Automaker Chapter 11 Filing Better for Taxpayers and Companies than Government Bailout According to Latest ABI Quick Poll
Contact: John Hartgen
(703) 739-0800
[email protected]
AUTOMAKER CHAPTER 11 FILING BETTER FOR TAXPAYERS AND COMPANIES THAN GOVERNMENT BAILOUT, ACCORDING TO LATEST ABI QUICK POLL
December 19, 2008, Alexandria, Va. — A majority of respondents (86 percent) in a recent ABI Quick Poll agreed that a chapter 11 filing is better for the taxpayers and companies than a government bailout of the auto industry. Sixty-five percent of respondents “strongly agreed” and 21 percent “somewhat agreed.”
Ten percent of respondents did not think that a chapter 11 filing would be more beneficial to taxpayers and companies than a government bailout of the auto industry. Six percent “disagreed strongly” and 4 percent “somewhat disagreed” that a chapter 11 bankruptcy filing is better for taxpayers and companies than a government bailout of the auto industry. Two percent of respondents did not know or had no opinion on the issue.
The Quick Poll was based on the recent discussions on Capitol Hill to explore ways to provide relief to the struggling U.S. automakers. U.S. automakers such as General Motors have stated that they would run out of funding by the end of the December if they did not receive government aid. Despite swift passage in the House of Representatives, legislation providing a financial bailout for U.S. automakers failed in the Senate on Dec. 12. Many lawmakers were critical of the automaker bailout package, saying that bankruptcy provided the best method for the automakers to reorganize their businesses. The Bush Administration announced today that U.S. automakers will receive $13.4 billion in loans through the Troubled Asset Relief Program in exchange for substantially restructuring their businesses.
ABI members and members of the public were welcome to submit their response to the statement: “A chapter 11 bankruptcy is better for the taxpayers and the companies than a government bailout of the auto industry.”
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.
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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 11,700 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.abiworld.org/conferences.html.
Respondents Closely Divided over Whether a Chapter 13 Debtor May Obtain a Discharge by Declaration
Contact: John Hartgen
(703) 739-0800
[email protected]
RESPONDENTS CLOSELY DIVIDED OVER WHETHER A CHAPTER 13 DEBTOR MAY OBTAIN A “DISCHARGE BY DECLARATION”
December 12, 2008, Alexandria, Va. — Respondents to the latest ABI Quick Poll were closely divided over whether a debtor could obtain a discharge of a student loan by including it in a chapter 13 plan if the creditor fails to object after receiving notice. Forty-four percent of respondents did not think that a debtor could receive a discharge of a student loan if a creditor had received proper notice and failed to object to the chapter 13 plan. Thirty-six percent “strongly disagreed” and 8 percent “disagreed somewhat.”
Fourty-three percent of respondents, however, thought that the debtor should be able to receive a discharge of a student loan if it was included in their chapter 13 plan and did not receive an objection from a creditor after serving the creditor notice. Thirty percent “strongly agreed” and 13 percent “somewhat agreed.” Eleven percent of respondents did not know or had no opinion on the issue.
Most student loans are undischargeable in bankruptcy unless the debtor can show that loan repayment imposes an “undue hardship,” generally a difficult standard to meet.
In the case of Espinosa v. United Student Aid Funds, the debtor included a portion of student loan debt to be discharged in his chapter 13 plan. The court notified United States Aid Funds, a nonprofit loan guarantee corporation, that there was a discrepancy in the claim on the student loan and that if the creditor wanted to object to the discrepancy, the corporation must file a request with the trustee in the case for resolving the discrepancy. The notice stated that if the creditor did not send a notice or object to the claim, the amount in the debtor’s chapter 13 plan would be discharged. When the creditor did not object, the chapter 13 plan was confirmed and the student loan debt was discharged. The creditor tried to collect on the amount of the discrepancy three years later, but the Ninth Circuit Court of Appeals upheld the discharge since proper notice was served on the creditor.
ABI members and members of the public were welcome to submit their response to the statement: “A debtor may obtain a discharge of a student loan by including it in a chapter 13 plan if the creditor fails to object after notice (discharge by declaration). (Espinosa v. United Student Aid Funds, 9th Cir).”
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.
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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 11,700 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.abiworld.org/conferences.html.
Investors in Securities Backed by Countrywides Subprime Loans have Right to Sue Against Loan Modification Attempts According to Latest ABI Quick Poll
Contact: John Hartgen
(703) 739-0800
[email protected]
INVESTORS IN SECURITIES BACKED BY COUNTRYWIDE’S SUBPRIME LOANS HAVE RIGHT TO SUE AGAINST LOAN MODIFICATION ATTEMPTS, ACCORDING TO LATEST ABI QUICK POLL
January 14, 2009, Alexandria, Va. — Most respondents (48 percent) in a recent ABI Quick Poll agreed that investors in securities backed by Countrywide’s subprime loans have a legitimate cause of action against any attempt to modify their loans under an agreement with the state attorneys general. Thirty-eight percent of respondents “strongly agreed” and 10 percent “somewhat agreed.”
Thirty-four percent of respondents did not agree that investors in securities backed by Countrywide’s subprime loans have a legitimate right to sue against any attempt to modify their loans under an agreement with state attorneys general. Twenty-five percent “disagreed strongly” and 9 percent “somewhat disagreed” that investors in securities backed by Countrywide’s subprime mortgages had a legitimate cause of action against any attempt to modify their loans under an agreement with state attorneys general. Fifteen percent of respondents did not know or had no opinion on the issue.
The Quick Poll was based on a lawsuit filed by hedge fund Greenwich Financial Services against Countrywide Financial Corp. (Greenwich Financial Services v. Countrywide) demanding that Countrywide compensate holders of some securities backed by mortgages if the lender changed the terms of the loans. Greenwich Financial Services said that it and other investors stood to lose money if Countrywide, now part of Bank of America, modified loans under a settlement that it reached with 11 state attorneys general in October.
ABI members and members of the public were welcome to submit their response to the statement: “Investors in securities backed by Countrywide's subprime loans have a legitimate cause of action against any attempt to modify their loans under an agreement with state attorneys general (Greenwich Financial Services v. Countrywide).”
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.
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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 11,700 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.abiworld.org/conferences.html.
Atlanta Consumer Bankruptcy Skills Training Set to Take Place in January and June
Contact: John
Hartgen
703-739-0800
[email protected]
ATLANTA CONSUMER BANKRUPTCY SKILLS TRAINING SET TO TAKE PLACE IN JANUARY AND JUNE
January 8, 2009, Alexandria, Va.— The Atlanta Consumer Bankruptcy Skills Training programs on Jan. 28 and June 4, 2009, will provide Georgia practitioners and bankruptcy professionals the tools necessary to hone their consumer bankruptcy litigation skills. The American Bankruptcy Institute, the Bankruptcy Section of the Atlanta Bar Association and the Metro-Atlanta Consumer Bankruptcy Attorneys Group are sponsoring this interactive program with two one-day training seminars, which will fulfill all the annual CLE requirements for Georgia practitioners. The programming will be led by a faculty of prominent regional bankruptcy judges, as well as experienced consumer practitioners.
The upcoming Jan. 28 seminar will focus on trial preparation and courtroom skills with the following sessions:
- “Discovery
Practices Lecture with Examples,” with panelists Michael F. Holbein of Arnall Golden Gregory LLP, Amy Alcoke Quackenboss of
Hunton & Williams LLP and Allen Paul Rosenfeld of Ellenberg,
Ogier, Rothschild & Rosenfeld, PC.
- “Discovery/Trial
Ethics,” featuring Hon. Paul
W. Bonapfel (N.D. Ga.) and Hon. James D. Walker, Jr.
(M.D. Ga.).
- “Testimony and Evidence Lecture with Examples,” with panelists Mark M. Maloney of King & Spalding LLP and Thomas J. Salerno of Squire, Sanders & Dempsey, LLP (Phoenix).
Additionally, three break-out sessions will be led by one judge and two attorneys. Groups will use the same problem and focus points to work through discovery, ethics, testimony and evidence issues. The first session will feature Hon. Mary Grace Diehl (N. D. Ga.), Edward J. Coleman, III of Surrett & Coleman PA (Augusta, Ga.) and Albert F. Nasuti of Thompson, O’Brien, Kemp & Nasuti, PC (Norcross, Ga.). The second session will include Hon. C. Ray Mullins (N.D. Ga.), Chapter 13 Trustee Camille Hope (Macon, Ga.) and Brian Michael Shockley of Clark & Washington, PC. The final session will feature Hon. James E. Massey (N.D. Ga.), Brian R. Cahn of Perrotta, Cahn & Prieto, P.C. (Cartersville, Ga.) and Denise Dotson of Jones & Walden, LLC.
Further details about the June 4 seminar will be available at later date. For more information about the Atlanta Consumer Bankruptcy Skills Training, please visit http://www.abiworld.org/ATL09.
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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 more than 11,700 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.abiworld.org/conferences.html.
Web Site Launched for ABI Law Student Writing Competition Submissions
Contact: John Hartgen
(703) 739-0800
[email protected]
WEB SITE LAUNCHED FOR ABI LAW STUDENT WRITING COMPETITION SUBMISSIONS
January 12, 2009, Alexandria, Va.— The American Bankruptcy Institute has launched http://papers.abi.org/for law students looking to submit a paper for the First Annual ABI Bankruptcy Law Student Writing Competition. Students from participating law schools can currently submit an entry until March 15. The Web site allows students to create an account and track the status of their entry. All submissions must be reviewed by a law professor prior to submission, and the scope has been expanded to topics focusing on current issues regarding bankruptcy jurisdiction, bankruptcy litigation, or evidence issues related to bankruptcy cases or proceedings. For clarification, papers submitted focusing on the previous scope of (A) §363 sales or (B) plan confirmation will still be considered. Winners of the competition will be announced on May 1, 2009.
The first-place writer will receive $1,000 cash, publication of the paper in the ABI Journal and a one-year ABI membership. The second-place writer will receive a cash award of $750, publication of the paper in the ABI Bankruptcy Litigation Committee’s quarterly newsletter and a one-year ABI membership. The third-place writer will receive a cash award of $500, publication of the paper in the ABI Bankruptcy Litigation Committee’s quarterly newsletter and a one-year ABI membership. For more information, please contact [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 more than 11,700 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.abiworld.org/conferences.html.
Mortgage Modification Government Bailouts and Retail Insolvencies Among the Hot Topics at ABIs 27th Annual Spring Meeting in April
Contact: John Hartgen
(703) 739-0800
[email protected]
MORTGAGE MODIFICATION, GOVERNMENT BAILOUTS AND RETAIL INSOLVENCIES AMONG THE HOT TOPICS AT ABI’S 27TH ANNUAL SPRING MEETING IN APRIL
January 28, 2009 Alexandria, Va. --More than 1,000 bankruptcy professionals are expected to attend the American Bankruptcy Institute's (ABI) 27th Annual Spring Meeting, April 1-4, 2009, at the Gaylord National Resort and Convention Center in Washington, D.C. ABI’s largest conference features a number of educational programs to address a wide array of timely insolvency issues, and will offer 19.5 hours of CLE credit, including a record 6.75 hours of ethics.
With a new administration and Congress facing serious financial challenges, the meeting has a strong policy orientation. Speakers from Congress and the Obama administration are expected on the program.
The conference educational program sessions begin with ABI's Thirteenth Annual Great Debates, moderated by ABI's Vice President of Education James T. Markus of Block, Markus & Williams, LLC (Denver). In the first debate, “Assets May Not Be Sold Free and Clear over the Objection of Junior Secured Creditors,” Eve H. Karasik of Stutman Treister & Glatt, PC (Los Angeles) will debate Candace C. Carlyon of Shea & Carlyon, Ltd. (Las Vegas).
In Debate No. 2, “Not Too Big to Fail – Bankruptcy Is Better than Bailout,” Peter S. Kaufman of Gordian Group LLC (New York) will debate Michael P. Thomas of BBK (Southfield, Mich.).
Debate No. 3, “The Time Is Now for Consumer Bankruptcy Reform,” will feature Prof. Katherine M. Porter of the University of Iowa College of Law (Iowa City) debating Philip S. Corwin of Butera & Andrews (Washington, D.C.).
Expert panels have been organized in concurrent sessions, allowing conference attendees to choose the ones that most interest them. Speakers include bankruptcy judges, accountants, attorneys, turnaround managers, law professors, trustees and others. The sessions include:
“Protecting Consumer in Financial Markets: New Developments in BAPCPA Reform, Credit Cards and Unsafe Credit Products” plenary session, moderated by Brady C. Williamson of Godfrey & Kahn SC (Madison, Wis.), will feature panelists Oliver I. Ireland of Morrison Foerster (Washington, D.C.), Travis Plunkett of the Consumer Federation of America (Washington D.C.) and John Rao of the National Consumer Law Center (Boston).
William A. Brandt, Jr. of Development Specialists, Inc. (Chicago) will moderate the plenary session “The Government-Managed Economy – TARP, Mortgage Modification, etc.: Is Anything Working?” featuring Harvey R. Miller of Weil, Gotshal & Manges, LLP (New York), Alex J. Pollock of American Enterprise Institute (Washington, D.C.) and Mark Zandi of Moody's Economy.com (West Chester, Pa.).
The “Trimming the Hedges: Liquidations of Private Equity/Hedge Funds” session, moderated by Jeff J. Marwil of Winston & Strawn LLP (Chicago), will include panelists Marc Abrams of Willkie Farr & Gallagher LLP (New York), Bankruptcy Judge James M. Peck of (S.D.N.Y.; New York), Steven J. Reisman of Curtis, Mallet-Prevost, Colt & Mosle LLP (New York) and Anthony H.N. Schnelling of Bridge Associates LLC (New York).
Ford Elsaesser of Elsaesser, Jarzabek, et al. (Sandpoint, Idaho) will moderate the “Sophisticated Planning or Playing a Shell Game – Asset Protection Planning” session with panelists Barry S. Engel of Engel Reiman & Lockwood PC (Denver), Robert C. Furr of Furr & Cohen, PA (Boca Raton, Fla.) and Paul G. Swanson of Steinhilber, Swanson,et al. (Oshkosh, Wis.).
The “SOS for Retail: Only the Strongest Survive” session, moderated by Jeffrey N. Pomerantz of Pachulski Stang Ziehl & Jones LLP (Los Angeles), will feature panelists Bankruptcy Judge Kevin R. Huennekens (E.D. Va.; Richmond), Robert L. LeHane of Kelley Drye & Warren LLP (New York), Scott Peltz of RSM McGladrey (Chicago) and Edward Stenger of AlixPartners LLP (New York).
“After Marrama: Applying Good-faith Standard in Bankruptcy” will feature David G. Baker of the Law Office of David G. Baker (Boston) with panelists Alane A. Becket of Becket & Lee, LLP (Malvern, Pa.), Steven L. Higgs of Steven L. Higgs, PC (Roanoke, Va.) and John Rao of the National Consumer Law Center (Boston).
“The State of Real Estate Industry and What's Next in Bankruptcies and Restructurings,” moderated by Debra Ann Riley of Allen Matkins, et al. (San Diego), will feature panelists Neil R. Aaronson of The Hilco Organization (Northbrook, Ill.), Matthew Bordwin of Keen Consultants - The Real Estate Division of KPMG Corporate Finance LLC (Melville, N.Y.) and William N. Lobel of Irell & Manella LLP (Newport Beach, Calif.).
C. R. “Chip” Bowles of Greenebaum Doll & McDonald PLLC (Louisville, Ky.) will be joined by panelists Jacob C. Cohn of Cozen O'Connor (Philadelphia), Donald L. Gaffney of Snell & Wilmer, LLP (Phoenix), Bankruptcy Judge Barbara J. Houser (N.D. Tex.; Dallas) and Joel H. Levitin of Cahill Gordon & Reindel LLP (New York) for the “Third-party Releases, Exculpation Provisions, Plan Injunctions and Postconfirmation Jurisdiction” session.
The “Water in the Sahara: What's Next in the Credit, DIP Lending and Exit Financing Markets?” session will be moderated by Howard Brod Brownstein of NachmanHaysBrownstein, Inc. (Narberth, Pa.) with panelists Steven Ballantine of Thomson West (Saint Paul, Minn.), Larry Lattig of Mesirow Financial Consulting, LLC (Dallas), M. Freddie Reiss of FTI Consulting, Inc. (Los Angeles) and Timothy G. Skillman of Grant Thornton LLP (Los Angeles).
“Ethical Issues for Creditors in Consumer Cases,” moderated by Prof. G. Ray Warner of St. John's University School of Law (Jamaica, N.Y.), will include panelists Robert S. Bernstein of Bernstein Law Firm, PC (Pittsburgh) and Ramona D. Elliott of the Executive Office for U.S. Trustees (Washington, D.C.).
Jonathan P. Friedland of Levenfeld Pearlstein, LLC (Chicago) will moderate the “Selling Strategies – Finding Buyers and Managing an Effective Sale Process” session with panelists Charles Reardon of Houlihan Lokey (McLean, Va.), Daniel F. Dooley of MorrisAnderson & Associates, Ltd. (Chicago) and Thomas J. Salerno of Squire, Sanders & Dempsey, LLP (Phoenix).
The “New Wave of Litigation – Fraudulent Transfers, Broken Commitments, Failure to Fund, Lack of Good Faith” session with moderator JoAnn J. Brighton of K&L Gates LLP (Charlotte, N.C.) will feature panelists John M. Duck of Adams and Reese LLP (New Orleans), Bankruptcy Judge Steven W. Rhodes (E.D. Mich.; Detroit) and Sheryl L. Toby of Dykema (Detroit).
Moderator William K. Snyder of CRG Partners Group LLC (Dallas) along with panelists Diana G. Adams of the Office of the U.S. Trustee, Region 2 (New York), Lorie R. Beers of KPMG Corporate Finance LLC (New York) and Patrick M. O'Keefe of O'Keefe & Associates (Bloomfield Hills, Mich.) will participate in the “Staying Out of the Quicksand: Ethical Considerations in Bankruptcy for Turnaround Professionals” session.
The “Practical Strategies to Maximize the Debtor’s Ability to Get a Discharge in Chapter 13” session will be moderated by Bankruptcy Judge Joan N. Feeney (D. Mass.; Boston) with panelists Henry E. Hildebrand of Lassiter, Tidwell, Davis, Keller & Hogan, PLLC (Nashville, Tenn.) and Steven L. Rayman of Rayman & Stone (Kalamazoo, Mich.).
Robert M. Fishman of Shaw Gussis Fishman, et al. (Chicago) will moderate the “Judicial Roundtable: Proving Valuation-What's Persuasive and What's Not” plenary session, featuring Bankruptcy Judges Kevin J. Carey (D. Del.; Wilmington), Dennis R. Dow (W.D. Mo.; Kansas City), Barry Russell (C.D. Calif.; Los Angeles), Eugene R. Wedoff (N.D. Ill.; Chicago) and Gregg W. Zive (D. Nev.; Reno).
Prof. Nancy B. Rapoport of the William S. Boyd School of Law University of Nevada, Las Vegas will facilitate the “Multimedia Ethics Extravaganza” plenary session.
Best-selling author David Baldacci will be the keynote speaker at this year's conference. Baldacci has published 17 novels, including the best-seller Absolute Power, and more than 60 million copies of his books have been published worldwide. Baldacci practiced law for nine years in Washington, D.C., as both a trial and corporate attorney.
Also featured will be speaker and author Gail Evans, who will address the Wednesday, April 1, luncheon sponsored by the International Women’s Insolvency & Restructuring Confederation (IWIRC). Evans, the author of the books Play Like A Man, Win Like A Woman and She Wins, You Win, is seen as a pioneer of advancing women’s status in the workplace, having worked at CNN since its inception in 1980 through 2001.
The conference also features a final night concert with recording artist Kenny Loggins.
In addition, ABI’s 25 committees will present educational programs on topics ranging from the new realities of today’s credit markets to financial distress in the health care sector. Committee programming at the conference will also include ethical considerations for turnaround professionals and a joint session with the National Auctioneers Association on maximizing the value of commercial real estate through the auction process.
Press interested in attending the conference should contact John Hartgen at [email protected]. For more information about ABI’s 27th Annual Spring Meeting, please visit www.abiworld.org/ASM09.
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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 more than 11,700 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.abiworld.org/conferences.html.
Bankruptcies to Increase More Than 35 Percent in 2009 According to Latest ABI Quick Poll
Contact: John Hartgen
(703) 739-0800
[email protected]
BANKRUPTCIES TO INCREASE MORE THAN 35 PERCENT IN 2009, ACCORDING TO LATEST ABI QUICK POLL
January 26, 2009, Alexandria, Va. — A majority of respondents (65 percent) in a recent ABI Quick Poll predicted that bankruptcies in 2009 would increase by at least 35 percent over the nearly 1.1 million cases filed in 2008. Fifty-three percent of respondents predicted that filings would increase by 35 percent or more while 12 percent thought that filings would increase by about 35 percent.
Thirty-three percent predicted that the 2009 filing total would represent an increase of 30 percent or less from the 2008 figure. Seventeen percent of respondents thought that bankruptcies would increase 30 percent, while 16 percent thought that the 2009 filings would increase 25 percent or less over the 2008 total.
Bankruptcies totaled nearly 1.1 million in 2008, with more than 97 percent of the cases filed by consumers, representing an increase of more than 30 percent over the 2007 filing total. Bankruptcies have increased nearly 35 percent each year since 2006, when filings reached their lowest levels since the 1980s following the implementation of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
ABI members and members of the public were welcome to submit their response to the statement: “Bankruptcies rose more than 30 percent in 2008 to nearly 1.1 million new cases, with more than 97 percent of cases filed by consumers. Filings will rise by what percentage in 2009?”
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.
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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 11,700 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.abiworld.org/conferences.html.
ABIS New Bankruptcy Town Hall Web Site Features Debate over U.S. Automakers
Contact: John
Hartgen
703-739-0800
[email protected]
ABI’S NEW “BANKRUPTCY TOWN HALL” WEB SITE FEATURES DEBATE OVER U.S. AUTOMAKERS
January 16, 2009, Alexandria, Va. — The American Bankruptcy Institute launched a new Web site, townhall.abiworld.org, to provide a forum for both practitioners and the public to read and share their views on current bankruptcy topics that are being debated on Capitol Hill and throughout the nation. The site features commentary on the issues from experts on both sides of the debate, and users visiting the site are encouraged to leave their opinions as well. The Bankruptcy Town Hall site will be updated with new issues and commentary throughout the year as new developments surface that will affect consumer or business bankruptcies.
The site currently features views on the ongoing debate about whether the federal government should bail out U.S. auto manufacturers or allow the companies to file for bankruptcy. General Motors and Chrysler were granted a federal loan package totaling $17.4 billion in December 2008, but the possibility of continued federal bailouts or bankruptcy for the U.S. auto sector remains as the industry continues to struggle under the strain of dwindling sales, large inventories and reduced access to private capital as a result of the global credit crunch.
Please click here to view townhall.abiworld.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 11,700 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.abiworld.org/conferences.html.
Experts Suggest Establishing New Chapter 10 Bankruptcy for Companies that are Too Big to Fail
Contact: John Hartgen
(703) 739-0800
[email protected]
EXPERTS SUGGEST ESTABLISHING NEW CHAPTER 10 BANKRUPTCY FOR COMPANIES THAT ARE “TOO BIG TO FAIL”
February 19, 2009, Alexandria, Va. — As an alternative to a chapter 11 bankruptcy or government bailout, two bankruptcy experts have suggested a new “chapter 10” bankruptcy to be established within the Bankruptcy Code for companies that are viewed as “too big to fail.” In response to financial distress of large companies, primarily the “Big Three” automakers General Motors, Chrysler and Ford, authors Prof. George W. Kuney of the University of Tennessee College of Law (Knoxville, Tenn.) and Michael St. James of St. James Law PC (San Francisco) have laid out their idea in the article “A Proposal for Chapter 10: Reorganization for ‘Too Big to Fail’ Companies,” to be published in the March 2009 issue of the American Bankruptcy Institute Journal.
Kuney and St. James found that a chapter 11 filing for companies such as the Big Three automakers “would inevitably impose great harm on vendors and other interrelated businesses.” The authors said that the primary problem with the current chapter 11 process was that a filing by a “too big to fail” (TBTF) company was that it could result in a cascade of business failures and layoffs for other nondebtor companies. The cascade of business failures would be due in large part to the “ordinary-course-of-business trade debts,” such as vendor payments and payroll expenses, that are put on hold for months or years while a company negotiates a reorganization plan. Vendors dependent on those payments, such as auto suppliers, are also likely to fail as a result of a TBTF company bankruptcy.
To remedy this potential problem of cascading business failures, the authors’ proposal for a new chapter 10 bankruptcy centers on excluding ordinary-course-of-business trade debts from the current chapter 11 process. “This one modification will free the bankruptcy process for a TBTF company from administering multitudes of granular claims that are unrelated to its core financial problems,” according to Kuney and St. James. “Since payables would not be disrupted by the bankruptcy filing, the bankruptcy of the TBTF company would not inevitably and automatically lead to cascading business failures.”
While providing the important exclusion for ordinary-course-of-business trade debts, the authors said that the chapter 10 process would closely resemble the chapter 11 filing process. The chapter 10 proposal would adopt the processes established by the current chapter 11 structure with respect to the restructuring of ongoing contractual relationships, modification or rejection of collective-bargaining agreements, restructuring of secured debt and the restructuring of rights and powers of the various financial stakeholders and constituencies in the bankruptcy case.
To obtain a copy of “A Proposal for Chapter 10: Reorganization for ‘Too Big to Fail’ Companies,” please contact John Hartgen at 703-739-0800 or via email at [email protected]. In addition, make sure to visit ABI’s Bankruptcy Town Hall Web site to read expert opinions and view several quick polls about whether the U.S. automakers should file for bankruptcy or if the federal government should provide further financial assistance to the struggling companies. To view the ABI Bankruptcy Town Hall site, please visit http://townhall.abiworld.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 more than 11,700 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.abiworld.org/conferences.html.
Congress Should Not Enact a 3-6 Month Foreclosure Moratorium According to Latest ABI Quick Poll
Contact: John Hartgen
(703) 739-0800
[email protected]
CONGRESS SHOULD NOT ENACT A NATIONAL 3-6 MONTH FORECLOSURE MORATORIUM, ACCORDING TO LATEST ABI QUICK POLL
February 2, 2009, Alexandria, Va. — A large majority of respondents (60 percent) in a recent ABI Quick Poll think that Congress should not pass legislation providing for a national 3-6 month foreclosure moratorium in response to the housing crisis. Fifty-two percent of respondents “strongly disagreed” and 8 percent “somewhat disagreed” that Congress should pass legislation establishing a national foreclosure moratorium for 3-6 months.
However, 36 percent of respondents agreed that Congress should pass legislation providing for a national 3-6 month foreclosure moratorium. Thirty percent “strongly agreed” and 6 percent “somewhat agreed” that Congress should pass legislation suspending foreclosures for 3-6 months. Two percent of respondents did not know or had no opinion on the issue.
The Quick Poll was based on proposals to suspend foreclosures nationwide for 3-6 months, such as the 90-day moratorium recently recommended by Senate Banking Chair Christopher Dodd (D-Conn.) as part of the economic stimulus package. Many states have explored the idea of foreclosure moratoriums as a method of easing the housing crisis. Proponents of a national foreclosure moratorium say that it would give distressed borrowers and lenders time to seek financial relief. Opponents of a national foreclosure moratorium argue that it could delay the recapitalization of the banking system and delay the restoration of stability in the financial markets and financial relief to homeowners.
ABI members and members of the public were welcome to submit their response to the statement: “Congress should pass legislation providing for a national, 3 to 6 month foreclosure moratorium.”
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.
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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 11,700 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.abiworld.org/conferences.html.