"National Guard and Reservists Debt Relief Extension Act of 2023" Passed by House, Awaits Senate Consideration​​​

The House of Representatives passed H.R. 3315, the "National Guard and Reservists Debt Relief Extension Act of 2023," via voice vote on Dec. 11, and the bill now proceeds to the Senate, where prospects for passage are favorable. The bipartisan measure was reintroduced on May 15 by Rep. Steve Cohen (D-Tenn.) to provide the same means-test treatment under chapter 7 of the Bankruptcy Code for guard members and reservists who were recently federally deployed as that of active duty servicemembers. The legislation, which passed 24-0 out of the House Judiciary on Nov. 2, aims to exempt for an additional four-year period, from the application of the means-test presumption of abuse under chapter 7, qualifying members of reserve components of the Armed Forces and members of the National Guard who, after September 11, 2001, are called to active duty or to perform a homeland defense activity for not less than 90 days. Prospects for passage are favorable, as Senate Judiciary Chair Richard Durbin (D-Ill.) and Senate Judiciary Ranking Member Lindsay Graham (R-S.C.) on Nov. 15 introduced companion legislation, S. 3328, in the Senate. 

Analysis: U.S. Bankruptcy Wave May Stretch into 2024, but Pace Could Slow ​​​

The retail sector could continue to lead U.S. bankruptcies next year due to sticky inflation and high interest rates, but analysts expect easing monetary policy to offer some respite in the second half of 2024, Reuters reported. There have been 591 U.S. corporate bankruptcy filings so far this year, the highest since 2020, according to data from S&P Global Market Intelligence. "The end of ultra-low interest rates that started in 2008 ushered in a resurgence of bankruptcy filings," but the trend could normalize going forward, said Art Hogan, chief market strategist at B. Riley Wealth. Among sectors, consumer discretionary companies topped the list of bankruptcies in the first 11 months of 2023 with 76 filings, S&P Global data showed, including retail darlings such as Bed Bath & Beyond. "Retail will be a particularly hot sector next year (for bankruptcies)," said Catherine Corey, global head of restructuring data at Debtwire. "There are plenty of retailers that saw a boom in profits during the pandemic that have since dried up." Read more.

Don't miss the "Post-Petition Appreciation: When Things Go Up, Who Gets What?" abiLIVE Webinar on Tuesday!​​​

One of the fundamental objectives to consumer bankruptcy is the idea of a fresh start – but when should that fresh start begin? In this webinar, we will pose a simple question: Who gets the benefits when property appreciates during the course of a reorganization? The answer to this question may surprise you. Join this distinguished panel from the bar, academia and the bench as we unpack the complex debate surrounding this seemingly simple but multifaceted question. Register for free!

Startups Face Grim Holiday Season as Layoffs, Closures Mount​​​

In a year when much of the tech industry has pulled back on spending, startups have been hit particularly hard. During the pandemic boom, investors were happy to bankroll promising young companies’ growth at any cost. Now, with new funding rounds all but evaporated, the order of the day is cuts, Bloomberg News reported. More than 250,000 workers at tech companies of all sizes were let go this year, according to job tracker Layoffs.fyi. While that includes big reductions at giants like Meta Platforms Inc. and Google, thousands came from smaller, closely held companies facing their first reckoning with a slowdown. More than 500 startups closed their doors in 2023, according to equity management firm Carta Inc. — and many of those that endured are laying off workers and looking for alternative sources of cash. Serve Automation Inc.’s Stellar Pizza, which uses robotics technology to make pizza, is one such business. The company cut half its workforce this year and announced a crowdfunding campaign to try to raise $1.24 million, which it said would give it runway to keep operating for five more months. Read more.

Inaugural Episode of "Unordinary Course" Podcast Examines Industrial Policy Issues​​​

ABI's Business Reorganization Committee is proud to launch "Unordinary Course," a podcast series that aims to unpack current events and emerging trends in the restructuring industry. The inaugural episode features host Lee Pacchia of ICR talking with Karol Denniston of Squire Patton Boggs about trends and issues surrounding industrial policy, and why practitioners should take note. Listen here.

Experts Have Difficulty Agreeing on Key Elements of Biden’s New Student Loan Relief Plan​​​

After three months of negotiations, a panel of higher education experts could not agree on key elements of the Biden administration’s latest student loan forgiveness plan, the Washington Post reported. The group, convened by the Education Department, has been hammering out a regulation to replace the debt-relief program the Supreme Court struck down earlier this year. Student advocates and borrowers on the committee have pressed for a plan as far-reaching as Biden’s initial bid to cancel up to $20,000 in federal student loan debt for about 40 million people. But the administration is opting for a narrower approach, placing it at odds with some negotiators. While negotiators found common ground with the department on facets of the agency’s proposal, the panel failed to reach a consensus on provisions that limit relief and eligibility. The Education Department wants to deliver student debt relief to select groups of borrowers: those who owe far more than they originally borrowed because of interest; those who have been paying for 20 or 25 years; those who attended career training programs that led to high debt loads or low earnings; and those who are eligible for existing forgiveness programs but never applied. The department said it would add a fifth group composed of borrowers experiencing financial hardships not addressed through existing forgiveness initiatives. But the agency has so far failed to produce a plan. After meeting with negotiators in November, the department fleshed out details of the proposed forgiveness. Chief among the updates is a proposal to cancel up to $10,000 for all borrowers whose balances have ballooned because of interest. People enrolled in an income-driven repayment plan and who earn less than 225 percent of the poverty line would be entitled to up to $20,000 in one-time debt relief if their remaining balance exceeds what they originally borrowed. Those enrolled in Biden’s new income-driven plan, dubbed SAVE, would also qualify to have $20,000 of their debt canceled if their adjusted gross income is less than $125,000 for an individual or $250,000 for a married couple. Read more.

U.S. Economy Still Resilient as Retail Sales Beat Expectations, Layoffs Stay Low​​​

U.S. retail sales unexpectedly rose in November as the holiday shopping season got off to a brisk start amid deep discounting, likely keeping the economy on a moderate growth path this quarter and further alleviating fears of a recession, Reuters reported. The rebound in retail sales reported by the Commerce Department today underscored consumers' resilience, thanks to a strong labor market, and cast doubts on financial markets' expectations for a rate cut as early as next March. The Federal Reserve held interest rates steady on Wednesday and signaled in new economic projections that the historic tightening of monetary policy engineered over the last two years is at an end, and that lower borrowing costs are coming in 2024. Retail sales increased 0.3% last month after falling 0.2% in October, the Commerce Department's Census Bureau said. Sales increased 4.1% year-on-year in November. Though the pace has slowed as households adjust to higher borrowing costs and prices, it remains sufficient to ward off a recession. A third report from the Labor Department showed initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 202,000 for the week ended Dec. 9. Economists were dismissive of the persistent elevation in unemployment rolls. The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 20,000 to 1.876 million during the week ending Dec. 2, the claims report showed. Continuing claims have mostly increased since mid-September, blamed on difficulties adjusting for seasonal fluctuations after a surge in filings for benefits early in the COVID-19 pandemic. Read 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, who 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, although please note that abstracts to be considered for the upcoming Annual Spring Meeting, being held April 18-20, 2024, at the Marriott Marquis in Washington, D.C., must be submitted no later than December 31, 2023. 

Miss Any of the 25+ Hours of CLE Programming at CPEX23? Access All Replays for Only $100!

Leading practitioners over the past two weeks examined key issues across the consumer bankruptcy landscape during ABI’s 2023 Consumer Practice Extravaganza (CPEX). Did you miss any of the sessions, including an exclusive “Fireside Chat” with EOUST Director Tara Twomey and deep dives into student loans, technology and the future, subchapter V of chapter 11, tax issues and more? Get access to all replays via a state-of-the-art virtual platform for only $100! All sessions will conveniently remain available until Jan. 31! 

Please note that in order to obtain 2023 CLE credit for watched CPEX sessions, they must be viewed by December 15. After that date, recorded CPEX sessions can be considered for 2024 CLE credit.

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