Senate Leaders Look to Curb ‘Judge-Shopping,’ but in Different Ways​​​

Senate Majority Leader Chuck Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) on April 10 each introduced legislation that would alter how certain cases are assigned in the federal courts. Each says that the goal of their respective bills is to eradicate the pursuit of sympathetic judges by savvy litigants. But the bills take different tacks in trying to do that, the New York Times reported. S.4096, the "End Judge Shopping Act," which has 41 Democratic co-sponsors, tracks with the guidance last month from the Judicial Conference, the federal judiciary’s policymaking body. It would end the most targeted form of judge-shopping, where plaintiffs game a district’s case-assignment system by filing in a small division staffed by one or two judges. A system in which plaintiffs get to choose their judge, Sen. Schumer said in an interview, “perverts the system of justice, which is supposed to be straight down the middle.” Techniques used by patent owners and bankrupt companies to get their cases in front of specific judges could be at risk with legislation from Senate Minority Leader Mitch McConnell (R-Ky.), Bloomberg Law reported. The bill, introduced by McConnell (R-Ky.) on April 10, diverges from guidance issued by the federal judiciary’s policymaking body and a competing proposal from Majority Leader Chuck Schumer (D-N.Y.) by tweaking rules for establishing venue in patent and bankruptcy suits. The practice, called “judge-shopping” by its critics, has drawn attention in recent years as conservative attorneys general have challenged Biden administration policies in one-judge divisions in Texas and Louisiana. S.4095, the "Stop Helping Outcome Preferences Act" ("SHOP Act"), also was co-sponsored by Tens. Tom Cotton (R-Ark.) and Tom Tillis (R-N.C.). “The SHOP Act would stop that, restricting the relief that judges in Texas and in California can provide to the parties in front of them or the geographic reach of their jurisdictions," McConnell said in floor remarks on April 10. "It also addresses the problem of venue-selling in bankruptcy and patent cases…. The SHOP Act would impose uniform standards for where bankruptcy and patent cases should be heard to solve this problem. The prospects for either bill introduced by Senators Chuck Schumer and Mitch McConnell becoming law are unclear. Neither has drawn co-sponsors from the opposing party.

Analysts: New Wave of e-Commerce Disruption Could Close 45,000 Retail Stores over the Next Five Years​​​

A decade ago, Amazon.com was all the worry in the retail industry — and retailers, to some degree, adapted. But UBS analysts have suggested that e-commerce isn’t done with the brick-and-mortar store just yet, MarketWatch.com reported. The analysts predict that around 45,000 retail stores will close over the next five years, as online shopping and larger players like Chinese discount-shopping site Temu and Singapore-based fast-fashion giant Shein become more prevalent. The closures would play into the hands of larger, deeper-pocketed retailers like Walmart Inc. and Target Corp. and put smaller ones at greater risk, they said. Some 16,500 of those store closures could come out of the “softlines” retail industry, which sells things like clothing and bedsheets. Department stores and specialty retailers could be hit particularly hard. “Our basic premise is that as e-commerce penetration continues to rise, more of those places of exchange will take place at a consumer’s home,” the UBS analysts wrote in a note on Monday. “Thus, there will just be less need for stores.” “In fact,” they added, “it’s likely that the next wave of e-commerce penetration is pushed in part by third-party players such as Temu, Shein and others that don’t even have a physical presence in the U.S.” Read more.

Have You Downloaded Your Copy of the Final Report of ABI's Subchapter V Task Force?​​​

The ABI Subchapter V Task Force unveiled its Final Report of recommendations at ABI’s Annual Spring Meeting in Washington, D.C., on April 19, 2024. The Task Force’s findings revealed that subchapter V of chapter 11 of the U.S. Bankruptcy Code is achieving its objective of helping more small businesses reorganize efficiently in bankruptcy while also offering best practices and potential statutory amendments for policymakers, judges and practitioners to consider. The key recommendation highlighted by the Task Force’s Final Report was the support for maintaining the filing eligibility limit of $7.5 million in aggregate noncontingent, liquidated debt for small businesses looking to reorganize under subchapter V. Click here to download your copy!

Florida’s Home Insurance Industry May Be Worse than Anyone Realizes​​​

Seven property insurers in Florida went bankrupt in 2021 and 2022. The bankruptcies left thousands of homeowners scrambling to get new coverage, which often came with a big increase in cost. Worse, many had outstanding claims for hurricane damage that had not been addressed, Bloomberg News reported. Jacqueline Ravelo, a Miami homeowner, was among them. Her roof was damaged by Hurricane Irma in 2017. Her insurance company, Avatar Property and Casualty, covered the cost of some repairs. But the roof continued to leak and mold grew inside the house, she said. Ravelo sued Avatar to compensate her for further repairs, which she said came to $50,000. When they were on the verge of settling, she said, the company went out of business. Avatar and the six other companies that folded had something in common: They had all been rated A (“exceptional”) or higher by Demotech, Inc., an Ohio-based insurance ratings firm. (One of those insurers was also rated A- by competitor AM Best Co. Inc.) In fact, nearly 20% of the companies doing business in Florida that Demotech rated as financially stable went insolvent during the period 2009 to 2022, according to a working paper by researchers at Harvard University, Columbia University and the Federal Reserve that was released by Harvard Business School in December. In their data sample, 99.7% of the ratings issued by Demotech were an A or above. That’s a signal, the researchers said, that Florida’s insurance market may be full of weak players and is even more precarious than already known. “Our research shows that lax regulation and monitoring of property insurers makes Florida mortgage markets far more exposed to climate risk than people might think,” said Parinitha Sastry, an author of the report and an assistant professor of finance at Columbia Business School. The paper has yet to be peer-reviewed. The authors say this rating system also allows lenders making the riskiest mortgages to pass their liability on to everyone else. Read more.

Surging Auto Insurance Rates Squeeze Drivers, Fuel Inflation​​​

Auto insurance rates rose 2.6% in March and are up 22% from a year ago, the Associated Press reported. Premium costs have been marching steadily higher since 2022, even as inflation at the consumer level steadily cooled from its 9.1% peak in the middle of that year. Consumers have had some relief as the rate of cost increases for food and energy, two key components of most budgets, has eased greatly. But auto insurance and car ownership costs have become a sticking point for consumers and the Federal Reserve in its battle to rein in inflation back to its goal of 2%. Typically, individuals would see a noticeable increase in their premiums because of speeding tickets and other moving violations. Adding new drivers or a general increase in claims in the area were other reasons. But the persistent rise in rates over the last two years has been far more sweeping. New vehicle prices started spiking during the pandemic, mainly because of a worldwide shortage of computer chips amid production cuts and supply chain bottlenecks. Dealers spent much of 2021 with few or no cars in stock. Car price increases eased heading into 2024, with the average at $47,338 in January, down from a peak of $48,516 in late 2022, according to Edmunds.com. Read more.

Get Your Copy of The Purdue Papers to access Amicus Briefs and Commentaries Related to Purdue Pharma Case!​​​

A petition by the U.S. Trustee regarding the case of Purdue Pharma L.P. is currently being considered by the U.S. Supreme Court. Regardless of how the Court rules, the case has already generated a mountain of commentary in the form of amicus briefs, petitions and other related background material. ABI, guided by editor David R. Kuney (who represented one group of amicus filers), has gathered together all of this material in a fully searchable form — more than 3,000 pages worth! This collection will be updated with the final Supreme Court decision — expected later in 2024 — as well as a final commentary by ABI Editor-at-Large Bill Rochelle, who writes Rochelle’s Daily Wire. This collection is an invaluable resource for anyone working in the area of third-party releases, either as a practitioner, an academic or just an interested party. Get your digital copy for only $25!

Application and Nomination Period for ABI’s 2024 “40 Under 40” Class Open Through June 30 ​​​

The ABI "40 Under 40" annual program continues to highlight the best up-and-comers in the industry. If you are, or know of, a dynamic insolvency professional who is committed to growth and excellence both professionally and in your community, this is one opportunity not to be missed! Nominations and applications are due June 30. Click here for more information and to submit a nomination or application. 

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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