Biden Administration Can Move Forward with Student Loan Forgiveness, Federal Judge Rules​​​

A federal judge will let expire a temporary restraining order against the Biden administration’s sweeping new student loan forgiveness plan, which could deliver relief to tens of millions of Americans, CNBC.com reported. The plan could benefit as many as three in every four federal student loan holders, when combined with the administration’s previous efforts, according to an estimate by the Center for American Progress. U.S. District Judge Randal Hall in Georgia, appointed by former Republican President George W. Bush, delivered the win for the Biden administration late on Wednesday. The ruling means President Joe Biden may move forward with his administration’s student loan forgiveness plan, just weeks before the November election. The development stems from a lawsuit against the aid package brought by seven GOP-led states. The states — Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio — said the U.S. Department of Education’s new debt-cancellation effort is illegal. However, Judge Hall found that Georgia lacked standing to sue against the relief plan and could not be the venue for the case. The judge directed the case to be transferred to Missouri, since the states claim Biden’s plan would most harm student loan servicer Mohela, or the Missouri Higher Education Loan Authority. Read more.

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.
 

Banks Reclaim $30 Billion of Debt Deals from Private Credit​​​

Banks are capitalizing on lower interest rates to claw back corporate debt deals from private credit funds, staging a major comeback after losing market share in recent years, Bloomberg News reported. Almost $30 billion of private debt has been refinanced through broadly syndicated loans across more than 70 deals so far this year, according to Bank of America Corp. research, as more borrowers look to slash interest costs. Banks and private credit lenders have been in tense competition to provide financing for what’s been a thin pipeline of mergers and acquisitions. Expectations for interest rate cuts have helped the broadly syndicated loan market come roaring back as borrowers seek to cut interest expenses. The savings are significant for borrowers that had high-cost loans. In the case of Vista Equity Partners’ Alegeus, the private loan used to acquire the business had a hefty margin of 8.25 percentage points over the Secured Overnight Financing Rate. The company sought pricing of 5 to 5.25 percentage points over the benchmark in its broadly syndicated deal launched last month, which was offered at a discounted price of 98 cents. That would equate to $75 million in interest savings over the life of the five-year loan, according to Bloomberg calculations. The shift comes at a time when the private credit market is under considerable pressure to deploy capital. Lenders that have raised record amounts of cash have struggled to invest it amid a muted market for leveraged buyouts. Private credit dry powder, the amount of money committed to funds that has yet to be deployed, reached an all-time high earlier this year. Read more.

U.S. Retailers Look to Back-up Shipping Plans to Prep for Holidays as Strike Continues​​​

Major retailers from Levi Strauss to Costco are preparing alternative shipping plans to ensure that goods arrive in time for the peak holiday season as the U.S. East Coast and Gulf Coast ports strike drags on, Reuters reported. Long lines of container ships queued up outside major U.S. ports today as the biggest dockworker strike in nearly half a century entered its third day, preventing unloading and threatening shortages of everything from bananas to auto parts. Retailers account for about half of all container shipping volume, with Walmart, IKEA and Home Depot among those that heavily rely on the East Coast and Gulf Coast ports, according to eMarketer analyst Sky Canaves. Read more.

U.S. Service Sector Activity Accelerates to 1-1/2-Year High​​​

U.S. services sector activity jumped to a 1-1/2-year high in September amid strong growth in new orders, more evidence that the economy remained on a solid footing in the third quarter, Reuters reported. The Institute for Supply Management (ISM) said today that its non-manufacturing purchasing managers (PMI) index accelerated to 54.9 last month, the highest level since February 2023, from 51.5 in August. A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy. The ISM views PMI readings above 49 over time as generally indicating an expansion of the overall economy. The survey joined fairly upbeat August data on consumer spending and a smaller goods trade deficit in suggesting that the economy retained much of its momentum from the second quarter. Read more.

More Americans Filed for Unemployment Benefits Last Week, but Layoffs Remain Historically Low​​​

The number of Americans applying for unemployment benefits rose modestly last week but remains at healthy levels. The Labor Department reported Thursday that applications for jobless claims rose by 6,000 to 225,000 for the week of Sept. 28, the Associated Press reported. The four-week average of claims, which evens out some of the weekly volatility, fell by 750 to 224,250. Today’s report said that the total number of Americans collecting jobless benefits was down by 1,000 to about 1.83 million for the week of Sept. 21. Separately on Thursday, some retailers said that they are ramping up hiring for the holiday season, but fewer seasonal employees are expected to be taken on this year. Read more.

Analysis: Americans Are More Reliant than Ever on Government Aid​​​

Americans’ reliance on government support is soaring, driven by programs such as Social Security, Medicare and Medicaid, according to a Wall Street Journal analysis. The big reasons for this dramatic growth: A much larger share of Americans are seniors, and their health care costs have risen. At the same time, many communities have suffered from economic decline because of challenges including the loss of manufacturing, leaving government money as a larger share of people’s income in such places. For its analysis of government spending, EIG used a government definition of income that includes spending on programs that Americans pay into, such as Medicare and Social Security. Another major government health program — Medicaid — is also counted. The analysis also includes unemployment insurance, food stamps, the earned income tax credit, veterans’ benefits, Pell grants, Covid-era payments and other income support. States help pay for some of these programs, such as Medicaid, but the federal government covers roughly 70% of the total cost. Government spending to help address poverty also contributes to the trend of increasing reliance, especially during economic downturns. But poverty in the U.S. has been relatively stable as the population has been growing older. Meanwhile, the costs of an aging population are rising. Today, more than 17% of Americans are ages 65 or older, up from about 10% in 1970. (Subscription required.). Read more.

Second Circuit Accepting Applications for E.D.N.Y. Bankruptcy Judgeship​​​

The U.S. Court of Appeals for the Second Circuit invites applications from qualified candidates for a 14-year appointment as U.S. Bankruptcy Judge for the Eastern District of New York. For more information, please click here.​​​​​​

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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