Editor’s Note: For more information about the proposed Chapter 14 plan, register for ABI’s July 15th webinar titled “Proposed Chapter 14 and the Future of Large Financial Institution Resolution.” This webinar is being hosted by the Legislation Committee: http://goo.gl/bjid0z.
Earlier this year, Rep. John Conyers (D-Mich.) and 12 House Democrats proposed revisions to the Bankruptcy Code that would restrict executive compensation in business bankruptcies while purporting to preserve jobs and protect retirement benefits. The congressional sponsors of H.R.
Sen. Elizabeth Warren (D-Mass.), among others, has introduced “The 21st Century Glass-Steagall Act,” which primarily seeks to restore the bank regulatory barriers that existed before 1999, when the original Glass-Steagall Act’s ban on commercial banks owning investment banks was repealed.[1] However, tacked onto the end of the bill is a provision that would repeal §§ 555, 559, 560, 561 and 562 of the Bankruptcy Code.[2]
In July 2010, amid the worst mortgage meltdown since the Great Depression,[1] the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was enacted to promulgate pervasive new regulations on mortgage servicers.[2] In reviewing the causes of the mortgage crisis, the U.S. House of Representatives found a need to increase transparency and accountability in the mortgage-servicing field.[3] Accordingly, the Dodd-Frank Act incorporates new servicing regulations requiring mortgage servicers to disclose certain information to delinquent borrowers.
The appropriate venue for chapter 11 cases has long been the subject of debate, especially over the past decade. The debate’s most recent development is the Chapter 11 Bankruptcy Venue Reform Act of 2011 (“H.R. 2533”), introduced on July 14, 2011, by Representatives Lamar Smith of Texas, John Conyers, Jr. of Michigan, Howard Coble of North Carolina, and Steve Cohen of Tennessee (“Sponsors”). [1] H.R.
In 2008, Congress enacted the National Guard and Reservists Debt Relief Act of 2008 which allowed servicemembers, who have served on active duty for at least 90 days to be exempt from completing and satisfying the means test requirements set out in Section 707(b)(2)(A) in a Chapter 7 case filed between December 19, 2008 and December 19, 2011. The exemption must be claimed while the servicemember is on active duty or with 540 days after they have completed a minimum 90-day period of service to claim the means test exemption.
The story goes that a farmer bought a mule from a salesman who told him that if he were polite to the mule, it would do whatever he wanted. After months of being nice – but with no success in getting the mule to work, the farmer asked the salesman for help. The salesman came over, hit the mule on the head with a 2x4 and explained that you did have to be nice – “but first you had to get the mule’s attention.”
In 2009, the bankruptcy courts for the Districts of Rhode Island and New York began loss-mitigation programs, whereby the court may order a homeowner and loan servicer to try in good faith to negotiate a settlement that would be preferable to foreclosure for all parties. [1] Under these programs, the servicer is required to provide a negotiator with the authority to modify and/or settle. There is no requirement that the parties reach a settlement, and all settlements under the loss-mitigation programs are consensual.
“But as the collapse of Lehman Brothers showed, the Bankruptcy Code is not an effective tool for resolving the failure of a global financial services firm in times of severe economic stress.”
Treasury Secretary Timothy Geithner, Oct. 29, 2009
The “rationalization”—read, reduction—of Chrysler and GM’s dealership networks has taken center stage in their respective government-led restructurings. In total, just under 800 Chrysler dealers have had their franchise and related agreements formally rejected under bankruptcy law, while approximately 2,000 GM dealers have either experienced a similar fate or they have entered into “wind-down” agreements allowing them to continue operating through October 2010.