February Bankruptcy Filings Register Double-Digit Increases Across Major Filing Categories over Last Year​​​

New bankruptcy filings in February 2023 registered double-digit increases year-over-year across all U.S. major filing categories, according to data provided by Epiq Bankruptcy, the leading provider of U.S. bankruptcy filing data. The 31,889 total new bankruptcy filings in February were up 18 percent from the 27,006 filings registered in February 2022. Total commercial filings also increased 18 percent, to 1,696 versus 1,442. Commercial chapter 11 filings increased 83 percent to 373 filings, up from 204. Subchapter V small business elections increased 45 percent to 120 versus the 83 filings registered the previous year. Continuing year-over-year, total individual filings increased 18 percent to 30,193 versus 25,564 in February 2022. While still below pre-pandemic levels, individual chapter 7 filings increased 12 percent to 16,991 versus 15,190, and individual chapter 13 filings increased 28 percent to 13,149 versus 10,311 the previous year. Read more.

Student Loan Case Could Redefine Limits of Presidential Power​​​

One of President Biden’s most ambitious proposals — a $400 billion program to forgive student loan debt for 40 million Americans — could become the latest victim of a legal tug of war with the Supreme Court over the powers of the presidency, the New York Times reported. Conservative justices on the court signaled Tuesday that they are deeply skeptical that Mr. Biden has the power to wipe out such a vast amount of student debt. In oral arguments, several justices said that they believed a program that costs so much and affects so many people should have been more explicitly approved by Congress. The court’s decision on whether to block the student loan program as well, which is likely to come by summer, will have a vast impact on millions of borrowers who have struggled to pay back their loans. It also will set additional legal precedents, potentially defining new limits for presidential power. Read more.

Applications for Jobless Claims Fall for Third Straight Week​​​

The number of people applying for unemployment benefits in the U.S. fell for a third straight week, the Associated Press reported. Applications for jobless claims in the U.S. for the week ending February 25 fell to 190,000 from 192,000 the previous week, the Labor Department said Thursday. It’s the seventh straight week that claims were under 200,000. The four-week moving average of claims, which evens out some of the weekly volatility, rose by 1,750 to 193,000, remaining below the 200,000 threshold for the sixth straight week. About 1.66 million people were receiving jobless aid during the week that ended Feb. 18, a decrease of 5,000 from the week before. Read more.

USTP to Resume Debtor Audits on March 13​​​

Effective March 13, 2023, the USTP will resume its designation of individual chapter 7 and chapter 13 cases for audit. These audits had been suspended in March 2020 due to public health concerns associated with the COVID-19 pandemic. As authorized in section 603(a) of Public Law 109-8, the USTP established procedures for independent audit firms to audit petitions, schedules and other information in consumer bankruptcy cases. Pursuant to 28 U.S.C. § 586(f), the USTP contracts with independent accounting firms to perform audits in cases designated by the USTP. Read more.

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Don’t Miss Experts Discussing Mediation Issues on a Special abiLIVE on March 14

Conducted in a Q&A format, an abiLIVE webinar on March 14 will feature a series of mediation hypotheticals/questions presented to Mediation Committee Co-Chair Connor Bifferato and Education Director Edward Schnitzer for discussion and/or debate. Register for FREE!

Analysis: The SPAC Fad Is Ending in a Pile of Bankruptcies and Fire Sales​​​

It took only 10 months for Quanergy Systems Inc., a maker of high-tech sensors and software, to go from its stock market debut to filing for bankruptcy. Fast Radius Inc., a 3D-printing company, made it nine months. And online retail startup Enjoy Technology Inc. lasted eight-and-a-half months before it filed, according to a Bloomberg Businessweek analysis. What these companies all have in common is the way they made it onto the market. Instead of selling shares in a conventional initial public offering, each of them merged with a special purpose acquisition company, or SPAC. An SPAC is a publicly traded corporate shell with no business other than to seek out a merger with another company, which then inherits the shell’s listing. Such deals were a pandemic-era Wall Street fad — but now a growing number of ventures that went public in this way have gone bankrupt, highlighting how speculative the SPAC game can be. Read more.

Application Period for ABI’s 2023 Diversity and Inclusion Mentoring Program Open Until March 15​​​

Applications for 2023 mentees for ABI’s Diversity Mentoring Program are due 3/15! The program seeks to build personal and professional relationships while promoting diversity and leadership. To learn about eligibility requirements and apply, click here! 

Annual Spring Meeting Early Bird Rate Expires Tomorrow!​​​

Time is running out to get the best rate on ABI’s Annual Spring Meeting: Our Early Bird rate expires on March 3, 2023. We know you don’t want to miss one of the largest gatherings of bankruptcy and insolvency professionals — or the chance to save money on registration. Click here to register and save!

Justice Department Policy Aims to Have Execs Foot Bill for Corporate Misconduct​​​

The U.S. Justice Department is rolling out a new policy aimed at pushing the cost of corporate crime into the pockets of executives, Reuters reported. The agency's criminal division will give discounts on fines for companies that seek to claw back compensation from corporate wrongdoers, Deputy Attorney General Lisa Monaco said today. Any company seeking to resolve a U.S. investigation will also have to implement a plan to include compliance goals as part of compensation and bonuses. "Our goal is simple: to shift the burden of corporate wrongdoing away from shareholders, who frequently play no role in misconduct, onto those directly responsible," Monaco said. Companies often pay fines to U.S. authorities to resolve investigations into wrongdoing, a practice that some say further harms shareholders but leaves corporate executives unscathed. "Clawbacks are not a new idea, but our view is that they have never really been deployed effectively or regularly," said Marshall Miller, principal associate deputy attorney general at the Justice Department. The three-year pilot program will give discounts tied to the size of the clawback on penalties, and firms will get to retain a portion of that money even if they are unsuccessful in clawing back compensation, provided they try to in good faith, Miller said. Read more.

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