analysis regarding the financial distress being inflicted by the COVID-19 pandemic. The site features exclusive ABI content on the crisis, weekly filing statistics, recommended member analysis, industry sector news, charts and more. Also, ABI’s SBRA Resources webpage is routinely updated with information, statistics, analysis and events related to the Small Business Reorganization Act of 2019, which went into effect this year to make bankruptcy more accessible, efficient and cheaper for struggling small businesses.

For further information about the statistics or additional requests, please contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or [email protected].

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events.

Epiq, a global leader in the legal services industry, takes on large-scale, increasingly complex tasks for corporate counsel, law firms, and business professionals with efficiency, clarity, and confidence. Clients rely on Epiq to streamline the administration of business operations, class action and mass tort, court reporting, eDiscovery, regulatory, compliance, restructuring, and bankruptcy matters. Epiq subject-matter experts and technologies create efficiency through expertise and deliver confidence to high-performing clients around the world. Learn more at www.epiqglobal.com.

Sessions at ABI's International Insolvency Forum on November 18-20 to Examine Implications for Global Restructurings During COVID-19 Pandemic, International Airline Distress, Bankruptcy as a Tool to Fight Fraud and More!

Alexandria, Va. – Insolvency experts from around the world will virtually gather to provide their insights on key issues and timely topics pertaining to international practice at ABI’s 2020 International Insolvency Forum. The three-day online conference brings together ABI’s annual International Insolvency & Restructuring Symposium partners — International Insolvency Institute (III), American College of Bankruptcy, TMA Europe, INSOL and IWIRC — and ABI's annual Cross-Border Insolvency Program. Experts will be examining the global restructuring landscape and provide an outlook on the year ahead. The Forum will be a "one-stop shop" for attendees looking for technical sessions covering current international insolvency issues and light-hearted networking opportunities — all from the comfort of their home or office! This program is eligible for up to 10.75/12.5 hours of general CLE/CPE credit.

Ian G. Williams of Williams Consulting International (London) is the chair of the Forum, and the program co-chairs are E. Patrick Shea of Gowling WLG LLP (Toronto) and Dr. Annerose Tashiro, ABI Vice President-International Affairs, of Schultze & Braun GmbH (Achern, Germany).

Sessions for the International Insolvency Forum include:

  • One Year into COVID-19: What Are the Implications for Restructurings Around the Globe in 2021?
  • Arbitration for Cross-Border Insolvency
  • Follow The Money: Bankruptcy as a Tool to Fight Fraud and Recover Assets
  • Emerging from the COVID-19 Disruption: The Need for a National Emergency Restructuring Entity
  • The New Europe: The Reality of Working Together
  • Troubled Non-U.S. Airlines Landing in Chapter 11: The Inside Story
  • Addressing COVID—Local Reactions to a Global Pandemic
  • Cross-Border Communication - Getting the Message Across

For more information about the program, please click here. Members of the press that would like to attend the International Insolvency Forum should contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or [email protected]

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/calendar-of-events.

ABI Announces 2020 "40 Under 40" Emerging Leaders in Insolvency Practice

Alexandria, Va. ABI announces the honorees of its 2020 “40 Under 40” initiative, which identifies 40 top industry professionals under age 40. The honorees will be recognized at a special virtual ceremony to be held in February 2021. ABI’s 2020 class of “40 Under 40” honorees are:

  • Krystal M. Ahart of Kahn & Ahart PLLC/Bankruptcy Legal Center (Phoenix)
  • Liz Boydston of Polsinelli (Dallas)
  • Kayla D. Britton of Faegre Drinker Biddle & Reath LLP (Indianapolis)
  • Robert Britton of Paul, Weiss, Rifkind, Wharton & Garrison LLP (New York)
  • Veronica D. Brown-Moseley of the Boleman Law Firm (Richmond, Va.)
  • Richard P. Cook of Cape Fear Debt Relief (Wilmington, N.C.)
  • Laura Coordes of the Arizona State University Sandra Day O'Connor College of Law (Phoenix)
  • Jody A. Corrales of DeConcini McDonald Yetwin & Lacy, P.C. (Tucson, Ariz.)
  • Chris Creger of CohnReznick LLP (New York)
  • Swapna Deshpande of Ankura Consulting Group (New York)
  • Christopher DiPompeo of Jones Day (Washington, D.C.)
  • Prof. Jared Ellias of the Hastings College of the Law at the University of California (San Francisco)
  • Erin R. Fay of Bayard, P.A. (Wilmington, Del.)
  • Cameron M. Fee of Skadden Arps (Wilmington, Del.)
  • Maja Zerjal Fink of Arnold & Porter (New York)
  • Jeffrey Fraser of Albertelli Law (Tampa, Fla.)
  • Bradley T Giordano of McDermott Will & Emery (Chicago)
  • Isley Gostin of WilmerHale (New York)
  • Victoria A. Guilfoyle of Blank Rome LLP (Wilmington, Del.)
  • Cristina Perez Hesano of Perez Law Group, PLLC (Glendale, Ariz.)
  • Susana Hidvegi of the Colombian Superintendence of Companies (Bogotá, Colombia)
  • Eunice Hudson of Freddie Mac (McLean, Va.)
  • Ferve E. Khan of Baker & Hostetler LLP (New York)
  • James Ktsanes of Latham & Watkins LLP (Chicago)
  • Michael L. Martinez of Grier Wright Martinez, PA (Charlotte, N.C.)
  • Conor McShane of AlixPartners, LLP (New York)
  • Peter R. Morrison of Squire Patton Boggs (US) LLP (Cleveland)
  • Ellen E. Ostrow of Stoel Rives, LLP (Salt Lake City)
  • Nisha R. Patel of Samuel I. White, P.C. (Richmond, Va.)
  • Alan R. Rosenberg of Markowitz Ringel Trusty + Hartog (Miami)
  • Brian Schartz of Kirkland & Ellis LLP (New York)
  • Cristine Schwarzman of Ropes & Gray LLP (New York)
  • Sunny Singh of Weil, Gotshal & Manges LLP (New York)
  • Dania Slim of Pillsbury Winthrop Shaw Pittman LLP (Miami)
  • Randall Swick of Reid Collins & Tsai LLP (Austin, Texas)
  • Sarah E. Tomlinson of the U.S. Bankruptcy Court for the Eastern District of Missouri (St. Louis)
  • Natasha Tsiouris of Davis Polk & Wardwell LLP (New York)
  • Jolene Wee of JW Infinity Consulting LLC (New York)
  • Erica S. Weisgerber of Debevoise & Plimpton LLP (New York)
  • Claire K. Wu of SulmeyerKupetz, APC (Los Angeles)

“Accomplished in both their careers and communities, the 2020 class of honorees is an inspiration for the future of the insolvency community,” said ABI Executive Director Amy Quackenboss. “We look forward to collaborating with this diverse collection of young leaders in the full range of ABI's activities to advance the profession.”

Honorees were chosen from both large and small firms from every region of the country, and represent diverse practice areas such as law, finance, consulting, academia, government and more. The age range of this year’s class is between 32 and 40 years old, with 16 of the honorees having applied previously to ABI’s “40 under 40” initiative. Sixteen members of the 2020 “40 under 40” class are male and 24 are female, and 15 of the honorees are people of color. One honoree is located in Bogotá, Colombia.

Nominations were submitted earlier this year by the candidates themselves or by colleagues via the initiative’s website, http://abi40under40.org. More than 200 candidates, each with outstanding records of professional achievement and community leadership, were evaluated by 20 judges. The majority of the applicants were partners, directors or managing directors at their firms.

A steering committee chaired by Hon. Daniel P. Collins (D. Ariz.; Phoenix) included experienced professionals from ABI’s current leadership, including four former honorees, established the criteria for selection and chose this year’s class. Members of the steering committee included Hon. Martin R. Barash (C.D. Cal.; Woodland Hills), John R. Bollinger of Boleman Law Firm, P.C. (Hampton, Va.), Marchand Boyd of Axos Bank (Delaware, Ohio), Scott K. Brown of Lewis Roca Rothgerber Christie LLP (Phoenix), Daniel F. Dooley of MorrisAnderson (Chicago), Paul H. Deutch of Omni Agent Solutions (New York), Scott Eisenberg of Amherst Partners, LLC (Birmingham, Mich.), Allen G. Kadish of Archer (New York), Jon Jay Lieberman of Sottile & Barile LLC (Loveland, Ohio), Kathryn McGlynn of AlixPartners LLP (New York), Lindsay Zahradka Milne of Bernstein Shur (Portland, Maine), Chérie Schaible of Ankura (New York), Bradley Sharp of Development Specialists, Inc. (Los Angeles), Summer M. Shaw of Shaw & Hanover PC (Palm Desert, Calif.), E. Patrick Shea of Gowling WLG (Toronto), Glenn E. Siegel of Morgan Lewis (New York), William Snyder of CR3 Partners LLC (Southlake, Texas), Catherine L. Steege of Jenner & Block (Chicago) and Wayne P. Weitz of B. Riley Advisory Services (New York)

The goal of ABI’s “40 under 40” initiative is not simply to create a one-time ceremony, but to fully engage those selected as future leaders in the insolvency profession and to build on the initiative each year. ABI staff have created a year-round promotional campaign in the ABI Journal and at all of its CLE programs in consultation with the steering committee.

For more information about ABI’s “40 under 40” initiative, visit http://abi40under40.org/.

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events.

 

Racial Disparities in the Bankruptcy System, Student Loans, COVID and Bankruptcy Among the Topics to Be Discussed at ABI's Consumer Bankruptcy Forum on November 11

Alexandria, Va. – Leading consumer bankruptcy professionals will converge online to provide their insights on a variety of important and timely topics pertaining to consumer bankruptcy practice at ABI’s 2020 Consumer Bankruptcy Forum. Held on November 11 via an innovative Zoom meeting environment, the Forum will feature content from the National Association of Bankruptcy Trustees (NABT), National Association of Consumer Bankruptcy Attorneys (NACBA), National Association of Chapter 13 Trustees (NACTT), National Conference of Bankruptcy Judges (NCBJ), and ABI’s Hon. Eugene R. Wedoff Seventh Circuit Consumer Bankruptcy Conference and Hon. Steven W. Rhodes Consumer Bankruptcy Conference. The Forum will provide the perfect way for consumer bankruptcy practitioners to stay on top of the latest industry trends — all from the comfort of their home or office for the low price of $100! This program is eligible for 6.25/7.5 hours of general CLE/CPE credit, including 1.25 hours of mental health/professionalism and 1.25 hours of diversity and inclusion.

Sessions for the Consumer Bankruptcy Forum include:

  • Veterans Day Tribute & Welcome
  • Consumer Case Law Update
  • It Ain’t Over ’Til It’s Over: Identifying and Addressing Issues Arising at the End of Chapter 13 Cases
  • Racial Disparities in the Bankruptcy System
  • Stress and Lawyers
  • Advanced Issues in Chapter 13 Practice
  • After the Love (and the Money) Is Gone: The Intersection Between Bankruptcy and Divorce
  • Issues with Means Testing and Schedules I and J
  • Duties and Obligations upon Conversion
  • Chapter 13: The Problem, or the Solution?
  • Best Practices for Virtual Meetings
  • COVID-19 and Bankruptcy
  • Student Loans, Reexamined

For more information about the program, please click here. Members of the press that would like to attend the Consumer Bankruptcy Forum should contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or [email protected]

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/calendar-of-events.

September Commercial Chapter 11 Filings Up 78 Percent over Last Year; Total Filings Decrease 35 Percent

Commercial chapter 11 filings totaled 747 in September, a 78 percent increase over September 2019’s total of 420 filings, according to data provided by Epiq. However, overall September 2020 business filings were 2,677, a decrease of 16 percent compared to the 3,190 business filings in September 2019. Total U.S. filings registered 39,701 in September 2020, down 35 percent from last September’s total of 61,156. The 37,024 consumer filings in September represented a 36 percent decrease from the September 2019 consumer total of 57,966.

"Families and businesses are faced with growing financial challenges because of the economic uncertainty due to the COVID-19 pandemic and mounting debt loads," said ABI Executive Director Amy Quackenboss. “While fluctuating market conditions and high filing costs continue to be a challenge for struggling consumers and companies seeking the financial fresh start of bankruptcy, the expiration of government stabilization programs, high unemployment and a precarious financial outlook for many sectors will likely lead to a dramatic climb in filings in early 2021.”

Commercial chapter 11 filings increased 33 percent during the first nine months of 2020 (Jan. 1-Sept. 30) from the same period a year ago, as the 5,529 filings surpassed the 4,148 filings in 2019. Total U.S. bankruptcy filings decreased 28 percent during the first nine months of the year, as the 420,048 filings dropped from the 580,625 filings in 2019. The 394,618 total noncommercial filings through the first three quarters of 2020 also represented a 28 percent decrease from the noncommercial filing total of 551,082 through the first three quarters of 2019. Commercial bankruptcy filings during the first nine months of the year decreased 14 percent to 25,430 from the 29,543 filings during the same period in 2019.

The average nationwide per capita bankruptcy filing rate for the first nine calendar months of 2020 (Jan. 1-Sept. 30) decreased slightly to 1.81 (total filings per 1,000 population) from the 1.84 rate for the first eight months of the year. The average daily filing total in September 2020 was 1,891, a 25 percent decrease from the 2,527 total daily filings registered in September 2019. States with the highest per capita filing rates (total filings per 1,000 population) through the first nine months of 2020 were:

1. Alabama (4.05)

2. Delaware (3.68)

3. Tennessee (3.59)

4. Mississippi (3.09)

5. Nevada (2.96)

ABI is one of 16 leading organizations taking part in the Insolvency 2020 Virtual Summit through the end of October, which has gathered numerous experts to provide their perspectives on current insolvency and restructuring trends during the COVID-19 pandemic and the future of corporate reorganization. Sessions taking place this week include a look at restructuring an industry that has been shut down, how commercial real estate will be the next big wave of chapter 11s, and M&A strategies during the pandemic. If you would like to be registered for a press pass to attend the Insolvency 2020 Virtual Summit, please contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or [email protected]

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events.

Epiq, a global leader in the legal services industry, takes on large-scale, increasingly complex tasks for corporate counsel, law firms, and business professionals with efficiency, clarity, and confidence. Clients rely on Epiq to streamline the administration of business operations, class action and mass tort, court reporting, eDiscovery, regulatory, compliance, restructuring, and bankruptcy matters. Epiq subject-matter experts and technologies create efficiency through expertise and deliver confidence to high-performing clients around the world. Learn more at https://www.epiqglobal.com.

 

COVID-19 Pandemic Exacerbating "Pre-Existing" Conditions of Financially Struggling Skilled-Nursing Facilities, According to ABI Journal Article

Alexandria, Va. — Those practicing in and for skilled-nursing facilities (SNFs) reasonably expected failure and death at rates greater than other health care settings because of what an article in the September ABI Journal deemed the “pre-existing conditions” of the industry. “The skilled nursing industry’s pre-existing conditions have multiple causes, the most impactful being the unique financial model found in the SNF industry,” Jerry Seelig of Seelig+Cussigh HCO LLC (Los Angeles), David Hoffman of David Hoffman & Associates (Philadelphia) and Louis J. Cisz III of Nixon Peabody LLP (San Francisco) write in their article, “Painful Impact of COVID-19 on the Troubled Skilled-Nursing Industry.”

An SNF is a nursing home that a friend or family member moved to when that individual’s care and safety demanded supervision, and nursing care was not available at home or in the current assisted living facility, according to the authors. This nursing home is also a skilled-nursing provider in that it provides post-acute and/or surgery care that is far more cost- and clinically effective in an SNF setting.

The authors identified three pre-existing conditions of the skilled nursing industry that have been exacerbated by the COVID-19 pandemic:

  1. An SNF can (and often does) have one party that owns the building, another that owns the license to operate and yet another that is hired to be the operator.
  2.  SNFs are now more than 50 percent for-profit and are heavily dependent on REITs, equity investors and lenders of all sorts.
  3. The industry has failed to adequately prepare for the COVID-19 coronavirus.

“These factors have set the stage for both industry-wide restructurings and bankruptcy filings for many facilities and management companies,” Seelig, Hoffman and Cisz write.

The authors highlighted that the debtors and/or restructuring clients in question are health care providers, meaning that they must yield to (1) lives that are in danger; (2) the conflicts among Bankruptcy Rules, regulations and practices, and health care rules, regulations, reimbursements and even culture; (3) the profound lack of understanding of health care settings, in particular skilled nursing; and (4) a limited tool set to assess, manage and improve health care providers. “Many facilities and multi-facility owners entered the pandemic without cash reserves and with cash flow burdened by large payments to REITs, equity funds and lenders,” Seelig, Hoffman and Cisz write. “Therefore, the for-profit SNFs will face the greater challenges of having enough money to pay the bills and to support their investors and landlords.”

The authors said that the Coronavirus Aid, Relief, and Economic Security (CARES) Act saved many from immediate collapse, yet it did not slow the financially and quality-challenged facilities’ rapid descent toward restructuring. “Going forward, there will be a large number of new and potential skilled-nursing debtors and restructuring clients with extraordinary financial and operating challenges,” they write.

Seelig, Hoffman and Cisz fear that these challenges cannot be met if those tasked with restructuring can only monitor without enforcement, enforce without mandated quality improvement, and, if the interim manager lacks the resources to rebuild, then maintain quality care and safety. “It is imperative that additional interventions such as the Temporary Management program bring public funding to the restructuring effort and concurrently create hybrids of the TM [temporary managers] and other interim-management programs to ensure resident safety, reduced likelihood of harm and set the foundation for needed facilities’ long-term financial viability,” they concluded.

To obtain your copy of “Painful Impact of COVID-19 on the Troubled Skilled-Nursing Industry,” please contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or [email protected].

To stay up to date on the COVID-19 pandemic, be sure to bookmark ABI’s Coronavirus Resources for Bankruptcy Professionals website (abi.org/covid19).

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/education-events.

 

Creditor Strategies Under the Small Business Reorganization Act Detailed in Summer ABI Law Review

Alexandria, Va. — Creditors will have to develop a new playbook for small business debtors because of subchapter V elections ushered in by the Small Business Reorganization Act of 2019 (SBRA), according to an article in the Summer 2020 edition of the American Bankruptcy Institute (ABI) Law Review (Volume 28, No. 2). “The contents of this playbook depend greatly on how debtors use subchapter V, how trustees play their role under it, and how judges interpret it,” writes Prof. Christopher G. Bradley of the University of Kentucky's Rosenberg College of Law (Lexington, Ky.) in his article “The New Small Business Bankruptcy Game: Strategies for Creditors Under the Small Business Reorganization Act.” Bradley’s article presents a preliminary strategic analysis of the subchapter V provision of SBRA from the perspective of creditors that will be affected by it.

Other articles included in the Summer 2020 ABI Law Review include:

  • “The Supreme Court, Dischargeability and Actual Fraud” by Prof. David Gray Carlson of Cardozo Law (New York).
  • “Poking at Preference Actions: SBRA Amendments Signal the Need for Change” by Prof. Brook E. Gotberg of the University of Missouri School of Law (Columbia, Mo.).
  • “The Geography of Bankruptcy in Australia” by Dr. Lucinda O'Brien, Dr. Malcolm Anderson and Prof. Ian Ramsay of Melbourne Law School at the University of Melbourne.
  • “Disclosure Requirements for Reorganization Consultants Under the Bankruptcy Code” by Frank Pecorelli of St. John's University School of Law (New York) and recipient of the 2020 American Bankruptcy Institute Medal for Excellence in Bankruptcy Studies.

 

ABI’s Law Review, published in conjunction with St. John’s University School of Law in Jamaica, N.Y., is among the most cited and respected scholarly publications in the bankruptcy community. Now in its 28th year, it has the largest circulation of any bankruptcy law review. Past issues of the Law Review have focused on a variety of timely insolvency issues, including chapter 11 reform, distressed sectors, single-asset cases, consumer bankruptcy, revised Article 9 of the Uniform Commercial Code and other topics.

Members of the press looking to obtain any of the articles from the Summer 2020 issue should contact John Hartgen at 703-894-5935 or [email protected]

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/calendar-of-events.

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