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HOUSE COMMITTEE APPROVES STUDENT LOAN FIX



Members of the Republican-led House Education and Workforce Committee approved a bill that would keep interest rates from doubling on new subsidized Stafford loans on July 1, the Associated Press reported. The GOP measure, which is opposed by House Democrats, provides lower rates immediately and for the next few years, but the plan also comes with potentially higher costs for some students in coming years. Without Congress's action, interest rates for new subsidized Stafford student loans would double from 3.4 percent to 6.8 percent on July 1. Under the proposal by the committee's chairman, Rep. John Kline (R-Minn.), student loans would be reset every year and based on 10-year Treasury notes, plus an added percentage. Using Congressional Budget Office projections, that would translate to a 5 percent interest rate on Stafford loans in 2014 but climb to 7.7 percent for loans in 2023. Read more.

Read the House Education and Workforce Committee's press release.

EDITORIAL: NEW YORK TARGETING PENSION PREDATORS



New York Gov. Andrew Cuomo (D) has done retirees and military veterans a great service by ordering New York’s top banking regulator to investigate “pension advance” firms that persuade customers to sign over all or part of their monthly pensions in exchange for immediate cash payments, according to a New York Times editorial today. The payments, advertised as advances, are, in fact, cleverly disguised loans that can carry ruinously high interest rates and eventually strip older citizens of their meager assets. By insisting that they are making advances, not loans, these firms elude state supervision, including usury laws, licensing regulations and the federal Truth in Lending Act, which requires lenders to disclose borrowing costs. These and other subterfuges have enabled the companies to ambush pensioners with “advance” loans that carry interest charges ranging from 27 percent to 106 percent, according to a review by the New York Times. Read more.

INVESTORS FLOOD INTO LOAN FUNDS



Money is flooding into funds that buy up loans to companies as some investors brace for the end of ultra-low interest rates, the Wall Street Journal reported today. The activity is adding fuel to the roaring corporate-refinancing boom by driving loan prices up, in turn pushing interest rates lower for companies rated below investment grade. Leveraged loans are again increasing in popularity among investors because the interest they pay changes with benchmark interest rates, typically quarterly. That is a major selling point amid concerns that prices of Treasurys and long-term corporate bonds will drop as the Federal Reserve pares back its support for financial markets—even though policymakers have signaled that a shift is not imminent. Yields rise as prices fall. Loan mutual funds took in $5.6 billion in April, dwarfing the combined $2.25 billion that went into Treasury bond and junk-bond funds, according to Lipper Inc. Inflows in the first four months of 2013 hit $22.4 billion, eclipsing full-year tallies for every year since 2003, when Lipper started tracking the data. Read more. (Subscription required.)

NEW SEC CHIEF MARY JO WHITE BEGINS JOB WITH PRESSURE TO TACKLE RULES



Since Mary Jo White took over as head of the Securities and Exchange Commission a month ago, Congress has pressed the former federal prosecutor to pump out long-overdue financial regulations required by the Dodd-Frank Act and rewrite key rules that govern the capital markets, the Washington Post reported today. This week, lawmakers are applying more pressure to get the job done — on their terms. The House passed a measure yesterday that gives the SEC an Oct. 31 deadline to adopt a portion of the JOBS Act, which aims to make it easier for small businesses to raise money. On Friday, another bill is scheduled to reach the House floor that would reinforce the need for the agency to do thorough cost analyses of any rules it’s considering. White yesterday tapped Keith Higgins of Ropes & Gray to head the SEC’s corporation finance division, which is heavily involved in writing the JOBS Act rules. She also named Lona Nallengara, who joined the SEC in 2011, as the agency’s chief of staff. Meanwhile, the SEC staff internally circulated a draft this month to revamp part of the money market fund industry, a plan that’s evolved over the past year. The agency has also proposed a plan for how rules governing derivatives should be applied in the global marketplace. But they are less stringent than what the Commodity Futures Trading Commission has promoted, alarming some investor advocates. Read more.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: TRUSTEES SLEEP EASY AFTER HIGH COURT RULING



Trustees of all types are sleeping easier, knowing that their liabilities for theft by a co-trustee is a debt that can be wiped out in bankruptcy as a result of a unanimous Supreme Court decision discussed by Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle on their latest video. To watch, please click here.

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



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

ASSOCIATES: ABI'S NUTS & BOLTS ONLINE PROGRAMS HELP YOU HONE YOUR SKILLS WHILE SAVING ON CLE!



Associates looking to sharpen their bankruptcy knowledge should take advantage of ABI's special offer of combining general, business or consumer Nuts & Bolts online programs. Each program features an outstanding faculty of judges and practitioners explaining the fundamentals of bankruptcy, offering procedures and strategies tailored for both consumer and business attorneys. Click here to get the CLE you need at a great low price!

ABI GOLF TOUR UNDERWAY; NEXT STOP IS CENTRAL STATES BANKRUPTCY WORKSHOP IN JUNE



Rob Schwartz and Scott Gautier are tied at 34 Stableford Points atop the closely bunched leaderboard after the ABI's Golf Tour's first stop at Lake Presidential Golf Club. Next up for the Tour is the famed Bear course at the Grand Traverse Resort at the Central States Bankruptcy Workshop on June 14. Final scoring to win the Great American Cup—sponsored by Great American Group—is based on your top three scores at seven scheduled ABI events, so play as many as you can before the tour wraps up at the Winter Leadership Conference in December. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! There's no charge to register or participate in the Tour, and women are most welcome.

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



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

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: SOTO V. DORAL BANK (IN RE SOTO; 1ST CIR.)



Summarized by Samuel Ari Mushell of Americans United for Government Reform

The Bankruptcy Appellate Panel for the First Circuit affirmed the bankruptcy court's decision to dismiss the debtors' chapter 13 petition because the debtors did not comply with 521(a) of the Code. 521(a) requires debtors to submit their tax returns and payment advices to the trustee.

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: BROWN-VITTER BILL A POTENTIAL CAPITAL FIX FOR TROUBLED MARKETS

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post finds that the common-sense steps taken in the "Terminating Bailouts for Taxpayer Fairness Act," introduced by Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.), will help even the playing field between community banks and big financial firms.

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

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

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

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

May

- Litigation Skills Symposium

     May 21-24, 2013 | Dallas, Texas

- ABI Live Webinar: Consumer Class Actions

     May 29, 2013

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

- INSOL’s Latin American Regional Seminar

     June 13, 2013 | São Paulo, Brazil

- Charity Golf Tournament

     June 14, 2013 | City of Industry, Calif.

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.

- Southwest Bankruptcy Conference

    August 22-24, 2013 | Incline Village, Nev.

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

October

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York

ADMINISTRATION’S STUDENT DEBT PLAN WOULD EASE BURDEN, BUT CRITICS SAY IT COULD PROMOTE OVERBORROWING



The White House proposal that the government forgive billions of dollars in student debt over the next decade is supported by student advocates, but critics say that it would expand a program that already encourages students to borrow too much and stick taxpayers with the bill, the Wall Street Journal reported yesterday. The proposal, included in President Barack Obama's budget for next year, would increase the number of borrowers eligible for a program known as income-based repayment (IBR), which aims to help low-income workers stay current on federal student debt. Borrowers in IBR programs make monthly payments equivalent to 10 percent of their income after taxes and basic living expenses, regardless of how much they owe. After 20 years of on-time payments—10 years for those who work in public or nonprofit jobs—the balance is forgiven. Under the program today, most borrowers with loans issued since October 2007 are eligible to participate. The budget proposal—which requires congressional approval—would let all borrowers with pre-2007 loans participate and would make tax exempt any debt forgiven through the program. (Loan forgiveness can be considered taxable income.) Read more. (Subscription required.)

SURVEY: MILLIONS STRUGGLING WITH MEDICAL DEBT



A recent survey found that medical debt continues to weigh on the shoulders of millions of consumers, according to a column in yesterday’s Dallas Morning News. Last year, 41 percent of adults ages 19 to 64 said that they had problems paying medical bills or were paying off medical debt over time, according to a survey by the Commonwealth Fund, a private foundation that promotes improvements in the health care system. Twenty-nine percent of those paying off medical bills said they were carrying more than $4,000 in debt, and 16 percent reported $8,000 or more in medical debt. Gaps in health insurance, inadequate coverage and large medical bills have left millions with medical debt, said Sara Collins, vice president of Affordable Health Insurance at the Commonwealth Fund. The Affordable Care Act, which goes into full effect next year, has improved the situation somewhat, she said. In particular, a provision that allows adult children to remain on their parents’ health insurance policies until they are age 26 has had an impact. Another bill currently being considered in Congress, the "Medical Debt Responsibility Act," would prohibit credit bureaus from using paid-off or settled medical debt collections in determining a consumer’s creditworthiness. The bureaus also would have 45 days from the date the medical debt collection is paid off or settled to expunge the collection from the consumer’s credit report. Read more.

TRANSUNION: CREDIT QUALITY OF MORTGAGE BORROWERS NATIONWIDE HAS IMPROVED



Widely reported mortgage delinquency rates are being weighed down by older mortgages and loans long past due, but more recent mortgages are performing at pre-housing-bubble norms, according to an analysis of national lending data by TransUnion, the Chicago Tribune reported today. In a study of 52 million mortgages, the credit information provider found that mortgages originated before 2009 comprised 50 percent of all outstanding loans and 86 percent of all loans that were 60 days or more past due. That translates to 14.5 percent of loans originated in 2007 falling delinquent within their first three years, compared with only 2.5 percent of mortgages originated in 2010, after the housing bubble burst and lending standards tightened. Read more.

CREDIT-RATING AGENCIES POISED TO AVOID OVERHAUL



Three years after Congress told federal regulators to consider changing the way credit-rating agencies are paid, the industry appears poised to dodge a major overhaul, the Washington Post reported today. The ratings firms have been widely criticized for contributing to the 2008 financial crisis by issuing high ratings to toxic securities backed by residential mortgages. Since then, the way these firms are compensated has come under scrutiny, with critics arguing that the agencies have a conflict of interest because they are paid for their analysis by the very banks and corporations whose products they are rating. One proposal designed to end this “pay to play” dilemma comes from Sen. Al Franken (D-Minn.), who is pushing to have the Securities and Exchange Commission set up an independent board that would assign financial products such as bonds to credit-rating agencies to rate, rather than allow banks and companies to choose which agencies to use. The approach will be debated today when the SEC holds a day-long roundtable to discuss the credit-rating agencies’ business model with industry officials, academics and investor advocates. But several analysts who track the issue say it is unlikely that the SEC will adopt a plan that separates hiring from payment, in part because doing so is not as simple as it appears. Read more.

ANALYSIS: IP TRANSACTIONS NEED SPECIAL CARE WHEN COMPANY IS IN FINANCIAL DISTRESS



In intellectual property licensing deals where one party is in financial distress, practitioners must take particular care as the transaction unfolds, according to experts on the topic, Reuters reported yesterday. IP counsel Daniel Ilan and bankruptcy partner Lisa Schweitzer, both of Cleary Gottlieb Steen & Hamilton, who in 2011 represented Nortel Networks in the $4.5 billion bankruptcy sale of its residual patents, said that caution is especially needed when balancing the fate of intellectual property during bankruptcy. Due to the way that recent transactions are scrutinized by bankruptcy courts for fairness, they may be voided or challenged if they appear to have been made for less than market value, said Schweitzer. If the company seeking to license its IP is financially distressed, including on the verge of bankruptcy, the company that pays for the license must make sure it is paying a fair price for the property, Schweitzer said. U.S. appeals courts have disagreed over whether certain obligations under IP licensing contracts, including the responsibility of the licensor to protect the "quality" of the trademark, constitute obligations that are absolutely necessary in order to complete the contract, Ilan said. Read more.

For more information about intellectual property in bankruptcy or valuation issues in bankruptcy, be sure to pick up a copy of Bankruptcy and Its Impact on Intellectual Property Law, Second Edition and A Practical Guide to Bankruptcy Valuation from ABI's Bookstore.

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



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

ASSOCIATES: ABI'S NUTS & BOLTS ONLINE PROGRAMS HELP YOU HONE YOUR SKILLS WHILE SAVING ON CLE!



Associates looking to sharpen their bankruptcy knowledge should take advantage of ABI's special offer of combining general, business or consumer Nuts & Bolts online programs. Each program features an outstanding faculty of judges and practitioners explaining the fundamentals of bankruptcy, offering procedures and strategies tailored for both consumer and business attorneys. Click here to get the CLE you need at a great low price!

ABI GOLF TOUR UNDERWAY; NEXT STOP IS CENTRAL STATES BANKRUPTCY WORKSHOP IN JUNE



Rob Schwartz and Scott Gautier are tied at 34 Stableford Points atop the closely bunched leaderboard after the ABI's Golf Tour's first stop at Lake Presidential Golf Club. Next up for the Tour is the famed Bear course at the Grand Traverse Resort at the Central States Bankruptcy Workshop on June 14. Final scoring to win the Great American Cup—sponsored by Great American Group—is based on your top three scores at seven scheduled ABI events, so play as many as you can before the tour wraps up at the Winter Leadership Conference in December. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! There's no charge to register or participate in the Tour, and women are most welcome.

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



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

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: BRANIGAN V. DAVIS (IN RE DAVIS; 4TH CIR.)



Summarized by Ann Brogan of Crowley, Liberatore, Ryan & Brogan, P.C.

In two “Chapter 20” cases, the Fourth Circuit affirmed confirmation orders stripping off valueless junior liens against debtors’ property. In a 2-1 ruling, the Court rejected the argument of the chapter 13 bankruptcy trustee that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 created a per se rule that barred lien-stripping in Chapter 20 cases.

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 ANALYSIS OF THE SUPREME COURT'S RULING IN BULLOCK V. BANKCHAMPAIGN

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post takes a closer look at the Supreme Court's ruling yesterday in Bullock v. BankChampaign NA involving the definition of "defalcation" in 11 U.S.C. § 523(a)(4).

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

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

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

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

May

- "Nuts and Bolts" Program at NYCBC

     May 15, 2013 | New York, N.Y.

- ABI Endowment Cocktail Reception

     May 15, 2013 | New York, N.Y.

- New York City Bankruptcy Conference

     May 16, 2013 | New York, N.Y.

- Litigation Skills Symposium

     May 21-24, 2013 | Dallas, Texas

- ABI Live Webinar: Consumer Class Actions

     May 29, 2013

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

- INSOL’s Latin American Regional Seminar

     June 13, 2013 | São Paulo, Brazil

- Charity Golf Tournament

     June 14, 2013 | City of Industry, Calif.

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.

- Southwest Bankruptcy Conference

    August 22-24, 2013 | Incline Village, Nev.

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

BIG BANKS PUSH BACK AGAINST TIGHTER RULES



In the wake of the latest push against the too-big-to-fail banks, the banks are pushing back against regulators and legislators, the Wall Street Journal reported today. The banks have hired longtime influential Washington, D.C., personnel to deflect regulatory and political pressure to strengthen their finances and to sell assets. Regulators and some lawmakers have raised concern that large banks remain "too big to fail" and could require another government bailout in the event of another financial meltdown. The effort by banks marks a lobbying turning point for the industry, which adopted a mostly low-profile stance to new regulations in the wake of the financial crisis. It also comes as banks such as Morgan Stanley, Bank of America Corp. and Goldman Sachs Group Inc. are shedding lucrative assets that would have required them to hold more capital to compensate for their risk-taking. Several banks and the Financial Services Forum, a top trade association, have hired Tony Fratto, a former Bush administration official, to provide what they call a "rapid response" to criticism that the banks remain too large. Regulators and lawmakers are increasingly signaling that more work is needed to lessen the risk posed by large, complex banks, including bigger capital cushions and minimum amounts of expensive long-term debt. The moves by banks include pushing back against bipartisan legislation sponsored by Sens. David Vitter (R.-La.) and Sherrod Brown (D-Ohio) that would sharply increase capital cushions at large banks to the point where most analysts expect firms would be forced to shrink. Read more. (Subscription required.)

REALTYTRAC: FORECLOSURE ACTIVITY AT SIX-YEAR LOW IN APRIL



A report from RealtyTrac on Thursday showed that foreclosure activity fell in April to its lowest level in more than six years, the latest sign that the recovery in the housing market is on track, Reuters reported yesterday. Foreclosure activity – which includes default notices, scheduled auctions and bank repossessions – was seen on 144,790 properties last month, down 5 percent from March and down 23 percent from a year earlier, the lowest level since February 2007. There were also signs that some foreclosures that had been deferred were working their way through the process in states that use the court system to handle foreclosures, known as judicial states. There are 26 judicial or quasi-judicial foreclosure states, according to RealtyTrac. Scheduled foreclosure auctions in judicial states rose 22 percent in April to their highest level since October 2010. Scheduled auctions in non-judicial states fell 7 percent. Read more.

U.S. PUBLISHERS STILL REELING FROM BORDERS BANKRUPTCY



The closure of Borders Group, Inc. is still causing problems for the U.S. publishing industry two years after the nation's number two bookseller closed down, the (London) Telegraph reported today. According to a report in Publishers Weekly, the 20 largest unsecured publishing creditors were owed $241 million when the company filed for chapter 11 protection in February 2011. It is not yet clear which publishers have settled, but figures have emerged showing the extent they were left out of pocket and how much they have so far been remunerated. Penguin Putnam was owed $41 million and has only received $12 million. Hachette Book Group was owed almost $37 million and has only been paid back $4.9 million. Simon & Schuster was owed $33.7 million and has received $10.7 million. Read more.

REPORT: COLLEGES SOAK POOR STUDENTS TO FUNNEL AID TO RICH



A report by the New America Foundation released yesterday found that U.S. colleges such as Boston University are using financial aid to lure rich students while shortchanging the poor, forcing those most in need to take on heavy debt, Bloomberg News reported yesterday. Almost two-thirds of private institutions require students from families making $30,000 or less annually to pay more than $15,000 a year, according to the report released today by the Washington, D.C.-based New America Foundation. The research analyzing U.S. Education Department data for the 2010-2011 school year undercuts the claims of many wealthy colleges that financial aid practices make their institutions affordable, said Stephen Burd, the report’s author. To increase their standing on college rankings, more private colleges are giving “merit aid” to top students, who are often affluent, while charging unaffordable prices to the needy, according to the report. The percentage of students receiving merit aid jumped to 44 percent in 2007-2008 from 24 percent in 1995-1996, the report found. Read more.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: LEHMAN TEST CASE ON JUDICIAL NULLIFICATION



Although Lehman Brothers Holdings Inc. has been out of bankruptcy for a year, Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss how Lehman is becoming a test case to decide whether a prohibition in one specific provision in bankruptcy law can be sidestepped by reliance on a general provision. To watch the full video, please click here.

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



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

ASSOCIATES: ABI'S NUTS & BOLTS ONLINE PROGRAMS HELP YOU HONE YOUR SKILLS WHILE SAVING ON CLE!



Associates looking to sharpen their bankruptcy knowledge should take advantage of ABI's special offer of combining general, business or consumer Nuts & Bolts online programs. Each program features an outstanding faculty of judges and practitioners explaining the fundamentals of bankruptcy, offering procedures and strategies tailored for both consumer and business attorneys. Click here to get the CLE you need at a great low price!

ABI GOLF TOUR UNDERWAY; NEXT STOP IS CENTRAL STATES BANKRUPTCY WORKSHOP IN JUNE



Rob Schwartz and Scott Gautier are tied at 34 Stableford Points atop the closely bunched leaderboard after the ABI's Golf Tour's first stop at Lake Presidential Golf Club. Next up for the Tour is the famed Bear course at the Grand Traverse Resort at the Central States Bankruptcy Workshop on June 14. Final scoring to win the Great American Cup—sponsored by Great American Group—is based on your top three scores at seven scheduled ABI events, so play as many as you can before the tour wraps up at the Winter Leadership Conference in December. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! There's no charge to register or participate in the Tour, and women are most welcome.

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



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

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: WEBER V. SEFCU (IN RE WEBER; 2D CIR.)



Summarized by Joel Levitin, Cahill Gordon & Reindel LLP

The Second Circuit affirmed the district court's ruling and held that failing to deliver repossessed vehicle to the debtor promptly after receiving notice of pending petition constituted willful violation of the automatic stay under chapter 13 of the Bankruptcy Code, and that the creditor is responsible for actual damages, costs and attorney's fees.

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: CONSUMER FINANCIAL PROTECTION BUREAU CRACKS DOWN ON DEBT-SETTLEMENT SCAM

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post takes an in-depth look at the Consumer Financial Protection Bureau's (CFPB) referral of a case for criminal prosecution against a debt-settlement company, Mission Settlement Agency. The action is the first-ever criminal referral by the CFPB.

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

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

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

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

May

- "Nuts and Bolts" Program at NYCBC

     May 15, 2013 | New York, N.Y.

- ABI Endowment Cocktail Reception

     May 15, 2013 | New York, N.Y.

- New York City Bankruptcy Conference

     May 16, 2013 | New York, N.Y.

- Litigation Skills Symposium

     May 21-24, 2013 | Dallas, Texas

- ABI Live Webinar: Consumer Class Actions

     May 29, 2013

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

- INSOL’s Latin American Regional Seminar

     June 13, 2013 | São Paulo, Brazil

- Charity Golf Tournament

     June 14, 2013 | City of Industry, Calif.

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.

- Southwest Bankruptcy Conference

    August 22-24, 2013 | Incline Village, Nev.

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.