New Biden Administration Student Loan Relief Proposal More Narrow than Supreme Court-Rejected Plan​​​

The Biden administration is moving forward with a new student loan relief plan that is narrower than its original proposal, which was struck down by the Supreme Court over the summer, The Hill reported. The Department of Education released regulatory draft text Monday showing that the new plan for student debt forgiveness is targeting specific groups instead of providing cancellation for all 45 million borrowers like officials planned last year. The administration is planning for the debt relief to go to borrowers who have federal student loan balances that are greater than what they originally borrowed, have loans they’ve been paying off for 25 years or more, attended schools with high student loan default rates, and attended programs that created high debt but low wages. Included are borrowers eligible for targeted relief programs already in place, such as the Public Service Loan Forgiveness program. “President Biden and I are committed to helping borrowers who’ve been failed by our country’s broken and unaffordable student loan system,” said Secretary of Education Miguel Cardona. “These draft proposals would build on the historic $127 billion in loan forgiveness the Biden-Harris Administration has already approved for nearly 3.6 million borrowers. We are fighting to ensure that student debt does not stand in the way of opportunity or prevent borrowers from realizing the benefits of their higher education.” The department also issued a paper to consider adding one more group to their plan: borrowers experiencing financial hardships that the student loan system currently does not take into consideration. The draft does not detail how many borrowers would be impacted by the plan or how much it would cost. It could take months before those details are finalized. Read more.
 

U.S. Weekly Jobless Claims Rise Marginally​​​

The number of Americans filing new claims for unemployment benefits increased moderately last week as the labor market continued to show few signs of a significant slowdown, Reuters reported. While the weekly jobless claims report from the Labor Department on Thursday also showed unemployment rolls rising to a six-month high, economists were divided on whether this suggested a material change in the underlying trend. The so-called continuing claims have been rising since mid-September. Initial claims for state unemployment benefits rose 5,000 to a seasonally adjusted 217,000 for the week ended Oct. 28. Economists polled by Reuters had forecast 210,000 claims for the latest week. Though the labor market is gradually cooling, conditions remain tight, highlighting the economy's enduring strength. The government reported on Wednesday that there were 1.5 job openings for every unemployed person in September. Unadjusted claims rose 2,768 to 196,767 last week. There were notable increases in California, Michigan and North Carolina, which more than offset a sharp decline in New York. The rise in claims in Michigan likely reflected recently ended strikes in the automobile industry. The number of people receiving benefits after an initial week of aid, a proxy for hiring, advanced 35,000 to 1.818 million during the week ending Oct. 21. That was the highest level for continuing claims since mid-April. Read more.
 

CPEX23 Continues Tomorrow and Next Week! Don't Miss 25+ Hours of Live and On-Demand CLE Programming — All for Only $100!

Leading practitioners will be examining key issues across the consumer bankruptcy landscape during ABI’s 2023 Consumer Practice Extravaganza (CPEX), which continues tomorrow through next week via a state-of-the-art virtual platform. There is something for every level of consumer practitioner, including deep dives into student loans, technology and the future, subchapter V of chapter 11, tax issues and more! The program also featured an exclusive “Fireside Chat” yesterday with Tara Twomey, who was appointed as the director of the Executive Office for U.S. Trustees earlier this year. Registration for the entire virtual conference is only $100, and all sessions will conveniently remain available to attendees for 30 days after the conclusion of the conference. Register today!
 

Analysis: Wind Power Write-Downs Cast Shadow over Industry Outlook​​​

A wave of impairments is sweeping through the U.S. wind-energy sector amid high interest rates, inflation and supply-chain woes, forcing developers to put off projects and casting doubts over the industry’s outlook, WSJ Pro reported. Governments around the world have set ambitious targets to increase the share of renewables in their energy mixes, but their plans are now under pressure as wind developers face a surge in financing costs. Orsted, BP and Equinor have collectively written off $4.8 billion against U.S. offshore wind projects in recent days. Danish renewable-energy company Orsted said Tuesday that it booked an impairment charge of 28.4 billion Danish kroner, equivalent to $4.02 billion, against its U.S. offshore portfolio and abandoned the development of two wind projects off the coast of New Jersey — Ocean Wind 1 and 2 — due to spiraling costs and supplier delays. Orsted previously flagged increasing risks for its projects in the country, citing the lack of favorable progress on tax credits. (Subscription required.) Read more.
 

Latest ABI "Party in Interest" Podcast Features Renowned Mediator Ken Feinberg!​​​

The latest episode of ABI's "Party in Interest" podcast features ABI Executive Director Amy Quackenboss talking with Kenneth R. Feinberg, one of the nation’s leading experts in alternative dispute resolution. Currently the court-appointed mediator in both the Imerys/Cyprus talc bankruptcy case in Delaware and the Honx asbestos bankruptcy case in Texas, Feinberg's distinguished career includes previously having served as Special Master of the 9/11 Victim Compensation Fund, the Department of Justice Victims of State-Sponsored Terrorism Fund, the Department of Justice Boeing 737 Max Crash Victim Beneficiaries Compensation Fund and many other high-profile complex disputes over the past 40 years. Listen to the discussion here!
 

NRF: Holiday Sales Expected to Slow to 3% to 4%, Compared with 5.4% Growth a Year Ago​​​

The National Retail Federation, the nation’s largest retail trade group, expects holiday sales growth will slow to a range of 3% to 4%, compared with 5.4% growth of a year ago, the Associated Press reported. Sales in November and December will increase to between $957.3 billion and $966.6 billion. The pace is consistent with the average annual holiday increase of 3.6% from 2010 to pre-pandemic 2019. Americans ramped up spending during the pandemic, which accounted for some outsized sales numbers. For the holiday 2021 season, sales for the two-month period surged 12.7%. The forecast, released today, comes as shoppers keep spending, powered by sturdy hiring, low unemployment and healthy household finances. That's despite still higher prices — though inflation has eased — and higher interest rates that make getting a mortgage or borrowing on credit cards more expensive. Read more.
 

Analysis: Private Equity Makes Loan Payments with More Debt to Keep Cash​​​

Private equity titans are dusting off an old gambit to cope with the rising cost of interest on their leveraged buyout loans: Don’t pay cash. Instead, they’re making payments with more debt, preserving liquidity for now with the promise of a bigger payoff later when the debts mature. Those “payment-in-kind” (PIK) loans don’t always come cheap — the annual interest can run as high as 16% — but lenders and borrowers are wagering that they’ll refinance when rates come down long before the due dates. Private-equity firms ranging from Carlyle Group Inc., Vista Equity, BC Partners, TPG Inc., Cinven and One Rock Capital Partners are using PIK to buy or refinance companies that otherwise might struggle to carry heavy LBO debt. In turn, it’s a boon for direct lenders that offer PIK financing, such as Apollo Global Management Inc. and Ares Management Corp., which get an edge over Wall Street banks because PIK debt is harder to sell in traditional syndicated markets. Collectively, the loans are injecting life into deal markets where activity is near the lowest in at least a decade, while papering over the cash shortfalls that some privately held companies are facing until times get better. Or at least, that’s the presumption. “PIK is being used more and in unique ways,” said Randy Schwimmer, co-head of senior lending at Churchill Asset Management. “When interest rates go back to more normal levels, then there will be much less need.” Read more.
 

Vacancy Announcement for Bankruptcy Judgeship for the District of New Hampshire​​​

The U.S. Court of Appeals for the First Circuit is seeking applicants for a bankruptcy judge position in the U.S. Bankruptcy Court for the District of New Hampshire in Concord. The jurisdiction of a bankruptcy judge is specified in Title 28, United States Code, §§ 151-158, and explained in Title 11, United States Code, § 101, et seq. Attorneys are encouraged to apply, even if their experience is not specifically in bankruptcy law. Interested applicants may obtain an application on the Court of Appeals' website at https://www.ca1.uscourts.gov/employment. Persons applying for this position and willing to serve if selected should personally submit their applications to Susan Goldberg, Circuit Executive, via email at ca01_chjobs@ca1.uscourts.gov. Any applicant must comply with the financial disclosure requirements pursuant to the Ethics in Government Act of 1978, Title 5, United States Code Appendix, §§ 101-111, as implemented by the Judicial Conference of the United States, and will be required to satisfy FBI and IRS background investigations prior to appointment. The term of office is 14 years, and the current salary is $213,992. Applications are to be received no later than Monday, November 27, 2023. Persons will be considered without regard to race, color, age (over 40), gender, religion, national origin, disability, or sexual orientation. 

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