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New ABI Officers and Directors Elected

Alexandria, Va. — The following members of the American Bankruptcy Institute (ABI) were elected to leadership positions as officers and directors:

Hon. Barbara J. Houser (N.D. Tex., Dallas) becomes ABI President for a one-year term, succeeding Alane A. Becket of Becket & Lee, LLP (Malvern, Pa.), who now assumes the position of Immediate Past President. Robert P. Reynolds of Reynolds, Reynolds & Little, LLC (Tuscaloosa, Ala.), formerly Vice President—Development, was named President-Elect and will become President in April 2021. Ted Gavin of Gavin/Solmonese LLC (Wilmington, Del.) succeeds retired Bankruptcy Judge Eugene R. Wedoff (Chicago) as Chairman of the Board for a one-year term.

Christopher A. Ward of Polsinelli (Wilmington, Del.) was elected to serve a two-year term succeeding Robert P. Reynolds as ABI Vice President-Development. Soneet R. Kapila of KapilaMukamal, LLP (Fort Lauderdale, Fla.), formerly an at-large member, was selected to serve as Treasurer. Stephen Lerner of Squire Patton Boggs (Cincinnati) and William Henrich of Getzler Henrich & Associates LLC (New York) were elected as at-large members of the Executive Committee. Lisa Sommers Gretchko of Howard & Howard Attorneys PLLC (Royal Oak, Mich.), Vice President—Publications; Thomas M. Horan of Fox Rothschild LLP (Wilmington, Del.), Vice President—Communication & Information Technology; and Annerose Tashiro of Schultze & Braun GmbH (Achern, Germany), Vice President—International Affairs, were all reappointed to two-year terms.

Nine ABI members were elected to their first terms on the ABI Board of Directors:

  • Dawn Cica of Carylon Cica (Las Vegas)
  • H. David Cox of Cox Law Group (Lynchburg, Va.)
  • Eric L. Johnson of Spencer Fane LLP (Kansas City, Mo.)
  • Ericka Johnson of Womble Bond Dickinson LLP (Wilmington, Del.)
  • Paul Leake of Skadden, Arps, Slate, Meagher & Flom LLP (New York)
  • Erika Morabito of Foley & Lardner LLP (Washington, D.C.)
  • Victor Owens of East West Bank (Pasadena, Calif.)
  • William S. Sugden of Alston & Bird (Atlanta)
  • Adrienne Walker of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC (Boston)

There are 60 members on the ABI Board of Directors. The complete list of directors and officers is available at https://www.abi.org/about-us/board-of-directors

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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 Provides Complimentary Access to Digital Trove of Premier Insolvency E-Learning Programs During Covid-19 Quarantine

Alexandria, Va. — ABI is offering complimentary access to more than 2,700 high-quality sessions on its eLearning website during the ongoing COVID-19 quarantine. Featuring sessions recorded from previous ABI conferences and online events, the eLearning site’s programs were previously available only to ABI members. ABI is now opening access to all practitioners, members and non-members alike, giving everyone the opportunity to learn about new bankruptcy topics and refresh their knowledge of core issues.

“We anticipate that the insolvency profession will see an influx of new practitioners who will be seeking training and resources to provide much-needed assistance to individuals and businesses during the current financial crisis,” said ABI Executive Director Amy Quackenboss. “ABI’s eLearning site provides an incredible wealth of bankruptcy knowledge, and we are happy to provide complimentary access during these challenging and uncertain times.”

The digital trove now available for complimentary access features videos and recordings from ABI’s signature bankruptcy conferences and online sessions, and presenters include some of the leading professionals in the bankruptcy and insolvency field. CLE credit will not be available for the complimentary content, but the site does include some on-demand programs that are eligible for CLE. ABI members can already access the site using their member log-in, and non-members will now be able to access it simply by creating an online profile.

To access ABI’s eLearning site and explore the programs available at no charge, please click here.

 

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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.

Commercial Chapter 11 Bankruptcies Increase 14 Percent in the First Quarter Of 2020, Total Filings Down 5 Percent Before COVID-19 Financial Distress Fully Reflected in Filings

Alexandria, Va. Total commercial chapter 11 bankruptcy filings for the first calendar quarter of 2020 increased 14 percent from the same period last year, according to data provided by Epiq Systems, Inc. The 1,709 total commercial chapter 11s from January 1 through March 31, 2020, increased from the 1,500 total commercial chapter 11s during the same period in 2019. Total overall commercial bankruptcy filings also increased in the first quarter of 2020, as the 9,817 during the first three months of 2020 marked a 4 percent increase over the 9,481 total commercial filings over the same period in 2019. However, total overall bankruptcy filings decreased 5 percent over the first three months of 2020 to 177,198 from the 187,325 filings during the same period of 2019. Consumer bankruptcy filings decreased 6 percent over the first three months of 2020 to 167,381 from the 177,844 consumer filings over the same period of 2019.

“The first quarter filings represent a calm before the storm of the financial distress caused by the COVID-19 pandemic,” said ABI Executive Director Amy Quackenboss. “Consumers and businesses face growing financial challenges due to the pandemic, and bankruptcy provides a vital safe harbor from their mounting debts. We anticipate business filings to start rising this month and consumer filings to start to accelerate in early summer.”

The 530 total commercial chapter 11 filings for the month of March 2020 increased 18 percent over the 449 commercial chapter 11 filings in March 2019. Total commercial filings decreased 5 percent in March 2020 to 3,167 from the 3,317 business filings recorded in March 2019. Total overall bankruptcy filings for the month of March 2020 decreased 15 percent to 62,847 from the 73,522 total filings registered in March 2019. Consumer filings also decreased 15 percent in March 2020, to 59,680 from the March 2019 consumer filing total of 70,205.

The average nationwide per capita bankruptcy filing rate for the first three months of 2020 increased to 2.29 (total filings per 1,000 per population) from the 2.21 filing rate of the first two months of the year. States with the highest per capita filing rates (total filings per 1,000 population) for the first quarter of 2020 were:

1. Alabama (5.47)

2. Tennessee (5.05)

3. Mississippi (4.45)

4. Georgia (4.34)

5. Arkansas (3.56)

ABI has partnered with Epiq Systems, Inc. in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media. Epiq Systems is a leading provider of managed technology for the global legal profession. 

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 Systems is a leading provider of managed technology for the global legal profession. Epiq Systems offers innovative technology solutions for electronic discovery, document review, legal notification, claims administration and controlled disbursement of funds. Epiq System’s clients include leading law firms, corporate legal departments, bankruptcy trustees, government agencies, mortgage processors, financial institutions, and other professional advisors who require innovative technology, responsive service and deep subject-matter expertise. For more information on Epiq Systems, Inc., please visit http://www.epiqsystems.com.

House Approves, Trump Signs Coronavirus Stimulus into Law with Provisions Providing Greater Access to Bankruptcy Relief for Consumers and Small Businesses

Alexandria, Va. — President Donald J. Trump today signed the “Coronavirus Aid, Relief and Economic Security Act” (CARES Act) into law with provisions to provide financially distressed consumers and small businesses greater access to bankruptcy relief. The legislative package, which quickly passed the House of Representatives on a voice vote earlier today and 96-0 in the Senate on Wednesday, provides a $2 trillion economic stimulus for U.S. industries and citizens faced with the challenges of the COVID-19 coronavirus. 

“ABI commends Congress and the President for their prompt action on this stimulus package to provide needed financial relief due to the COVID-19 coronavirus pandemic,” said ABI Executive Director Amy Quackenboss. “Consumers and small businesses will have greater access to the financial fresh start of bankruptcy thanks to this important legislation.”

Key bankruptcy provisions within the CARES Act include:

  • Amending the Small Business Reorganization Act of 2019 (SBRA) to increase the eligibility threshold for businesses filing under new subchapter V of chapter 11 of the U.S. Bankruptcy Code from $2,725,625 of debt to $7,500,000. The eligibility threshold will return to $2,725,625 after one year. The increased debt limit for struggling small businesses to access subchapter V reflects recommendations of ABI’s Commission to Study the Reform of Chapter 11.
  • Amending the definition of “income” in the Bankruptcy Code for chapters 7 and 13 to exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy.
  • Clarifying that the calculation of disposable income for purposes of confirming a chapter 13 plan shall not include coronavirus-related payments.
  • Explicitly permitting individuals and families currently in chapter 13 to seek payment plan modifications if they are experiencing a material financial hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due.

The bankruptcy provisions of the CARES Act listed above sunset within a year.

Additionally, the law provides temporary relief for federal student loan borrowers by requiring the Secretary of Education to defer student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans. This provides relief for over 95 percent of student loan borrowers.

“Our members will be sure to utilize these tools to help consumers and small businesses struggling with overwhelming debts due to the economic fallout of the pandemic,” Quackenboss said.

ABI will be holding a free abiLIVE webinar with experts examining the bankruptcy provisions of the CARES Act on April 3 at 1 p.m. EDT. To register, please click here.

SBRA became effective on Feb. 19, adding a new section to chapter 11, subchapter V, to provide a better path for small businesses to successfully restructure, reduce liquidations, save jobs and increase recoveries to creditors. Subchapter V of the new law is based on the recommendations contained in the Final Report of ABI’s Commission to Study the Reform of Chapter 11, a project that was funded by ABI’s Anthony H.N. Schnelling Endowment Fund. The provision of the CARES Act to temporarily increase the debt limit set forth in SBRA aligns closely with the recommendation of ABI’s Chapter 11 Reform Commission to permanently increase the debt eligibility limit to $10 million. For more information and resources on SBRA, please visit www.abi.org/sbra.

Chapter 7 bankruptcy relief, available to consumers and business debtors, involves the sale of a debtor’s nonexempt assets by a chapter 7 trustee, who uses the proceeds of the sales to pay creditors in accordance with the rules outlined in the Bankruptcy Code.

Chapter 13 bankruptcy relief, available only to consumer debtors, enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.

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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.

Senate Passes Coronavirus Stimulus Bill with Provisions Providing Greater Access to Bankruptcy Relief For Distressed Consumers and Small Businesses

Alexandria, Va. — The Senate included key provisions in the “Coronavirus Aid, Relief and Economic Security Act” (CARES Act) to provide financially distressed consumers and small businesses greater access to bankruptcy relief. The legislative package, which yesterday passed the Senate 96-0, provides a $2 trillion economic stimulus for U.S. industries and citizens faced with the challenges of the COVID-19 coronavirus. The legislation now goes to the House, where it is anticipated to be approved on Friday and signed shortly after passage by President Trump.

“Consumers and small businesses in dire need of financial relief due to the COVID-19 coronavirus pandemic will have greater access to the financial fresh start of bankruptcy thanks to this important legislation,” said ABI Executive Director Amy Quackenboss. “ABI commends the Senate’s expedited work, and we look forward to swift enactment of this important bipartisan legislation.”

Key bankruptcy provisions within Sect. 1113 of the CARES Act include:

  • Amending the Small Business Reorganization Act of 2019 (SBRA) to increase the eligibility threshold for businesses filing under new subchapter V of chapter 11 of the U.S. Bankruptcy Code from $2,725,625 of debt to $7,500,000. The eligibility threshold will return to $2,725,625 after one year. The increased debt limit for struggling small businesses to access subchapter V reflects recommendations of ABI’s Commission to Study the Reform of Chapter 11.
     
  • Amending the definition of “income” in the Bankruptcy Code for chapters 7 and 13 to exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy.
     
  • Clarifying that the calculation of disposable income for purposes of confirming a chapter 13 plan shall not include coronavirus-related payments.
     
  • Explicitly permitting individuals and families currently in chapter 13 to seek payment plan modifications if they are experiencing a material financial hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due.

The bankruptcy provisions of the CARES Act listed above sunset within a year of the legislation being enacted.

Additionally, Sect. 3513 of the legislative package provides temporary relief for federal student loan borrowers by requiring the Secretary of Education to defer student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans. This provides relief for over 95 percent of student loan borrowers.

“ABI members are ready to utilize these tools to help consumers and small businesses struggling with overwhelming debts due to the economic fallout of the pandemic,” Quackenboss said.

SBRA became effective on Feb. 19, adding a new section to chapter 11, subchapter V, to provide a better path for small businesses to successfully restructure, reduce liquidations, save jobs and increase recoveries to creditors. Subchapter V of the new law is based on the recommendations contained in the Final Report of ABI’s Commission to Study the Reform of Chapter 11, a project that was funded by ABI’s Anthony H.N. Schnelling Endowment Fund. The provision of the CARES Act to temporarily increase to the debt limit set forth in SBRA aligns closely with the recommendation of ABI’s Chapter 11 Reform Commission to permanently increase the debt eligibility limit to $10 million. For more information and resources on SBRA, please visit www.abi.org/sbra.

Chapter 7 bankruptcy relief, available to consumers and business debtors, involves the sale of a debtor’s nonexempt assets by a chapter 7 trustee, who uses the proceeds of the sales to pay creditors in accordance with the rules outlined in the Bankruptcy Code.

Chapter 13 bankruptcy relief, available only to consumer debtors, enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.

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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.

 

February Commercial Chapter 11 Bankruptcy Filings Drop 20 Percent Ahead of Potential Financial Impact from Coronavirus COVID-19 Pandemic

Alexandria, Va. Total commercial chapter 11 filings in February 2020 decreased 20 percent over the same period last year, according to data provided by Epiq Systems, Inc. The 547 commercial chapter 11 filings in February 2020 were down from the 685 commercial chapter 11 filings in February 2019. Total commercial filings were 3,084 in February 2020, representing a 4 percent decrease from the 3,203 business filings recorded in February 2019. Total bankruptcy filings upticked 0.1 percent to 56,182 in February 2020 from the 56,144 filed in February 2019. Consumer filings increased 0.3 percent in February 2020 to 53,098 from the February 2019 consumer filing total of 52,941.

“As businesses close and the supply chain endures disruptions due to the COVID-19 coronavirus, bankruptcy provides distressed businesses and consumers the financial shelter they need in these challenging times,” said ABI Executive Director Amy Quackenboss. “While the statistics might not show the immediate effects, we expect filings to increase as a result of the financial impact of the COVID-19 pandemic.”

ABI hosted a webinar on March 10 featuring a panel of experts that shed light on the impact, and likely reaction, from various sectors of the economy, as well as suggestions on what may be around the corner in the world economy. Click here to watch a replay of the webinar.

ABI members Thomas J. Salerno of Stinson, LLP (Phoenix) and G. Neil Elsey of Avion Holdings, LLC (Scottsdale, Ariz.) also wrote a column on the coronavirus’s impact on capital markets, supply-chain disruption, hospitality and transportation. Click here to read the column.

The February 2020 commercial chapter 11 filing total of 547 represented a 13 percent decrease over the previous month’s commercial filing total of 630. February 2020’s 3,084 commercial filings also dropped 13 percent over the 3,535 filings recorded in January 2020. Total bankruptcy filings fell 3 percent in February 2020 from January’s total of 58,150 filings. Total noncommercial filings also decreased 3 percent from the previous month, from 54,615 filings in January 2020 to 53,098 filings in February 2020.

The average nationwide per capita bankruptcy filing rate in February 2020 was 2.21 (total filings per 1,000 per population), a slight decrease from January 2020’s rate of 2.25. Average total filings per day in February 2020 were 2,957, a slight increase from the 2,955 total daily filings recorded in February 2019. States with the highest per capita filing rates (total filings per 1,000 population) in February 2020 were:

1. Alabama (5.33)

2. Tennessee (5.00)

3. Georgia (4.49)

4. Mississippi (4.16)

5. Arkansas (3.50)

ABI has partnered with Epiq Systems, Inc. in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media. Epiq Systems is a leading provider of managed technology for the global legal profession. 

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.

Epiq Systems is a leading provider of managed technology for the global legal profession.  Epiq Systems offers innovative technology solutions for electronic discovery, document review, legal notification, claims administration and controlled disbursement of funds.  Epiq System’s clients include leading law firms, corporate legal departments, bankruptcy trustees, government agencies, mortgage processors, financial institutions, and other professional advisors who require innovative technology, responsive service and deep subject-matter expertise. For more information on Epiq Systems, Inc., please visit http://www.epiqsystems.com.

 

SMU Dedman School of Law Registers Back-to-Back Wins at Annual Conrad B. Duberstein National Bankruptcy Moot Court Competition

Alexandria, Va. The Southern Methodist University Dedman School of Law won the 28th Annual Conrad B. Duberstein National Bankruptcy Moot Court Competition, held Feb. 29-March 2 in New York. The SMU team also won the Duberstein Moot Court Competition last year. The competition is co-sponsored by the American Bankruptcy Institute and St. John’s University School of Law. Baylor University Law School took second place in the competition, and third-place honors were shared by teams from the University of Notre Dame Law School and the University of Texas at Austin School of Law. Baylor University Law School won for the Best Brief, and Destiney Thompson from Campbell University Norman Adrian Wiggins School of Law won the Best Oralist award.

The competition consists of eight rounds of oral arguments, and the final rounds are held at the Duberstein Federal Courthouse in Brooklyn, N.Y. Many of the teams are coached by ABI practitioners or academic members, and nearly 200 lawyers and federal judges donated their time and expertise to help judge the event. The fact pattern for the competition focused on two key developments stemming from chapter 11 case law. The first issue looked at whether 11 U.S.C. § 365(c)(1) permits a debtor in possession to assume an executory contract over the objection of the nondebtor party to such contract when applicable nonbankruptcy law excuses the nondebtor party from accepting performance from or rendering performance to an entity other than the debtor or the debtor in possession. The second issue focused on whether, in a case where a class of claims is proposed to be impaired under a joint multi-debtor plan, 11 U.S.C. § 1129(a)(10) requires acceptance from at least one impaired class of claims of each debtor or, alternatively, acceptance from one impaired class of claims of any one debtor.

Final-round judges for the 2020 competition included Chief Bankruptcy Judge Carla E. Craig (E.D.N.Y., Brooklyn), Chief Bankruptcy Judge Cecilia G. Morris (S.D.N.Y., Poughkeepsie), Judge Michael J. Melloy of the U.S. Court of Appeals for the Eighth Circuit (Cedar Rapids, Iowa) and Judge Robert Summerhays of the U.S. District Court for the Western District of Louisiana (Lafayette). Bankruptcy Judge John T. Gregg (W.D. Mich.; Grand Rapids) and Paul Hage of Jaffe Raitt Heuer & Weiss (Southfield, Mich.) drafted this year’s fact pattern.

The Duberstein Competition, named for the late Judge Conrad B. Duberstein, a St. John’s alumnus and former ABI director, has grown into the largest appellate moot court competition in the nation. ABI’s Endowment Fund awarded $12,000 in cash prizes for the winners during the final night gala reception at Gotham Hall in New York City on March 2, which was attended by more than 500 members of the New York restructuring community.

For more information on ABI's Conrad B. Duberstein National Bankruptcy Moot Court Competition, please go to http://www.stjohns.edu/academics/graduate/law/academics/llm/duberstein. 

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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.

Bankruptcy Courts to Receive Free Access to Advanced Legal Research Technology Through New Partnership Between ABI and Casetext

Alexandria, Va. — A new partnership between the American Bankruptcy Institute and Casetext will provide bankruptcy judges and clerks with free unlimited access to Casetext’s full research suite, including its unique artificial intelligence (A.I.) research technology, CARA A.I. This technology allows legal researchers to upload a brief or complaint from their litigation to instantly find tailored research of authorities with the same facts and legal issues in the same jurisdiction.

Judges and clerks can sign up for free access at https://www.abi.org/casetext.  

"ABI is excited to partner with Casetext to offer this dynamic and powerful legal research tool," said Karim Guirguis, ABI Chief Strategy & Innovation Officer. "Judges and clerks will be able to utilize Casetext's fast and efficient technology free of charge, and all other ABI members will be provided discounted access."

“ABI is the central resource for bankruptcy professionals for legal research. We’re proud to contribute to their mission to equip judges and their clerks with the best tools to conduct their practice more efficiently and effectively,” said Jake Heller, co-founder and CEO of Casetext.

Last fall, ABI and Casetext partnered to provide a 20 percent discount on the Casetext research suite for bankruptcy attorneys and legal professionals. ABI members can learn more about this and sign up for a free trial at https://www.abi.org/casetext.  

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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.

Casetext is a smarter legal research platform, combining conventional search functionality with A.I. search technology. Founded by a team of former litigators from top law firms, as well as Ph.D. data scientists and leading A.I. engineers, Casetext helps legal researchers find the best cases faster, including cases they would otherwise miss. Over 5,000 law firms, including 40% of the Am Law 100, rely on Casetext to help them research smarter.

 

ABI Journal Article Examines How Reserve Fund Concept Keeps Chapter 13 Plans Alive for Debtors and Benefits Unsecured Creditors

Alexandria, Va. — As chapter 13 bankruptcy plans are typically structured without a buffer for any unforeseen costs (such as a car repair or medical procedure), an article in the February ABI Journal explores how establishing a reserve fund in these cases helps both debtors and creditors. Chapter 13 of the Bankruptcy Code provides for the adjustment of debts of an individual with regular income by allowing a debtor to keep property and pay debts over time, usually three to five years. The chapter 13 reserve fund concept will “provide flexibility to the rigid projected-expense calculations that the Bankruptcy Code mandates, which puts debtors in a better position to withstand unexpected financial events, which are virtually certain to occur, without having their plans derailed,” judicial clerks John Andreasen and Samuel Rabuck of the U.S. Bankruptcy Court for the Northern District of Illinois (Chicago) write in their article. “Although unsecured creditors do not seem like the obvious beneficiaries of the reserve funds discussed, some simple math and common sense reveal just how much they stand to gain.”

Research pointed out that plan failure is the ultimate result of 66 percent of all chapter 13 cases filed nationwide, according to data reviewed by Andreasen and Rabuck from a 12-month-period ending June 30, 2017. “Most of these failures are due to nonpayment of monthly plans,” they write. “After a chapter 13 plan fails, debtors typically do one of two things: (1) refile a chapter 13 case; or (2) stay out of bankruptcy and allow the race to the courthouse to commence among creditors.”

To avoid jeopardizing chapter 13 plans, the authors found that the Southern District of Texas started creating reserve funds for chapter 13 debtors to allow these debtors to pay for unforeseen costs that may arise throughout the life of the plan. “Under the Southern District of Texas’s approach, the appropriateness of each reserve fund is determined on a case-by-case basis, and participation in this program is completely voluntary,” according to Andreasen and Rabuck. “Upon completion of the plan, any money remaining in the reserve fund is returned to the debtor.”

Inspired by the Southern District of Texas's initiative, the ABI Consumer Commission formally recommended adoption of this practice nationwide. Under the ABI Consumer Commission's proposed statutory amendment, the chapter 13 reserve fund would be limited to one month of the debtor's scheduled expenses, and the fund may be restored by additional debtor contributions to the extent of any disbursements from the fund. “For debtors with incomes above the median, the excess funds would be disbursed to unsecured creditors after the plan is completed,” Andreasen and Rabuck write. “Debtors with incomes below the median retain the funds at the completion of their plans.”

As debtors are provided a better cushion to make payments on their chapter 13 plans, the authors also show that reserve funds will benefit unsecured creditors “because empirical evidence suggests they lengthen the average lifespans of chapter 13 plans, which means that unsecured creditors receive more money in plan payments.”

To obtain your copy of “Water for Plants: How Reserve Funds Keep Chapter 13 Plans Alive on Rainy Days and Benefit Unsecured Creditors,” please click here.

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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.

Pharmaceutical Cases, Intersection of IP and Bankruptcy, SBRA, Real Estate Cases and More to Be Discussed at ABI's 2020 Annual Spring Meeting in April

Alexandria, Va. -- The American Bankruptcy Institute's (ABI) 2020 Annual Spring Meeting returns to the JW Marriott in Washington, D.C., April 23-25. ABI’s largest annual conference features timely concurrent sessions tailored for commercial and consumer practitioners. A special edition of the popular “ABI Talks” session kicks off this year’s program with presentations from G. Eric Brunstad of Dechert Llp (Hartford, Conn.), Hon. Steven W. Rhodes (Ret.) of JAMS (Ann Arbor, Mich.) and Cate Long of the Puerto Rico Clearinghouse (New York). A special plenary session on April 24 features restructuring twins and ABI members Demetra Liggins and Bemetra Simmons as they show attendees how to step up their “A-Game” through mentoring and being mentored. Former ABI Executive Director Samuel J. Gerdano will be honored at this year’s conference with a special luncheon showcasing his three decades of service. Up to 12.5/15.5 hours of CLE/CPE credit are available, along with ethics credit totaling 2.25/2.5 hours.

Sessions at the 2020 Annual Spring Meeting include:

  • “Too Many Hats”: The Peculiar Problems and Challenges When an Equity Sponsor/Secured Lender Is Also a DIP Lender and Stalking-Horse Buyer in a Chapter 11 Case
  • Is It or Is It Not Property of the Estate? Section 541 Conundrums
  • Supreme Court Update and Circuit Splits on Consumer Issues
  • Peace Bridge, or Bridge of Sighs? Cross-Border Mediation of Insolvency-Related Disputes
  • Opportunities and Challenges Associated with Early-in-the-Case § 363 Sales
  • Witness Preparation: A Roundtable Discussion
  • Consumer Commission Report Top 10 Wish List
  • Special Issues in Real Estate Bankruptcy Cases
  • Be Careful What You Ask For: Risks and Benefits of Involuntary Bankruptcy Filings
  • Current Issues Facing Creditors’ Committees
  • Technology and Ethics: Protecting Your Sale Process, Your Online Presence — and Your Hide
  • Great Debates 2.0
  • Advanced Issues on Cash-Flow Projections in Restructuring Cases
  • Advanced Chapter 13 Topics
  • Litigating Against Directors and Officers in Bankruptcy
  • The New Small Business Reorganization Act: How It Works and the Types of Debtors that Will Benefit from It
  • The Intersection of Intellectual Property Rights and Bankruptcy: How to Protect Your Intangible Assets in Bankruptcy Cases
  • A Few Good Lawyers: Best Behavior, Use of Technology and Other Taboos — A Discussion by ABC Judges
  • Hot Topics with Bill Rochelle
  • In and Outs of RESPA
  • Anatomy of a Pharmaceutical Case
  • Do This, Not That: Ethics Roundtable
  • Claims Traders: Sharks or Saints?
  • “But I Am Afraid of Needles”: Fearlessly Navigating the Sale of Health Care Assets

For the full schedule with the speakers for each session at ABI’s Annual Spring Meeting, please click here.

Press interested in attending the conference 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.

 

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