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FIRST QUARTER BANKRUPTCY FILINGS FALL 16 PERCENT FROM 2012, COMMERCIAL FILINGS DROP 27 PERCENT

Total bankruptcy filings in the United States decreased 16 percent in the first calendar quarter (Jan. 1 - March 31) of 2013 from the same period in 2012, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 263,516 in the first quarter of 2013, down from the 314,832 filings registered in the first calendar quarter of 2012. Total commercial filings for the first three months of 2012 were 11,521, representing a 27 percent decrease from the 15,869 filings during the same period in 2012. The 251,995 total noncommercial filings recorded in the first calendar quarter of 2013 represented a 16 percent decrease from the 2012 total of 298,963. Click here to read the full ABI press release.

Click here to access the March 2013 bankruptcy filing data charts.

NEW BANKRUPTCY CLAIMS TRANSFER FEE TO TAKE EFFECT MAY 1

Federal bankruptcy courts will institute a new $25 fee for filing evidence of claims transfers, transactions in which bankruptcy claims are sold by one creditor to another, usually as part of a speculative investment, according to a release today by the Administrative Office of the U.S. Courts. The fee, approved last September by the Judicial Conference of the United States, will take effect May 1. The fee will be assessed by bankruptcy courts on each individual claim or partial claim that is transferred, and it must be paid by the creditor that files evidence of the transfer (typically the claim transfer form) with the courts. Debtors filing for bankruptcy will not be affected by the fee. The fee must be paid by credit card, using Pay.gov, when the claims transfer is filed with the courts' Case Management/Electronic Case Files system, or by whatever means is designated by the court if the claims transfer is not filed electronically. Read more.

OBAMA ADMINISTRATION PUSHES BANKS TO MAKE HOME LOANS TO PEOPLE WITH WEAKER CREDIT

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place, the Washington Post reported yesterday. President Obama's economic advisers and outside experts say the nation's housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession. In response, administration officials say that they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default. Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default. Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today's low interest rates, among other steps. Read more.

In related news, the improving job market is lifting incomes and helping families repair credit scores, expanding the pool of eligible buyers and providing additional firepower to the housing recovery, Bloomberg News reported yesterday. About 7 million mortgageholders have had to leave their homes since 2007 because of foreclosure or a short sale, in which a property is sold for less than is owed, according to RealtyTrac. More than 1 million of them are now eligible for mortgages backed by the Federal Housing Administration, which requires a three-year waiting period and a minimum 3.5 percent down payment, said Mark Zandi, chief economist for Moody’s Analytics Inc. While many Americans will be blocked from buying because of insufficient credit, savings and income, eligible households will expand to nearly 2 million by the end of 2014, Zandi said. Read more.

ANALYSIS: AS BUSINESS LENDING INCREASES, CONCERNS EMERGE ABOUT PROFIT

The recent uptick in bank business lending is starting to flash some warning signs that banks are making loans to businesses at rates that are so low they may end up being unprofitable, the New York Times DealBook blog reported yesterday. A recent survey by the Federal Reserve shows that American banks are charging an average of just 2.83 percent on commercial and industrial loans, down from 3.4 percent a year earlier. Banks of all sizes are participating in this resurgence, including smaller banks, which managed to avoid many of the excesses of the credit boom of the last decade. Extraordinarily low interest rates have breathed life into several markets where companies go to borrow. Last year, companies issued nearly $360 billion of junk bonds in the U.S., according to Dealogic. Less noticed was the increase in commercial and industrial loans at American banks. They added $174 billion of such loans in 2012, a 13 percent increase from the prior year, according to figures from the Fed. Read more.

GAO: 401(K) COMPANIES OFTEN MISLEAD ACCOUNT-HOLDERS

Money management firms frequently offer workers misleading and self-serving information about how to handle their retirement savings when they change jobs, according to a Government Accountability Office report released yesterday, the Washington Post reported. Departing workers are often encouraged to roll their accounts into individual retirement accounts (IRAs) run by the firms that already manage their retirement money, even when it would be best for the outgoing employees to keep their money in a 401(k), the GAO investigation concluded. Having workers move their money into IRAs typically allows money management companies to harvest bigger fees for handling the retirement money, the report said. The GAO had undercover investigators call 30 money management firms posing as workers about to change jobs in an effort to learn how money managers market their services. In seven cases, they were given incorrect information, including that moving their money into an IRA would be "free," even though workers would incur ongoing fees by opening the accounts. The GAO also reviewed the websites of 10 large firms and found that five incorrectly said that their IRAs were free. Read more.

LATEST ABI PODCAST EXAMINES BANKRUPTCY VALUATION ISSUES

ABI's latest podcast features ABI Resident Scholar Prof. Scott Pryor speaking with Dr. Israel Shaked of The Michel-Shaked Group (Boston) and Robert F. Reilly of Willamette Management Associates Inc. (Chicago), authors of a new ABI publication, A Practical Guide to Bankruptcy Valuation. Shaked and Reilly discuss their book and other issues involved in the complex task of valuing a bankrupt or financially distressed business. Click here to listen to the podcast.

For more information or to purchase A Practical Guide to Bankruptcy Valuation, please click here.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: STOCKTON MAY WIN THE BATTLE, BUT LOSE THE WAR

Although Stockton, Calif. established the right to be in a chapter 9 municipal bankruptcy, the judge warned the city that victory may be short-lived if bondholders prove that pensioners must take a haircut along with other unsecured creditors. The latest Bloomberg bankruptcy video with Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle examines the issue. Click here to watch.

TOMORROW! DON’T MISS THE ABI LIVE WEBINAR – "LEGACY LIABILITIES: DEALING WITH ENVIRONMENTAL, PENSION, UNION AND SIMILAR TYPES OF CLAIMS"

A panel of experts has been assembled for a webinar on April 5 from 1-2:15 p.m. ET to discuss environmental and pension liabilities, the statutory schemes under which these liabilities arise and the key players involved. Are non-monetary environmental claims dischargeable? Do post-petition expenditures for environmental cleanup constitute administrative expenses? When can an employer terminate a pension plan in bankruptcy, what is the process and what are the consequences? Learn the answer to these questions and more from the comfort of your own office. Special ABI member rate is available! Register here.

HOTEL BLOCK FOR ABI'S ANNUAL SPRING MEETING ALMOST SOLD OUT! REGISTER TODAY!

The hotel block at the Gaylord National Resort and Convention Center in National Harbor, Md., is almost sold out for ABI’s 2013 Annual Spring Meeting! Held April 18-21, 2013, ASM 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
• Current Issues for Financial Advisors in Bankruptcy Cases
• The Individual Conundrum: Chapter 7, 11 or 13?
• The Power to Veto Bankruptcy Sales
• Real Estate Issues in Health Care Restructurings
• 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!

Make sure to register today!

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: ARROYO V. SCOTIABANK DE PUERTO RICO (IN RE ARROYO; 1ST CIR.)

Summarized by William Amann of Craig, Deachman & Amann PLLC

The First Circuit ruled that a chapter 7 debtor lacked standing to appeal because he could not demonstrate that either (1) a reasonable possibility existed that a surplus would exist if the order on appeal was denied or (2) the appealed order adversely affected his discharge.

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: FURTHER EXAMINATION OF STOCKTON'S ONGOING CHAPTER 9 CASE

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post takes a closer look at Stockton, Calif.'s chapter 9 case, which was allowed to continue after Bankruptcy Judge Christopher Klein on Monday issued a bench ruling finding that Stockton is an eligible debtor and therefore entitled to remain in 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.

TEE OFF ON THE NEW ABI GOLF TOUR!

Starting with the Annual Spring Meeting, ABI will offer conference registrants the option to participate in the ABI Golf Tour. The Tour will take place concurrently with all conference golf tournaments. The Tour 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." 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.

ABI Quick Poll

The scope of protection of "financial contracts" in bankruptcy should be rolled back to what it was before BAPCPA expanded it in 2005.

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 37 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.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

April
- ABI Live Webinar: "Legacy Liabilities : Dealing with Environmental, Pension, Union and Similar Types of Claims"
     April 5, 2013
- ABI Live Webinar: "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?"
     April 10, 2013
- "Nuts and Bolts" Program at ASM
     April 18, 2013 | National Harbor, Md.
- Annual Spring Meeting
     April 18-21, 2013 | National Harbor, Md.

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

June
- Memphis Consumer Bankruptcy Conference
     June 7, 2013 | Memphis, Tenn.
- Central States Bankruptcy Workshop
     June 13-16, 2013 | Grand Traverse, Mich.

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.

REPORT: CREDIT CARD DELINQUENCIES REACH 18-YEAR LOW



The American Bankers Association reported today that delinquencies on bank-issued credit cards sank to 2.47 percent in the fourth quarter of 2012 – the lowest level since 1994, CNNMoney.com reported today. The percentage of credit card accounts that were 30 days or more overdue during the quarter was roughly half the record high of 5.01 percent set in 2009 and well below the 15-year average of 3.87 percent. It was also down significantly from the previous quarter when 2.75 percent of credit card customers were delinquent on payments. Delinquencies in all three home-related categories – home equity loans, home equity lines of credit and property improvement loans – also fell during the fourth quarter. Read more.

COMMENTARY: PENSIONS NEED TO SHARE FINANCIAL PAIN WHEN CITIES GO BROKE



Stockton, Calif., wants bondholders to pay for its financial woes while leaving retirement benefits intact, but that approach undermines the law's power to rein in runaway pension costs, according to a Reuters commentary on Friday. The housing boom filled Stockton's coffers with tax revenue that officials squandered through poor management, pay raises and downtown renovations, according to the commentary. With the economic bust came $90 million in cuts over three years and, last summer, its chapter 9 filing. Bankruptcy Judge Christopher Klein yesterday approved Stockton's chapter 9 filing petition to move forward. The city's plan to right itself includes a bond-principal haircut that could be the first for a major municipality since the 1930s, according to the commentary. Some bonds could be cut as much as 83 percent, but officials would continue to pay out about $30 million a year to the California Public Employees' Retirement System (CalPERS), which manages the city's pensions. Wells Fargo and other bondholders owed more than $300 million have understandably cried foul. Legally, the securities they own merit the same treatment in bankruptcy as payments to CalPERS, according to the commentary. Central Falls, R.I., which exited bankruptcy last September, showed that a municipality can slash retirement benefits without a political or legal firestorm. Read more.

FORECLOSURE INVENTORY BALLOONED IN FIRST QUARTER OF 2013



RealtyTrac reported yesterday that nearly 1.5 million U.S. properties were actively in the foreclosure process or bank-owned in the first quarter of 2013, up 9 percent from the first quarter of 2012, but still down 32 percent from the peak of 2.2 million in December 2010, UPI.com reported yesterday. Though overall inventories are up, completed foreclosure inventories are still declining. CoreLogic reported yesterday that there were 54,000 completed foreclosures in the U.S. in February 2013, down from 67,000 in February 2012, a year-over-year decrease of 19 percent. On a month-over-month basis, completed foreclosures fell from 58,000 in January 2013 to the February level of 54,000, a decrease of 7 percent. Read more.

COMMENTARIES SHARE CONCERN OF RISK-TAKING BY BIG BANKS



Financial firms can borrow money more cheaply and with less market scrutiny when they have access to government guarantees of deposit insurance, loans from the Federal Reserve and, ultimately, taxpayer support such as what was seen with the Troubled Assets Relief Program in 2008, according to a commentary by Thomas M. Hoenig, the vice chairman of the Federal Deposit Insurance Corp., in Friday's Washington Post. Hoenig said that this safety net was intended to stabilize the financial system by protecting the payments system that transfers money around the country and the world, as well as the essential lending that commercial banks provide. But these protections also assure those who lend to banks that they will be repaid regardless of the condition of the bank. Under such circumstances, creditors give the firms a discount on the cost of the funds they borrow. Things are made more difficult, according to Hoenig, by the fact that the largest financial companies now combine traditional commercial banking with higher-risk activities such as trading so that both their banking and betting activities get access to these government protections and the multibillion-dollar subsidy that comes with them. Using subsidized money to finance the conglomerates’ bets encourages ever-higher levels of debt, risk and interconnectedness not attainable or sustainable in a truly free market, according to Hoenig. Click here to read the full commentary.

A related commentary in today's Wall Street Journal written by former FDIC chair Sheila Bair found that while bank use of risk models is common and not illegal, their use in bolstering a bank's capital ratios can give the public a false sense of security about the stability of the nation's largest financial institutions. Capital ratios (also called capital adequacy ratios) reflect the percentage of a bank's assets that are funded with equity and are a key barometer of the institution's financial strength: They measure the bank's ability to absorb losses and still remain solvent, according to Bair. While this should be a simple measure, it is not, according to Bair, because regulators allow banks to use a process called "risk weighting," which allows them to raise their capital ratios by characterizing the assets they hold as "low risk." For instance, as part of the Federal Reserve's recent stress test, the Bank of America reported to the Federal Reserve that its capital ratio is 11.4 percent. But that was a measure of the bank's common equity as a percentage of the assets it holds as weighted by their risk—which is much less than the value of these assets according to accounting rules. Take out the risk-weighting adjustment, and its capital ratio falls to 7.8 percent. On average, the three big universal banking companies (JPMorgan Chase, Bank of America and Citigroup) risk-weigh their assets at only 55 percent of their total assets. For every trillion dollars in accounting assets, these megabanks calculate their capital ratios as if the assets represented only $550 billion of risk. Read more. (Subscription required.)

ANALYSIS: PACE OF MERGERS SLOWED IN THE FIRST QUARTER 2013 TO THE FEWEST SINCE 2003



Only 8,115 merger deals were announced worldwide in the first quarter of this year, the lowest number since 2003, according to data from Thomson Reuters, the New York Times DealBook blog reported today. While the combined value of $542.8 billion outpaced last year's first quarter by about 10 percent, it is still 26 percent below the level for the period in 2011. Bankers and lawyers have been publicly boasting about a nascent revival in mergers. In March, 97 percent of deal makers surveyed by the Brunswick Group public relations firm said that they expected more deals to be announced in North America this year than in the last year. Many advisers caution against judging 2013 by one quarter; some deals that would otherwise have been announced in the first quarter were moved to fourth quarter 2012 to avoid incurring potentially higher taxes, they said. Read more.

FRIDAY! DON’T MISS THE ABI LIVE WEBINAR – "LEGACY LIABILITIES: DEALING WITH ENVIRONMENTAL, PENSION, UNION AND SIMILAR TYPES OF CLAIMS"



A panel of experts has been assembled for a webinar on April 5 from 1-2:15 p.m. ET to discuss environmental and pension liabilities, the statutory schemes under which these liabilities arise and the key players involved. Are non-monetary environmental claims dischargeable? Do post-petition expenditures for environmental cleanup constitute administrative expenses? When can an employer terminate a pension plan in bankruptcy, what is the process and what are the consequences? Learn the answer to these questions and more from the comfort of your own office. Special ABI member rate is available! Register here.

HOTEL BLOCK FOR ABI'S ANNUAL SPRING MEETING ALMOST SOLD OUT! REGISTER TODAY!



The hotel block at the Gaylord National Resort and Convention Center in National Harbor, Md., is almost sold out for ABI’s 2013 Annual Spring Meeting! Held April 18-21, 2013, ASM 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

• Current Issues for Financial Advisors in Bankruptcy Cases

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

• The Power to Veto Bankruptcy Sales

• Real Estate Issues in Health Care Restructurings

• 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!

Make sure to register today!

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: SCHOPPE V. COMMISSIONER OF INTERNAL REVENUE (10TH CIR.)



Summarized by Eric Madden of Diamond McCarthy LLP

The Tenth Circuit ruled that the automatic stay under 11 U.S.C. § 362(a)(1) does not apply to a proceeding commenced by the debtor taxpayer's petition filed in tax court, including any appeal from rulings in the underlying proceeding. Adopting the reasoning of the First, Third, Fifth and Eleventh Circuits and rejecting the reasoning of the Ninth Circuit, the Tenth Circuit concluded that a petition filed in tax court is an independent judicial proceeding initiated by the debtor, not the continuation of an administrative proceeding against the debtor.

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: I'M A CREDITOR OF DETROIT...NOW WHAT? (PART 2)

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. Previously examining some of the overarching issues that can make a chapter 9 restructuring more challenging for creditors than a chapter 11, a recent blog post takes a closer look at the financial challenges of Detroit.

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.

TEE OFF ON THE NEW ABI GOLF TOUR!



Starting with the Annual Spring Meeting, ABI will offer conference registrants the option to participate in the ABI Golf Tour. The Tour will take place concurrently with all conference golf tournaments. The Tour 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." 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.

ABI Quick Poll

The scope of protection of "financial contracts" in bankruptcy should be rolled back to what it was before BAPCPA expanded it in 2005.

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 37 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.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

April

- ABI Live Webinar: "Legacy Liabilities : Dealing with Environmental, Pension, Union and Similar Types of Claims"

     April 5, 2013

- ABI Live Webinar: "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?"

     April 10, 2013

- "Nuts and Bolts" Program at ASM

     April 18, 2013 | National Harbor, Md.

- Annual Spring Meeting

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

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

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

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.

REPORT: BIG BANKS ENGAGING IN PAYDAY LENDING



A new report from the Center for Responsible Lending found that some of the nation's largest banks are providing short-term loans with interest rates of up to 300 percent, driving borrowers into a cycle of debt, the Washington Post reported today. The study that was released today gives an updated look at the perils of advance-deposit loans offered by Wells Fargo, U.S. Bancorp, Regions Bank, Fifth Third Bank, Guaranty Bank and Bank of Oklahoma. Researchers looked at a sample of 66 direct-deposit advances over a 12-month period. Critics say that the structure of advance-deposit loans promotes a cycle of debt. Account holders typically pay up to $10 for every $100 borrowed, with the understanding that the loan will be repaid with their next direct deposit. If the deposited funds are not enough to cover the loan, the bank takes whatever money comes in, triggering overdraft fees and additional interest. Banks contend that they are offering a vital service to customers at more reasonable price points than storefront lenders, who often charge twice as much as banks. The Consumer Financial Protection Bureau has supervisory and enforcement authority for storefront and bank payday lenders with more than $10 billion in assets. The bureau issued a request for comment last year to gauge consumer and industry concerns. Read more.

In related news, a New York Times editorial today found that even though JPMorgan Chase has instituted new policies intended to shield customers from predatory lenders, which can charge up to 500 percent in interest, banks should be doing more to protect their customers. State and federal banking officials also need to expedite their investigations into the relationship between banks and predatory lenders, according to the editorial, with the aim of developing industrywide regulations that protect the public. New rules that go into effect at JPMorgan in May will limit the overdraft fees charged to customers in situations where the lender tries to collect a payment multiple times. Banks could adopt common practices that would allow customers to close their accounts at any time and deny lenders access to automatic payments in states where predatory loans are illegal. Read more.

JUSTICE DEPARTMENT PROBING BANKS' ROLE IN FRAUD BY CUSTOMERS



The U.S. Justice Department is examining the role financial institutions play in fraud schemes perpetrated by bank customers offering deceptive products, Reuters reported yesterday. Attorneys and investigators in the DOJ's Civil Division are examining banks' possible role in assisting scammers who offer questionable payday loans, false offers of debt relief, fraudulent health care discount cards and phony government grants, according to Michael Bresnick, who heads the department's Financial Fraud Enforcement Task Force. That task force has been focused on pursuing the type of misconduct that fueled the financial crisis, but the new priorities suggest that investigators are looking beyond those cases into other types of financial misconduct that extends to different industries, from payday lending to auto loans. Read more.

WITH FREDDIE MAC SUIT, BANKS FACE BILLIONS MORE IN LIBOR CLAIMS



The fallout from the manipulation of the London interbank offered rate (Libor) has already cost banks $2.5 billion in penalties, but that sum pales in comparison to payouts that will come from private lawsuits, the New York Times DealBook blog reported yesterday. Any finding of liability could be compounded because of the potential for any award to be tripled under the antitrust laws. The latest salvo comes from mortgage finance company Freddie Mac, which has filed a lawsuit in the Federal District Court in Alexandria, Va. It asserts that the company was harmed by collusive activity among the banks that lowered the benchmark interest rate. And where Freddie Mac goes, Fannie Mae, its larger sibling, usually follows, so we can expect it to file a suit seeking damages from Libor manipulation. The three regulatory settlements to date – with Barclays, UBS and the Royal Bank of Scotland — provide much of the evidence Freddie Mac relies on in its complaint. Among the documents now public is a litany of e-mails demonstrating just how the banks worked to lower their Libor submissions to benefit their trading positions and make themselves appear stronger during the height of the financial crisis. Read more.

COMMENTARY: THE PROBLEM WITH "TOO BIG TO FAIL" BANKS



The real issue with "too big to fail" financial institutions resides in the government-provided incentives for banks to get inefficiently big in the first place, according to a commentary in yesterday's Wall Street Journal. In the absence of such incentives, according to the commentary, the risk-averse funding on which banks thrive would not be available to allow banks to create sprawling credit portfolios impossible for regulators or investors in the marketplace to assess. Modern governments, as long as they are assuming the risks of the financial system, find it convenient to have those risks concentrated in a few very large, very handy institutions. A lean solution would be to require banks to hold Treasury paper against their insured deposits, according to the commentary. Those experts who prefer solutions like higher capital requirements maintain that the business of banks would survive, forcing banks to rely more on equity than debt to finance their activities. If so, then experts should also consider that equity markets might erect new business models to finance small businesses and credit-worthy consumers if government-insured deposits were no longer available at all to underwrite such risks. Read the full commentary. (Subscription required.)

ANALYSIS: SYNTHETIC CDOs MAKING COMEBACK



Derivatives that pool credit-default swaps to make magnified bets on corporate debt, popularized in the last credit bubble, are making a comeback as investors search farther afield for alternatives to bonds at record-low yields, Bloomberg News reported yesterday. Citigroup Inc. is among several banks that have sold as much as $1 billion of synthetic collateralized debt obligations (CDOs) this year, following $2 billion in all of 2012, according to estimates from the New York-based lender. Trading in tranches of indexes that use a similar strategy to juice yields rose 61 percent in the past month. Synthetic credit, which amplified the financial crisis five years ago, is enticing investors after corporate-bond yields dropped to less than half the 20-year average. Read more.

LATEST ABI PODCAST EXAMINES EFFECTIVENESS OF CURRENT FINANCIAL EDUCATION PROGRAMS



The latest ABI podcast features ABI Resident Scholar Prof. Scott Pryor speaking with Prof. Lauren Willis of Loyola Law School talking about the effectiveness of current financial education programs. Willis discusses the strengths and weaknesses of current financial education programs and what improvements can be made going forward. Click here to listen to the podcast.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: WHY IS KODAK'S STOCK SOARING?



Despite Eastman Kodak Co. stock shooting up dramatically in a week's time, investors might not have the same long-term profitable outcome that owners of American Airlines shares enjoyed, as Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss on their new video. Click here to watch the video.

DON'T MISS ACB'S FREE EVENT TOMORROW, "THE AUTO BANKRUPTCIES: CHECKING THE REARVIEW MIRROR," ON MARCH 22!



ABI members are encouraged to register for the American College of Bankruptcy's "The Auto Bankruptcies: Checking the Rearview Mirror" on March 22 at Boston College Law School in Newton, Mass. The afternoon event will feature key players looking back at the events that led to GM and Chrysler being placed into bankruptcy and the lessons that have been learned from the cases. Panelists include:

• Corinne Ball of Jones Day (New York), who served as lead bankruptcy counsel to Chrysler.

• Matthew A. Feldman of Willkie Farr and Gallagher LLP (New York), who served as chief legal advisor to the Obama administration's Task Force on the Auto Industry.

• Hon. Arthur J. Gonzalez, a Senior Fellow at New York University School of Law and formerly the Chief Bankruptcy Judge for the U.S. Bankruptcy Court for the Southern District of New York, who presided over the Chrysler chapter 11 proceedings.

• Harvey R. Miller of Weil, Gotshal & Manges LLP (New York), who served as lead bankruptcy counsel to GM.

The moderator will be Mark N. Berman of Nixon Peabody LLP (New York).

Registration for the afternoon event is free, so be sure to sign up today before it reaches capacity!

HOTEL BLOCK FOR ABI'S ANNUAL SPRING MEETING ALMOST SOLD OUT! REGISTER TODAY!



The hotel block at the Gaylord National Resort and Convention Center in National Harbor, Md., is almost sold out for ABI’s 2013 Annual Spring Meeting! Held April 18-21, 2013, ASM 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

• Current Issues for Financial Advisors in Bankruptcy Cases

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

• The Power to Veto Bankruptcy Sales

• Real Estate Issues in Health Care Restructurings

• 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!

Make sure to register today!

ABI IN-DEPTH

TEE OFF ON THE NEW ABI GOLF TOUR!



Starting with the Annual Spring Meeting, ABI will offer conference registrants the option to participate in the ABI Golf Tour. The Tour will take place concurrently with all conference golf tournaments. The Tour 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 in the regular ABI conference events, Tour participants will "play their own ball." 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 randomly be 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, and 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.

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!

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



Summarized by Geoffrey Miller from the U.S. Bankruptcy Court for the District of Arizona

Dismissing the appeals of the bankruptcy court's orders remanding two quiet title actions to state court, the Tenth Circuit BAP held that the appeals were moot and that the debtors lacked the requisite standing to appeal the bankruptcy court's orders.

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: EXAMINATION OF PENSION AND OPEB LIABILITIES FACING MUNICIPALITIES

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines two of the largest issues facing municipalities today: underfunded pensions and unfunded "other" post-employment obligations (OPEB).

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

Who will win the NCAA basketball tournament?

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 37 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.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

March

- Bankruptcy Battleground West

     March 22, 2013 | Los Angeles, Calif.

- ACB's Free Event, "The Auto Bankruptcies: Checking the Rearview Mirror" Program

     March 22, 2013 | Newton, Mass.

April

- ABI Live Webinar: "Legacy Liabilities : Dealing with Environmental, Pension, Union and Similar Types of Claims"

     April 5, 2013

- ABI Live Webinar: "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?"

     April 10, 2013

- "Nuts and Bolts" Program at ASM

     April 18, 2013 | National Harbor, Md.

- Annual Spring Meeting

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

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

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

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.

ANALYSIS: MORE HOMEOWNERS EMERGE FROM "UNDERWATER" STATUS



Rising home values have lifted more borrowers out of the hole of owing more than their properties are worth, an encouraging sign for an economy still closely tied to the health of the housing market, the Wall Street Journal reported today. The number of "underwater" homeowners in the fourth quarter of 2012 declined by 1.7 million from a year earlier, meaning 1.7 million U.S. households have regained home equity, according to data released Tuesday by CoreLogic, a research company. Overall, the company said 21.5 percent of households with a mortgage were underwater at the end of 2012, down from 25.2 percent at the end of 2011. While the trends are encouraging, some newly above-water households are just barely at breakeven and therefore are a long way off from being able to change their finances in any significant way. And the overall ranks of those underwater remain large, at about 10.4 million, down from 12.1 million at the end of 2011, according to CoreLogic. Read more. (Subscription required.)

To see a state-by-state analysis of CoreLogic's 4Q 2012 data, be sure to check out ABI's Chart of the Day site.

FANNIE MAE SEES WAY TO REPAY BILLIONS TO U.S. TREASURY



The rebounding housing market has helped return Fannie Mae to profitability and now might allow the government-controlled mortgage-finance company to repay as much as $61.5 billion in rescue funds to the U.S. Treasury, the Wall Street Journal reported. The potential payment would be the upshot of an accounting move whereby the company would reclaim certain tax benefits that were written down shortly after the company was placed under federal control in 2008. The potential move was disclosed last week in a regulatory filing in which the company said that it would delay the release of its annual report, due yesterday, as it tries to reach a resolution with its accountants and regulator over the timing of the accounting move. The debate about when Fannie should be allowed to reclaim the deferred-tax assets comes as Fannie and its smaller sibling, Freddie Mac, are likely to show large profits in the coming quarters as the housing market gradually recovers from its prolonged bust. The potential payment also has political implications as lawmakers and regulators wrangle over the fate of the firms, which were placed into a federal conservatorship amid soaring losses. The Obama administration has publicly said that the two companies eventually would be wound down and has blocked them from retaining profits, but has done little to de-emphasize their role in the mortgage market. Read more. (Subscription required.)

CFPB ISSUES PROPOSAL TO SUPERVISE STUDENT LOAN SERVICERS



The Consumer Financial Protection Bureau on Friday issued a proposal to supervise nonbank servicers of private and federal student loans that qualify as "larger participants" in the student loan servicing market, according to an analysis yesterday by Ballard Spahr LLP. The proposal represents an attempt by the CFPB to significantly expand its supervisory authority over student loan servicers. Because it already has supervisory authority over larger banks and nonbank private student lenders, the CFPB believes it should oversee student loan servicing by those entities. The CFPB's current authority to supervise nonbank private student lenders, however, does not allow it to supervise the nonbank student loan servicers that do not offer or provide private student loans. The proposal would allow the CFPB to supervise servicing of private and federal student loans by such nonbank servicers. Comments on the proposal will be due 60 days after its publication in the Federal Register. Click here to read the proposal.

OBAMA CUTS STUDENT-DEBT COLLECTOR COMMISSIONS TO AID BORROWERS



President Barack Obama's administration slashed the commissions paid to private collection companies that chase overdue student loans, reducing an incentive to squeeze borrowers, Bloomberg News reported today. Previously, the U.S. Education Department paid a commission as high as 16 percent of the entire loan amount only if collectors convinced defaulted borrowers to make stiff monthly payments. Starting this month, the fee dropped to as low as 11 percent, regardless of payment size. With $77.4 billion worth of student loans in default, the federal government turns to an army of private collectors to pursue borrowers. These companies, which receive about $1 billion annually in commissions, have sparked growing complaints that they insist on high payments, even when borrowers qualify for leniency. Under the new schedule, collectors will no longer have an incentive to avoid offering affordable payments tied to borrowers' incomes. Read more.

PLASTIC-SHY YOUNG IN U.S. SPUR MOVE TO USE NEW CREDIT DATA



Thirty-nine percent of undergraduate students between the ages of 18 and 24 owned a credit card in 2012, down from 49 percent in 2010, a Sallie Mae and Ipsos Public Affairs survey found, Bloomberg News reported today. And young adults who do have credit cards are carrying smaller balances: A median of $1,600 in 2010 compared with $2,500 in 2001 for under-35 households, according to Federal Reserve data. The trend, rooted in stricter lending rules and weaker job outlooks for young Americans since the 2008-09 recession, has implications for the strength of the economy. Fewer are building the traditional credit histories that would help them obtain financing for the purchases of homes and cars, which is critical to economic growth. Credit bureaus and the lending industry are stepping up their search for new ways to bolster credit files, and young people who do not pay credit card bills often do pay mobile phone bills. As reporting agencies gather data from telephone, rent and other payments, some scoring models incorporate this information to help assess candidates' creditworthiness. Read more.

ANALYSIS: WORKERS SAVING TOO LITTLE TO RETIRE



Workers and employers in the U.S. are bracing for a retirement crisis, even as the stock market sits near highs and the economy shows signs of improvement, the Wall Street Journal reported today. New data show that powerful financial and demographic forces are combining to squeeze individuals and companies that are trying to save for the future and make their money last. Fifty-seven percent of U.S. workers surveyed reported less than $25,000 in total household savings and investments excluding their homes, according to a report to be released Tuesday by the Employee Benefit Research Institute. Only 49 percent reported having so little money saved in 2008. The survey also found that 28 percent of Americans have no confidence they will have enough money to retire comfortably—the highest level in the study's 23-year history. Read more. (Subscription required.)

NUMBER OF CASES FILED BY SEC SLOWS



The Securities and Exchange Commission is filing significantly fewer civil fraud cases this year as its efforts to punish misconduct related to the financial crisis start to ebb, the Wall Street Journal reported yesterday. The agency is likely to fall short this fiscal year of its record-breaking number of enforcement actions in the previous two years. The expected drop in the numbers could be a headache for Mary Jo White, the former prosecutor nominated by President Barack Obama to be SEC chairman. A Senate panel is set to approve White's appointment today, the last step before the full Senate votes on it. White last week told a Senate hearing that she would strengthen the SEC's enforcement function to ensure that "all wrongdoers … will be aggressively and successfully called to account." The slowdown in enforcement actions reflects changes in the economic cycle, according to SEC officials. "We're at a point of inflection in our enforcement program," George Canellos, acting SEC enforcement head, said last month. Market meltdowns on the scale of the 2008 crisis, when companies implode and trillions of dollars are wiped off asset values, tend to expose major frauds and produce big cases, Canellos said. "We're now in a different era," he added. Read more. (Subscription required.)

NEW ABI BOOK EXPLORES THE DEPTHS OF DEEPENING INSOLVNECY



Any company executive juggling the competing demands of the troubled firm and its obligations to investors, as well as litigators practicing on either side of the insolvency aisle, will be interested in ABI’s latest publication, The Depths of Deepening Insolvency: Damage Exposure for Officers, Directors and Others. Authors Kathy Bazoian Phelps (Diamond McCarthy LLP) and Prof. Jack F. Williams (Mesirow Financial) wrote the book from both the plaintiffs' and defendants' perspectives to offer a deep analysis of the legal principle known as "deepening insolvency." The book also provides potential defenses that may be asserted to deepening insolvency allegations, as well as a state-by-state list of significant case law on this issue. To find out more about the book or to pre-order your copy, please click here. (Make sure to log in using your ABI member credentials to obtain the ABI member discount.)

DON'T MISS ACB'S FREE EVENT, "THE AUTO BANKRUPTCIES: CHECKING THE REARVIEW MIRROR," ON MARCH 22!



ABI members are encouraged to register for the American College of Bankruptcy's "The Auto Bankruptcies: Checking the Rearview Mirror" on March 22 at Boston College Law School in Newton, Mass. The afternoon event will feature key players looking back at the events that led to GM and Chrysler being placed into bankruptcy and the lessons that have been learned from the cases. Panelists include:

• Corinne Ball of Jones Day (New York), who served as lead bankruptcy counsel to Chrysler.

• Matthew A. Feldman of Willkie Farr and Gallagher LLP (New York), who served as chief legal advisor to the Obama administration's Task Force on the Auto Industry.

• Hon. Arthur J. Gonzalez, a Senior Fellow at New York University School of Law and formerly the Chief Bankruptcy Judge for the U.S. Bankruptcy Court for the Southern District of New York, who presided over the Chrysler chapter 11 proceedings.

• Harvey R. Miller of Weil, Gotshal & Manges LLP (New York), who served as lead bankruptcy counsel to GM.

The moderator will be Mark N. Berman of Nixon Peabody LLP (New York).

Registration for the afternoon event is free, so be sure to sign up today before it reaches capacity!

HOTEL BLOCK FOR ABI'S ANNUAL SPRING MEETING ALMOST SOLD OUT! REGISTER TODAY!



The hotel block at the Gaylord National Resort and Convention Center in National Harbor, Md., is almost sold out for ABI’s 2013 Annual Spring Meeting! Held April 18-21, 2013, ASM 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

• Current Issues for Financial Advisors in Bankruptcy Cases

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

• The Power to Veto Bankruptcy Sales

• Real Estate Issues in Health Care Restructurings

• 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!

Make sure to register today!

ABI IN-DEPTH

TEE OFF ON THE NEW ABI GOLF TOUR!



Starting with the Annual Spring Meeting, ABI will offer conference registrants the option to participate in the ABI Golf Tour. The Tour will take place concurrently with all conference golf tournaments. The Tour is designed 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 in the regular ABI conference events, Tour participants will "play their own ball." 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 randomly be 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, and 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.

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!

LATEST CASE SUMMARY ON VOLO: GORDON V. PAPPALARDO (IN RE GORDON; 1ST CIR.)



Summarized by Jennifer L. Saffer of J.L. Saffer, P.C.



In this appeal by a debtor in her chapter 13 case, the Bankruptcy Appellate Panel (BAP) for the First Circuit affirmed, after de novo review, the bankruptcy court’s order sustaining the chapter 13 trustee’s objection to the debtor's claimed exemption in a scheduled remainder interest in real estate. Affirming the decision of the bankruptcy court, the BAP determined that the property claimed as exempt was not "owned" by the debtor as required by and within the meaning of Mass. Gen. Laws ch. 188, § 3(a); the debtor had elected Massachusetts exemption rules rather than the federal, as was her option under 11 U.S.C. § 522(b).

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: CONGRESS, NOT FHFA, SHOULD BE REFORMING THE GSEs

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post found that while there is an emerging bipartisan consensus on the way forward for the secondary mortgage market, Congress has punted on what should be done with Fannie Mae and Freddie Mac, and the (Federal Housing Finance Agency) FHFA is taking significant steps without hearings or public discussion.

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

Who will win the NCAA basketball tournament?

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 37 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.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

March

- Bankruptcy Battleground West

     March 22, 2013 | Los Angeles, Calif.

- ACB's Free Event, "The Auto Bankruptcies: Checking the Rearview Mirror" Program

     March 22, 2013 | Newton, Mass.

April

- ABI Live Webinar: "Legacy Liabilities : Dealing with Environmental, Pension, Union and Similar Types of Claims"

     April 5, 2013

- ABI Live Webinar: "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?"

     April 10, 2013

- "Nuts and Bolts" Program at ASM

     April 18, 2013 | National Harbor, Md.

- Annual Spring Meeting

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

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

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

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.

ANALYSIS: MORE HOMEOWNERS EMERGE FROM "UNDERWATER" STATUS



Rising home values have lifted more borrowers out of the hole of owing more than their properties are worth, an encouraging sign for an economy still closely tied to the health of the housing market, the Wall Street Journal reported today. The number of "underwater" homeowners in the fourth quarter of 2012 declined by 1.7 million from a year earlier, meaning 1.7 million U.S. households have regained home equity, according to data released Tuesday by CoreLogic, a research company. Overall, the company said 21.5 percent of households with a mortgage were underwater at the end of 2012, down from 25.2 percent at the end of 2011. While the trends are encouraging, some newly above-water households are just barely at breakeven and therefore are a long way off from being able to change their finances in any significant way. And the overall ranks of those underwater remain large, at about 10.4 million, down from 12.1 million at the end of 2011, according to CoreLogic. Read more. (Subscription required.)

To see a state-by-state analysis of CoreLogic's 4Q 2012 data, be sure to check out ABI's Chart of the Day site.

FANNIE MAE SEES WAY TO REPAY BILLIONS TO U.S. TREASURY



The rebounding housing market has helped return Fannie Mae to profitability and now might allow the government-controlled mortgage-finance company to repay as much as $61.5 billion in rescue funds to the U.S. Treasury, the Wall Street Journal reported. The potential payment would be the upshot of an accounting move whereby the company would reclaim certain tax benefits that were written down shortly after the company was placed under federal control in 2008. The potential move was disclosed last week in a regulatory filing in which the company said that it would delay the release of its annual report, due yesterday, as it tries to reach a resolution with its accountants and regulator over the timing of the accounting move. The debate about when Fannie should be allowed to reclaim the deferred-tax assets comes as Fannie and its smaller sibling, Freddie Mac, are likely to show large profits in the coming quarters as the housing market gradually recovers from its prolonged bust. The potential payment also has political implications as lawmakers and regulators wrangle over the fate of the firms, which were placed into a federal conservatorship amid soaring losses. The Obama administration has publicly said that the two companies eventually would be wound down and has blocked them from retaining profits, but has done little to de-emphasize their role in the mortgage market. Read more. (Subscription required.)

CFPB ISSUES PROPOSAL TO SUPERVISE STUDENT LOAN SERVICERS



The Consumer Financial Protection Bureau on Friday issued a proposal to supervise nonbank servicers of private and federal student loans that qualify as "larger participants" in the student loan servicing market, according to an analysis yesterday by Ballard Spahr LLP. The proposal represents an attempt by the CFPB to significantly expand its supervisory authority over student loan servicers. Because it already has supervisory authority over larger banks and nonbank private student lenders, the CFPB believes it should oversee student loan servicing by those entities. The CFPB's current authority to supervise nonbank private student lenders, however, does not allow it to supervise the nonbank student loan servicers that do not offer or provide private student loans. The proposal would allow the CFPB to supervise servicing of private and federal student loans by such nonbank servicers. Comments on the proposal will be due 60 days after its publication in the Federal Register. Click here to read the proposal.

OBAMA CUTS STUDENT-DEBT COLLECTOR COMMISSIONS TO AID BORROWERS



President Barack Obama's administration slashed the commissions paid to private collection companies that chase overdue student loans, reducing an incentive to squeeze borrowers, Bloomberg News reported today. Previously, the U.S. Education Department paid a commission as high as 16 percent of the entire loan amount only if collectors convinced defaulted borrowers to make stiff monthly payments. Starting this month, the fee dropped to as low as 11 percent, regardless of payment size. With $77.4 billion worth of student loans in default, the federal government turns to an army of private collectors to pursue borrowers. These companies, which receive about $1 billion annually in commissions, have sparked growing complaints that they insist on high payments, even when borrowers qualify for leniency. Under the new schedule, collectors will no longer have an incentive to avoid offering affordable payments tied to borrowers' incomes. Read more.

PLASTIC-SHY YOUNG IN U.S. SPUR MOVE TO USE NEW CREDIT DATA



Thirty-nine percent of undergraduate students between the ages of 18 and 24 owned a credit card in 2012, down from 49 percent in 2010, a Sallie Mae and Ipsos Public Affairs survey found, Bloomberg News reported today. And young adults who do have credit cards are carrying smaller balances: A median of $1,600 in 2010 compared with $2,500 in 2001 for under-35 households, according to Federal Reserve data. The trend, rooted in stricter lending rules and weaker job outlooks for young Americans since the 2008-09 recession, has implications for the strength of the economy. Fewer are building the traditional credit histories that would help them obtain financing for the purchases of homes and cars, which is critical to economic growth. Credit bureaus and the lending industry are stepping up their search for new ways to bolster credit files, and young people who do not pay credit card bills often do pay mobile phone bills. As reporting agencies gather data from telephone, rent and other payments, some scoring models incorporate this information to help assess candidates' creditworthiness. Read more.

ANALYSIS: WORKERS SAVING TOO LITTLE TO RETIRE



Workers and employers in the U.S. are bracing for a retirement crisis, even as the stock market sits near highs and the economy shows signs of improvement, the Wall Street Journal reported today. New data show that powerful financial and demographic forces are combining to squeeze individuals and companies that are trying to save for the future and make their money last. Fifty-seven percent of U.S. workers surveyed reported less than $25,000 in total household savings and investments excluding their homes, according to a report to be released Tuesday by the Employee Benefit Research Institute. Only 49 percent reported having so little money saved in 2008. The survey also found that 28 percent of Americans have no confidence they will have enough money to retire comfortably—the highest level in the study's 23-year history. Read more. (Subscription required.)

NUMBER OF CASES FILED BY SEC SLOWS



The Securities and Exchange Commission is filing significantly fewer civil fraud cases this year as its efforts to punish misconduct related to the financial crisis start to ebb, the Wall Street Journal reported yesterday. The agency is likely to fall short this fiscal year of its record-breaking number of enforcement actions in the previous two years. The expected drop in the numbers could be a headache for Mary Jo White, the former prosecutor nominated by President Barack Obama to be SEC chairman. A Senate panel is set to approve White's appointment today, the last step before the full Senate votes on it. White last week told a Senate hearing that she would strengthen the SEC's enforcement function to ensure that "all wrongdoers … will be aggressively and successfully called to account." The slowdown in enforcement actions reflects changes in the economic cycle, according to SEC officials. "We're at a point of inflection in our enforcement program," George Canellos, acting SEC enforcement head, said last month. Market meltdowns on the scale of the 2008 crisis, when companies implode and trillions of dollars are wiped off asset values, tend to expose major frauds and produce big cases, Canellos said. "We're now in a different era," he added. Read more. (Subscription required.)

NEW ABI BOOK EXPLORES THE DEPTHS OF DEEPENING INSOLVNECY



Any company executive juggling the competing demands of the troubled firm and its obligations to investors, as well as litigators practicing on either side of the insolvency aisle, will be interested in ABI’s latest publication, The Depths of Deepening Insolvency: Damage Exposure for Officers, Directors and Others. Authors Kathy Bazoian Phelps (Diamond McCarthy LLP) and Prof. Jack F. Williams (Mesirow Financial) wrote the book from both the plaintiffs' and defendants' perspectives to offer a deep analysis of the legal principle known as "deepening insolvency." The book also provides potential defenses that may be asserted to deepening insolvency allegations, as well as a state-by-state list of significant case law on this issue. To find out more about the book or to pre-order your copy, please click here. (Make sure to log in using your ABI member credentials to obtain the ABI member discount.)

DON'T MISS ACB'S FREE EVENT, "THE AUTO BANKRUPTCIES: CHECKING THE REARVIEW MIRROR," ON MARCH 22!



ABI members are encouraged to register for the American College of Bankruptcy's "The Auto Bankruptcies: Checking the Rearview Mirror" on March 22 at Boston College Law School in Newton, Mass. The afternoon event will feature key players looking back at the events that led to GM and Chrysler being placed into bankruptcy and the lessons that have been learned from the cases. Panelists include:

• Corinne Ball of Jones Day (New York), who served as lead bankruptcy counsel to Chrysler.

• Matthew A. Feldman of Willkie Farr and Gallagher LLP (New York), who served as chief legal advisor to the Obama administration's Task Force on the Auto Industry.

• Hon. Arthur J. Gonzalez, a Senior Fellow at New York University School of Law and formerly the Chief Bankruptcy Judge for the U.S. Bankruptcy Court for the Southern District of New York, who presided over the Chrysler chapter 11 proceedings.

• Harvey R. Miller of Weil, Gotshal & Manges LLP (New York), who served as lead bankruptcy counsel to GM.

The moderator will be Mark N. Berman of Nixon Peabody LLP (New York).

Registration for the afternoon event is free, so be sure to sign up today before it reaches capacity!

HOTEL BLOCK FOR ABI'S ANNUAL SPRING MEETING ALMOST SOLD OUT! REGISTER TODAY!



The hotel block at the Gaylord National Resort and Convention Center in National Harbor, Md., is almost sold out for ABI’s 2013 Annual Spring Meeting! Held April 18-21, 2013, ASM 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

• Current Issues for Financial Advisors in Bankruptcy Cases

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

• The Power to Veto Bankruptcy Sales

• Real Estate Issues in Health Care Restructurings

• 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!

Make sure to register today!

ABI IN-DEPTH

TEE OFF ON THE NEW ABI GOLF TOUR!



Starting with the Annual Spring Meeting, ABI will offer conference registrants the option to participate in the ABI Golf Tour. The Tour will take place concurrently with all conference golf tournaments. The Tour is designed 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 in the regular ABI conference events, Tour participants will "play their own ball." 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 randomly be 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, and 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.

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!

LATEST CASE SUMMARY ON VOLO: GORDON V. PAPPALARDO (IN RE GORDON; 1ST CIR.)



Summarized by Jennifer L. Saffer of J.L. Saffer, P.C.



In this appeal by a debtor in her chapter 13 case, the Bankruptcy Appellate Panel (BAP) for the First Circuit affirmed, after de novo review, the bankruptcy court’s order sustaining the chapter 13 trustee’s objection to the debtor's claimed exemption in a scheduled remainder interest in real estate. Affirming the decision of the bankruptcy court, the BAP determined that the property claimed as exempt was not "owned" by the debtor as required by and within the meaning of Mass. Gen. Laws ch. 188, § 3(a); the debtor had elected Massachusetts exemption rules rather than the federal, as was her option under 11 U.S.C. § 522(b).

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: CONGRESS, NOT FHFA, SHOULD BE REFORMING THE GSEs

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post found that while there is an emerging bipartisan consensus on the way forward for the secondary mortgage market, Congress has punted on what should be done with Fannie Mae and Freddie Mac, and the (Federal Housing Finance Agency) FHFA is taking significant steps without hearings or public discussion.

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

Who will win the NCAA basketball tournament?

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 37 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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2013

March

- Bankruptcy Battleground West

     March 22, 2013 | Los Angeles, Calif.

- ACB's Free Event, "The Auto Bankruptcies: Checking the Rearview Mirror" Program

     March 22, 2013 | Newton, Mass.

April

- ABI Live Webinar: "Legacy Liabilities : Dealing with Environmental, Pension, Union and Similar Types of Claims"

     April 5, 2013

- ABI Live Webinar: "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?"

     April 10, 2013

- "Nuts and Bolts" Program at ASM

     April 18, 2013 | National Harbor, Md.

- Annual Spring Meeting

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

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

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

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.