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Bankruptcy Bills Await President's Signature



A trio of bankruptcy bills are sitting on President Trump’s desk awaiting his signature. The three bankruptcy bills are the “Small Business Reorganization Act of 2019” (H.R. 3311), the “Honoring American Veterans in Extreme Need Act of 2019” or the “HAVEN Act” (H.R. 2938), and the “Family Farmer Relief Act of 2019” (H.R. 2336).

JPMorgan: Tariffs Could Cost U.S. Families Up to $1,000 a Year



More than a year into the U.S./China trade war, American consumers are about to find themselves squarely in the crosshairs for the first time, with households estimated to face up to $1,000 in additional costs each year from tariffs, according to research from JPMorgan Chase, the Washington Post reported. Consumers, whose spending fuels about 70 percent of the U.S. economy, have been largely shielded from previous rounds of tariffs, which have left businesses reeling and upended global supply chains. But that’s about to change with the 10 percent levies on roughly $300 billion in Chinese imports, about a third of which will take effect Sept. 1. Those tariffs will primarily target consumer goods. Amid growing concern that the tariffs could damage the economy, Trump abruptly announced he would delay tariffs on certain popular products such as laptops, footwear and video games — about two-thirds of the impacted items — until mid-December. But that’s not enough to eliminate the added burden for consumers. JPMorgan researchers calculated that after the 10 percent levies go into effect, American families will be facing about $1,000 in additional costs from all tariffs on Chinese goods annually. If the upcoming tariffs are raised to 25 percent, as Trump has warned, consumers’ costs could go as high as $1,500 a year, researchers estimated. “The impact from reduced spending could be immediate for discretionary goods and services, since tariffs are regressive,” JPMorgan researchers noted. “Unlike the agriculture sector, which is receiving subsidies/aid to offset the impact of China’s retaliatory actions, there is no simple way to compensate consumers.”

Law Firm Bills in Big Bankruptcy Cases Growing Rapidly



There was no summer slowdown for law firms advising on large corporate bankruptcies: The season has brought a bonanza of law firm fee applications and approvals, Law.com reported. Several large firms stand to gain up to tens of millions of dollars from some of the most active chapter 11 bankruptcies this summer, including Sears Holding Corp. and PG&E Corp. In the Sears case, Bankruptcy Judge Robert Drain on June 28 approved fee requests for 16 advisors — including six law firms — that totaled about $130 million in all for work mostly from mid-October through February. Across the country, PG&E has already paid more than $84 million to four firms in the months leading to its January 2019 bankruptcy.

Wells Fargo Pays $6.5 Million to Navajo Nation over 'Predatory' Practices



Wells Fargo & Co. will pay the Navajo Nation $6.5 million to settle a lawsuit over “predatory and unlawful practices” by the bank, the Native American tribe said today, Reuters reported. The Navajo Nation sued Wells Fargo in federal and tribal courts in 2017, alleging that the San Francisco-based bank had opened unauthorized accounts for vulnerable tribe members as part of the potentially millions of fake accounts opened by bank employees nationwide. The settlement “puts other companies on notice that harmful business practices against the Navajo people will not be tolerated,” Navajo Nation President Jonathan Nez said in the statement, which referred to Wells Fargo’s “long campaign of predatory and unlawful practices.” The settlement with the Navajo Nation followed a $575 million deal in 2018 with U.S. states over claims that Wells Fargo opened phony customer accounts and improperly referred and charged customers for financial products.

Hedge Funds Have Already Bled $55.9 Billion This Year



Hedge funds have already bled 50 percent more money this year than in all of 2018, as the industry struggles to win back investors fed up with high fees and poor performance, Bloomberg News reported. Investors yanked $8.4 billion in July, bringing net outflows this year to $55.9 billion, according to an eVestment report on Thursday. That’s up from $37.2 billion for all of last year. Investors’ frustration with hedge funds continues to mount, driving down management and performance fees to well below the “two and 20” fee model once considered standard, according to Eurekahedge. More hedge funds have shut than started in each of the last three years, and those that do launch are far smaller than they were before the financial crisis. The pain for hedge funds isn’t spread evenly, with 37 percent of funds posting net inflows this year. So-called event-driven funds have fared the best, with inflows of $10.3 billion through July, eVestment data show. These funds try to cash in when events such as mergers, takeovers and bankruptcies lead to a temporary mispricing of a company’s shares.

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