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Wednesday, June 4, 2014 - 12:00

Mekhi Phifer Files for Bankruptcy Reportedly 1.3 Million In Debt

Submitted by webadmin on Thu, 2014-05-08 00:00

Mekhi Phifer, best known for his role as Dr. Greg Pratt on NBC's "ER," has filed for bankruptcy, TMZ.com reported yesterday. The 39-year-old actor racked up approximately $1.2 million in back taxes, $50,000 in lawyer fees and $4,500 in back child support, according to court records obtained by TMZ. Legal documents also show he spends around $11,600 in monthly expenses, but pulls in only $7,500.

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Thursday, May 8, 2014 - 12:00

April Bankruptcy Filings Decrease 13 Percent from Previous Year Business Filings Decrease 24 Percent

Submitted by webadmin on Mon, 2014-05-05 00:00

Total bankruptcy filings in the United States decreased 13 percent in April 2014 from April of last year, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 87,954 in April 2014, down from the April 2013 total of 100,770. Consumer filings declined 12 percent to 84,579 from the April 2013 consumer filing total of 96,357. Total commercial filings in April 2014 decreased to 3,375, representing a 24 percent decline from the 4,413 business filings recorded in April 2013. Total commercial chapter 11 filings dipped 4 percent to 683 filings in April 2014 from the 711 commercial chapter 11 filings registered in April 2013. Click below to read the full ABI statistical press release.
http://news.abi.org/press-releases/april-bankruptcy-filings-decrease-13…

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Monday, May 5, 2014 - 12:00

First Quarter Bankruptcy Filings Fall 12 Percent from 2013 Commercial Filings Drop 22 Percent

Submitted by webadmin on Thu, 2014-04-03 00:00

Total bankruptcy filings in the United States decreased 12 percent in the first calendar quarter (Jan. 1 - March 31) of 2014 from the same period in 2013, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 231,647 in the first quarter of 2014, down from the 263,635 filings registered in the first calendar quarter of 2013. Total commercial filings for the first three months of 2013 were 9,048, representing a 22 percent decrease from the 11,611 filings during the same period in 2013. The 222,599 total noncommercial filings recorded in the first calendar quarter of 2014 represented a 12 percent decrease from the 2013 total of 252,024. For the full statistical release, please click here: http://news.abi.org/press-releases/first-quarter-bankruptcy-filings-fal…

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Thursday, April 3, 2014 - 12:00

Analysis Supreme Court Hears Arguments on Whether an Inherited IRA is Exempt

Submitted by webadmin on Tue, 2014-03-25 00:00

By Charles J. Tabb
Mildred Van Voorhis Jones Chair in Law, University of Illinois, and Resident Scholar for the American Bankruptcy Institute

The United States Supreme Court yesterday heard oral arguments in the case of Clark v. Rameker, on the issue of whether an inherited IRA is exempt. The Seventh Circuit had denied the debtor’s exemption, disagreeing with the Fifth Circuit in the Chilton case, as well as the clear majority of lower courts, which had held that an inherited IRA is exempt under section 522(b)(3)(C) or 522(d)(12) (depending on whether the debtor elects the state or federal exemptions). On balance, while it is a close question, the oral arguments appear to indicate that the Court is likely to reverse the Seventh Circuit and hold for the debtor. My sense is that the Justices do not really like the result as a policy matter but think the Code dictates a pro-exemption reading.

After Heidi Heffron-Clark and her husband Brandon Clark filed chapter 7, Heidi claimed an exemption under section 522(b)(3)(C), for an IRA valued at close to $300,000 that she had inherited from her mother Ruth. The trustee (Rameker) objected. If the trustee wins, the Clarks’ creditors get that money. If the debtor wins, she keeps all of the money for herself, and indeed does not even have to wait until she is retirement age to start enjoying the funds. It would just be a $300,000 windfall for her (albeit with some tax implications), free from her creditors. Clearly, this was the point at oral argument that most troubled the Justices if they were to hold for the debtor. Justices Ginsburg, Alito, and the Chief Justice all found it quite odd that Congress would have allowed a debtor who had not herself saved the money for retirement to keep such a huge pile of money for herself, ripe for immediate enjoyment. Why Congress would have wanted a debtor to be able to keep all of an inherited IRA, but none of other inherited funds, puzzled them.

Yet, the questioning suggested that a majority of the Justices — led most vociferously by Justice Breyer — found the statutory reading to favor the debtor. The relevant statutory exemption language is for “retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under” certain enumerated sections of the Internal Revenue Code, including the ones for IRAs. The inherited funds indisputably satisfied the latter part of the statutory test, as they were exempt from taxation under a listed section. The battle is over whether they are “retirement funds” within the meaning of the exemption. The debtor argued that they are, as they had that status when set aside initially in the account by the debtor’s mother, and nothing in the statute limited the exemption to “the debtor’s” retirement funds. The trustee countered by arguing that after being inherited, in the hands of the non-spousal debtor, they no longer constituted retirement funds at all. While still tax exempt, the attributes relevant to retirement had changed significantly so as to negate that characterization; for example, the debtor could withdraw the money immediately (before age 59½), and indeed was not even permitted to wait until she was 59½, but had to start withdrawals within a short time. Also, she could neither make new retirement contributions to the fund nor roll it over.

The Justices, though, seemed persuaded by the plain meaning of the unqualified reference to “retirement funds,” especially given the telling omission of any further requirement that they be “the debtor’s” retirement funds. This omission was notable, the Justices thought, since all of the other enumerated exemption provisions in section 522(d) do include a specific reference to “the debtor’s” interest in the property at issue, be it a car, a tool of the trade, a homestead, or whatever. The Justices also seemed to agree with the debtor that the qualifying language “to the extent” in the exemption favored a broader reading of the “retirement funds” language. Further, the Court worried about the administrative complexity that would result if “retirement funds” was not given a broad meaning. In short, several of the Justices thought that the phrase “retirement funds” was not necessarily and definitionally limited to funds set aside originally by the debtor (or inherited only by a spouse), but could include a retirement fund that was inherited from its creator by someone other than a spouse.

Economically and demographically, this is a huge issue. Massive amounts of wealth are being passed down to future generations via inherited retirement vehicles as both “the greatest generation” and baby boomers are dying. Whether creditors get to share in that largesse or not is a very significant question; the magnitude is staggering. Forty percent of U.S households have IRAs, totaling over $5 trillion in value. Indisputably, in the hands of the person who set up the IRA, creditors cannot touch the money in bankruptcy. Is that protection lost if the creator of the IRA dies and the funds are inherited by someone other than her spouse? When the Court hands down its decision in Clark v. Rameker, we will know the answer. After the oral arguments, it appears likely that the Court will hold for the debtor and maintain the exemption; in short, the exempt status of “retirement funds” in bankruptcy will not die with the creator of the account.

Looking for a transcript of yesterday's oral argument? Please click here: http://www.supremecourt.gov/oral_arguments/argument_transcripts/13-299_…

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Tuesday, March 25, 2014 - 12:00

Lady Gaga Admits Filing for Bankruptcy During Early Career

Submitted by webadmin on Mon, 2014-03-17 00:00

Lady Gaga revealed that she was bankrupt during her "Monster's Ball" tour, ContactMusic.com reported yesterday. The "Applause" singer admits that she suffered financial difficulties after she invested her entire $3 million fortune into staging at her concerts in a bid to launch her pop career back in 2009. ''I had $3 million in the bank to my name and I threw it all in to make my stage. So I was bankrupt during the show," Lady Gaga said. The comments come as part of a trailer for documentary that follows the Live Nation executive who Lady Gaga was keen to help take her career to the next level. Meanwhile, she came under fire for questionable spending through her Born This Way Foundation after accusations that $1.85 million was used on expenses while only $5,000 was reportedly donated as a grant.

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Monday, March 17, 2014 - 12:00

February Bankruptcy Filings Decrease 12 Percent from Previous Year Commercial Filings Fall 24 Percent

Submitted by webadmin on Wed, 2014-03-05 00:00

Total bankruptcy filings in the United States decreased 12 percent in February over the same period last year, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 72,193 in February 2014, down 12 percent from the February 2013 total of 82,336. Consumer filings declined 12 percent to 69,380 from the February 2013 consumer filing total of 78,614. Total commercial filings in February 2014 decreased to 2,813, representing a 24 percent decline from the 3,722 business filings recorded in February 2013. Total commercial chapter 11 filings also decreased 27 percent, to 452 filings in February from the 619 commercial chapter 11 filings recorded in February 2013. “Low interest rates, tighter lending standards and high costs to file continue to be reflected in fewer bankruptcy filings,” said ABI Executive Director Samuel J. Gerdano. “As these trends persist, expect bankruptcy filings to continue to decline in 2014.”
While bankruptcies were down from a year ago, February’s bankruptcy filings trended upward from January. Total bankruptcy filings for the month of February represented a 6 percent increase over the 68,187 total filings registered in January 2014. To read the full statistical release, please click here:
http://news.abi.org/press-releases/february-bankruptcy-filings-decrease…

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Wednesday, March 5, 2014 - 12:00

Bankruptcy Watchdogs Resume Debtor Audits

Submitted by webadmin on Thu, 2014-02-27 00:00

Federal bankruptcy watchdogs are once again patrolling in full force, restarting the consumer debtor audits that a tight budget forced them to suspend last year, the Wall Street Journal reported today. The U.S. Trustee Program announced that it will resume ordering audits of certain consumer debtors on March 10. The program indefinitely suspended the audit program last March due to budgetary constraints. When Congress overhauled the Bankruptcy Code in 2005, it directed bankruptcy watchdogs to ferret out fraud by auditing consumer debtors. U.S. trustees may randomly designate for audit one out of every 250 consumer bankruptcy cases per federal judicial district. The Bankruptcy Abuse Protection and Consumer Protection Act of 2005 also authorized audits of any cases in which debtors posted statistically unusual income or expenditures.

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Hedge Fund Legend David Tepper to Keynote- Register Today!

Thursday, February 27, 2014 - 12:00

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

Submitted by webadmin on Thu, 2014-02-06 00:00

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.

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

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:

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.

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

Thursday, February 6, 2014 - 12:00

January Bankruptcy Filings Decrease 13 Percent from Previous Year Up Slightly over Last Month

Submitted by webadmin on Wed, 2014-02-05 00:00

Total bankruptcy filings in the United States decreased 13 percent in January from the same period last year, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 68,153 in January 2014, down from the January 2013 total of 78,602. Consumer filings declined 13 percent in January 2014 to 65,263 from the January 2013 consumer filing total of 74,846. In addition, total commercial filings in January 2014 decreased to 2,890, representing a 23 percent decline from the 3,756 business filings recorded in January 2013. Total commercial chapter 11 filings fell 21 percent as January 2013’s 487 filings decreased to 387 commercial chapter 11 filings in January 2014. Click here to read the full press release.

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