| NEWS AND ANALYSIS
U.S. MORTGAGE DELINQUENCY RATE APPROACHING PRE-RECESSION LEVEL
Five years after the end of the U.S. recession, the number of Americans who are behind on their mortgages and the backlog of homes in the foreclosure process are finally approaching pre-recession levels, the Wall Street Journal reported today. The U.S. mortgage delinquency rate -- loans that are a payment or more behind but not yet in foreclosure -- fell to 6.39 percent of loans in the fourth quarter of 2013, down from 7.09 percent a year ago and the lowest rate since the early months of the recession in the first quarter of 2008, according to a report released today by the Mortgage Bankers Association. The backlog of foreclosure inventory also fell to its lowest level since 2008, while the number of loans on which lenders initiated foreclosure was the lowest since 2006, just as the housing bubble was starting to burst. Western markets like California and Arizona were among the hardest hit by the real estate bust, but they now have foreclosure inventories that rank among the bottom handful of states. Read more. (Subscription required.)
U.S. CREDIT CARD LATE PAYMENTS UP IN 4Q FROM 3Q
Many Americans took on more credit card debt and failed to make timely payments in the final quarter of 2013, when consumers typically crank up spending on holiday shopping, the Associated Press reported yesterday. While late payments crept up over last quarter, the national late-payment rate remained close to its lowest level in six years, credit reporting agency TransUnion reported on Tuesday. The rate of credit card payments at least 90 days overdue was 1.48 percent in the October-December quarter. That's up from 1.36 percent in the previous three-month period, but down from 1.61 percent in the fourth quarter of 2012, the firm said. Average card debt per borrower rose 1.7 percent from the third quarter to an average of $5,325. It slipped 1 percent from a year earlier. Read more.
SURVEY: CLOSE TO HALF OF AMERICANS HAVE MORE CREDIT CARD DEBT THAN SAVINGS
A recent survey by Bankrate.com found that only 51 percent of Americans have enough cash in their emergency accounts to clear themselves of credit card debt, CBSNews.com reported yesterday. According to the survey, nearly 30 percent of Americans reported having more credit card debt than emergency savings -- the highest percentage in the past four years. Meanwhile, some 17 percent reported they had neither emergency savings nor credit card debt. The overall personal savings rate has fallen even as Americans have increased their spending. According to the U.S. Department of Commerce, the U.S. personal savings rate fell to 4.2 percent in November of last year. That is near the recent low mark of just under 3 percent, which came at the end of 2007. Read more.
FEDERAL RESERVE PUTS RATE INCREASE ON THE RADAR
Conversation at the Federal Reserve's most recent policy meeting turned to something that hasn't been a serious topic for years: the possibility of interest-rate increases in the near future, the Wall Street Journal reported today. The Fed has held short-term interest rates at close to zero since December 2008, near the height of the financial crisis, and Chairwoman Janet Yellen shows no appetite for raising them soon. Investors generally don't see Fed rate increases until well into 2015, a view also held by many officials. Still, a "few" Fed officials argued at a Jan. 28-29 policy meeting that increases might be needed soon to prevent the economy from overheating, according to minutes of the meeting released yesterday. The Fed cut its monthly bond purchases by $10 billion to $65 billion at the January meeting, and officials agreed to stay on a path of winding down the program by year-end, barring an unexpected slowdown in the economy. The program, launched at the end of 2012, is aimed at lowering long-term interest rates in hopes of spurring more spending, hiring and investment. Read more. (Subscription required.)
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ABI MEMBERS INVITED TO ATTEND TOMORROW'S WHARTON RESTRUCTURING AND DISTRESSED INVESTING CONFERENCE
ABI members are invited to attend the 10th Annual Wharton Restructuring and Distressed Investing Conference, taking place tomorrow at the Union League of Philadelphia. The theme for this year's conference is "Then & Now: Lessons of the Market Cycle," and the program will offer a unique opportunity to hear from a distinguished gathering of keynote speakers and panelists in their discussion of the current economic climate and issues of debt, investing, and restructuring across the globe. To see the keynote speakers for the conference and to register, please click here.
DUBERSTEIN GALA AWARDS DINNER ON MARCH 3 TO PAY TRIBUTE TO BANKRUPTCY JUDGE BURTON LIFLAND AND CHIEF BANKRUPTCY CLERK JOSEPH HURLEY
The Gala Awards Dinner at this year's 22nd Annual Duberstein Bankruptcy Moot Court Competition on March 3 will feature a special tribute to Bankruptcy Judge Burton J. Lifland of the U.S. Bankruptcy Court for the Southern District of New York and Joseph P. Hurley, Chief Bankruptcy Clerk (retired) of the U.S. Bankruptcy Court for the Eastern District of New York. To purchase tickets for the gala or to find out more information, please visit http://www.dubersteingala.com.
JUST ONE WEEK REMAINING TO TAKE ADVANTAGE OF THE ABI BOOKSTORE CLEARANCE SALE!
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.
But the offer ends at the end of February, so act now to claim your free book! 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.
MARCH 4 IS THE DEADLINE FOR SUBMISSIONS FOR ABI'S SIXTH ANNUAL LAW STUDENT WRITING COMPETITION!
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.
NEW ABILIVE WEBINAR ON MARCH 20 EXAMINES HOW TO DRAFT LOAN WORKOUT AGREEMENTS
The next abiLIVE webinar will take place on March 20 from 1-2:30 p.m. ET and will examine how to draft loan workout agreements. Learn the purpose and legal underpinnings of the various component parts of frequently used workout documents such as forbearance agreements, intercreditor agreements and restructuring/override agreements. The panel will focus on real-world examples of good and bad provisions of workout documents and will provide drafting tips. Group discounts available! Click here to register.
ABI IN-DEPTH
NEW CASE SUMMARY ON VOLO: MITCHELL V. WEINMAN, ET AL. (IN RE MITCHELL; 10TH CIR.)
Summarized by Benjamin Ellison of the U.S. Bankruptcy Court for the Western District of Washington
The Tenth Circuit Court of Appeals rejected the debtors' objections that the underlying settlement conceding involuntary bankruptcy was void under FRCP 60(b)(4) because requirements for involuntary bankruptcy under 11 U.S.C. §303(b)(1) were not jurisdictional. The corporate debtor's objections on this basis were specifically denied because the pro se individual debtor lacked standing to assert claims on the corporation's behalf.
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: COURT OPINION SUPPORTS CREDIT BID CAP
A recent blog post takes a look at a recent opinion by the U.S. Bankruptcy Court for the District of the Delaware in In re Fisker Automotive Holdings Inc., 2014 WL 210593 (Bankr. D. Del. 01/17/2014), in which the court limited the credit bid of Fisker's secured creditor, Hybrid Tech Holdings, Inc., to $25 million, the amount it had paid to purchase the secured claim.
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
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