Fitch: January U.S. Defaults Span Five Unique Sectors ​​​

The leveraged loan (LL) trailing twelve-month (TTM) default rate for January 2025 is 5.32%, while the high-yield (HY) TTM default rate is 2.46%, according to Fitch Ratings’ U.S. Distressed and Default Monitor: February 2025. In January, five issuers defaulted on their LL and HY debt across five unique sectors: retail, health care and pharmaceuticals, food, beverage and tobacco, gaming, lodging and restaurants, and business services, according to Fitch Ratings. Defaults were driven by macro pressures, issuer-specific challenges (including regulatory changes in Medicare reimbursement rates), litigation challenges and pressured revenue from contract repricings. Business services company Multiplan is grappling with litigation challenges regarding allegations of price-fixing and collusion with issuers, alongside contract repricing changes that pressured revenue. Better Health (also known as Physician Partners) faced operational pressure from changes in medical insurance reimbursement rates, including Medicare. Better Health completed a three-step distressed debt exchange (DDE) seemingly structured to navigate around the Dec. 31, 2024, Serta decision by the Fifth Circuit Appeals Court. Macro pressures from a softening retail economy, weaker domestic leisure spending, inflation and ongoing fallout from the pandemic continued to impact certain stressed issuers. Read more.

Alice Eaton of Paul Weiss Talks Restructuring Trends, Career Path on Inaugural Episode of "Women in Restructuring" Podcast ​​​

ABI and Debtwire recently collaborated to launch the "Women in Restructuring" podcast series featuring leading women in the industry, who discuss key issues in a variety of insolvency sectors and talk about their paths to the profession. On the inaugural episode, host Sarah Foss of Debtwire talks with Alice Eaton of Paul Weiss about key restructuring developments and how Eaton's bankruptcy career took shape at an early age. Click here to listen! 

Subchapter V Experiences to Share? ABI Wants to Hear from You!

ABI is continuing its study of Subchapter V, and it needs your help! We are particularly interested in learning more about the real-world impact of Subchapter V. So our question is, do you have a story about a distressed business or creditor who has used or benefited from the subchapter? If so, could that case still happen under the lower debt cap for Subchapter V debtors? Any and all responses are welcome. Submit your story at https://abi.org/subvstories.
 

U.S. Weekly Jobless Claims Rise More than Expected​​​

The number of Americans filing new applications for unemployment benefits increased more than expected last week, but that likely does not signal a material shift in labor market conditions, Reuters reported. Initial claims for state unemployment benefits jumped 22,000 to a seasonally adjusted 242,000 for the week ended February 22, the Labor Department said today. A separate unemployment compensation for federal employees (UCFE) program, which is reported with a one-week lag, showed no impact yet from mass layoffs of probationary federal government workers, most of whom were fired around February 14 by billionaire Elon Musk's Department of Government Efficiency. The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 5,000 to a seasonally adjusted 1.862 million during the week ending February 15, the claims report showed. Read more.

U.S. Economic Growth Slows in Fourth Quarter​​​

U.S. economic growth slowed in the fourth quarter, the government confirmed on Thursday, and the loss of momentum appears to have persisted early this quarter amid cold temperatures and concerns that tariffs will hurt spending through higher prices, Reuters reported. Gross domestic product increased at a 2.3% annualized rate last quarter after accelerating at a 3.1% pace in the July-September quarter, the Commerce Department's Bureau of Economic Analysis (BEA) said in its second GDP estimate for the fourth quarter on Thursday. Upgrades to government spending and exports were partly offset by downward revisions to consumer spending and investment. Nonetheless, consumer spending, which accounts for more than two-thirds of the economy, grew at a 4.2% rate last quarter after rounding, matching the previously estimated pace. The economy grew 2.8% in 2024 after expanding 2.9% in 2023. Read more.

Student Loan Forgiveness, Lower Payments Blocked for Millions as Department of Education Removes More Forms​​​

The Department of Education took additional steps this week that effectively block affordable repayment plans and student loan forgiveness for millions of borrowers, Forbes reported. The department’s actions follow a sweeping ruling by a federal appeals court last week that widened and extended an existing injunction halting implementation of the SAVE plan, a Biden-era income-driven repayment plan intended to lower monthly payments, halt runaway interest, and simplify the federal student loan repayment system while offering borrowers a pathway to student loan forgiveness. SAVE operated alongside several older IDR plans. In response to the latest ruling, last Friday the department took down the online applications for IDR plans and for Direct loan consolidations. It appeared for several days that borrowers could still apply for these plans via a paper application, available for download through the Department of Education’s forms library. But then this week, the department removed the paper IDR application from the forms library — leaving borrowers with no means of applying for these plans. Read more.

Nominations Due Tomorrow for ABI's "Asset Sale of the Year" Award​​

ABI’s Asset Sales Committee is seeking nominations for its Seventh Annual ABI Asset Sale of the Year award. Any bankruptcy sale that closed between January 1 and December 31, 2024, and involved at least one professional who is a member of ABI’s Asset Sales Committee (free for ABI Members to join) is eligible. Nominations are due by tomorrow, February 28; for more information about the award and submitting a nomination, please click here.

Applications Due Tomorrow for ABI’s Diversity Mentoring Program​​​

Applications are being accepted through tomorrow for ABI’s Diversity Mentoring Program, hosted by our Diversity, Equity and Inclusion Committee to connect active or recently graduated business and law students with experienced insolvency professionals and ABI members who are offering professional development guidance. Throughout the program, mentors and mentees will meet bi-monthly to discuss a variety of topics with resources from ABI and members of the reorganization community, including judges, trustees, attorneys and accountants. For more information about the Diversity Mentorship Program and to apply to be a mentee for 2025-26, please visit ABI’s Diversity and Inclusion website at diversity.abi.org.

NYC Area Practitioners: Don't Miss Monday's 33rd Annual Duberstein Bankruptcy Moot Court Awards Gala!​​​

Join nearly 500 leading bankruptcy practitioners and judges from the New York metro region and beyond on Monday for the annual Duberstein Bankruptcy Moot Court Gala and Awards Presentation, taking place at the New York Marriott Downtown in New York City. The Awards Gala is the culminating event of the annual Duberstein Bankruptcy Moot Court Competition, sponsored by the American Bankruptcy Institute and St. John’s University School of Law. More than 50 law school teams participate in the competition each year, making this the largest single-site appellate moot court competition in the nation. Click here to register! Read more.

Don't Miss Monday's Special abiLIVE Webinar Looking at Efforts to Amend Bankruptcy Rule 9031​​​

Don't miss the special abiLIVE webinar on Monday, sponsored by ABI's Mediation Committee, to discuss efforts currently underway to amend Bankruptcy Rule 9031 to expand judges’ toolboxes and allow for the appointment of special neutrals (a.k.a. special masters). The webinar will focus on practical considerations in evaluating such an amendment. Register for FREE! 

Access All Current ABI Titles Through ABI’s New Digital Book Subscription!​​​

One of the best collections of bankruptcy books is now available as an annual digital subscription! ABI’s bankruptcy library opens the door to a constantly evolving area of the law, and our books are continually being updated by top industry professionals. Auto-renewing annual subscriptions guarantee immediate access to this invaluable resource, which is comprised of fully searchable content that’s always available on any digital device. Convenient pricing plans for individual and institutional subscribers offer immediate and unlimited access to our entire digital library of books — nearly 100 treatises! Plus, you get advanced access to new and revised books as soon as they are published — all included in your annual subscription. Learn more!

Have an Idea for a Topic for an ABI Conference Session? Submit Your Proposal via ABI’s “Call for Abstracts” Page!​​​

ABI has launched an online portal for professionals to submit proposals for educational sessions at future ABI conferences. Submitters can describe their proposed topic, outline the session’s focus and learning goals, suggest speakers, and provide contact information via the portal’s detailed form. The portal can be accessed here.

All submissions will be reviewed by an internal Education Committee, which will contact the submitter to ask questions as needed and to discuss the status of the proposal. Submissions will be reviewed on a rolling basis.

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