Consumer Bankruptcy

Creditor Lawsuit Could Undo Auto Bailout, Force GM into Bankruptcy

Claims

Mortgage

Bankruptcy Litigation

ABI Bankruptcy Brief | January 24 2013

January 24, 2013

NEWS AND ANALYSIS

PERCENTAGE OF HOMES IN FORECLOSURE DROPS NATIONWIDE

The percentage of homes in foreclosure dropped nationwide last month, although the percentage of borrowers behind on their payments increased slightly, the Los Angeles Times reported today. In a sign of continued recovery in the housing market, about 3.44 percent of mortgages were in some stage of the foreclosure process in December, according to Lender Processing Services Inc., a mortgage and consumer loan processing firm. That represents a nearly 2 percent decline from November and a roughly 18 percent drop-off from a year earlier. The percentage of mortgages that are 30 days or more past due stood at 7.17 percent last month, a 0.74 percent increase from November, LPS reported. Still, that rate declined 9 percent when compared with the same month in 2011. Read more.

COMMENTARY: BANK REFORM TAKES ONE FLAWED STEP FORWARD

While the Financial Accounting Standards Board (FASB) issued a draft of a new rule to change the way banks build reserves against losses on loans, the proposed rule is flawed conceptually and in its application, according to a Wall Street Journal commentary by Eugene A. Ludwig, CEO of the Promontory Financial Group and former Comptroller of the Currencey, and Paul Volcker, former chairman of the Federal Reserve System and namesake of the Volcker Rule included in the Dodd-Frank Act. It is a positive sign, according to the commentary, that the FASB recognizes that its existing rules on the Allocation for Loan and Lease Losses may have worsened the 2008 financial crisis. These rules limited bank reserves to those that are already "incurred." This all but ensures that banks' rainy day funds will be too skinny, particularly in periods when credit markets are under stress. The FASB's draft proposal to reform these rules incorporates what is known as the "Current Expected Credit Loss Model." It is meant to expand reserves to reflect losses that are expected over the life of the loan, and it is a big improvement over the existing regime. But as it stands, the proposal could create risks for the financial system as it could hurt small banks and their customers, according to the commentary. In an effort to ensure that everything is "auditable," the proposal ties the loan-loss reserve to what the accounting profession will decide is an acceptable "model." While the proposal is well-intentioned and makes clear that various models can be used, this model-driven approach is dangerous. Click here to read the full commentary. (Subscription required.)

FINANCIAL CRISIS SUIT SUGGESTS MORGAN STANLEY KNEW OF BAD INVESTMENTS

Hundreds of pages of internal Morgan Stanley documents, released publicly last week in a case against Morgan Stanley brought by a Taiwanese bank, shed much new light on what bankers knew at the height of the housing bubble and what they did with that knowledge, the New York Times DealBook blog reported today. The lawsuit concerns a $500 million collateralized debt obligation called Stack 2006-1, created in the first half of 2006. The documents suggest a pattern of behavior larger than this one deal: People across the bank understood that the American housing market was in trouble. They took advantage of that knowledge to create and then bet against securities and then also to unload garbage investments on unsuspecting buyers. Morgan Stanley is fighting the lawsuit, contending that the buyers were sophisticated clients and could have known what was going on in the subprime market. Read more.

LIBOR SUIT LIST SHOWS BARCLAYS PROBE SPANNED NY TO TOKYO

Barclays Plc senior executives, dozens of traders and the bank’s chief economist were all identified by regulators in a probe into interest-rate rigging that spanned continents, according to documents released in the U.K.’s first Libor-manipulation lawsuit, Bloomberg News reported today. Barclays is being sued by affiliates of Guardian Care Homes Ltd. that claim that an interest-rate swap should be annulled because it is linked to Libor, which Barclays tried to rig. Judge Julian Flaux in London rejected a bid by a group of employees identified in the Libor documents to prevent their names from being published ahead of a trial later this year. Among those identified in connection with the case were former Chief Executive Officers Robert Diamond and John Varley, and Jerry Del Missier, the bank’s former chief operating officer. The list of names, which Judge Flaux in London said had to be turned over to Guardian, was compiled from evidence that Barclays provided in the regulatory probes that led a 290 million-pound fine ($457.5 million) in June. Read more.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: AMR MAKE-WHOLE OPINION VULNERABLE ON APPEAL

The case of the week on the Bloomberg bankruptcy video is the decision by Bankruptcy Judge Sean Lane who concluded that American Airlines is not obliged to pay several hundred million dollars in make-whole premiums even though debt would be repaid before maturity. Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss how Lane's adverse ruling evidently was expected by the debt holders who believe the result may be better on appeal, if the dispute does not become moot in the meantime. Click here to watch.

NEW BANKRUPTCY PROFESSIONALS: DON'T MISS THE NUTS AND BOLTS PROGRAM AT ABI'S ANNUAL SPRING MEETING! SPECIAL PRICING IF YOU ARE AN ASM REGISTRANT!

An outstanding faculty of judges and practitioners explains the fundamentals of bankruptcy in a one-day Nuts and Bolts program on April 18 being held in conjunction with ABI's Annual Spring Meeting. Ideal training for junior professionals or those new to this practice area!

The morning session covers concepts all bankruptcy practitioners need to know, and the afternoon session splits into concurrent tracks, focusing on consumer and business issues. The session will include written materials, practice tip sessions with bankruptcy judges, continental breakfast and a reception after the program. Click here to register!

CURRENT ISSUES FOR FINANCIAL ADVISORS IN BANKRUPTCY CASES AT ABI'S 31ST ANNUAL SPRING MEETING

The 2013 Annual Spring Meeting, to be held April 18-21, 2013, at the Gaylord National Resort and Convention Center in National Harbor, Md., features a roster of the best national speakers, while the depth and scope of topics offer something for everyone. Specifically, four concurrent workshops will cover various “tracks,” including programs for attorneys in commercial cases, a track for restructuring professionals, a track of professional development programming and a track dealing solely with consumer issues. More than 16 hours of CLE/CPE is offered in some states, along with ethics credit totaling 3 hours, making the cost only about $50 per credit. In addition, committee sessions will drill down on other topics to provide you with the most practical and varied CLE/CPE experience ever. Sessions include:

• 17th Annual Great Debates

• Mediation: An Irrational Approach to a Rational Result

• Creditors’ Committees and the Role of Indenture Trustees and Related Issues

• The Individual Conundrum: Chapter 7, 11 or 13?

• The Power to Veto Bankruptcy Sales

• Real Estate Issues in Health Care Restructurings

• Law Firm Bankruptcies

• How to Be a Successful Expert

• The Ethical Compass: Multiple Ethical Schemes Applicable to Financial Advisors

• Chapter 9s, Nonprofits and Other Nontraditional Restructuring Processes

• And much more!

The Spring Meeting will also feature a field hearing of the ABI Commission to Study the Reform of Chapter 11, a report from the ABI Ethics Task Force, a luncheon panel discussion moderated by Bill Rochelle of Bloomberg News, and a Final Night Gala Dinner featuring a concert by Joan Jett and the Blackhearts!

ABI IN-DEPTH

ABI LIVE WEBINAR: REVISITING RADLAX AND HALL – NEW LEGAL AND PRACTICAL IMPACT OF THE DECISIONS

See why this was the top-rated panel at the ABI Winter Leadership Conference last month! Join the expert panel on Feb. 19 from 12:00-1:15pm EST as the summarize and discuss the legal impact and practical implications of the Supreme Court’s 2012 decisions in Radlax and Hall. Participants include:

• Susan M. Freeman of Lewis and Roca LLP (Phoenix)

• Adam A. Lewis of Morrison & Foerster LLP (San Francisco)

• Prof. Charles J. Tabb of the University of Illinois College of Law (Champaign, Ill.)

• Eric E. Walker of Perkins Coie LLP (Chicago)

Click here to register!

LATEST CASE SUMMARY ON VOLO: MASSACHUSETTS DEPT. OF UNEMPLOYMENT ASSISTANCE V. OPK BIOTECH LLC (IN RE PBBPC INC.; 1ST CIR.)

Summarized by Hale Yazicioglu, Bartlett Hackett Feinberg P.C.

The First Circuit BAP, adopting the expansive definition of “interest” in § 363(f) of the Bankruptcy Code, held that “interest” in § 363(f) includes all obligations that may flow from ownership of property, including the right to tax the purchaser of the debtor’s assets at the same high rate imposed on the debtor. The First Circuit BAP first evaluated its jurisdiction on appeal and found that the bankruptcy court order approving the stipulation entered into between the parties effectively terminated the litigation, and therefore was a final judgment from which the parties could appeal to the BAP.

There are more than 700 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: THIRD CIRCUIT REJECTS WAIT-AND-SEE VALUATION APPROACH AND ACCEPTS LIENSTRIPPING IN § 506(a)

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines In re Heritage Highgate, Inc., in which the Third Circuit held that the fair market value of property as of the confirmation date controls whether or not a lien is fully secured. Additionally, the court held that lienstripping is permissible in a chapter 11 reorganization.

ABI'S INDUBITABLE EQUIVALENTS: TELL US A TUNE AND WE'LL SING YOU THAT SONG!

ABI's Indubitable Equivalents need your help: Tell us your favorite Rock and Roll tune - that elusive classic that takes you back, makes your feet tap, your head bang, and your horns come out! If we pick your song, you get widespread promotion by the band and you'll receive a free CD of IE’s greatest hits!

To enter, log onto www.abiband.com or “like” the Band’s Facebook page.

The fine print: No purchase necessary. You can enter as many times as you want. Multiple winners will be selected. Winners will be announced on the IE website and on Facebook. Entry deadline: January 31.

ABI Quick Poll

After Stern, bankruptcy courts do not have the constitutional authority to enter final judgments on fraudulent conveyance claims.

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

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NEXT EVENT:

Feb. 7-9, 2013

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COMING UP:

ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions

Feb. 19, 2013

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Feb. 20-22, 2013

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March 7-9, 2013

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March 22, 2013

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"Nuts and Bolts" Program at ASM- A Must for Junior Professionals or Those New to Bankruptcy Practice

April 18, 2013

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April 18-21, 2013

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CALENDAR OF EVENTS

2013

February

- Caribbean Insolvency Symposium

     February 7-9, 2013 | Miami, Fla.

- ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions

     February 19, 2013

- VALCON 2013

     February 20-22, 2013 | Las Vegas, Nev.

March

- 37th Annual Alexander L. Paskay Seminar on Bankruptcy Law and Practice

March 7-9, 2013 | St. Petersburg, Fla.

- Bankruptcy Battleground West

March 22, 2013 | Los Angeles, Calif.

April

- Annual Spring Meeting

April 18-21, 2013 | National Harbor, Md.

Thursday, August 21, 2025

ABI Tags

Percentage of Homes in Foreclosure Drops Nationwide

ABI Bankruptcy Brief | April 25 2013

April 25, 2013

NEWS AND ANALYSIS

FINAL REPORT OF ABI’S ETHICS TASK FORCE PROVIDES GUIDANCE TO BOTH CONSUMER AND BUSINESS BANKRUPTCY PROFESSIONALS

The ABI National Ethics Task Force released its final report at ABI’s 31st Annual Spring Meeting to provide recommendations for both consumer and business practitioners for uniform ethical standards in bankruptcy practice. Funded by ABI’s Anthony H.N. Schnelling Endowment Fund, the Task Force formulated a set of uniform ethical standards on a variety of bankruptcy-related matters, including use of conflicts counsel, employment of counsel and necessary disclosures, competency standards, and fiduciary duties of counsel for the debtor in possession (DIP).

The Ethics Task Force was established in 2011 by then-ABI President Geoffrey L. Berman of Development Specialists Inc. (Los Angeles) to address ethics problems encountered by bankruptcy professionals and judges as state ethics rules do not always fit with the realities of bankruptcy practice. The Task Force formed committees, surveyed bankruptcy professionals, academics and judges, and examined recent case law to focus on seven recommendations:

1. proposed amendments to Bankruptcy Rule 2014 governing the hiring of bankruptcy professionals, including greater disclosure provisions for conflicts and connections;

2. duties of counsel for a debtor in possession as fiduciary and responsibilities to the estate;

3. framework for pre-approval of terms for retention and compensation under 11 U.S.C. § 328 to provide efficiency and clarity to courts in bankruptcy professional employment applications;

4. use of conflicts counsel in business reorganization cases, especially in large or complicated cases that may present significant conflicts;

5. best practices for limited services representation in consumer bankruptcy cases;

6. competency for debtors’ counsel in business and consumer cases; and

7. report on best practices on creditors’ committee solicitation.

Profs. Nancy B. Rapoport of the UNLV William S. Boyd School of Law (Las Vegas) and Lois R. Lupica of the University of Maine School of Law (Portland, Maine) served as reporters and said that while the report provides an ethical guide to all in the bankruptcy profession, new bankruptcy lawyers in particular should make sure they review the final report. "The findings and recommendations within the report are essential for new bankruptcy attorneys to absorb," Lupica said.

To read the ABI Ethics Task Force Final Report, please click here.

REPORT: DISCLOSURE OF INSIDER PAY MURKY IN A FEW CHAPTER 11 CASES

A Wall Street Journal analysis released today found that in 250 chapter 11 cases over the past five years, 19 companies tried to keep the details of insider pay secret, and 17 were successful at doing so. When Reader's Digest first ventured into bankruptcy in the summer of 2009, the multimillion-dollar payouts to top executives that showed up in court filings sparked outrage from employees facing layoffs and retirees staring down benefit cuts. Less than four years later, the publisher is now back in chapter 11, but how much its insiders were paid is not in the public record. RG Steel, whose collapse last year put thousands out of work, identified its top executives only as "Employee A" through "Employee G" when listing what it paid insiders. New York law firm Dewey & LeBoeuf LLP navigated bankruptcy without identifying the firm's top earners. Media giant Tribune Co. didn't reveal the names of insiders who collected $268 million the same year a leveraged buyout put the company on the path to bankruptcy. Read more. (Subscription required.)

DOWN PAYMENT RULES ARE AT THE HEART OF THE MORTGAGE DEBATE

While making home buyers put more money down seemed like an easy fix to prevent the excesses of the housing market, the issue is up for debate as the housing market starts to return and the subprime mess fades from memory, the New York Times DealBook blog reported yesterday. Lenders and consumer advocates — rarely on the same side of the issue — are now cautioning against down payment requirements. They argue that such restrictions could limit lending, and prevent lower-income borrowers from buying homes. They also contend that the new mortgage rules put in place this year will do enough to limit foreclosures, making down payment requirements somewhat superfluous. Regulators want to protect borrowers and promote homeownership. But they also want to encourage lending and insulate the financial system from future shocks. Read more.

ANALYSIS: HOW THE WHEELS CAME OFF FOR FISKER AUTOMOTIVE

The near-collapse of Anaheim, Calif.-based Fisker Automotive Inc.—it missed a loan payment on Monday, earlier dismissed most of its staff and has hired bankruptcy advisors—comes as affluent buyers have turned away from the once-promising startup and falling gasoline prices have chipped away at demand for electric cars, the Wall Street Journal reported yesterday. Barring a last-minute rescue, the company’s dissolution also represents one of the most prominent failures of the government's use of public funds to wean American industry from fossil fuels—and of how that government backing pushed Fisker to reach too far. At its peak, tiny Fisker received one of the largest U.S. venture capital payouts ever. Its founders raised more than $1 billion from highly regarded Silicon Valley venture funds including Kleiner Perkins Caufield & Byers. Its biggest single investor, though, was the U.S. In 2009, the Obama administration's interest in cultivating electric cars got the untested Fisker loans totalling $529 million, more than the company had initially requested, and an amount that encouraged private backers to chip in more funds. But despite its wealthy backers, Fisker had plenty of problems. Troubles with suppliers and regulatory requirements added months to the release of the company's first car, the Karma. Although engineers expressed concerns that the software that ran the Karma's display screens and phone connections was not ready, the Karma was released to customers. The company said that its problems were similar to those that would be expected of any new model. In May 2011, the Obama administration, under pressure from critics of its alternative energy spending and after the high-profile failure of U.S.-backed solar panel maker Solyndra LLC, froze disbursements to Fisker, citing delays in the Karma's rollout. Read more. (Subscription required.)

NEW ABI LIVE WEBINAR ON MAY 29 WILL FOCUS ON CLASS ACTIONS IN BOTH BUSINESS AND CONSUMER CASES

Class action lawsuits in both chapter 11 and 13 cases are becoming more prevalent. Are you wondering whether your clients’ WARN Act claims would be better pursued against a debtor company in a class action adversary proceeding or in a class proof of claim, or both? If your client has been sued in a debtor’s consumer class action adversary proceeding, do you know the best defenses against class certification? ABI's panel of experts will explore the potential benefits and pitfalls of class actions by creditors against debtor companies in chapter 11 cases and by debtors/trustees against creditors in chapter 13 cases by highlighting recent appellate and bankruptcy court decisions on May 29 from 1-2:15 p.m. ET. Special ABI member rate available! Click here to register.

ABI MEMBERS WELCOME TO ATTEND INSOL'S LATIN AMERICAN REGIONAL SEMINAR ON JUNE 13 IN SAO PAULO

ABI members are encouraged to attend INSOL’s Latin American regional seminar in São Paulo, Brazil, on June 13. The one-day seminar has been organized by INSOL in association with TMA Brasil to cover current cross-border insolvency and restructuring topics. The seminar is designed to be interactive and to allow the attendees to discuss and debate about practical issues with speakers who are leading players in the insolvency and restructuring field and with experience in insolvency proceedings involving different countries. The seminar will benefit from simultaneous translation in English, Portuguese and Spanish. For more information and to register, please click here.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: IN RE RODRIGUEZ (3D CIR.)

Summarized by Thomas Horan of Womble Carlyle Sandridge & Rice LLP

Because a chapter 13 plan confirmation order may be revoked only if such order was procured by fraud, the Third Circuit ruled that absence of such fraud prevents the court from reconsidering the plan confirmation order under Rule 60(b) of the Federal Rules of Civil Procedure, made applicable in a bankruptcy case by Rule 9014 of the Federal Rules of Bankruptcy Procedure.

There are more than 800 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: WILL THE NEXT WAVE OF CHAPTER 9 FILINGS BE FROM PUBLIC HOSPITALS?

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new blog post examines the possibility of a wave of chapter 9 filings by public hospitals.

For further analysis on bankruptcy filings and distress by hospitals, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition, from ABI's Bookstore!

TEE OFF ON THE ABI GOLF TOUR!

ABI now offers conference registrants the option to participate in the ABI Golf Tour. The Tour kicked off at ABI’s Annual Spring Meeting and will take place concurrently with most conference golf tournaments. It is designed to enhance the golfing experience for serious golfers while still offering a fun networking opportunity for players of any ability. As opposed to the format used at ABI’s regular conference events, Tour participants will "play their own ball" in stroke play format. They will be grouped on the golf course separately from other conference golf participants and will typically play ahead of the other participants, expediting Tour play. Tour participants will be randomly grouped in foursomes, unless otherwise requested of the Commissioner in advance of each tournament. Prizes will be awarded for each individual Tour event, which are sponsored by Great American Group. The grand prize is the "Great American Cup," also sponsored by Great American Group, which will be awarded to the top player at the end of the Tour season. Registration is free. Click here for more information and a list of 2013 ABI Golf Tour event venues and early leader board.

ABI Quick Poll

Bankruptcy courts should implement constructive trusts in any case where applicable state law would recognize them.

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

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NEXT EVENTS:

May 15, 2013

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May 16, 2013

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COMING UP

May 21-24, 2013

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May 29, 2013

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June 7, 2013

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June 13-16, 2013

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INSOL’s Latin American Regional Seminar in São Paulo, Brazil

June 13, 2013

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July 11-14, 2013

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July 18-21, 2013

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Aug. 8-10, 2013

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CALENDAR OF EVENTS

2013

May

- "Nuts and Bolts" Program at NYCBC

     May 15, 2013 | New York, N.Y.

- ABI Endowment Cocktail Reception

     May 15, 2013 | New York, N.Y.

- New York City Bankruptcy Conference

     May 16, 2013 | New York, N.Y.

- Litigation Skills Symposium

     May 21-24, 2013 | Dallas, Texas

- ABI Live Webinar: Consumer Class Actions

     May 29, 2013

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

     June 13-16, 2013 | Grand Traverse, Mich.

- INSOL’s Latin American Regional Seminar

     June 13, 2013 | São Paulo, Brazil

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

July 18-21, 2013 | Amelia Island, Fla.

August

- Mid-Atlantic Bankruptcy Workshop

August 8-10, 2013 | Hershey, Pa.

Thursday, August 21, 2025

ABI Tags

Final Report of the ABI's Ethics Task Force Provides Guidance to Both Consumer …

Court Administration

Ethics

Practice and Procedure

ABI Bankruptcy Brief | February 4, 2014

February 6, 2014

NEWS AND ANALYSIS

U.S. PERSONAL BANKRUPTCIES SET TO DROP AGAIN, ACCORDING TO FITCH RATINGS

Fitch Ratings issued a report today stating that personal bankruptcy filings are on track to achieve a fourth straight year of declines, Reuters reported today. Fitch projects 2014 filings to fall another 8-10 percent, following the 12 percent drop in 2013 filings. After that, the report says that the pace of improvement is likely to level off. "Banks will continue to ease underwriting standards and open up access to larger credit lines to consumers," said Fitch Managing Director Michael Dean. Filings closed slightly above the one million mark after falling 12 percent, or 145,759, to 1,011,732 from 1,157,491 in 2012. Read more.

To review the latest filing trends, including January 2014's numbers, please click here.

ANALYSIS: WELCOME RELIEF FOR HOMEOWNERS, UNTIL THE TAX BILL ARRIVES

While JPMorgan Chase will be able to write off the $1.5 billion in debt relief it must give homeowners to satisfy the terms of a recent settlement, the homeowners who receive the help will have to treat it as taxable income, resulting in whopping tax bills for many families who have just lost their homes or only narrowly managed to keep them, the New York Times reported yesterday. A tax exemption for mortgage debt forgiveness, put in place when the economy began to falter in 2007, was allowed to expire on Dec. 31, leaving hundreds of thousands of struggling homeowners in financial limbo even as the Obama administration has tried to encourage such debt write-downs. The tax exemption was intended to help homeowners who are underwater, and according to real estate data service CoreLogic, there are still more than 6.4 million households underwater. The number of people using the mortgage debt-relief exemption has increased every year, reaching almost 100,000 in 2011, the most recent year for which the IRS has figures. That number could be far greater for 2013, when there were more than a quarter-million short sales, according to Daren Blomquist of RealtyTrac, who estimates that those families received an average debt reduction of roughly $37,000. If the exemption had not been in place, that would have translated to an extra $9,250 tax bill for those in the 25 percent bracket. Read more.

RETAILERS TO CONGRESS: THERE'S NO END IN SIGHT FOR CREDIT CARD BREACHES

A Target executive warned Congress that credit card breaches, such as the one that affected up to 110 million of its customers, are going to become very common and there may be that little retailers can do to shield shoppers for now, the Washington Post reported yesterday. "The unfortunate reality is that we suffered a breach, and all businesses -- and their customers -- are facing increasingly sophisticated threats from cyber criminals," Target Chief Financial Officer John J. Mulligan told lawmakers at a Senate Judiciary Committee hearing on Tuesday. "In fact, recent news reports have indicated that several other companies have been subjected to similar attacks." Real change would require all the actors in the payment card system -- merchants, banks that issue credit cards and the card networks -- to work together to replace the plastic in our wallets with something more sophisticated, such as a card with a computer chip. "Updating payment card technology and strengthening protections for American consumers is a shared responsibility and requires a collective and coordinated response," Mulligan said.
Read more.

AMERICANS BOOST SPENDING ON REMODELING

Americans are spending lavishly again to upgrade their homes, an indication that they remain confident about the long-term prospects for the recovery of the housing market despite recent signs of weakness, the Wall Street Journal reported today. Homeowners spent $130 billion on remodeling projects last year, according to data released Monday by the U.S. Census Bureau. That was up 3.1 percent from 2012 and was the largest amount of home-remodeling spending since 2007, the year that the housing downturn began. Permits for remodeling jobs in the U.S. rose 5.1 percent last year from 2012, the largest increase since 2010, when the figures began their rebound from a 10-year low, according to permit-tracking company BuildFax. Home-equity lending -- which sank to its lowest level of the past 10 years in 2010 -- jumped 18 percent last year to $123.4 billion, according to estimates by Moody's Analytics. According to real estate data firm CoreLogic, two-thirds of all U.S. homeowners had at least 20 percent equity in their homes as of last year's third quarter, up from 53.2 percent two years earlier. Read more. (Subscription required.)

PUBLIC COMMENT PERIOD ENDS NEXT WEEK FOR PROPOSED AMENDMENTS TO THE FEDERAL RULES OF BANKRUPTCY PROCEDURE

The Judicial Conference Advisory Committee on Bankruptcy Rules has proposed amendments to the Federal Rules of Bankruptcy Procedure and Official Forms, and requested that the proposals be circulated to the bench, bar, and public for comment. On August 15, 2013, the public comment period opened for the proposed amendments to Bankruptcy Rules 2002, 3002, 3007, 3012, 3015, 4003, 5005, 5009, 7001, 9006, and 9009 and Official Forms 17A, 17B, 17C, 22A-1, 22A-1Supp, 22A-2, 22B, 22C-1, 22C-2, 101, 101A, 101B, 104, 105, 106Sum, 106A/B, 106C, 106D, 106E/F, 106G, 106H, 106Dec, 107, 112, 113, 119, 121, 318, 423 and 427. The public comment period closes on February 15, 2014. For more information, please click here.

To access the online comment site for the proposed amendments, please click here.

PURCHASE EITHER THE CONSUMER OR BUSINESS EDITION OF THE BEST OF ABI 2013 AND RECEIVE A FREE ADDITIONAL TITLE!

To make room for new books in 2014, ABI is having a special Bookstore clearance sale. Now, when you buy either Best of ABI 2013: The Year in Business Bankruptcy or The Year in Consumer Bankruptcy, you can choose a free book from a select list of ABI publications. You'll be able to make your selection when you click "Buy Now" on either edition of the Best of ABI 2013. To purchase the Best of ABI 2013: The Year in Business Bankruptcy, please click here.

Make your selection when you click "Buy Now" on either edition of the Best of ABI 2013. To purchase the Best of ABI 2013: The Year in Consumer Bankruptcy, please click here.

LOOKING FOR A REPLAY OF THE "BACK TO BASICS" WEBINARS? CHECK OUT ABI'S CLE SITE!

The final installment of ABI's "Back to Basics" live webinar series, hosted by the Young and New Members Committee, was held last week, and you now have the opportunity to access the programs at your convenience! The three webinars in the series, an examination of financial statements and operating reports, using financial documents as evidence and issues surrounding bankruptcy and hedge funds, are now posted to ABI's e-Learning website. Let a trusted CLE provider help get your associates up to speed.

ABI'S SIXTH ANNUAL LAW STUDENT WRITING COMPETITION DEADLINE APPROACHING

Law school students are invited to submit a paper between now and March 4, 2014 for ABI's Sixth Annual Bankruptcy Law Student Writing Competition. ABI will extend a complimentary one-year membership to all students who participate in this year's competition. Eligible submissions should focus on current issues regarding bankruptcy jurisdiction, bankruptcy litigation, or evidence issues in bankruptcy cases or proceedings. The first-place winner, sponsored by Invotex Group, Inc., will receive a cash prize of $2,000 and publication of his or her paper in the ABI Journal. The second-place winner, sponsored by Jenner & Block LLP, will receive a cash prize of $1,250 and publication of his or her paper in an ABI committee newsletter. The third-place winner, sponsored by Thompson & Knight LLP, will receive a cash prize of $750 plus publication of his or her paper in an ABI committee newsletter. For competition participation and submission guidelines, please visit http://papers.abi.org.

DETROIT EMERGENCY MANAGER KEVYN ORR TO KEYNOTE ABI'S 32ND ANNUAL SPRING MEETING ON APRIL 25

Kevyn Orr, emergency manager to the city of Detroit, will provide the keynote at the Friday Luncheon at ABI's 32nd Annual Spring Meeting at the JW Marriott in downtown Washington, D.C. The conference, taking place April 24-27, 2014, features a roster of the best national speakers, while the depth and scope of topics offer something for everyone. Specifically, four concurrent workshops will cover various "tracks," including programs for attorneys in commercial cases, a track for restructuring professionals, a track of professional development programming and a track dealing solely with consumer issues. The Annual Spring Meeting offers 18.25/22 hours of CLE/CPE credit, along with ethics credit totaling 3.25/4 hours. In addition, committee sessions will drill down on topics covered in the larger sessions to provide you with the most practical and varied CLE/CPE experience ever. Also featured will be a special half-day optional event sponsored by ABI and the FCBA titled "The Intersection of the FCC and Bankruptcy Law."

Sessions at the 2014 Annual Spring Meeting include:

- 18th Annual Great Debates

- Where the Work Is (and Isn't)

- The Ever-Changing Role of Committees

- Large Complex Trusts: A General Motors Case Study

- Municipal Bankruptcies

- Use of Governmental Assistance Programs in Chapter 13

- The Financial Professional's Role in Out-of-Court Restructurings and Dissolutions

- Civility in the Restructuring Profession

- Union Contracts

- Student Loan Update

- Social Media: What You Don't Know Can Hurt You

- The § 363 Sale Process from a Transactional Perspective

The conference kicks off with an Opening Reception at the Smithsonian's National Museum of the American Indian, offering a truly D.C. experience. Optional events include a golf tournament at Westfields Golf Club, a Washington Nationals vs. San Diego Padres baseball game and an evening at the Kennedy Center with the National Symphony Orchestra.

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: CLARK V. ZWANZIGER (IN RE ZWANZIGER; 10TH CIR.)

Summarized by Michael Cooley of Akin Gump Strauss Hauer & Feld LLP

Emphasizing the fact that issue preclusion generally applies to a decision on the merits of an issue that has been actually litigated, the Tenth Circuit held that issue preclusion does not apply to a final determination in district court that a party has waived an issue. Sharply dissenting, Judge Holloway emphasized the equitable nature of issue preclusion, and concluded there was no reason to relieve the plaintiff from the effect of his procedural error in the original district court litigation.

There are more than 1,200 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: WHAT PERCENTAGE GETS PAID BACK IN A CHAPTER 13 BANKRUPTCY?

The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent post looks at how to calculate what percentage of debts are going to get paid back to creditors if a consumer files for chapter 13 bankruptcy.

ABI Quick Poll

The Bankruptcy Code permits a debtor to artificially impair a class for cramdown purposes.

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

INSOL INTERNATIONAL

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 43 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

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NEXT EVENT:

Hedge Fund Legend David Tepper to Keynote- Register Today!

COMING UP

Detroit Emergency Manager Kevyn Orr to Keynote- Register Today!

CALENDAR OF EVENTS

2014

February

- VALCON14

Feb. 26-28, 2014 | Las Vegas, Nev.

March

- Bankruptcy Battleground West

March 11, 2014 | Los Angeles, Calif.

- Alexander L. Paskay Memorial

Bankruptcy Seminar

March 13-15, 2014 | Tampa, Fla.

April

- Annual Spring Meeting

April 24-27, 2014 | Washington, D.C.

May

- Credit & Bankruptcy Symposium

    May 1-2, 2014 | Uncasville, Conn.

- New York City Bankruptcy Conference

    May 15, 2014 | New York, N.Y.

- Litigation Skills Symposium

    May 20-23, 2014 | Dallas, Texas

June

- Central States Bankruptcy Workshop

June 12-15, 2014 | Lake Geneva, Wis.

Thursday, August 21, 2025

ABI Tags

U.S. Personal Bankruptcies Set to Drop Again, According to Fitch Ratings

ABI Bankruptcy Brief | August 28, 2012

August 28, 2012

NEWS AND ANALYSIS

REPORT: ASSETS, LIABILITIES DECREASE WITH DROP IN 2011 CONSUMER FILINGS

Liabilities and assets of debtors decreased along with overall personal bankruptcy filing numbers, according to a report released yesterday by the Administrative Office of the U.S. Courts (AOUSC). The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) requires the annual compilation of statistics by the AOUSC on debtors who are individuals with primarily consumer debts seeking relief under chapters 7, 11, and 13. Compared to 2010 data, the AOUSC found the following decreases among debtors filing for personal bankruptcy in 2011:

• 11 percent decrease in overall filings

• 23 percent decrease in filer assets

• 25 percent decrease in filer liabilities

• 28 percent incidence of repeat filers

To read the AOUSC's full 2011 BAPCPA Report, please click here.

REGULATORS SAY LOAN QUALITY IMPROVING

The credit quality of large loan commitments owned by financial institutions regulated in the U.S. improved in 2012 for the third consecutive year, according to a review by the Federal Reserve and two other regulators, MarketWatch.com reported yesterday. However, the review also added that, despite the progress, poorly originated large loans in 2006 and 2007 "with weak underwriting standard" continued to hurt the portfolio of institutions reviewed. The agencies reviewed loan commitments of $20 million or more in real estate, stocks, notes or bonds extended by American and foreign financial institutions regulated in the U.S. The study noted that so-called nonbank firms, such as hedge funds insurance companies and pension funds, held the smallest share of large loan commitments but the largest share of credits rated "substandard or doubtful" or considered uncollectible and of little value. According to the report, institutions held roughly $2.8 trillion of large loans, with roughly 8,700 credit facilities going to roughly 5,600 borrowers. That number is up from about $2.5 trillion in 2011. Read more.

FSOC MAY HAVE TO MOVE SLOWLY ON MONEY FUNDS

Though the Securities and Exchange Commission said on Wednesday that it would have to drop its proposed overhaul of the money market mutual fund industry, regulators are contemplating pursuing money fund overhaul through the Financial Stability Oversight Council (FSOC), the New York Times DealBook blog reported on Saturday. The FSOC was set up by the Dodd-Frank legislation to identify systemic risks and then set in motion plans to remove those risks. The council, which is led by Treasury Secretary Timothy F. Geithner, has said that money funds are a concern, and backed the reforms scuttled at the SEC. While the FSOC certainly has the freedom and power to take up the issue of money market funds, some experts question whether the council will officially designate money funds as a risk, especially in the last few months before the presidential election. Read more.

CONSOLIDATION OF SMALL BANKS ON THE RISE

A growing number of small- and medium-sized banks are merging as shrinking profit margins, tepid loan demand and low interest rates place pressure on their operations, the Washington Post reported today. Community banks also are contending with the added cost of complying with new regulations stemming from the Dodd-Frank financial reform law. Industry watchers say all of these factors will spur buying activity in the coming quarters. M&T Bank, with $81 billion in assets, became the latest bank buyer, with a $3.7 billion deal yesterday to acquire Hudson City Bancorp, a $43.6 billion community bank in Paramus, N.J. Banking analyst Bert Ely said that the Dodd-Frank Act places the heaviest burden on banks with less than $500 million in assets, which will likely be the primary source of deal activity. Small banks, he said, will be especially taxed by new requirements to keep 5 percent of the loans they issue through mortgage-backed securities on their books. He also thinks smaller banks will be discouraged by higher and stricter capital requirements. Read more.

U.S. HOME PRICES CONTINUE UPWARD MOVE IN JUNE

The S&P/Case-Shiller 20-city composite index showed that U.S. home prices bounced higher for a second month in June, MarketWatch.com reported today. The S&P/Case-Shiller index registered a 2.3 percent advance in June, matching upwardly revised gains in May. Prices in the second quarter of 2012 gained 6.9 percent compared to the first quarter.All 20 cities in the index managed monthly gains, including a 6 percent surge in hard-hit Detroit and a 4.8 percent advance in Minneapolis. Read more.

For a historic look at housing prices, be sure to check out ABI’s Chart of the Day to browse house price data since 1976.

ABI IN-DEPTH

ABI MEMBERS WELCOME TO ATTEND ACB'S FREE HALF-DAY "BANKRUPTCY: BACK TO THE FUTURE" PROGRAM IN SEPTEMBER

The American College of Bankruptcy invites you to attend a free half-day program on Sept. 28 in Chicago for a discussion of many of the challenging topics facing current bankruptcy and reorganization professionals. Topics to be addressed include recent decisions of the U.S. Supreme Court and Court of Appeals, important work of the Advisory Committee on Bankruptcy Rules, and developments in the field of bankruptcy ethics. The nation’s leading judges, academics and bankruptcy professionals are among the speakers for the program. While there is no cost to attend, seating is limited, so early reservation is suggested. For more information and to register, please click here.

LATEST CASE SUMMARY ON VOLO: IN RE DAHLGREN (3D. CIR.)

Summarized by Emil Khatchatourian of the U.S. Bankruptcy Court for the Eastern District of California

Affirming the district court ruling, the Third Circuit held that a debtor's plan, as submitted by his counsel, would have voided the state court's sale order issued prior to the bankruptcy filing. Without deciding whether the Rooker-Feldman doctrine actually applied, the debtor's attempt to confirm a plan that contemplated a forced sale was improper.

There are more than 600 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: SIXTH CIRCUIT RULES THAT TORTIOUS USE OF PROPERTY IS NOT PROTECTED BY THE AUTOMATIC STAY

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. Noting that the “commission of a tort is not protected by the Bankruptcy Code,” a recent blog post examined the ruling by the U.S. Court of Appeals for the Sixth Circuit that found that the automatic stay imposed by section 362(a) of the Bankruptcy Code did not apply to a contempt proceeding against a debtor for violation of an injunction. The injunction related to, among other things, a suit for trademark infringement and trademark dilution.

ABI Quick Poll

Client matters left unfinished at a firm when it files for bankruptcy are the property of the defunct firm.

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

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NEXT EVENTS:

Sept. 11, 2012

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Sept. 13-15, 2012

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Sept. 13-14, 2012

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COMING UP:

Sept. 19-20, 2012

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"WHEN IS AN INDIVIDUAL CHAPTER 11 THE BEST FIT?" LIVE WEBINAR

Sept. 27, 2012

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Oct. 4, 2012

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Oct. 5, 2012

Register Today!

Oct. 8, 2012

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ABI YOUNG AND NEW MEMBERS COMMITTEE “TRENDING ISSUES: EXAMINERS AND SELECT PLAN CONFIRMATION ISSUES” WEBINAR

Oct. 15, 2012

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Oct. 18, 2012

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Nov. 7, 2012

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4TH ANNUAL PROFESSIONAL DEVELOPMENT PROGRAM

Nov. 9, 2012

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Nov. 12, 2012

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Nov. 29 - Dec. 1, 2012

Register Today!

CALENDAR OF EVENTS

September

- 7th Annual Golf and Tennis Outing

     September 11, 2012 | Maplewood, N.J.

- Complex Financial Restructuring Program

     September 13-14, 2012 | Las Vegas, Nev.

- Southwest Bankruptcy Conference

     September 13-15, 2012 | Las Vegas, Nev.

- 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization

     September 19-20, 2012 | New York, N.Y.

- "When Is an Individual Chapter 11 the Best Fit?" Live Webinar

     September 27, 2012

- American College of Bankruptcy's "Bankruptcy: Back to the Future" Program

     September 28, 2012 | Chicago, Ill.

- Bankruptcy 2012: Views from the Bench

     October 5, 2012 | Washington, D.C.

- Chicago Consumer Bankruptcy Conference

     October 8, 2012 | Chicago, Ill.

- "Trending Issues: Examiners and Select Plan Confirmation Issues" Webinar

     October 15, 2012

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

November

- U.S./Mexico Restructuring Symposium

     November 7, 2012 | Mexico City, Mexico

- Professional Development Program

     November 9, 2012 | New York, N.Y.

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.

- Winter Leadership Conference

     November 29 - December 1, 2012 | Tucson, Ariz.

Thursday, August 21, 2025

ABI Tags

Report: Assets, Liabilities Decrease with Drop in 2011 Consumer Filings

ABI Bankruptcy Brief | September 25, 2012

September 25, 2012

NEWS AND ANALYSIS

REPORT: FEWER MORTGAGE LOANS PAST DUE, IN FORECLOSURE

Lender Processing Services (LPS), which provides mortgage and consumer loan processing services and default solutions, said that mortgage delinquencies are down by more than 10 percent over the past year, although more than one homeowner in 10 remains at risk of losing their home, MortgageLoan.com reported yesterday. The nation’s mortgage delinquency rate fell to 6.87 percent in August to 3.43 million, according to new figures from LPS. That represents a 10.6 percent decline over the past year and a 2.3 percent drop from the July figure. Delinquent mortgages in the LPS survey include loans that are at least 30 days past due but not in foreclosure. Meanwhile, the national foreclosure rate fell to 4.04 percent, representing 2.02 million homes in foreclosure but not yet repossessed. That number is down 2.0 percent from the August 2011 level and 1.0 percent from July’s figures. Click here.

CONSUMERS GIVEN DIFFERENT CREDIT SCORES THAN WHAT IS PROVIDED TO LENDERS, CFPB SAYS

The Consumer Financial Protection Bureau (CFPB) released a study today that found that one in five U.S. consumers is likely to receive a credit score that is different than the one provided to lenders, potentially closing off access to credit for millions of Americans who believe that they are eligible for it, Bloomberg News reported today. The study comes five days before the consumer agency, created by the Dodd-Frank law of 2010, begins supervising credit-reporting companies' records and practices. The work involves direct examination of about 30 businesses, including the three biggest, Equifax Inc., Experian Plc and TransUnion Corp. Under the Fair Credit Reporting Act, consumers are entitled to a free copy of their credit report each year. Consumer advocates have long charged that credit-reporting companies provide varying scores to lenders, potentially driving the cost of credit higher or depriving consumers of it entirely. Specifically, the bureau found that one in five consumers likely receive a "meaningfully different" score than the one their lender receives from credit bureaus, and consumers are unlikely to know about the discrepancy. Read more.

MOODY'S: CARD CHARGE-OFFS, LATE PAYMENT RATE FELL IN AUGUST

Moody's Investors Service said yesterday that the rate of U.S. credit card charge-offs fell to 4.19 percent in August from 4.56 percent in July, the Associated Press reported. Moody's index of credit card delinquencies, or those balances with a monthly payment more than 30 days past due, also improved. The rate declined to 2.32 percent in August from 2.36 percent the previous month. August's card delinquency rate is at a record low, which points to lower charge-offs in coming months, Moody's said. As delinquencies drop, Moody's data shows that card users are increasing the size of their payments. The average amount of principal that cardholders paid as a percentage of their balance hit a new high in August, rising to a rate of 22.71 percent from 22.47 percent a month earlier, the firm said. Read more.

ANALYSIS: PENSION CRISIS LOOMS DESPITE CUTS

Almost every state in the U.S. has made cuts to its public-employee pensions, seeking to dig their way out from the economic downturn, but so far the measures have fallen well short of bridging a nearly $1 trillion funding gap, the Wall Street Journal reported on Saturday. Since 2009, 45 states have rolled back pension benefits for teachers, police, firefighters and other public workers, including cuts by Michigan and California this month. Next week, Ohio Gov. John Kasich (R) is expected to sign legislation requiring, for example, that certain teachers work longer and pay more toward their pensions. The state measures show how economic forces are reshaping traditional rivalries, convincing lawmakers and labor leaders that past public pension plans are unsustainable. Read more. (Subscription required.)

SYMPOSIUM ON OCT. 19 TO EXAMINE RELATIONSHIP BETWEEN BANKRUPTCY AND RACE

ABI, St. John's Center for Bankruptcy Studies and The Ronald H. Brown Center for Civil Rights and Economic Development are going to hold a symposium titled "Bankruptcy and Race: Is There a Relation?" on Oct. 19 from 8:30 a.m.-2:30 p.m. ET at the St. John's School of Law. In a recent study of personal bankruptcy cases and practitioners, Profs. Jean Braucher, Dov Cohen and Robert Lawless made a troubling finding: the debtor's race appears to affect the advice that lawyers give about whether to file for bankruptcy under chapter 7 or chapter 13 of the Bankruptcy Code. Is this finding correct? And if so, what are its implications for bankruptcy law and policy? This symposium will bring together leading bankruptcy, empirical, and race scholars to address these questions through commentary on the Braucher study and a reply from the primary study authors. The papers will be published in the winter issue of the ABI Law Review. There is no fee to attend the symposium, but advance registration is required. To register, please complete and submit the online registration form by Oct. 15.

ABI IN-DEPTH

MEMBERS WILL NOT WANT TO MISS ABI'S PROGRAM AT NCBJ'S ANNUAL MEETING ON OCT. 26

Members planning to attend the 86th Annual NCBJ Annual Conference in San Diego from Oct. 24-27 will not want to miss the exciting line-up scheduled for the ABI program track on Oct. 26. In addition to roundtable discussions on the hottest consumer and business bankruptcy topics, ABI will be hosting a ticketed luncheon that will feature the presentation of the 7th Annual Judge William L. Norton, Jr. Judicial Excellence Award and entertainment by Apollo Robbins, a sleight-of hand artist, security consultant and self-described gentleman thief. Robbins gained notoriety after pick-pocketing Secret Service agents accompanying former president Jimmy Carter. Click here to register for the Conference.

ABI's Chapter 11 Reform Commission will also be holding a public hearing on Oct. 26 from 2:30-4:30 p.m. PT at the San Diego Marriott. Interested parties have the opportunity to submit testimony at the hearing. For further information, please contact ABI Executive Director Samuel J. Gerdano at sgerdano@abiworld.org.

LATEST CASE SUMMARY ON VOLO: OLICK V. KEARNEY (IN RE OLICK; 3D CIR.)

Summarized by George Utlik of Arent Fox LLP

Affirming three decisions from the United States Bankruptcy Court for the Eastern District of Pennsylvania, the U.S. Court of Appeals for the Third Circuit held that: (1) plaintiff-appellant waived his objections to the summary judgment order and oral opinion rendered from the bench in March 2008 because he had failed to secure a transcript of proceedings in the bankruptcy court, despite having ample time to do so and despite having the option of moving for transcripts to be provided at the government's expense under 28 U.S.C. § 753(f)); (2) plaintiff-appellant failed to meet his burden of showing that defendants’ proffered reason for an adverse employment action (poor employment performance) was pretext because no reasonable jury would find that defendants-appellees acted with discriminatory intent when they terminated him; (3) with respect to plaintiff-appellant’s claim under Age Discrimination in Employment Act (“ADEA”), no causal connection existed between plaintiff-appellant’s protected activity and the termination of his field-agent contract.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: LEHMAN TO PAY LEGAL FEES OF PAULSON GROUP, GOLDMAN

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines how a number of Wall Street banks and hedge funds—including Goldman Sachs Group Inc., Paulson & Co. and Mark Brodsky’s Aurelius Capital—received bankruptcy court approval to have Lehman’s estate cover their legal fees.

ABI Quick Poll

Bankruptcy courts should have unfettered discretion in adjusting fee applications, even when no party-in-interest has raised objections.

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LAST CHANCE TO REGISTER:

"WHEN IS AN INDIVIDUAL CHAPTER 11 THE BEST FIT?" LIVE WEBINAR

Sept. 27, 2012

Register Today!

COMING UP:

Oct. 4, 2012

Register Today!

Oct. 5, 2012

Register Today!

Oct. 8, 2012

Register Today!

ABI YOUNG AND NEW MEMBERS COMMITTEE “TRENDING ISSUES: EXAMINERS AND SELECT PLAN CONFIRMATION ISSUES” WEBINAR

Oct. 15, 2012

Register Today!

Oct. 16, 2012

Register Today!

Oct. 18, 2012

Register Today!

ABI/ST. JOHN'S "BANKRUPTCY AND RACE: IS THERE A RELATION?" SYMPOSIUM

Oct. 19, 2012

Register Today!

ABI'S PROGRAM AT NCBJ'S ANNUAL MEETING

Oct. 26, 2012

Register Today!

Nov. 7, 2012

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4TH ANNUAL PROFESSIONAL DEVELOPMENT PROGRAM

Nov. 9, 2012

Register Today!

Nov. 12, 2012

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Nov. 29 - Dec. 1, 2012

Register Today!

Dec. 4-8, 2012

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Feb. 17-19, 2013

Register Today!

CALENDAR OF EVENTS

September

- "When Is an Individual Chapter 11 the Best Fit?" Live Webinar

September 27, 2012

- American College of Bankruptcy's "Bankruptcy: Back to the Future" Program

September 28, 2012 | Chicago, Ill.

October

- Nuts & Bolts for Young and New Practitioners - KC

     October 4, 2012 | Kansas City, Mo.

- Midwestern Bankruptcy Institute Program, Midwestern Consumer Forum

     October 5, 2012 | Kansas City, Mo.

- Bankruptcy 2012: Views from the Bench

     October 5, 2012 | Washington, D.C.

- Chicago Consumer Bankruptcy Conference

     October 8, 2012 | Chicago, Ill.

- "Trending Issues: Examiners and Select Plan Confirmation Issues" Webinar

October 15, 2012

- ABI/Bloomberg Distressed Lending Conference

October 16, 2012 | New York, N.Y..

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

- ABI/St. John's "Bankruptcy and Race: Is There a Relation?" Symposium

     October 19, 2012 | Queens, N.Y.

- ABI Program at NCBJ's Annual Conference

     October 26, 2012 | San Diego, Calif.

December

- Forty-Hour Bankruptcy Mediation Training

December 4-8, 2012 | New York, N.Y.

2013

February

- Kansas City Advanced Consumer Bankruptcy Practice Institute

February 17-19, 2013 | Kansas City, Mo.

Thursday, August 21, 2025

ABI Tags

Report: Fewer Mortgage Loans Past Due, in Foreclosure

ABI Bankruptcy Brief | October 16, 2012

October 16, 2012

NEWS AND ANALYSIS

CONSUMERS PAYING DOWN DEBT HELPS BOOST U.S. EXPANSION

Federal Reserve figures show that household debt as a share of disposable income sank to 113 percent in the second quarter from a record high of 134 percent in 2007 before the recession hit, Bloomberg News reported yesterday. Debt payments on that basis are the smallest in almost 18 years, while the delinquency rate for credit cards is the lowest since the end of 2008. The progress that consumers have been making will allow gross domestic product to absorb stepped-up deficit reduction by the federal government next year and keep on expanding, according to Mark Zandi, chief economist at Moody’s Analytics Inc. He sees GDP growing 2.1 percent in 2013, a bit slower than this year’s projected 2.2 percent, as Congress allows some, but not all, of the scheduled year-end tax increases and spending cuts to go ahead. The GDP number will mask stronger growth for the private side of the economy, which Zandi expects to increase to 3.6 percent from 3.1 percent. Read more.

FED GOVERNOR'S PLAN TO LIMIT BANK SIZE FUELS DEBATE

While academics, politicians and even former bank chiefs have called for the nation's banking behemoths to be broken up or shrunk, Daniel K. Tarullo, a Federal Reserve governor who oversees bank regulation, said in a speech last week that an important part of a bank's balance sheet could be capped at a set percentage of the nation's gross domestic product, the New York Times DealBook blog reported yesterday. That a regulator at the Fed – the most powerful of the banking industry's overseers – would say that such a structural overhaul of the financial system might be considered was a sign that the policy debate over what to do about "too big to fail" might be shifting. Some Republicans looking to repeal the Dodd-Frank Act say that they still want to constrain large banks. Their concern is that the law may lead the market to believe that the government protects large banks. In turn, investors might then provide cheap loans to the biggest banks, fueling even more growth in the banks' balance sheets. "I am completely open to the proposal because of my similar concern about the growing size of institutions that are too big to fail," said Sen. David Vitter (R-La.). "Beyond this specific proposal, there is a growing nonpartisan consensus to do a lot more to limit the size of the megabanks." Read more.

BANKS SEE HOME LOANS AS GATEWAY TO BIG GAINS

Federal stimulus has ignited a boom in mortgage refinancing, and the trend could continue as the government steps up its support of the broad housing market, according to a report in the New York Times DealBook blog on Friday. In the third quarter, banks may have likely originated as much as $450 billion of home loans, according to estimates by Inside Mortgage Finance, a publication that tracks the industry. That figure, which includes both refinances of existing mortgages and new loans to buy a house, would be a considerable jump from the previous period. In the second quarter, banks originated $405 billion, with 68 percent in refinancings. In September, the Fed announced plans to buy large amounts of mortgage-backed bonds. The proposal has driven the price of such securities higher, letting banks earn an even bigger financial gain when they sell mortgages into the market. Read more.

ANALYSIS: FLIPPING HOUSES IS ONCE AGAIN A BOOMING BUSINESS

Flipping houses earned a bad reputation during the housing boom thanks to speculators who bought and sold millions of homes in search of easy profits, but the practice is gaining popularity again as the nation’s real estate market shows signs of life, the Washington Post reported yesterday. The number of flips rose 25 percent during the first half of 2012 from the same period a year earlier, according to research firm RealtyTrac, and the gross profit on each property averaged $29,342. Areas of the country that were hit particularly hard by the housing crash have seen the most pronounced boom in flipping, as investors gobble up foreclosures and short sales — properties sold for less than the owners owe on the mortgage — and resell them to buyers eager to take advantage of record-low interest rates. The Phoenix area leads the country with nearly 10,000 flipped properties during the first half of this year. Las Vegas, Los Angeles, Miami and Atlanta also are high on the list. Read more.

NEW JERSEY CASE MAY UPEND HOME LOAN DISCRIMINATION RULES

A fight between the government and residents of what remains of Mount Holly Gardens in New Jersey has now reached the U.S. Supreme Court, which may decide in the next several weeks whether to take up a case with nationwide implications for the housing industry, Bloomberg News reported yesterday. Civil rights advocates are battling the industry over whether the 1968 Fair Housing Act authorizes discrimination suits even without allegations of intentional bias. Lower courts have said that suits can claim that a government policy or company lending practice has a discriminatory effect, known as "disparate impact," even if that was not the intent. Mount Holly has been buying up what it says had become a blighted, high-crime neighborhood, with an eye toward redevelopment. The opponents say that the effort has hurt black and Hispanic residents, devastating the township's only predominantly minority neighborhood. Although the Mount Holly case involves municipal action, the U.S. Justice Department also enforces the disparate impact doctrine against financial institutions. The statute lacks the language supporting this doctrine, which Congress affirmatively included in other laws, so it should not apply, said Jeffrey Naimon, a banking attorney with BuckleySandler LLP. The courts have disagreed. "Allowing disparate impact claims under the FHA would render illegal many legitimate governmental and private activities designed to promote the general welfare of the community," Mount Holly argued in its appeal to the Supreme Court. Read more.

CFPB REPORT FINDS PRIVATE STUDENT LOAN BORROWERS FACE ROADBLOCKS TO REPAYMENT

The Consumer Financial Protection Bureau (CFPB) Student Loan Ombudsman released a report today saying that private student loan borrowers are sometimes surprised by the terms and conditions of their loans, are given the runaround by their loan servicer and have few options to refinance or modify repayment for a better deal, insideARM.com reported. "Graduates don't have a fair chance to pay back their debts if they are faced with surprises, runarounds, and dead-ends by student loan servicers," said CFPB Director Richard Cordray. "Student loan borrower stories of detours and dead-ends with their servicers bear an uncanny resemblance to problematic practices uncovered in the mortgage servicing business," said CFPB Student Loan Ombudsman Rohit Chopra, who authored the report. Earlier this year, the CFPB announced that outstanding student loan debt crossed the $1 trillion mark. The Dodd-Frank Act established an ombudsman for student loans within the CFPB to assist borrowers with private student loan complaints. Today’s report, which was mandated by Congress, analyzed approximately 2,900 private student loan complaints, comments, and other submissions and input from borrowers. The report found that roughly 95 percent of the complaints are about loan servicing – when borrowers try to pay back their debt or are unable to pay. Read more.

Click here to read the CFPB report.

STUDY: WELL-OFF WILL BENEFIT MOST FROM CHANGE TO STUDENT DEBT RELIEF PLAN

While the federal government is making changes to its income-based student loan repayment plan to help borrowers with relatively high debt, a report released today by the New America Foundation, a nonprofit and nonpartisan policy institute, says that the changes ultimately will provide only marginal help for borrowers who are at the greatest risk of default, the New York Times reported. Rather, the changes would provide big benefits to middle- and high-income borrowers, particularly for those seeking a graduate degree, the authors found. The report says that at least one financial planning company is telling law school students that the changes could allow them to write off $100,000 in student debt. Under current rules, borrowers pay 15 percent of their discretionary income, based on a formula that is meant to exclude money spent on basic life necessities. The remaining balance and accrued interest is forgiven after 25 years of payments. The Obama administration is tweaking the program to lessen the burden for some borrowers by expediting changes that will reduce monthly payments from 15 percent of discretionary income to 10 percent and forgive outstanding balances after 20 years of payments, instead of 25 years. The New America Foundation report says the changes to income-based repayment could provide some benefits to all participants. But the primary beneficiaries would be high-income, high-debt participants who could make relatively small payments for 20 years and then have a large part of their debt forgiven, the authors said. Read more.

Click here to read the New America Foundation report.

WATCH COMMISSION HEARING LIVE TOMORROW!

ABI's Commission to Study the Reform of Chapter 11 will hold a public hearing tomorrow, October 17, at the LSTA Annual Conference in New York. The event will be live webcast beginning at 3:15 p.m. ET at the Commission's website (commission.abi.org).

ABI IN-DEPTH

LATEST ABI PODCAST EXAMINES LITIGATION SURROUNDING THE DISSOLUTION OF A DISTRESSED LAW FIRM

The latest ABI podcast features Executive Director Sam Gerdano talking with Paul Hage of Jaffe, Raitt, Heuer & Weiss, PC (Southfield, Mich.) and Dylan Trache of Wiley Rein LLP (McLean, Va.) about unfinished business litigation and other issues surrounding the dissolution of a financially distressed law firm. Click here to listen.

LATEST CASE SUMMARY ON VOLO: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA V. CITY OF BOSTON (IN RE SW BOSTON HOTEL VENTURE LLC; 1ST CIR.)

Summarized by Neal Paul Donnelly of the U.S. Bankruptcy Court for the District of Delaware

In a dispute between a developer-debtor and its primary secured lender, the BAP affirmed the bankruptcy court's decision to calculate postpetition interest (§506(b)) owing to the lender at the contractual default rate. The BAP also reversed the lower court's ruling as to when the post-petition interest began accruing, finding that the lender had been oversecured since the petition date, so that was when the lender became entitled to interest payments under § 506(b).

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: SUMMARY OF KEY DIFFERENCES BETWEEN CHAPTER 9 AND CHAPTER 11 BANKRUPTCY

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post summarizes several of the key differences between chapter 9 and chapter 11 bankruptcy.

ABI Quick Poll

Bankruptcy courts should adopt formal loss mitigation procedures to facilitate the negotiation of residential mortgage modifications for consumer debtors.

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THIS WEEK:

WATCH THE CHAPTER 11 COMMISSION HEARING LIVE TOMORROW AT 3:15 P.M. ET VIA WEBCAST!

CLICK HERE

Oct. 17, 2012

Oct. 18, 2012

Register Today!

ABI/ST. JOHN'S "BANKRUPTCY AND RACE: IS THERE A RELATION?" SYMPOSIUM

Oct. 19, 2012

Register Today!

COMING UP:

ABI'S PROGRAM AT NCBJ'S ANNUAL MEETING

Oct. 26, 2012

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Nov. 7, 2012

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4TH ANNUAL PROFESSIONAL DEVELOPMENT PROGRAM

Nov. 9, 2012

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Nov. 12, 2012

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Nov. 29 - Dec. 1, 2012

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Dec. 4-8, 2012

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Jan. 24-25, 2013

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Feb. 7-9, 2013

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Feb. 17-19, 2013

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CALENDAR OF EVENTS

October

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

- ABI/St. John's "Bankruptcy and Race: Is There a Relation?" Symposium

     October 19, 2012 | Queens, N.Y.

- ABI Program at NCBJ's Annual Conference

     October 26, 2012 | San Diego, Calif.

December

- Forty-Hour Bankruptcy Mediation Training

December 4-8, 2012 | New York, N.Y.

2013

January

- Rocky Mountain Bankruptcy Conference

January 24-25, 2013 | Denver, Colo.

February

- Caribbean Insolvency Symposium

February 7-9, 2013 | Miami, Fla.

- Kansas City Advanced Consumer Bankruptcy Practice Institute

February 17-19, 2013 | Kansas City, Mo.

Thursday, August 21, 2025

ABI Tags

Asset Sales

Consumers Paying Down Debt Helps Boost U.S. Expansion

Practice and Procedure

Venue/Jurisdiction

ABI Bankruptcy Brief | October 25, 2012

October 25, 2012

NEWS AND ANALYSIS

FORECLOSURES FALL IN 62 PERCENT OF U.S. CITIES

RealtyTrac said that foreclosures fell in nearly two-thirds of the nation's largest metro areas during the third quarter, CNNMoney.com reported today. With 62 percent of the nation's 212 largest markets seeing foreclosure activity shrink during the latest quarter, the ongoing decline is yet another sign that the housing market is starting to stabilize, according to RealtyTrac. During September, foreclosure activity in 58 percent of the major metro markets had even dropped below September 2007 levels. Major cities like San Francisco, Detroit, Los Angeles, Phoenix and San Diego saw foreclosures fall by double-digit percentages of 26 percent or more. Of the metro areas with the 20 highest foreclosure rates, all are still in California, Arizona, Nevada and Florida. Read more.

COMMENTARY: STUDENT DEBT DEBACLES

Students who finance their educations through private lenders often wrongly assume that private and federal loans work the same way, according to an editorial in today's New York Times. The problem is serious because private student loans now account for $150 billion of the $1 trillion in total outstanding student loan debt in the country, according to the first annual report from the Consumer Financial Protection Bureau’s student loan ombudsman. The report found that many loan servicers — the companies that collect the payments for the lenders — make it extremely difficult for student borrowers to manage their debts. Borrowers often have difficulty finding out how much they owe or getting information about their payment histories. Some struggling borrowers who need loan modification said that servicers forced them to pay more per month than they could possibly afford, without telling them the payments would not prevent default. The federal government needs to open up refinancing and debt-relief opportunities for these borrowers, according to the editorial, as it did for some mortgage-holders. The bureau should also set national standards for loan servicers to require clear disclosure of conditions, advance notice of any changes in the status of the account and prompt resolution of customer requests for information. Read the full editorial.

ANALYSIS: OUTSIDE LAW FIRMS FOR U.S. REGULATOR TO NET QUARTER OF CREDIT UNION SETTLEMENT

The National Credit Union Administration, the credit union industry's regulator, last year hired outside attorneys to recover between $6 billion and $9 billion in losses incurred by failed credit unions from their purchase of toxic mortgage securities from Wall Street banks before the 2008 financial crisis, according to a Wall Street Journal analysis yesterday. The law firms were hired under a contingency fee arrangement that would give them one-fourth of any judgment or settlement, according to congressional investigators who reviewed the contracts. It could mean a payday of hundreds of millions of dollars for the firms. The amount recovered in securities lawsuits typically falls short of the losses, said an attorney involved in the case. The NCUA filed suits in federal court in Kansas and California last year and this month against seven banks that structured and sold the deals. The NCUA declined to provide details about the lawyers' contract, saying it would compromise litigation and negotiation strategy. The two firms, Kellogg Huber Hansen Todd Evans & Figel PLLC and Korein Tillery LLC, declined to discuss the fee arrangement. House Oversight Committee Chairman Darrell Issa (R-Calif.) asked the inspector general of the NCUA last week to determine whether the agreement was legal. "Contingency fee arrangements impose exorbitant or unnecessary costs on taxpayers who have a right to expect the government to operate transparently and efficiently," Issa said. Read more. (Subscription required.)

JUDGE SAYS VISA, MASTERCARD DEAL APPEARS TO MEET STANDARD

A federal judge said that the proposed settlement of lawsuit brought by merchants over credit card fees that may cost Visa Inc., MasterCard Inc. and banks as much as $7.25 billion is probably worthy of initial approval, Bloomberg News reported today. "I have reviewed the settlement agreement, and at first blush it appears to satisfy the requirements for preliminary approval," U.S. District Judge John Gleeson said in an order yesterday. The order, containing Judge Gleeson's first public comments on the deal since it was unveiled in July, came in response to objections lodged by an expanding group of retailers and trade groups who contend that it is unfair. Judge Gleeson said that he will hear arguments against preliminary approval of the settlement on Nov. 9. He declined a request to form a committee for objecting retailers and said that there would be an opportunity for a more thorough discussion at a later hearing on final approval. Read more.

CFTC SAID TO ALLOW MORE SWAPS TRADING VIA PHONE IN FINAL RULE

The Commodity Futures Trading Commission (CFTC) will allow more swaps to be traded over the phone than initially indicated under proposed Dodd-Frank Act reforms, Bloomberg News reported today. Chairman Gary Gensler outlined the changes on Tuesday with executives of firms that want to create regulated entities allowed to trade swaps, known as swap execution facilities (SEFs). The details of what will be allowed are still being worked out for the final draft rule, which is expected to be shown to the four other CFTC commissioners today. The change in phone trading contrasts with the proposal written in the Federal Register in January 2011, which said that "entities offering the following services do not comply with the statutory definition of a SEF: one-to-one voice services for the execution or trading of swaps (other than for the execution of block trades)." Read more.

LIVE WEBCAST AVAILABLE FOR ABI'S CHAPTER 11 COMMISSION HEARING AT NCBJ'S ANNUAL MEETING TOMORROW!

If you are not able to attend the public hearing of ABI's Chapter 11 Reform Commission tomorrow from 2:30-4:30 p.m. PT (5:30-7:30 p.m. ET) at the 86th Annual NCBJ Annual Conference, there will be a live webcast stream available! To access the live webcast, simply go to the Commission’s website (http://commission.abi.org) and the webcast will appear on the main page when the hearing begins. Prepared witness testimony for the hearing will also be accessible from the webpage.

Additionally, members planning to attend the NCBJ Annual Conference in San Diego will not want to miss the exciting line-up scheduled for the ABI program track tomorrow. In addition to roundtable discussions on the hottest consumer and business bankruptcy topics, ABI will be hosting a ticketed luncheon (tickets can be purchased at the ABI Booth) that will feature the presentation of the 7th Annual Judge William L. Norton, Jr. Judicial Excellence Award and entertainment by Apollo Robbins, a sleight-of hand artist, security consultant and self-described gentleman thief. To view the list of ABI programs tomorrow and the full NCBJ Annual Conference schedule, please click here.

MEMBERS ENCOURAGED TO WEIGH IN ON REAPPOINTMENT OF BANKRUPTCY JUDGE JUDITH WIZMUR

The current 14-year term of office of Judith H. Wizmur, U.S. Bankruptcy Judge for the District of New Jersey at Camden, is due to expire on Sept. 4, 2013. The U.S. Court of Appeals for the Third Circuit is considering the reappointment of the judge to a new 14-year term of office. Members of the bar and the public are invited to submit comments for consideration by the Court of Appeals regarding the reappointment of Bankruptcy Judge Wizmur. All comments should be directed to one of the following addresses: by e-mail at Wizmur_Reappointment@ca3.uscourts.gov or by mail to the Office of the Circuit
Executive, 22409 U.S. Courthouse, 601 Market St, Philadelphia, PA 19106-1790.
Comments must be received no later than noon on Monday, December 3, 2012.

ABI IN-DEPTH

NEW DIP FINANCING BOOK AVAILABLE FOR PREORDER IN THE ABI BOOKSTORE

The Bankruptcy Code provides a variety of mechanisms designed to facilitate a chapter 11 debtor's access to new credit to fund its reorganization or sale efforts. DIP financing, or credit extended to a chapter 11 debtor, offers unique benefits—and challenges—for those that take on the risk of providing secured credit to troubled businesses. Debtor-in-Possession Financing: Funding a Chapter 11 Case details the real-world application of this part of the Code, particularly § 364, and explains common lending practices, including the critical financial analyses that lenders should complete before entering into a DIP agreement. Concluding with a detailed analysis of a "Model DIP Financing Order," this manual provides practitioners, lenders and debtors with an understanding of the history behind DIP financing and a practical explanation of its often-complex mechanics. (Softbound, 212 pages. Member price: $60. Non-member price: $85. To obtain member pricing, please log in prior to purchase.)

Click here to pre-order your copy today!

LATEST CASE SUMMARY ON VOLO: ANDERSON V. CRANMER (IN RE CRANMER; 10TH CIR.)

Summarized by Adam Kunst

The Tenth Circuit ruled that Social Security income need not be included in the calculation of projected disposable income for a chapter 13 repayment plan. Not including Social Security income in the calculation of projected disposable income in a chapter 13 repayment plan is not a ground for finding that the plan was not proposed in good faith.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: BIG BANKS NOW OFFERING PAYDAY LOANS

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines how Wells Fargo, First Third Bank and other large banks offer payday-style loans, called direct deposit advances or ready advances. Both the FDIC and the CFPB have taken notice of the loans and are investigating the practices.

ABI Quick Poll

Section 523(a)(8) should be amended to allow private student loans to be discharged in bankruptcy.

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

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TOMORROW:

CHAPTER 11 COMMISSION HEARING

Oct. 26, 2012

Live Webcast

MONDAY:

Oct. 29, 2012

Register Today!

COMING UP:

Nov. 7, 2012

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4TH ANNUAL PROFESSIONAL DEVELOPMENT PROGRAM

Nov. 9, 2012

Register Today!

Nov. 12, 2012

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Nov. 29 - Dec. 1, 2012

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Dec. 4-8, 2012

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Jan. 22, 2013

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Jan. 24-25, 2013

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Feb. 7-9, 2013

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Feb. 17-19, 2013

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Feb. 20-22, 2013

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CALENDAR OF EVENTS

October

- ABI Program at NCBJ's Annual Conference

October 26, 2012 | San Diego, Calif.

- ABI Endowment Event at Peter Max Gallery

October 29, 2012 | New York, N.Y.

December

- Forty-Hour Bankruptcy Mediation Training

December 4-8, 2012 | New York, N.Y.

2013

January

- Western Consumer Bankruptcy Conference

January 22, 2013 | Las Vegas, Nev.

- Rocky Mountain Bankruptcy Conference

January 24-25, 2013 | Denver, Colo.

February

- Caribbean Insolvency Symposium

     February 7-9, 2013 | Miami, Fla.

- Kansas City Advanced Consumer Bankruptcy Practice Institute

     February 17-19, 2013 | Kansas City, Mo.

- VALCON 2013

     February 20-22, 2013 | Las Vegas, Nev.

Thursday, August 21, 2025

ABI Tags

Foreclosures Fall in 62 Percent of U.S. Cities

Mortgage

Predatory Lending

Finance and Banking

ABI Bankruptcy Brief | November 6 2012

November 6, 2012

NEWS AND ANALYSIS

OCTOBER BANKRUPTCY FILINGS INCREASE 16 PERCENT OVER PREVIOUS MONTH, COMMERCIAL FILINGS UP 19 PERCENT

Total bankruptcy filings in the United States for the month of October increased 16 percent compared to September, according to data provided by Epiq Systems, Inc. October bankruptcy filings totaled 101,278, up from the 87,522 filings registered in September 2012. The 96,498 total noncommercial filings for October represented a 16 percent increase from the September noncommercial filing total of 83,493. Total commercial filings for October 2012 were 4,780, representing a 19 percent increase from the 4,029 filings in September. Commercial chapter 11 filings also increased in October as the 704 filings represented a 3 percent increase over the 681 filings in September. Read the full release.

ANALYSIS: ELECTION UNLIKELY TO AFFECT HOUSING REBOUND

Regardless of the outcome of today's elections, experts expect the housing market to continue its rebound, the Wall Street Journal reported today. Home prices continue to rise, as shown by the latest S&P/Case-Shiller data, and sales activity is strengthening, while delinquency trends are improving. Experts point out that the government still backs more than 90 percent of new mortgages, however, and there has been little progress made in devising new structures to encourage private capital to again take on residential-housing risk. Read more. (Subscription required.)

BONUSES ON WALL STREET EXPECTED TO EDGE UP SLIGHTLY IN 2012

Wall Street employees, whose paychecks have often been cut in recent years, are likely to get a slight bump in their bonuses this year, the New York Times DealBook blog reported today. Year-end incentives, which include cash bonuses and stock awards, will be flat to up to 10 percent higher when compared with last year, according to a survey released by Johnson Associates yesterday. The same firms in 2011 drastically cut costs, employment and pay. Johnson Associates, based in New York, surveyed 10 public asset management firms, eight major banks and more than a dozen other financial institutions. Business on Wall Street has picked up somewhat in 2012, but firms are still cutting both compensation and other expenses to save money and improve their profits. Read more.

Read the full Johnson Associates survey.

ANALYSIS: COMPANIES LOOK TO LIGHTEN THE PENSION LOAD

More companies are considering so-called annuity settlements as a way to pare down their burgeoning pension liabilities, even though historically low interest rates make the strategy significantly more expensive, the Wall Street Journal reported today. Last month Verizon Communications Inc. bought an annuity that transferred $7.5 billion of pension obligations, about a quarter of the phone giant’s total pension obligations, to Prudential Financial Inc. Over the summer General Motors Co. shifted roughly $25 billion of its pension obligations—or about 20 percent of its global total—to Prudential also through an annuity deal. The approach works like this: A company transfers pension obligations to an insurer by buying a group annuity for its employees at a price that includes a premium. The insurer agrees to use the funds it gets from the company’s pension plan to make regular payments to company retirees for as long as they live. Read more. (Subscription required.)

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: IN RE MICHAEL (3D CIR.)

Summarized by Michael Nestor of Young Conaway Stargatt & Taylor

The U.S. Court of Appeals for the Third Circuit held that if, upon conversion of a chapter 13 case to a case under chapter 7, the chapter 13 trustee is holding funds acquired post-petition by the debtor for eventual distribution to creditors under a confirmed chapter 13 reorganization plan, the trustee must return those funds to the debtor rather than distribute them to creditors under the plan.

There are nearly 700 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: NATIONAL MORTGAGE DATABASE FACES CHALLENGES IN BECOMING GO-TO RISK TOOL

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines how the Consumer Financial Protection Bureau and Federal Housing Finance Agency's effort to build a comprehensive data repository and identify emerging mortgage lending risks will depend on how regulators handle four areas: collaboration, scope, privacy and the regulatory burden.

ABI Quick Poll

Despite the "free and clear" language of Sect. 363(f), purchasers of assets in 363 sales may still be liable for injuries to unidentifiable future claimants. (In re Grumman Olson Indus, SDNY).

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

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THIS WEEK:

Nov. 7, 2012

Register Today!

4TH ANNUAL PROFESSIONAL DEVELOPMENT PROGRAM

Nov. 9, 2012

Register Today!

COMING UP:

Nov. 12, 2012

Register Today!

Nov. 29 - Dec. 1, 2012

Register Today!

Dec. 4-8, 2012

Register Today!

Jan. 21, 2013

Register Today!

Jan. 24-25, 2013

Register Today!

Feb. 7-9, 2013

Register Today!

Feb. 17-19, 2013

Register Today!

Feb. 20-22, 2013

Register Today!

CALENDAR OF EVENTS

December

- Forty-Hour Bankruptcy Mediation Training

December 4-8, 2012 | New York, N.Y.

2013

January

- Western Consumer Bankruptcy Conference

January 21, 2013 | Las Vegas, Nev.

- Rocky Mountain Bankruptcy Conference

January 24-25, 2013 | Denver, Colo.

Thursday, August 21, 2025

ABI Tags