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CREDITOR LAWSUIT COULD UNDO AUTO BAILOUT, FORCE GM INTO BANKRUPTCY



A backroom deal negotiated by General Motors during the auto bailout to fulfill the Obama administration's demand for a quick bankruptcy could be reversed, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009, according to a report in the Washington Free Beacon yesterday. As GM teetered on the edge of bankruptcy in June 2009, it cut a $367 million "lock-up agreement" with several major creditors in order to prevent its Canadian subsidiary from going under. The move spared the subsidiary from fulfilling the $1 billion debt it owed the creditors—major hedge funds—ensuring that GM would not have to face bankruptcy courts in two nations, which could have delayed the company’s recovery. "Many U.S. creditors waived their rights to object because the government wanted to push through the bailout for political reasons," risk analyst Chris Whalen said. "If they had continued through normal channels, they could have easily been in bankruptcy for five years." "When I approved the sale agreement and entered the sale approval order, I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs,” Bankruptcy Judge Robert Gerber said in July. “It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all." Industry experts say that GM should be very concerned with the judge’s reaction to the deal. More is at stake than the roughly $1 billion that “old GM’s” spurned creditors are seeking, according to industry observers. Judge Gerber may have to reopen the entire bailout, and that, according to bankruptcy experts, could unravel the entire settlement. Read more.

U.S. CHARGES 530 PEOPLE IN MORTGAGE PROBE WITH $1 BILLION IN LOSSES



Attorney General Eric Holder said today that the U.S. brought charges against 530 people over mortgage schemes that cost homeowners more than $1 billion, Bloomberg News reported. More than 73,000 homeowners were victims of various frauds for which charges were filed during a year-long crackdown, including "foreclosure rescue schemes" that take advantage of those who have fallen behind on payments, the Justice Department said. Typical schemes involved promises to homeowners that foreclosures could be prevented by payment of a fee, according to the statement. As part of the schemes, "investors" purchase the mortgage or the titles of homes are transferred to those taking part in the fraud, resulting in homeowners losing their property, the department said. Read more.

COURT SAYS CONGRESS CANNOT BLOCK PAY HIKES FOR JUDGES



The U.S. Court of Appeals for the Federal Circuit in a 10-2 decision on Friday found that Congress cannot revoke cost-of-living adjustments promised to federal judges in the Ethics Reform Act of 1989, reversing the court's holding to the contrary in 2001, the National Law Journal reported yesterday. Six current and retired federal judges sued over Congress' decision to block cost-of-living adjustments in the past and whether legislation passed after the court's 2001 decision overrode provisions of the 1989 law. In the Oct. 5 decision, the court found that Congress had violated the Compensation Clause of the Constitution, which aims to protect judicial independence by limiting the ability of the other branches of government from reducing judges' salaries. If Congress wanted to amend the 1989 law, the judges wrote, it could, but not in a way that affected any sitting judges. Read more.

WALL STREET REGULATOR RAMPS UP ENFORCEMENT



The Commodity Futures Trading Commission (CFTC), once considered a toothless regulator, brought a record number of enforcement cases over the past year as fines soared, the New York Times DealBook blog reported on Friday. The agency said on Friday that it levied $585 million in sanctions during its 2012 fiscal year, which ended Sept. 30, up from $450 million the year before. The surge in fines is largely tied to one case. In June, the British bank Barclays agreed to pay $200 million to the agency for trying to manipulating a crucial interest rate. Read more.

ABI MEMBERS CAN RECEIVE A DISCOUNT ON THEIR PURCHASE OF A DEBTOR WORLD



A Debtor World, published by Oxford University Press, contains a collection of contributions about the societal implications of private debt from top scholars at the 2008 Debt Symposium sponsored by ABI and hosted by the University of Illinois College of Law. The essays comprising this volume are authored by dozens of leading U.S. and international academics who have written about debt or issues related to debt in a wide range of disciplines including law, sociology, psychology, history, economics and more. The collection explores debt as neither a problem nor a solution but as a phenomenon, and promotes the exchange of knowledge to better comprehend why consumers and businesses decide to borrow money. It explores what happens to businesses and consumers under heavy debt loads, and what legal norms and institutions societies need in order to encourage the efficient use of debt while promoting a greater understanding of the global phenomenon of increased indebtedness and societal dependence. To order your copy and receive an ABI member discount, please click here and enter promo code "31256" when making your purchase. The discount expires 12/31.

SHOW YOUR SUPPORT FOR STEVEN GOLICK, A COLLEAGUE AND ABI LEADER



Our friend Steven Golick (Osler Hoskin & Harcourt LLP, Toronto) is facing a medical crisis. He has been diagnosed with a serious brain tumor, requiring complex surgery and treatment. Steven’s spirits are very strong and he and his family remain optimistic, but he can use our support. A prominent international restructuring attorney and an ABI member since 1994, Steven is also a founding member of the ABI house band, the Indubitable Equivalents. Because the band is important to Steven, his fellow band-mates have organized a new Blog site for Steven's friends and colleagues to show their love and support at this critical time. Please click on this link to share your thoughts with many others, and post as often as you'd like.

ABI IN-DEPTH

LAST CHANCE TO GET YOUR TICKET FOR TOMORROW’S PLAYOFF GAME TO SEE THE ST. LOUIS CARDINALS TAKE ON THE WASHINGTON NATIONALS IN D.C.!



Only a few tickets remain to the ABI Endowment's special event at Nationals Park tomorrow at 1 p.m. ET to see the St. Louis Cardinals take on the Washington Nationals in Game 3 of the National League Division Series. For $400, you will receive a game ticket to a luxury suite, food and open bar. Don't miss playoff baseball in Washington, D.C.! Click here to register!

Sponsorships Are also Available!

Stand out from the crowd and sponsor this historic playoff event! Bring a client; tickets included with your sponsorship. All sponsorships are tax deductible. Click here for details.

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



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

To view the list of ABI programs on Oct. 26 and the full NCBJ Annual Conference schedule, please click here.



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

LATEST CASE SUMMARY ON VOLO: LIQUIDATORS OF LEHMAN BROTHERS AUSTRALIA LTD. V. LEHMAN BROTHERS SPECIAL FINANCING INC. (IN RE LEHMAN BROTHERS HOLDINGS INC.; 2D CIR.)



Summarized by Janice Grubin of Todtman, Nachamie, Spizz & Johns, P.C.

The Second Circuit vacated and remanded the judgment of the district court and reinstated the appeal for consideration of the bankruptcy court order denying intervention on the merits. Given that (1) denials of intervention are generally considered to be final appealable orders in the non-bankruptcy context, (2) the bankruptcy standard for finality is more flexible than other civil litigation and (3) the pragmatic approach is required by the instant circumstances, the Circuit held that the bankruptcy court's denial of the appellants' motions to intervene was a final, appealable order.

There are more than 650 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: PINNACLE UNIONS BALK AT AIRLINE'S ATTEMPTS TO SCRAP CONTRACT



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post reported on how Pinnacle Airlines Corp.'s thousands of pilots and flight attendants are objecting to the airline’s bid to scrap their contracts, a move the regional carrier says is necessary to exit bankruptcy protection.

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

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

HAVE YOU TUNED IN TO BLOOMBERG LAW'S VIDEO PODCASTS?



Bloomberg Law's video podcasts feature top experts speaking about current bankruptcy topics. The podcasts are available via Bloomberg Law's YouTube channel so that you can access the programs from your computer or device of your choice! Click here to view the Bloomberg Law video podcasts.

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.

October

- ABI Endowment Event: Nationals Playoff Game

     October 10, 2012 | Washington, D.C.

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

October 15, 2012

- ABI/Bloomberg Distressed Lending Conference

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

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

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

     October 19, 2012 | Queens, N.Y.

- ABI Program at NCBJ's Annual Conference

     October 26, 2012 | San Diego, Calif.

November

- U.S./Mexico Restructuring Symposium

     November 7, 2012 | Mexico City, Mexico

- Professional Development Program

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

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.

- Winter Leadership Conference

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

December

- Forty-Hour Bankruptcy Mediation Training

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

2013

January

- Rocky Mountain Bankruptcy Conference

     January 24-25, 2013 | Denver, Colo.

February

- Kansas City Advanced Consumer Bankruptcy Practice Institute

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

CHANGES IN MORTGAGE SERVICING PRACTICES TAKE EFFECT TODAY



A significant element of the government’s historic settlement with big banks over foreclosure abuses takes effect today, when firms face a deadline for carrying out more than 300 changes in the way they service mortgages and treat struggling homeowners, the Washington Post reported today. Much of the attention surrounding this year’s $25 billion government settlement has focused on the banks' agreement to reduce the loan balances of some borrowers and undertake more refinancings for thousands of Americans. Although the new standards have not received as much attention, they are crucial for fixing a broken mortgage system, government officials said. The standards forbid the pervasive practice of "robo-signing," and mortgage servicers can no longer foreclose on a borrower while simultaneously negotiating a loan modification, a practice known as "dual tracking." They must provide customers with a single point of contact, rather than shuffling them around to different employees with each call. Read more.

U.S. CREDIT CARD LENDERS SHUN ADD-ONS AS CFPB CRACKS DOWN



JPMorgan Chase & Co., Bank of America Corp. and American Express Co. are among credit card lenders retreating from a $2.4 billion market as regulators seek curbs on deceptive marketing of products including debt cancellation, Bloomberg News reported today. Scrutiny from the Consumer Financial Protection Bureau (CFPB) has led to fines against banks including Capital One Financial Corp. and Discover Financial Services, prompting them to curtail sales of so-called add-ons that offer to help customers pay credit card bills if they get sick or lose their jobs, or help monitor their credit. American Express, the biggest U.S. credit-card issuer by purchases, said yesterday that it will pay $112.5 million to settle claims that it violated consumer safeguards from marketing to collections in products sold to about 250,000 customers. That case did not involve add-on products. The crackdown is CFPB Director Richard Cordray's first enforcement campaign after the Dodd-Frank Act consolidated regulation of retail financial products under one federal agency. With U.S. banks already complaining that regulation has squeezed revenue, the bureau is considering new limits on payday lending and fees for checking overdrafts, and has proposed an overhaul of mortgage practices. Read more.

COMMENTARY: MONEY MARKET MUTUAL FUNDS AND MORAL HAZARD



The wrangling over money-market mutual funds is a vivid illustration of some of the hidden costs of bailouts — in this case, the government rescue of the $2.6 trillion money-market mutual fund industry in 2008 that was so successful it took away any sense of urgency for major reform, according to a commentary in Friday’s Washington Post. Last month, SEC Chair Mary Schapiro canceled plans to move forward on a reform proposal for regulating the mutual fund industry after concluding she did not have the votes for passage of the proposal. SEC Commissioner Luis A. Aguilar had indicated he would oppose her proposal, favoring a more overarching approach to overseeing the cash-management industry. To step up pressure on the SEC, Treasury Secretary Timothy Geithner’s letter to the Financial Stability Oversight Council (FSOC), created by the Dodd-Frank Act, advocated for regulators to step up oversight of money-market mutual funds. Read the full commentary.

CALIFORNIA DAIRIES GOING BROKE DUE TO FEED, MILK PRICES



Across California, the nation's largest dairy state, dozens of dairy operators large and small have filed for bankruptcy in recent months, and many teeter on the edge of insolvency, the Associated Press reported on Saturday. Others have sold their herds or sent them to slaughter and given up on the business. Experts say California dairymen face a double hit to their operations: exorbitant feed costs and lower milk prices. The Midwest drought has led to corn and soybean costs increasing by more than 50 percent this summer, stressing dairymen from Wisconsin and Minnesota to Missouri. But in California, milk prices have also lagged behind those in the rest of the nation, exacerbating the crisis. And while milk revenues in California have soared to over $7.5 billion in 2011, making milk the top agricultural commodity, higher revenues mean little, farmers say, because it costs so much more to produce the milk. Read more.

SHOW YOUR SUPPORT FOR STEVEN GOLICK, A COLLEAGUE AND ABI LEADER



Our friend Steven Golick (Osler Hoskin & Harcourt LLP, Toronto) is facing a medical crisis. He has been diagnosed with a serious brain tumor, requiring complex surgery and treatment. Steven’s spirits are very strong and he and his family remain optimistic, but he can use our support. A prominent international restructuring attorney and an ABI member since 1994, Steven is also a founding member of the ABI house band, the Indubitable Equivalents. Because the band is important to Steven, his fellow band-mates have organized a new Blog site for Steven's friends and colleagues to show their love and support at this critical time. Please click on this link to share your thoughts with many others, and post as often as you'd like.

ABI IN-DEPTH

SEE THE N.L. EAST DIVISION CHAMPION WASHINGTON NATIONALS IN THE PLAYOFFS: ABI HAS YOUR TICKET!



Don't miss playoff baseball in Washington, D.C.! Only 20 tickets are available to the ABI Endowment's special event at the Nationals first home playoff game to be played either Oct. 9 or 10 (depending on Major League Baseball scheduling). For $400, you will receive a game ticket to a luxury suite, food and open bar. Click here to register!

Sponsorships Are also Available!

Stand out from the crowd and sponsor this historic playoff event! Bring a client- tickets included with your sponsorship. All sponsorships are tax deductible. Click here for details.

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



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

To view the list of ABI programs on Oct. 26 and the full NCBJ Annual Conference schedule, please click here.



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

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



Summarized by Guy Moss of Riemer & Braunstein LLP

As a threshold matter, the First Circuit BAP ruled that all tax refunds received by a chapter 13 debtor are property of the estate whether pursuant to 11 U.S.C. § 541(a) to the extent that they are rooted in pre-petition earnings, or 1306 to the extent that they relate to earnings from services performed by the debtor post-petition. Reversing the rulings of the bankruptcy court, the BAP next determined that an objection to the debtor's claimed exemption in the refund (defined below) did not lie because (1) the refund was property of the estate, (2) the exemption was valid on its face, and (3) the trial court incorrectly considered an alleged infirmity in plan confirmation, i.e., whether the refunds had to be devoted entirely to a plan pursuant to 11 U.S.C. §§ 1322(a)(1) and 1325(b)(1)(B), to determine the validity of an exemption. Rather, consideration of that issue arises only if and when there is an objection to the plan. The BAP reserved comment on whether such an objection to an exemption is a necessary "placeholder" to preserve the objecting party's ability to object to plan confirmation on the ground that not all future earnings and income are being devoted to plan payments.

There are more than 650 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: PILGRIM'S PRIDE OPINION ALLOWS ENHANCEMENTS IN BANKRUPTCY, OFFERS COMPREHENSIVE OVERVIEW OF BANKRUPTCY FEES



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines the Fifth Circuit's ruling in Matter of Pilgrim's Pride Corp., No. 11-10774 (5th Cir. 8/10/12), to allow a $1 million fee enhancement to a chief restructuring officer who achieved results described as "rare and exceptional." The court rejected the argument that a recent Supreme Court opinion on fee-shifting precluded enhancements, and in the process set forth a comprehensive framework for allowance of professional fees 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.

ABI Quick Poll

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

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

HAVE YOU TUNED IN TO BLOOMBERG LAW'S VIDEO PODCASTS?



Bloomberg Law's video podcasts feature top experts speaking about current bankruptcy topics. The podcasts are available via Bloomberg Law's YouTube channel so that you can access the programs from your computer or device of your choice! Click here to view the Bloomberg Law video podcasts.

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.

October

- Nuts & Bolts for Young and New Practitioners - KC

     October 4, 2012 | Kansas City, Mo.

- Midwestern Bankruptcy Institute Program, Midwestern Consumer Forum

     October 5, 2012 | Kansas City, Mo.

- Bankruptcy 2012: Views from the Bench

     October 5, 2012 | Washington, D.C.

- Chicago Consumer Bankruptcy Conference

     October 8, 2012 | Chicago, Ill.

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

October 15, 2012

- ABI/Bloomberg Distressed Lending Conference

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

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

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

     October 19, 2012 | Queens, N.Y.

- ABI Program at NCBJ's Annual Conference

     October 26, 2012 | San Diego, Calif.

November

- U.S./Mexico Restructuring Symposium

     November 7, 2012 | Mexico City, Mexico

- Professional Development Program

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

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.

- Winter Leadership Conference

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

December

- Forty-Hour Bankruptcy Mediation Training

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

2013

February

- Kansas City Advanced Consumer Bankruptcy Practice Institute

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

COMMENTARY: DODD-FRANK'S "ORDERLY LIQUIDATION" IS OUT OF ORDER



The Dodd-Frank Act continues to undermine economic growth and the rule of law by injecting immense uncertainty into our economy, according to a Wall Street Journal commentary yesterday by Oklahoma Attorney General Scott Pruitt (R) and South Carolina Attorney General Alan Wilson (R). Oklahoma, South Carolina and Michigan last week joined a federal lawsuit against the Dodd-Frank Act to uphold property rights and checks and balances. Pruitt and Wilson's commentary focused on Title II of the Dodd-Frank Act, which gives the Treasury secretary and the Federal Deposit Insurance Corp. unprecedented authority to "liquidate" financial companies. "This grants immense power to a handful of unelected federal bureaucrats, empowering them to pick winners and losers among a liquidated company's investors. This arrangement destroys rights long protected by bankruptcy law," according to Pruitt and Wilson. Read the full commentary.

CFPB FACING TEST OF "AGGRESSIVE ABILITY TO INVESTIGATE"



Lawyers who follow actions by the Consumer Financial Protection Bureau (CFPB) are closely watching a petition by mortgage lender PHH Corp., which filed the first-ever challenge to a CFPB civil investigative demand, the Legal Times reported yesterday. PHH's petition called the agency's request for information "overly broad and unduly burdensome." Last week, CFPB Director Richard Cordray denied the petition and ordered the company to produce all relevant documents within 21 days. The dispute arose from an investigation to determine whether mortgage lenders and private mortgage insurance providers engaged in "unlawful acts or practices in connection with residential mortgage loans," as the CFPB put it in its "Notification of Purpose" that agency lawyers served on PHH on May 22. In its petition, PHH complained that the CFPB failed to state the nature of the conduct at issue, as required by Dodd-Frank. "The failure of the CFPB to properly apprise PHH of the nature of its investigation prejudices PHH's ability to formulate appropriate objections," PHH counsel Mitchel Kider and David Souders of Weiner Brodsky Sidman Kider wrote. Cordray responded that an initial civil investigative demand may be "crafted broadly because the enforcement team needs to be thorough and comprehensive about its inquiries into possible violations of law that harm consumers." Read more.

GOV. BROWN SIGNS CALIFORNIA FORECLOSURE PREVENTION LEGISLATION



California Gov. Jerry Brown (D) has completed work on a package of foreclosure-prevention bills aimed at preventing future real estate and mortgage foreclosure problems, the Los Angeles Times reported yesterday. The governor on Tuesday signed into law S.B. 1474 by State Sen. Loni Hancock (D-Berkeley), giving the attorney general authority to impanel a statewide grand jury to investigate and issue indictments for alleged financial crimes, including mortgage fraud. Also signed on Tuesday were Assembly Bill 1950 by Assemblyman Mike Davis (D-Los Angeles), which extends from one to three years the legal statute of limitations for prosecuting mortgage-related crimes, and A.B. 2610 by Assemblywoman Nancy Skinner (D-Berkeley), which provides guarantees to renters that they can stay longer in foreclosed properties purchased by new owners. Read more.

ANALYSIS: STUDENT DEBT STRETCHES TO NEARLY 20 PERCENT OF U.S. HOUSEHOLDS



With college enrollment growing, student debt has stretched to a record number of U.S. households — nearly 1 in 5 — according to an analysis by the Pew Research Center, the Associated Press reported today. Pew found that 22.4 million households, or 19 percent, had college debt in 2010. That is double the share in 1989 and up from 15 percent in 2007, just prior to the recession — representing the biggest three-year increase in student debt in more than two decades. The increase was driven by higher tuition costs as well as rising college enrollment during the economic downturn. The biggest jumps occurred in households at the two extremes of the income distribution. More well-off families are digging deeper into their pockets to pay for costly private colleges, while lower-income people in search of higher-wage jobs are enrolling in community colleges, public universities and other schools as a way to boost their resumes. Read more.

MERGERS & ACQUISITIONS ACTIVITY SLUMPS TO LOWEST LEVEL SINCE HEIGHT OF FINANCIAL CRISIS



Global mergers and acquisitions slumped this quarter to a level not seen since the aftermath of the financial crisis amid increasing concern that the economic recovery is deteriorating, Bloomberg News reported today. Companies have announced $446 billion of takeovers since June 30, the smallest amount since the third quarter of 2009, according to data compiled by Bloomberg. Acquisitions are now on pace to drop 15 percent in 2012 to $2 trillion, the lowest in three years. Cross-border takeovers have accounted for about half of all announced deals this year. This quarter’s slowdown has been most pronounced in Europe, where takeovers accounted for about $92 billion, or 21 percent, of global activity, the continent's lowest share since 2010. The Americas accounted for $248 billion of transactions, and there were $104.5 billion of transactions in the Asia-Pacific region. Read more.

LATEST ABI PODCAST EXAMINES RESEARCH ON THE USE OF KERPS IN BANKRUPT FIRMS



ABI Resident Scholar Susan Hauser talks with Profs. Vidhan K. Goyal of the Hong Kong University of Science & Technology (HKUST) and Wei Wang of the Queen's School of Business about their controversial paper, "Provision of Management Incentives in Bankrupt Firms." Profs. Goyal and Wang examine the use of key employee retention plans (KERPs) in bankrupt firms and discuss how the results of their empirical research do not support the common view that retention bonus plans enrich managers at the expense of creditors. Click here to listen.

NEW ABI PUBLICATION EXAMINES BANKRUPTCY'S EFFECTS ON MANUFACTURING SUPPLY CHAINS



Now available for pre-order in the ABI Bookstore, Interrupted! Understanding Bankruptcy's Effects on Manufacturing Supply Chains explores the issues that arise when suppliers are unable to make deliveries of promised parts due to financial problems. When the authors of this manual set out to update ABI's Auto Supplier Insolvencies & Bankruptcies manual (ABI, 2006), they realized that supply chain issues had moved far beyond the scope of just financially troubled auto suppliers. This comprehensive manual unravels the sometimes-knotty intersection of the Uniform Commercial Code and the Bankruptcy Code, and includes special sections on cross-border matters in Canada, Germany and Mexico. Also included is a detailed discussion of relevant case law such as Delphi Corp. and Plastech Engineered Products, as well as sample agreements that outline common protections against supply chain disruptions. Click here to pre-order your copy today!

SHOW YOUR SUPPORT FOR STEVEN GOLICK, A COLLEAGUE AND ABI LEADER



Our friend Steven Golick (Osler Hoskin & Harcourt LLP, Toronto) is facing a medical crisis. He has been diagnosed with a serious brain tumor, requiring complex surgery and treatment. Steven’s spirits are very strong and he and his family remain optimistic, but he can use our support. A prominent international restructuring attorney and an ABI member since 1994, Steven is also a founding member of the ABI house band, the Indubitable Equivalents. Because the band is important to Steven, his fellow band-mates have organized a new Blog site for Steven's friends and colleagues to show their love and support at this critical time. Please click on this link to share your thoughts with many others, and post as often as you'd like.

ABI IN-DEPTH

FREE REGISTRATION, LIMITED SPOTS FOR THE ABI/BLOOMBERG DISTRESSED LENDING CONFERENCE ON OCT. 16!



The ABI Secured Credit Committee and Bloomberg Law are co-hosting a Distressed Lending Conference on October 16 at Bloomberg Headquarters in New York. Leading experts in the industry will discuss recent developments in distressed lending, the future of the European distressed market and the state of the U.S. credit markets, including prospects for corporate defaults and whether and how the European financial crisis will affect the U.S. credit markets. If you are a leader in the distressed lending industry, you do not want to miss this conference! Registration is free. Spaces are limited and seats are filling fast. Click here to register.

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



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

To view the list of ABI programs on Oct. 26 and the full NCBJ Annual Conference schedule, please click here.



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

LATEST CASE SUMMARY ON VOLO: LEWIS BROTHERS BAKERIES INC. V. INTERSTATE BRANDS CORP. (IN RE INTERSTATE BAKERIES CORP.; 8TH CIR.)



Summarized by William Joanis of JoanisLaw

Following the Countryman test for an executory contract (whether obligations remain on both sides so underperformed that the failure of either party to complete performance of those obligations would constitute a material breach excusing the performance of the other), the Eighth Circuit ruled that the obligations remaining on a license agreement entered into as part of the sale of a business was an executory contract. The Eighth Circuit distinguished the Third Circuit decision In Re Exide Technologies, 607 F.3d 957 (3rd Cir. 2010) on the basis of the obligation of the non-debtor to maintain quality standards. The dissent argued that the license agreement was but a part of a sale that had occurred years previously and the remaining obligations were not material, as the sale had been substantially consummated.

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: THE CURE FOR THE BANKING INDUSTRY: WHY DODD-FRANK IS NO HELP



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post describes how the law radically expands the power of the Fed and banking regulators, and gives the institutions that created the crisis more ability to cause bigger problems in the future.

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

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September

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

     September 28, 2012 | Chicago, Ill.

October

- Nuts & Bolts for Young and New Practitioners - KC

     October 4, 2012 | Kansas City, Mo.

- Midwestern Bankruptcy Institute Program, Midwestern Consumer Forum

     October 5, 2012 | Kansas City, Mo.

- Bankruptcy 2012: Views from the Bench

     October 5, 2012 | Washington, D.C.

- Chicago Consumer Bankruptcy Conference

     October 8, 2012 | Chicago, Ill.

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

October 15, 2012

- ABI/Bloomberg Distressed Lending Conference

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

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

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

     October 19, 2012 | Queens, N.Y.

- ABI Program at NCBJ's Annual Conference

     October 26, 2012 | San Diego, Calif.

November

- U.S./Mexico Restructuring Symposium

     November 7, 2012 | Mexico City, Mexico

- Professional Development Program

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

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.

- Winter Leadership Conference

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

December

- Forty-Hour Bankruptcy Mediation Training

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

2013

February

- Kansas City Advanced Consumer Bankruptcy Practice Institute

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