Consumer Debt

REPORT: ASSETS, LIABILITIES DECREASE WITH DROP IN 2011 CONSUMER FILINGS



Liabilities and assets of debtors decreased along with overall personal bankruptcy filing numbers, according to a report released yesterday by the Administrative Office of the U.S. Courts (AOUSC). The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) requires the annual compilation of statistics by the AOUSC on debtors who are individuals with primarily consumer debts seeking relief under chapters 7, 11, and 13. Compared to 2010 data, the AOUSC found the following decreases among debtors filing for personal bankruptcy in 2011:

• 11 percent decrease in overall filings

• 23 percent decrease in filer assets

• 25 percent decrease in filer liabilities

• 28 percent incidence of repeat filers

To read the AOUSC's full 2011 BAPCPA Report, please click here.

REGULATORS SAY LOAN QUALITY IMPROVING



The credit quality of large loan commitments owned by financial institutions regulated in the U.S. improved in 2012 for the third consecutive year, according to a review by the Federal Reserve and two other regulators, MarketWatch.com reported yesterday. However, the review also added that, despite the progress, poorly originated large loans in 2006 and 2007 "with weak underwriting standard" continued to hurt the portfolio of institutions reviewed. The agencies reviewed loan commitments of $20 million or more in real estate, stocks, notes or bonds extended by American and foreign financial institutions regulated in the U.S. The study noted that so-called nonbank firms, such as hedge funds insurance companies and pension funds, held the smallest share of large loan commitments but the largest share of credits rated "substandard or doubtful" or considered uncollectible and of little value. According to the report, institutions held roughly $2.8 trillion of large loans, with roughly 8,700 credit facilities going to roughly 5,600 borrowers. That number is up from about $2.5 trillion in 2011. Read more.

FSOC MAY HAVE TO MOVE SLOWLY ON MONEY FUNDS



Though the Securities and Exchange Commission said on Wednesday that it would have to drop its proposed overhaul of the money market mutual fund industry, regulators are contemplating pursuing money fund overhaul through the Financial Stability Oversight Council (FSOC), the New York Times DealBook blog reported on Saturday. The FSOC was set up by the Dodd-Frank legislation to identify systemic risks and then set in motion plans to remove those risks. The council, which is led by Treasury Secretary Timothy F. Geithner, has said that money funds are a concern, and backed the reforms scuttled at the SEC. While the FSOC certainly has the freedom and power to take up the issue of money market funds, some experts question whether the council will officially designate money funds as a risk, especially in the last few months before the presidential election. Read more.

CONSOLIDATION OF SMALL BANKS ON THE RISE



A growing number of small- and medium-sized banks are merging as shrinking profit margins, tepid loan demand and low interest rates place pressure on their operations, the Washington Post reported today. Community banks also are contending with the added cost of complying with new regulations stemming from the Dodd-Frank financial reform law. Industry watchers say all of these factors will spur buying activity in the coming quarters. M&T Bank, with $81 billion in assets, became the latest bank buyer, with a $3.7 billion deal yesterday to acquire Hudson City Bancorp, a $43.6 billion community bank in Paramus, N.J. Banking analyst Bert Ely said that the Dodd-Frank Act places the heaviest burden on banks with less than $500 million in assets, which will likely be the primary source of deal activity. Small banks, he said, will be especially taxed by new requirements to keep 5 percent of the loans they issue through mortgage-backed securities on their books. He also thinks smaller banks will be discouraged by higher and stricter capital requirements. Read more.

U.S. HOME PRICES CONTINUE UPWARD MOVE IN JUNE



The S&P/Case-Shiller 20-city composite index showed that U.S. home prices bounced higher for a second month in June, MarketWatch.com reported today. The S&P/Case-Shiller index registered a 2.3 percent advance in June, matching upwardly revised gains in May. Prices in the second quarter of 2012 gained 6.9 percent compared to the first quarter.All 20 cities in the index managed monthly gains, including a 6 percent surge in hard-hit Detroit and a 4.8 percent advance in Minneapolis. Read more.

For a historic look at housing prices, be sure to check out ABI’s Chart of the Day to browse house price data since 1976.

ABI IN-DEPTH

ABI MEMBERS WELCOME TO ATTEND ACB'S FREE HALF-DAY "BANKRUPTCY: BACK TO THE FUTURE" PROGRAM IN SEPTEMBER



The American College of Bankruptcy invites you to attend a free half-day program on Sept. 28 in Chicago for a discussion of many of the challenging topics facing current bankruptcy and reorganization professionals. Topics to be addressed include recent decisions of the U.S. Supreme Court and Court of Appeals, important work of the Advisory Committee on Bankruptcy Rules, and developments in the field of bankruptcy ethics. The nation’s leading judges, academics and bankruptcy professionals are among the speakers for the program. While there is no cost to attend, seating is limited, so early reservation is suggested. For more information and to register, please click here.

LATEST CASE SUMMARY ON VOLO: IN RE DAHLGREN (3D. CIR.)



Summarized by Emil Khatchatourian of the U.S. Bankruptcy Court for the Eastern District of California

Affirming the district court ruling, the Third Circuit held that a debtor's plan, as submitted by his counsel, would have voided the state court's sale order issued prior to the bankruptcy filing. Without deciding whether the Rooker-Feldman doctrine actually applied, the debtor's attempt to confirm a plan that contemplated a forced sale was improper.

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: SIXTH CIRCUIT RULES THAT TORTIOUS USE OF PROPERTY IS NOT PROTECTED BY THE AUTOMATIC STAY



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. Noting that the “commission of a tort is not protected by the Bankruptcy Code,” a recent blog post examined the ruling by the U.S. Court of Appeals for the Sixth Circuit that found that the automatic stay imposed by section 362(a) of the Bankruptcy Code did not apply to a contempt proceeding against a debtor for violation of an injunction. The injunction related to, among other things, a suit for trademark infringement and trademark dilution.

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

Client matters left unfinished at a firm when it files for bankruptcy are the property of the defunct firm.

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.

September

- 7th Annual Golf and Tennis Outing

     September 11, 2012 | Maplewood, N.J.

- Complex Financial Restructuring Program

     September 13-14, 2012 | Las Vegas, Nev.

- Southwest Bankruptcy Conference

     September 13-15, 2012 | Las Vegas, Nev.

- 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization

     September 19-20, 2012 | New York, N.Y.

- "When Is an Individual Chapter 11 the Best Fit?" Live Webinar

     September 27, 2012

- 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

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

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.

REPORT: BANKRUPTCY BIDDER PROTECTIONS CLIMBED IN 2012



A report from Morgan Joseph TriArtisan LLC, an investment bank that focuses on the middle market, found that bankruptcy bidder protections hit their highest level in recent years, the Wall Street Journal Bankruptcy Beat blog reported today. The report found that the average amount of bidder protections a company offered its lead bidder last year was 4.4 percent of the purchase price, while average bidder protections between 2008 and 2011 hovered between 3.5 and 3.7 percent. (They were a low 2.6 percent in 2007, before the economic downturn hit.) Bidder protections include the break-up fee that a company pays its stalking-horse bidder, as well as expense reimbursements, which cover the legal and due-diligence fees a stalking horse incurs as it puts its bid together. The average break-up fee last year was 3.7 percent of the purchase price compared to 2.5-2.9 percent in prior years, while the average expense reimbursement was 2.3 percent versus a past range of 0.4-1.6 percent. Read the full report.

COMMENTARY: A BETTER WAY TO END "TOO BIG TO FAIL"



Big banks and their defenders insist that the changes proposed in the Terminating Bailouts for Taxpayer Fairness Act—which would require them to boost the value of their stock and other equity to 15 percent of the value of their total assets—are unnecessary and would have dangerous consequences for the U.S. economy and our financial competitiveness, according to a commentary by Prof. David Skeel in today's Wall Street Journal. Both of these claims are wrong, according to Skeel, but in making them, the banks have accidentally pointed the way to a far more promising strategy for finally ending "too big to fail." Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.) introduced the Terminating Bailouts for Taxpayer Fairness Act on April 24, which would require U.S. financial institutions with more than $500 billion in assets to substantially increase their "equity capital." The banks further insist that Brown-Vitter would force them to cut back their lending to businesses just as the U.S. economic recovery is getting underway, and to shed assets to create the required 15 percent capital buffer. But as Bank of England's Robert Jenkins has argued, it is a widely held myth that banks reduce lending simply because capital obligations are increased. Still, according to Skeel, the giant banks' concerns do suggest a friendly amendment to Brown-Vitter: Rather than force them to fit the same 15 percent capital mode, why not let them choose either to comply with Brown-Vitter's capital requirements, or to downsize to a specific maximize size within five years of the enactment of the legislation? Read the full commentary. (Subscription required.)

LEGISLATION AIMS TO ENSURE MEDICAL-DEBT ACCURACY IN CREDIT REPORTS



Rep. Gary Miller (R-Calif.) on May 24 introduced legislation to give consumers more time to ensure that only accurate medical debt is reported to credit bureaus, according to a press release from Miller's office. H.R. 2211, the "Accuracy in Reporting Medical Debt Act," aims to ensure that consumers have ample time to resolve medical billing questions and potential errors before medical debt can be reported to the credit bureaus. The Accuracy in Reporting Medical Debt Act would delay the ability of a debt collector to report medical debt to a credit bureau if the consumer notifies the debt collector that:

• the consumer is continuing to work with an insurance company;

• the consumer did not know that the debt existed; or

• the consumer has applied for financial assistance.

To read the full copy of H.R. 2211, please click here.

COMMENTARY: SHADES OF 2007 BORROWING



American investors have taken out more margin loans than ever before, indicating that speculative investing has grown among retail investors, reaching levels that in the past indicated that the market was getting to unsustainable levels and might be in for a fall, according to a commentary in Saturday's New York Times. The amount owed on loans secured by investments rose to $384 billion at the end of April, according to data compiled by the Financial Industry Regulatory Authority (FINRA). It was the first time the total had surpassed the 2007 peak of $381 billion, a peak that was followed by the Great Recession and credit crisis. The latest total of borrowing amounts to about 2.4 percent of GDP, a level that in the past was a danger signal. Rising margin debt was once seen as a primary indicator of financial speculation, and the Federal Reserve controlled the amount that could be borrowed by each investor as a way to dampen excess enthusiasm when markets grew frothy. But the last time the Fed adjusted the margin rules was in 1974, when it reduced the down payment required for stocks to 50 percent of the purchase price from 65 percent. That came about during a severe bear market. Read more.

ABI WEBSITE (ABI.ORG) WILL BE DOWN THIS WEEKEND FOR SCHEDULED MAINTENANCE



From 10 p.m. ET on Friday, June 7, through Sunday evening, June 9, the ABI homepage (abi.org) will be down for scheduled maintenance. During this period, members will not be able to access certain features, including registering for conferences, printing and viewing CLE certificates, and purchasing publications. Other ABI sites, like Search.abi.org, Volo.abi.org, Journal.abi.org, law.abi.org, blogs.abi.org and news.abi.org, will be operational during this time, but users may experience limited functionality. ABI intends to limit this downtime as much as possible. If you have any questions, please email support@abiworld.org.

NEW ABI "BANKRUPTCY IN DEPTH" ON-DEMAND CLE PROGRAM LOOKS AT PRINCIPLES OF PROPERTY OF THE ESTATE: DEMYSTIFYING EQUITABLE INTERESTS



In this 90-minute seminar, Profs. Andrew Kull of Boston University School of Law and Scott Pryor of Regent University School of Law provide an in-depth analysis of a legal principle that has become, in their words, "a long-lost area of the law": § 541 of the Bankruptcy Code. Seeking to demystify what is meant by "property of the estate" and, in particular, the distinction between legal or equitable interests of the debtor in property, Kull and Pryor describe the legal entanglements that ensue when legal title belongs to one person but the equitable title belongs to someone else. The cost of the seminar, which includes written materials and qualifies for 1.5 hours of CLE, is $95. To order or to learn more, click here.

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 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 IN-DEPTH

NEW CASE SUMMARY ON VOLO: FADEL V. DCB UNITED LLC (IN RE FADEL; 9TH CIR.)



Summarized by Mark Hudson of Schian Walker PLC

The Ninth Circuit BAP affirmed the bankruptcy court's granting of relief from the automatic stay to permit a purchaser at a foreclosure sale to pursue a forcible detainer action against the debtor in state court and denying motion for reconsideration.

There are more than 900 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 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 blog post provides further examination of the Supreme Court's ruling on May 13 in the case of Bullock v. BankChampaign, N.A.

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

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.

- Bankruptcy 2013: Views from the Bench

    Sept. 27, 2013 | Washington, D.C.

October

- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum

    Oct. 4, 2013 | Kansas City, Mo.

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

November

- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York

ABI'S CHAPTER 11 COMMISSION EYES UPDATES TO BANKRUPTCY CODE



With the Bankruptcy Code now 35 years old, 2013 looks to be a key year in developing a replacement as ABI's Chapter 11 Commission continues its study of chapter 11 with a "top to bottom look" at the Code, The Deal reported yesterday. No specific changes have been recommended to date, and the Commission will not be close to specifics until it gets reports from all 13 of its advisory committees, according to Commission Co-Chair Al Togut of Togut, Segal & Segal LLP (New York). The commission, which is just looking at corporate chapter 11 and the parts of the code that affect business bankruptcies, expects to complete its report in the spring of 2014, said fellow Co-Chair Bob Keach of Bernstein Shur (Portland, Maine), adding that by the end of 2013 the commission should have a good idea of what the report will look like. The report will have two components: ideas for change where there is a consensus and proposals that lack a consensus. Since the ABI does not lobby Congress for legislation, an organization or a combination of organizations will likely work to convert the report into legislation, said Keach. "The idea is to develop a statute for the next 40 years that will get us through as well as this one did," Keach says. Read more.

PENSION FUNDING GAP WIDENS FOR BIG CITIES



A study released on Tuesday by the the Pew Center on the States found that major U.S. cities emerged from the financial crisis with increasingly underfunded pension and retiree health care plans, the Wall Street Journal reported today. Cities employing nearly half of U.S. municipal workers saw their pension and retiree health care funding levels fall from 79 percent in fiscal year 2007 to 74 percent in fiscal year 2009, according to the latest available data, the Pew report stated. The growing funding gulf, which the study estimated at more than $217 billion for the 61 cities in the study, raises worries about local finances at a time when states are also struggling to recover from the recession. More than half, or some $118 billion, of the projected pension shortfall stems from unfunded retiree health care costs, according to the Pew report. Read more. (Subscription required.)

ABI will be holding a media teleconference on Tuesday, Jan. 22, at 11 a.m. ET with experts examining municipal distress in 2013. There are limited spots available to ABI members that would like to join the call next week. Contact John Hartgen, ABI's Public Affairs Manager, at jhartgen@abiworld.org if you would like to participate in the teleconference.

CFPB'S NEW MORTGAGE RULES AID HOMEOWNERS



U.S. banks will have to do more to help struggling mortgage borrowers keep their homes under final rules released today by the Consumer Financial Protection Bureau (CFPB), the Wall Street Journal reported today. Mortgage-loan servicers, which collect borrowers' loan payments, will have to evaluate troubled borrowers for all loan-assistance options permitted by mortgage investors such as Fannie Mae and Freddie Mac, as well as private investors, according to the CFPB rules that will take effect in a year. Currently, no national standard exists for how mortgage servicers must treat defaulting borrowers. The lending industry "must consider all options available from the mortgage owners or investors to help the borrower retain the home," said CFPB director Richard Cordray. The industry "can no longer steer borrowers to those options that are most financially favorable for the servicer." The agency's move follows numerous federal and state efforts to regulate the industry, which came under fire after reports in 2010 found that banks were foreclosing on borrowers without properly reviewing documents and other paperwork, a practice dubbed "robo-signing." In 2011, regulators found abuses of foreclosure processes at 14 lenders. Ten of those lenders agreed to an $8.5 billion settlement of regulators' allegations. Read more. (Subscription required.)

ANALYSIS: "ODD COUPLE" IN U.S. HOUSE TO TACKLE MORTGAGE FINANCE



The will of the new Congress to begin rebuilding the U.S. mortgage finance system rests largely in the hands of Reps. Jeb Hensarling (R-Texas) and Maxine Waters (D-Calif.), known to be partisan fighters from opposite ends of the ideological spectrum, Bloomberg News reported yesterday. Hensarling is the new chairman of the House Financial Services Committee, while Waters is the highest-ranking Democrat. "While we clearly have profound philosophical differences – some might call us Capitol Hill’s newest odd couple – we are exploring areas of common concern where we hopefully can work together," Hensarling said. In addition to grappling with proposals to tweak and amend the Dodd-Frank regulatory law, they will be seeking common ground on what may be the panel's biggest issue this year: The future of Fannie Mae and Freddie Mac. For Hensarling, the solution is to abolish the government-owned mortgage companies and completely privatize the mortgage market. Waters argues that some government involvement is needed to preserve the 30-year fixed home loan. It is likely that the two lawmakers eventually will support a plan that would shrink the role of Fannie Mae and Freddie Mac without threatening to choke off the flow of money into home loans. Read more.

FLORIDA DEFIES HOUSING REBOUND AS FORECLOSURES SOAR



More than six years after subprime lending and overbuilding led to the recent U.S. real estate slump, RealtyTrac Inc. reported that Florida had the biggest increase in home seizures last year, and the highest foreclosure rate, Bloomberg News reported today. One in every 32 Florida households received a notice of default, auction or repossession in 2012, more than double the average U.S. rate of one in every 72, according to RealtyTrac Inc.'s report. Home repossessions increased by 16,276 during the year to 84,456, the biggest gain nationwide. Adding to the state’s woes is a backlog of foreclosures caused by a required court review of each case. Judicial supervision of repossessions is slowing Florida’s rebound, in contrast to California and Arizona, so-called nonjudicial states, where lenders send notices to delinquent borrowers and record defaults at the county level without court intervention, said Lawrence Yun, chief economist of the National Association of Realtors. It took 853 days on average in Florida to complete a foreclosure in the fourth quarter, the third-longest behind New York and New Jersey, RealtyTrac said in today’s report. The U.S. average rose to 414 days from 348 days a year earlier, the most since the data firm began tracking the metric in 2007. Texas had the shortest period at 113 days. Almost 20 percent of outstanding Florida loans were more than 30 days delinquent or in foreclosure in November, the largest share of non-current mortgages in the nation, according to data provider Lender Processing Services. Read more.

ANALYSIS: REWRITING U.S. TAX LAW HAS CONSENSUS WHILE FIX PROVES ELUSIVE



Maintaining a bipartisan consensus in Congress to rewrite the U.S. tax code will be difficult as there is little agreement on what a tax overhaul means and what it is supposed to achieve, according to a Bloomberg News analysis yesterday. Republicans, who control the U.S. House, want lower tax rates and fewer breaks in a simpler system that raises no additional revenue. The Obama administration and many Democrats endorse some of those goals – particularly corporate rate reduction – while viewing a tax rewrite as a way to guarantee more revenue from top earners. That split will challenge lawmakers as they decide whether to rewrite the code as part of budget talks or work on a major tax bill without a fiscal agreement. Compromise remains elusive, though the code is more convoluted -- and therefore, ripe for change -- following passage of a law Jan. 1 that raised marginal rates and reinstated limits on personal exemptions and deductions. Read more.

BLOOMBERG'S LATEST "BILL ON BANKRUPTCY" VIDEO: MF GLOBAL CREDITORS UNDETERRED BY LOW VALUE



The low valuation creditors of MF Global Holding Ltd. put on their liquidating chapter 11 plan is not deterring the bond market where debt is being sold for roughly twice the predicted recovery for unsecured creditors of the liquidating commodity broker's holding company. Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle explore this and other current cases in their latest video. Click here to view.

TAKE AN IN-DEPTH LOOK AT CREDITORS' COMMITTEES AND THE ROLE OF THE INDENTURE TRUSTEES AT ABI'S 31ST ANNUAL SPRING MEETING



The 2013 Annual Spring Meeting, to be held April 18-21, 2013, at the Gaylord National Resort and Convention Center in National Harbor, Md., 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

• 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

• Law Firm Bankruptcies

• 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!

Register today!

ABI IN-DEPTH

ABI LIVE WEBINAR: REVISITING RADLAX AND HALL – NEW LEGAL AND PRACTICAL IMPACT OF THE DECISIONS



See why this was the top-rated panel at the ABI Winter Leadership Conference last month! Join the expert panel on Feb. 19 from 12:00-1:15pm EST as the summarize and discuss the legal impact and practical implications of the Supreme Court’s 2012 decisions in Radlax and Hall. Participants include:

• Susan M. Freeman of Lewis and Roca LLP (Phoenix)

• Adam A. Lewis of Morrison & Foerster LLP (San Francisco)

• Prof. Charles J. Tabb of the University of Illinois College of Law (Champaign, Ill.)

• Eric E. Walker of Perkins Coie LLP (Chicago)

Click here to register!

LATEST CASE SUMMARY ON VOLO: TIMCO LLC V. T AND M SALES AGENCY INC. (IN RE TIMCO LLC; 6TH CIR.)



Summarized by James E. Bailey III of Butler Snow O'Mara Stevens & Cannada PLLC

The Sixth Circuit ruled that the appeal of the bankruptcy court's decision to remand a case removed by state court action to confirm an arbitration award that was affirmed by a district court was not reviewable by the court of appeals under 28 U.S.C. § 1334(d). The appeal of the order granting relief from the automatic stay to allow the state court action to proceed was moot where the debtor failed to obtain stay pending appeal and the state court had entered a valid order confirming an arbitration award.

There are more than 700 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: HIGH-INCOME EARNERS NOT BARRED FROM PASSING BANKRUPTCY'S MEANS TEST



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new post discusses the misconception that bankruptcy's means test bars high-income earners from qualifying for chapter 7 relief.

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'S INDUBITABLE EQUIVALENTS: TELL US A TUNE AND WE'LL SING YOU THAT SONG!



ABI's Indubitable Equivalents need your help: Tell us your favorite Rock and Roll tune - that elusive classic that takes you back, makes your feet tap, your head bang, and your horns come out! If we pick your song, you get widespread promotion by the band and you'll receive a free CD of IE’s greatest hits!

To enter, log onto www.abiband.com or “like” the Band’s Facebook page.

The fine print: No purchase necessary. You can enter as many times as you want. Multiple winners will be selected. Winners will be announced on the IE website and on Facebook. Entry deadline: January 31.

ABI Quick Poll

After Stern, bankruptcy courts do not have the constitutional authority to enter final judgments on fraudulent conveyance claims.

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

January

- Western Consumer Bankruptcy Conference

     January 21, 2013 | Las Vegas, Nev.

- Rocky Mountain Bankruptcy Conference

     January 24-25, 2013 | Denver, Colo.

February

- Caribbean Insolvency Symposium

     February 7-9, 2013 | Miami, Fla.

- ABI Live Webinar: Revisiting RadLAX and Hall- New Legal and Practical Impact of the Decisions

     February 19, 2013

- VALCON 2013

     February 20-22, 2013 | Las Vegas, Nev.

March

- 37th Annual Alexander L. Paskay Seminar on Bankruptcy Law and Practice

     March 7-9, 2013 | St. Petersburg, Fla.

- Bankruptcy Battleground West

     March 22, 2013 | Los Angeles, Calif.

April

- Annual Spring Meeting

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

SUPREME COURT GRANTS CERT IN NINTH CIRCUIT CASE ON JURISDICTION BY CONSENT



The Supreme Court yesterday granted certiorari in Executive Benefits Ins. Agency v. Arkison (In re Bellingham Insurance Agency) about the scope of the bankruptcy court's powers in the wake of the Court's ruling in Stern v. Marshall. In a Ninth Circuit case that drew attention after Stern was decided, a fraudulent transfer defendant argued the bankruptcy court lacked jurisdiction to enter judgment against it. The Ninth Circuit agreed that the bankruptcy court could not enter a final judgment in a fraudulent transfer action but held that the defendant had consented to the bankruptcy court's jurisdiction through its litigation conduct. The Supreme Court will decide whether parties can consent to bankruptcy court jurisdiction. They will also have to rule on a statutory issue about a gap Stern created in the jurisdictional framework. A potential outcome is that bankruptcy courts will lose the power to hear any fraudulent transfer actions. To read the petition for a writ of certiorari, please click here.

LATE AUTO LOAN PAYMENTS EDGED HIGHER IN 1Q 2013



Banks are increasingly extending auto loan financing to borrowers with less-than-sterling credit, a trend that's contributing to a higher rate of missed loan payments, the Associated Press reported today. The rate of U.S. auto-loan payments late by 60 days or more rose to 0.88 percent in the first three months of the year, credit reporting agency TransUnion said today. That's up from 0.82 percent in the first quarter last year, but down from 1 percent in the last three months of 2012, the firm said. Among subprime borrowers, or those whom lenders deem to be higher credit risks because of their track record of managing debt, the delinquency rate jumped to 5.5 percent in the first quarter from 5.09 percent a year earlier. Read more.

ANALYSIS: HIGH-END HOME LOANS STAGE A COMEBACK



Despite a recent sharp rise in mortgage rates, "jumbo" loans are becoming easier to get, according to a Wall Street Journal analysis on Saturday. Lenders originated $54 billion in such mortgages in the first quarter of 2013, according to Inside Mortgage Finance, an industry newsletter, up from $47 billion during the same period a year earlier. Higher loan volume isn't the only sign of a turnaround. The difference in the rate for a government-backed "conforming" mortgage and a jumbo loan is the narrowest it has been since 2007. Many jumbo lenders also have increased the amount of a home's value they will finance, and some are becoming more flexible in evaluating borrowers with strong credit. Read more. (Subscription required.)

COMMENTARY: HOW SAM ZELL IS SINKING TRIBUNE A SECOND TIME AROUND



Sam Zell is gone from the Tribune Co., but his toxic financial legacy lives on, according to a commentary in Friday's Washington Post. Not only did his debt-fueled purchase of one of the nation’s biggest media companies help precipitate its bankruptcy, costing creditors billions of dollars and wiping out thousands of jobs, but he also left a nasty tax mess behind for Tribune, which exited chapter 11 proceedings on Dec. 31. The Internal Revenue Service has challenged the tax-avoiding way that Zell had Tribune unload Newsday, a Long Island, N.Y., newspaper, and it seems almost certain to challenge the way that Tribune unloaded the Chicago Cubs. By the time the final papers are shuffled, the IRS and local tax authorities will likely seek considerably more than half a billion dollars in taxes, penalties and interest from Tribune from the sales of the Cubs and Newsday. Read more.

LATEST ABI PODCAST EXAMINES SUPREME COURT'S DECISION ON THE MEANING OF “DEFALCATION”



ABI's latest podcast features ABI Resident Scholar Scott Pryor speaking with Prof. Keith Sharfman of St. John's University School of Law and attorney Tom Byrne of Sutherland Asbill & Brennan LLP (Atlanta) on the issues surrounding the Supreme Court's unanimous decision in Bullock v. BankChampaign, N.A. In its decision on May 13, the Court held that a defalcation by a trustee requires a finding of gross negligence or some knowledge that what he or she is doing is improper. Byrne was the counsel of record for Randy Bullock, and Scharfman joined fellow professors on an amici curiae brief in support of BankChampaign. Click here to listen to the podcast.

NEW ABI LIVE WEBINAR ON JULY 15 WILL FOCUS ON THE § 1111(b) ELECTION, PLAN FEASIBILITY AND CRAMDOWN ISSUES



Utilizing a case study, ABI's panel of experts will explore issues surrounding a lender’s decision on whether or not to make an election under § 1111(b), plan feasibility and voting. The abiLIVE panel will also walk attendees through the necessary mathematical analyses used to analyze these issues. The webinar will take place on July 15 from 1-2:15 p.m. ET. Special ABI member rate available! Click here to register.

ABI GOLF TOUR UNDERWAY; NEXT STOP IS THE NORTHEAST BANKRUPTCY CONFERENCE ON JULY 12



The next stop for the ABI Golf Tour is the famed Newport National course in Newport, R.I., in conjunction with the Northeast Bankruptcy Conference on July 12. 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.

ABI IN-DEPTH

NEW ABI "BANKRUPTCY IN DEPTH" ON-DEMAND CLE PROGRAM LOOKS AT PRINCIPLES OF PROPERTY OF THE ESTATE: DEMYSTIFYING EQUITABLE INTERESTS



In this 90-minute seminar, Profs. Andrew Kull of Boston University School of Law and Scott Pryor of Regent University School of Law provide an in-depth analysis of a legal principle that has become, in their words, "a long-lost area of the law": § 541 of the Bankruptcy Code. Seeking to demystify what is meant by "property of the estate" and, in particular, the distinction between legal or equitable interests of the debtor in property, Kull and Pryor describe the legal entanglements that ensue when legal title belongs to one person but the equitable title belongs to someone else. The cost of the seminar, which includes written materials and qualifies for 1.5 hours of CLE, is $95. To order or to learn more, click here.

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!

NEW CASE SUMMARY ON VOLO: SUAREZ V. BARRET (IN RE SUAREZ; 9TH CIR.)



Summarized by James Portman Webster of the James Portman Webster Law Office PLC

The Ninth Circuit affirmed the Bankruptcy Appellate Panel and bankruptcy court's ruling that a state court contempt ruling can be used as evidence that a debt results from a willful and malicious injury and is, therefore, nondischargeable under 11 U.S.C. § 523(a)(6).

There are more than 900 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 IN RE BELLINGHAM INSURANCE AGENCY

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post takes a closer look at the questions raised by the Supreme Court yesterday when it granted certiorari in Executive Benefits Insurance Agency v. Arkison (In re Bellingham Insurance Agency).

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

Law firms should provide support for law student-staffed bankruptcy clinics for consumer debtors.

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

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- abiLIVE Webinar

     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.

- Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization

    Sept. 18-19, 2013 | New York

- Bankruptcy 2013: Views from the Bench

    Sept. 27, 2013 | Washington, D.C.

October

- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum

    Oct. 4, 2013 | Kansas City, Mo.

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

- Chicago Consumer Bankruptcy Conference

    Oct. 14, 2013 | Chicago, Ill.

November

- Austin Advanced Consumer Bankruptcy Practice Institute

   Nov. 10-12, 2013 | Austin, Texas

- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York

JUDGE'S RULING ON DODD-FRANK ACT BEEFS UP PROTECTION FOR WHISTLEBLOWERS



U.S. District Judge J. Paul Oetken bolstered protection for corporate whistleblowers yesterday by ruling the Dodd-Frank law gave retroactive protection to employees of subsidiaries, not just people who work directly for the parent companies, Reuters reported yesterday. The decision concerned the Sarbanes-Oxley Act of 2002, adopted in the wake of Enron Corp's collapse the prior year, which helped protect employees of publicly-traded companies against retaliation for whistleblowing. Dodd-Frank amended that law in July 2010, as part of a series of financial reforms, to show that employees of subsidiaries should also be protected from any reprisals by their companies. Judge Oetken yesterday said that the Dodd-Frank amendments should apply retroactively to cases that predated Dodd-Frank, being "a clarification of Congress's intent" concerning whistleblowers. Read more.

In related news, the House Financial Services Capital Markets and Government Sponsored Enterprises held a hearing today titled "The Impact of Dodd-Frank on Customers, Credit, and Job Creators." To view the witness list and prepared witness testimony, please click here.

The House Financial Services Financial Institutions and Consumer Credit Subcommittee will hold a hearing tomorrow at 10 a.m. ET titled "The Impact of Dodd-Frank’s Home Mortgage Reforms: Consumer and Market Perspectives." Click here for more information.

CONSUMER BORROWING INCREASED IN MAY, PROPELLED BY CREDIT CARD BORROWING



Consumer borrowing rose by $17.1 billion in May from April, the Federal Reserve said yesterday, according to the Associated Press. The gain drove total borrowing to a seasonally adjusted $2.57 trillion, nearly matching the all-time high reached in July 2008. Borrowing has increased steadily over the past two years, but most of the gains have been driven by auto and student loans, which rose to a record level of $1.7 trillion in May. Consumers cut back sharply on credit card debt during the recession and immediately after, but that changed in May when the measure of credit card debt jumped by $8 billion. Still, the level of debt for that category increased to only $870 billion, or 2.2 percent above the post-recession low hit in April 2011. The category had totaled more than $1 trillion before and shortly after the recession began. Read more.

ANALYSIS: PRICE OF USING CREDIT CARDS MAY RISE



Merchants may soon begin imposing a surcharge each time a customer pays with a credit card, a practice Visa Inc. and MasterCard Inc. currently prohibit, the Wall Street Journal reported today. Retailers have long pushed for the right to charge extra to customers who pay with plastic versus cash, saying that the practice would help defray their costs for accepting credit and debit cards. Merchants pay transaction fees on each card swipe. But Visa and MasterCard, which operate the world's largest card-payment networks, ban the practice in the U.S. as part of rules they require retailers to follow to accept their cards. That ban is expected to be eliminated or altered, though, under a potential settlement of long-standing lawsuits retailers have brought against the card networks and numerous banks that issue their cards. Read more. (Subscription required.)

COMMENTARY: COMMERCIAL MORTGAGES SHOW DEPTH OF BAD LOAN SECURITIZATIONS



The first of the commercial real estate mortgages that were securitized in 2007 have started to come due, and it is becoming clear just how bad many of the loans were, according to a commentary in Friday's New York Times. The time when investors were most eager to buy, according to the commentary, turns out to have been the worst time to do so. Commercial mortgages — unlike residential ones — are seldom issued for periods of longer than 10 years, and often for as little as five. Many require no principal repayments during that period but call for the entire amount to be repaid in a balloon payment at the end of the loan. "Only 28 percent of the loans from 2007 due to mature in 2012 managed to pay off in full," said Manus Clancy, the senior managing director at Trepp L.L.C., which monitors the commercial mortgage market. Other loans in those securitizations were for seven or 10 years, so new waves of losses may arrive in 2014 and again in 2017. Read more.

CFTC SUES PEREGRINE FINANCIAL GROUP



Federal regulators sued Peregrine Financial Group Inc. and CEO Russell Wasendorf Sr. today, alleging fraud, customer funds violations and making false statements, and the FBI began an investigation of the brokerage, the Wall Street Journal reported today. The complaint from the Commodity Futures Trading Commission comes a day after the National Futures Association, the futures industry's self-regulatory body, said that it had taken an emergency enforcement action against broker PFGBest's parent company, Peregrine Financial Group. Regulators have shut down almost all operations of futures broker PFGBest after the firm froze client accounts yesterday. Read more. (Subscription required.)

LATEST ABI PODCAST FEATURES EXPERT DISCUSSING WHAT TO EXPECT FROM STOCKTON'S CHAPTER 9 FILING



The latest podcast features ABI Executive Director Samuel J. Gerdano speaking with Lynnette R. Warman, a partner at Hunton & Williams LLP (Dallas) and ABI Vice President—Publications, about Stockton, Calif.'s recent chapter 9 filing. Warman has been following Stockton's financial distress and she discusses what can be expected for the city and its creditors in the first year of the chapter 9 filing. Click here to listen.

ABI IN-DEPTH

“SUBJECTING BUSINESS PROJECTIONS TO SCRUTINY IN VALUATION DISPUTES” WEBINAR TO BE HELD ON JULY 30!



Reassembling the speakers from the highest-rated panel at the New York City Bankruptcy Conference this year, ABI will be holding a live webinar on July 30 at 11 a.m. ET titled, "Subjecting Business Projections to Scrutiny in Valuation Disputes." Panelists include:

• Moderator David Pauker of Goldin Associates, LLC (New York)
• Martin J. Bienenstock of Proskauer (New York)
• David M. Hillman of Schulte Roth & Zabel LLP (New York)
• Bankruptcy Judge Robert E. Gerber (S.D.N.Y.)

The panel will address:

• How much deference should management projections be accorded?
• How do you determine whether projections are unrealistically optimistic or pessimistic?
• What is the relevance of "market consensus?"
• How do management’s incentives impact projections?

The webinar is available to ABI members for $75 and is approved for 1.0 CLE hours in Calif., Ga., Hawaii, Ill., N.Y. (approved jurisdiction policy) S.C. and Texas. CLE approval is pending in Del., Fla., Pa. and Tenn. To register, please click here.

LATEST CASE SUMMARY ON VOLO: SUNBEAM PRODUCTS, INC. V. CHICAGO AMERICAN MANUFACTURING, LLC (7TH CIR.)



Summarized by Jonathan Brand of Lakelaw

The Seventh Circuit was not persuaded by Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, Inc., 756 F.2d 1043 (4th Cir. 1985), holding that when an intellectual-property license is rejected in bankruptcy, the licensee does not lose the ability to use any licensed copyrights, trademarks and patents. The court reasoned that, outside of bankruptcy, a licensor's breach does not terminate a licensee's right to use intellectual property. The same is true under §365(g). When a contract is rejected in the context of a bankruptcy, a breach is established, but the other party's rights remain in place. Therefore, Chicago American Manufacturing had the right to continue to perform under the pre-petition contract for the production of fans with the trademark of Lakewood Engineering & Manufacturing Co.

More than 550 appellate opinions are summarized on Volo typically 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: DREIER BANKRUPTCY DEMONSTRATES THE ENDLESS SCOPE OF CLAWBACK CLAIMS



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines the Dreier, LLP bankruptcy and the important role that clawback claims are playing in the case.

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 full-payment rule in section 1325's "hanging paragraph" for new car PMSIs should be repealed to level the playing field between car lenders and other partially and fully unsecured creditors.

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

IS YOUR ABI MEMBERSHIP PROFILE CURRENT?



Keeping a current profile will allow you to benefit from one of ABI's most important services - networking. When you update your profile, you are putting your most valuable information in the membership directory. Be sure to include your areas of expertise, firm information, education and join any other committees that are of interest. Click here to update your profile.

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.

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 12-15, 2012 | Bretton Woods, N.H.

- Southeast Bankruptcy Workshop

     July 25-28, 2012 | Amelia Island, Fla.

-Valuation Webinar, July 30 at 11 a.m. ET

August

- Mid-Atlantic Bankruptcy Workshop

     August 2-4, 2012 | Cambridge, Md.

September

- Complex Financial Restructuring Program

     September 13-14, 2012 | Las Vegas, Nev.


- Southwest Bankruptcy Conference

     September 13-15, 2012 | Las Vegas, Nev.

- 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization

     September 19-20, 2012 | New York, N.Y.

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.

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

COMMENTARY: A VISION FOR REFORMING STUDENT LOANS

With outstanding student debt topping one trillion dollars and the default rate on federal loans approaching 15 percent, many borrowers are finding themselves in a spiral of debt and financial ruin, according to a CNBC.com commentary by Sen. Marco Rubio (R-Fla.) and Rep. Tom Petri (R-Wis.). This week, the Federal Reserve announced that American consumer debt is higher than it's ever been, with student loans leading this surge. It's important to note that a significant number of borrowers default on small debt levels, according to the commentary. In fact, the average amount of a defaulted federal loan is roughly $14,000. Many of these defaults occur because our system focuses the burden of repayment on a borrower's initial years out of school when he or she is least equipped to bear it. As a result, temporary struggles to find a job right out of college or low initial earnings turn into needless defaults. And while other options exist, the system's bewildering complexity prevents many students from taking advantage of them. Far better would be to have each borrower's payments set automatically as an affordable percentage of income, according to Rubio and Petri. For most, this would mean paying less early in their careers and more as their income grows over time. Additionally, borrowers would be protected from income shocks such as unemployment, something many recent graduates have struggled with during the economic downturn. Read the full commentary.

For further discussion of the student loan debt crisis, be sure to attend ABI's Student Loan Debt Symposium, which will feature Rep. Petri, sponsor of a new graduated loan repayment bill, as the keynote speaker. Click here for more information or to register.

GM OFFICIALS TO FACE QUESTIONING IN CRIMINAL PROBE

Government investigators are about to start calling in General Motors Co. officials for questioning as they intensify a criminal probe into the auto maker's mishandling of faulty ignition switches that are linked to 13 deaths, the Wall Street Journal reported today. As the criminal probe moves forward, GM Chief Executive Mary Barra is sticking with her plan to delay answering key questions about the ignition-switch recall until the company's internal investigation of the matter wraps up. Barra is under growing pressure from regulators, lawmakers and accident victims and their families to deliver more quickly on her promises of transparency. Barra has refused to give Congress and federal vehicle-safety regulators the names of those inside GM who made the decisions that delayed the compay's recall, saying that those responses must wait until Chicago attorney Anton Valukas, who is spearheading the company's probe, completes his findings. GM hired Valukas last month. Last week, Barra told lawmakers she expected him to complete his investigation in 45 to 60 days. Barra's strategy is costing GM $7,000 a day in fines, which the National Highway Traffic Safety Administration began to levy after GM missed an April 3 deadline to answer 107 questions about the recall. Read more. (Subscription required.)

New GM shielded itself from liability for crashes that happened before its 2009 bankruptcy. Victims are left to sue a shell company that has few assets. Congressional pressure is building for GM to establish a victim compensation fund notwithstanding the limit on liability. For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel at ABI's Annual Spring Meeting. This panel will discuss the General Motors bankruptcy case with an in-depth discussion about the issuance of public units in a major bankruptcy. The session will also include the challenges addressed by the trust such as liability claims. For more information or to register, please click here.

REALTYTRAC: U.S. FORECLOSURES FALL TO LOWEST QUARTERLY LEVEL SINCE MID-2007

RealtyTrac reported that the number of U.S. home foreclosure filings slid 23 percent in March from a year ago, helping bring first-quarter foreclosure activity to its lowest level since the second quarter of 2007, Reuters reported today. However, there were 117,485 U.S. properties with default notices, scheduled auctions and bank repossessions in March, according to RealtyTrac, which lifted overall foreclosure activity by 4 percent last month from February, when it posted a more than seven-year low. The monthly increase was driven by a 7 percent rise in foreclosure starts. Overall, though, more U.S. homeowners are keeping up with their mortgage payments. March was the 42nd straight month where U.S. foreclosure activity dropped from year-ago levels. A total of 28,840 U.S. properties were repossessed by lenders in March, down 5 percent from February, and a 34 percent drop from the same month a year ago to the lowest level since July 2007. Read more.

FANNIE MAE, FREDDIE MAC SHAREHOLDERS RAIL AGAINST MEASURE TO DISMANTLE TWO FIRMS

Dozens of Fannie Mae and Freddie Mac shareholders flocked to Capitol Hill yesterday to protest a Senate proposal that they say would trample on the rights of the mortgage giants' investors, the Washington Post reported today. Over the past two weeks, three groups have weighed in forcefully on the Senate legislation, which seeks to dismantle D.C.-based Fannie and McLean-based Freddie, replace them with a new entity and shift more of the risks of mortgage lending to the private sector. These groups are demanding a stop to what they view as the government's rip-off of Fannie and Freddie investors. In August 2012, about four years after the government took control of the two mortgage firms, federal officials directed the companies to turn over nearly all profits to the U.S. Treasury. Several investor groups have sued to challenge the arrangement. The Senate legislation, introduced by Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho), does not address how to deal with the shareholders. Some key lawmakers, including Crapo, have said that they are looking to the courts for answers. But as a Senate panel prepares to vote on the Johnson-Crapo measure possibly later this month, the newly formed groups are making it known that they want Congress to deal with the issue. Read more.

CARE FOUNDER JUDGE JOHN C. NINFO AWARDED WITH 2014 EXCELLENCE IN FINANCIAL LITERACY EDUCATION LEGACY AWARD

Credit Abuse Resistance Education (CARE) Founder Hon. John C. Ninfo II received the 2014 Excellence In Financial Literacy Education (EIFLE) Award by the Institute for Financial Literacy for his distinguished accomplishments in developing, implementing and promoting successful financial literacy education worldwide. Now in its eighth year, the EIFLE Awards were created to acknowledge innovation, dedication and the commitment of individuals and organizations that support financial literacy education worldwide. For more information on CARE and how you can help, please click here.

EXPLORE CHALLENGES THAT LIE AHEAD FOR UNITS AND TRUSTS ESTABLISHED FROM GM'S BANKRUPTCY AT SPECIAL PRESENTATION AT ABI'S ANNUAL SPRING MEETING

Watch below to find out more about what is on tap for ABI's 32nd Annual Spring Meeting at the JW Marriott in downtown Washington, D.C. The conference, taking place April 24-27, 2014, features a roster of the best national speakers, while the depth and scope of topics offer something for everyone.

REGISTER TODAY!

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: COLLINS V. EBERT, ET AL. (IN RE MARANATHA CONSTRUCTION CO.; 5TH CIR.)

Summarized by Doug Stewart of Stewart Robbins & Brown LLC

The Fifth Circuit affirmed the district court's decision finding veil-piercing claims to be property of the estate under 11 U.S.C. § 541(a)(1) and properly pursued by the bankruptcy trustee where the appellant creditors alleged only the same general harm suffered by all other creditors and failed to allege any harm personal only to them.

There are nearly 1,300 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:  COLLINS V. EBERT, ET AL (IN RE MARANATHA CONSTRUCTION CO.; 5TH CIR.)

A recent post on the ABI Blog Exchange looks at a few items consumers should know about tax liens after 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

Detroit should not be allowed to slash pensions in its bankruptcy case.

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

INSOL INTERNATIONAL

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 43 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2014

April
- Annual Spring Meeting
    April 24-27, 2014 | Washington, D.C.

May
- Credit & Bankruptcy Symposium
    May 1-2, 2014 | Uncasville, Conn.

- New York City Bankruptcy Conference
    May 15, 2014 | New York, N.Y.

- Litigation Skills Symposium
    May 20-23, 2014 | Dallas, Texas

- abiLIVE Webinar
    May 28, 2014 |

- Student Debt Crisis Symposium
    May 30, 2014 | Washington, D.C.

June
- Memphis Consumer Bankruptcy Conference
    June 6, 2014 | Memphis, Tenn.

- Central States Bankruptcy Workshop
    June 12-15, 2014 | Lake Geneva, Wis.

- abiWorkshop: Chief Bankruptcy Judges Roundtable
    June 16, 2014 | Alexandria, Va.

- Cross-Border Insolvency Program
    June 20, 2014 | New York, N.Y.

July
- Northeast Bankruptcy Conference
    July 17-20, 2014 | Stowe, Vt.

- Southeast Bankruptcy Conference
    July 24-27, 2014 | Amelia Island, Fla.

August
- ABI Endowment Baseball Event
    Aug. 13, 2014 | Baltimore, Md.

- Fourth Hawai'i Bankruptcy Workshop
    Aug. 13-16, 2014 | Maui, Hawai'i

PRELIMINARY HEARING ON DETROIT'S CHAPTER 9 ELIGIBILITY MOVES CASE TO CRITICAL PHASE

In an exchange with an attorney representing Detroit's two pension funds, Bankruptcy Judge Steven Rhodes discussed whether protections for the city's pension funds could violate federal bankruptcy law. The exchange occurred during the closing session yesterday of a three-day preliminary hearing on Detroit's chapter 9 eligibility. Robert Gordon, the pension funds' attorney, argued that the city should not be eligible for bankruptcy protection because Michigan's constitution protects pensions from impairment, and because the retiree unions believe that the city will pursue pension cuts. While a Reuters story yesterday suggested that a decision was made on the pension issue, Judge Rhodes did not issue an opinion on the matter during the exchange, but he did pose tough questions to attorneys representing Detroit's unions, retirees and pension funds as they disputed the legal arguments the city's attorneys made last week. Even if Judge Rhodes believes that the Constitution prevents impairment, that is not an issue to be decided during the eligibility trial. The trial on Detroit's chapter 9 eligibility is scheduled to begin tomorrow. Read more.

CORDRAY DOESN'T EXPECT WAVE OF LITIGATION OVER CFPB'S QM RULE

U.S. Consumer Financial Protection Bureau Director Richard Cordray said that he doesn't anticipate an outburst of litigation after his agency's qualified mortgage rule takes effect next year, Bloomberg News reported yesterday. Regulators understand that banks will need time for implementation of the rule, which will require that lenders take certain steps to confirm a borrower's ability to repay, Cordray said yesterday. "Let me also assure you that our oversight of the new mortgage rules in the early months will be sensitive to the progress made by institutions that have been squarely focused on making good-faith efforts to come into substantial compliance on time -- a point that we have also been discussing with our fellow regulators," he said. The consumer bureau will have no data initially and will need to wait a few months after the rule takes effect in January to judge its impact, Cordray said. Read more.

For more on the CFPB's new mortgage servicing rules, be sure to attend the inaugural abiWorkshop program, "Risky Times for Secured Lenders and Servicers," on Nov. 6. One of the program sessions is devoted to the CFPB's new mortgage servicing rules scheduled to take effect next year. To register to attend in person or via live webstream, please click here.

DOJ SEES $13 BILLION JPMORGAN DEAL AS A TEMPLATE FOR FUTURE BANK SETTLEMENTS

The Justice Department plans to use its tentative $13 billion settlement with JPMorgan Chase as a blueprint for reaching similar deals with other banks in probes related to bad mortgages and the 2008 financial crisis, the Washington Post reported today. Justice Department officials plan to expand the use of a 1980s law that carries a relatively low burden of proof and gives prosecutors 10 years to pursue such cases, twice as long as under standard securities law. Under this model, the department would also require that some of the settlement money be directed to consumers; in JPMorgan's case, $4 billion would be set aside for struggling homeowners. The department would also refuse to allow banks to avoid criminal prosecution by paying higher civil penalties. The strategy will give the Justice Department several more years to extract multibillion-dollar fines from banks eager to rid themselves of crushing legal burdens. The strategy also includes requiring that any future deals include help for homeowners devastated by the housing market's collapse. Justice Department officials want JPMorgan to agree to aggressive forms of mortgage relief, including lowering the balances of borrowers who owe significantly more than their homes are worth. The agency wants that help directed to the areas most affected by the troubled housing market, including Detroit. Read more.

BIG U.S. BANKS SAY PROPOSAL TO LIMIT LEVERAGE ARBITRARY, HARMFUL

Some of the largest U.S. banks said a proposed rule to increase the capital they hold against potential losses is arbitrary and would put them at a disadvantage against non-U.S. banks facing easier requirements, Bloomberg News reported yesterday. The so-called leverage ratio -- proposed by banking regulators at 5 percent for holding companies and 6 percent for their banking units -- targeted banks with the most assets. In comment letters yesterday, New York-based Citigroup Inc., the third-biggest U.S. bank, said the idea could worsen an uneven global playing field for U.S. banks, and State Street Corp. said that the regulators showed "no evidence" they based the numbers on an impact study. The Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. proposed a tougher limit on U.S. firms than those agreed to in Basel III international accords. The leverage cap -- also affecting JPMorgan Chase & Co., Goldman Sachs Group Inc., Morgan Stanley, Bank of America Corp., Wells Fargo & Co. and Bank of New York Mellon Corp. -- is meant to limit vulnerabilities in the financial system that were seen in the lead-up to the 2008 credit crisis. Read more.

ANALYSIS: PRIVATE-EQUITY FIRMS TARGETING RENTAL MARKET IN HOUSING'S HARDEST-HIT AREAS

Private-equity firms and hedge funds have bought as many as 200,000 homes across the U.S., typically in areas hardest hit by the housing crash, to profit from soaring demand for rentals, Bloomberg News reported yesterday. Demand for rental accommodations in the U.S. has grown as almost 8 million homes have been repossessed through foreclosure or sold for a loss since 2007, according to RealtyTrac. The homeownership rate dropped to 65 percent in the first half of this year, its lowest level since 1998, Census data show, and may keep falling as more owners lose their homes and slow income growth and tight credit limit people's ability to buy. Last year, U.S. home prices dropped to a low of 35 percent below their 2006 peak, triggering a wave of acquisitions from investors trying to turn a business that's been dominated by mom and pop landlords into an institutional asset class resembling the apartment industry. Blackstone Group LP has led the stampede, spending more than $7.5 billion on almost 40,000 properties, followed by American Homes 4 Rent with more than 20,000. Investors have largely targeted Phoenix, Atlanta, Dallas, Charlotte, N.C. and Tampa, Fla., where growth in jobs and population is expected to drive up rents and home values. Read more.

RENEW YOUR ABI MEMBERSHIP BY DEC. 31 AND SAVE!

Beginning in January 2014, ABI will institute its first dues increase to the regular dues rate in six years. The $20 increase will ensure that ABI can continue to provide you with the latest and most effective tools available in insolvency information and education. You can lock in 2013 rates, and additional discounts, for up to three years by using a multi-year renewal option (save $75!). You can also save 10 percent on future dues by opting into the automated dues program. To renew your membership and save, please go to renew.abi.org.

NEW "BANKRUPTCY IN DEPTH" VIDEO PREVIEWS UPCOMING SUPREME COURT BANKRUPTCY CASES

ABI's next "Bankruptcy In Depth" video features ABI Resident Scholar Kara Bruce talking with Eric Brunstad of Dechert LLP (Hartford, Conn.) to preview the bankruptcy cases that the Supreme Court will consider during its 2013 term. Brunstad, who has argued many cases before the Court and is an expert in bankruptcy appellate practice, discusses in depth Law v. Siegel, which questions whether the court may use its general equitable authority under §105 of the Bankruptcy Code to surcharge a debtor's exempt assets, and Executive Benefits Insurance Agency v. Arkison (In re Bellingham), which will address the bankruptcy court's authority to adjudicate Article III matters. He also provides a candid view of what it is like to argue a case before the Court and an in-depth analysis of the issues involved with the upcoming cases. Click here to watch a preview of the forthcoming ABI "Bankruptcy In Depth" video.

ABI LAUNCHES SIXTH ANNUAL WRITING COMPETITION FOR LAW STUDENTS

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.

RISKY TIMES FOR SECURED LENDERS AND SERVICERS TO BE FOCUS OF FIRST ABI WORKSHOP PROGRAM- ATTEND IN PERSON OR VIA LIVE WEBSTREAM!

You will not want to miss the abiWorkshops series' inaugural program, "Risky Times for Secured Lenders and Servicers." The program is cosponsored by TMA (Chesapeake), IWIRC (D.C./Greater Maryland) and RMA (Potomac), and will be held on Nov. 6 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 6 program include:



- Living with the New CFPB Mortgage Servicing Rules

-
Business Lending: Navigating What Lies Ahead

- Business Lending: Recent Legal Developments



For more information or to register for the "Risky Times for Secured Lenders and Servicers" abiWorkshop on Nov. 6, please click here.

EXPERTS TO EXAMINE STUDENT LENDING AND BANKRUPTCY AT ABI WORKSHOP PROGRAM ON NOV. 15

Experts will tackle the hot topic of student lending issues in bankruptcy on the abiWorkshops series' new program, "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" The program will be held on Nov. 15 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 15 program include:

- Student Lending Today: Who Borrows, How Much, Delinquency & Default Trends

- Repayment Options: Income Based Repayment and New Lender/Servicer Programs

- Litigation under Sect. 523(a)(8): What Proofs Are Needed? Evidence Demonstration

For more information or to register for the "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" abiWorkshop on Nov. 15, please click here.

ABI GOLF TOUR UNDERWAY; LAST STOP FOR 2013 IS WINTER LEADERSHIP CONFERENCE IN DECEMBER

The 7th and final stop for the 2013 ABI Golf Tour is on Dec. 5 at the Trump National Golf Club, held in conjunction with ABI’s Winter Leadership Conference. Final scoring to win the Great American Cup — sponsored by Great American Group — is based on your top three scores from the seven ABI events. 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! A 22-handicapper won the tour event at July’s Southeast Bankruptcy Workshop. There's no charge to register or participate in the Tour.

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: PENNINGTON-THURMAN V. BANK OF AMERICA N.A. (IN RE PENNINGTON-THURMAN; 8TH CIR.)

Summarized by Michael Tamburini of the Commercial Law Group P.A.

The BAP affirmed the bankruptcy court's conclusion that the debtor's allegations against her mortgage lender were without merit and, therefore, it did not abuse its discretion in denying the debtor's motion to reopen her case to bring an adversary proceeding.

There are more than 1,000 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: HOW MORTGAGE MARKETS CAN PRICE RISK EFFICIENTLY

The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent blog post suggested that higher capital requirements for federal mortgage lenders, more stringent qualified mortgage and qualified residential mortgage requirements for borrowers and a heightened reliance on private markets will help keep taxpayers from paying for future bailouts.

The abiWorkshops series' inaugural program, "Risky Times for Secured Lenders and Servicers," on Nov. 6 will cover potential legal issues associated with the CFPB's new qualified mortgage lending rules set to take effect in 2014. Attend in person or via live webstream.

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

Does the bankruptcy court's Section 105 power enable it to surcharge the debtor's exempt property?

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

INSOL INTERNATIONAL



INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 43 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

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2013

October

- International Insolvency & Restructuring Symposium

    Oct. 25, 2013 | Berlin, Germany

November

- abiWorkshop: "Risky Times for Secured Lenders and Servicers"

   Nov. 6, 2013 | Alexandria, Va.

- Complex Financial Restructuring Program

   Nov. 7, 2013 | Philadelphia, Pa.

- Corporate Restructuring Competition

   Nov. 7-8, 2013 | Philadelphia, Pa.

- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

-abiWorkshop: "You Can't Discharge Student Loans in Bankruptcy - Or Can You?"

   Nov. 15, 2013 | Alexandria, Va.

- Delaware Views from the Bench

   Nov. 25, 2013 | Wilmington, Del.

December

- Winter Leadership Conference

    Dec. 5-7, 2013 | Rancho Palos Verdes, Calif.

January

- Western Consumer Bankruptcy Conference

    Jan. 20, 2014 | Las Vegas, Nev.

- Rocky Mountain Bankruptcy Conference

    Jan. 23-24, 2014 | Denver, Colo.

HOUSING COMMENTARY #1: WHY HAS CONGRESS LEFT HOUSING TO FANNIE MAE AND FREDDIE MAC?



Fannie Mae and Freddie Mac, along with their regulator, are doing more to dismantle themselves than Congress can be bothered to do, according to a commentary in the Washington Post Tuesday. On Monday, their regulator, Ed DeMarco of the Federal Housing Finance Agency, said that a new company will be formed that will do much of the back-office work of both firms, setting the stage for whatever Congress decides to do next to overhaul the mortgage sector. The two government-sponsored mortgage finance companies are nearing the five-year anniversary of when the feds took them over, a bailout that has cost taxpayers $131 billion so far. They have been vilified, particularly by conservatives, as representing the worst of crony capitalism (fairly) and as being major drivers of the financial crisis (unfairly). For many Republicans, their stated objection to the Dodd-Frank financial reform act was that it didn't do anything to reform Fannie and Freddie. No legislation to overhaul the nation's mortgage finance has passed either the Republican-led House or the Democratic-led Senate. The White House unveiled a plan for what to do—more than two years ago—that was less a plan than a menu of options from which Congress might choose in sculpting its own approach to reforming the government-sponsored enterprises, or GSEs. So what is going on here? How is this an area where seemingly everybody agrees there needs to be an overhaul, yet no actual legislative action has taken place? The answer boils down to this: Too many people benefit from the current system, and too many people have something to lose in any overhaul, according to the commentary. But something will have to change in order to give the U.S. a system of housing finance that doesn't leave taxpayers on the hook for everyone who wants a place to live. Click here to read the full commentary.

HOUSING COMMENTARY #2: HOW TO REPEAT THE MORTGAGE MESS



In September 2008, amid the financial panic and collapse of the housing market, the federal government bailed out and took control of Fannie Mae and Freddie Mac—two government-sponsored enterprises that dominated the mortgage market. After four years and $180 billion of taxpayer funds to keep them afloat, they are beginning to make profits from their near monopoly. This week, the head of the federal agency that supervises Fannie and Freddie, Edward DeMarco, outlined a sensible plan that would prepare the companies—which remain the dominant players in housing finance—for either full privatization or government ownership. These are the obvious alternatives, but there is a third idea in the mix, one that is as seductive as it is dangerous: a private system with an explicit government mechanism for future bailouts when they prove necessary, according to a commentary in the Wall Street Journal yesterday. The rationale? If there's a problem in housing finance, the government will inevitably step in as it did in 2008. So why not create a government insurance program now, compensating taxpayers for the burdens they will have to shoulder eventually anyway? This argument has been advanced many times since Fannie and Freddie went under, most recently by the Bipartisan Policy Center, a Washington think tank. A system for private housing finance with a government insurance backstop may sound reasonable, even sophisticated. But it is seriously flawed. At the end of this road is bailout nation: a government insurance backstop for every industry. Also, taxpayers never get compensated from insurance funds, and federal insurance encourages careless behavior by those who know that if things go bad, someone will be there with a bailout. Once a fund of any size is created to back a particular industry, the arguments against a bailout virtually disappear. The reality is that sufficient funds are not going to be there. The only way to ensure a stable mortgage market is to get the government out, and keep it out. Click here to read the full commentary (subscription required).

ANALYSIS: STUDENT DEBT IS A DRAG ON ECONOMIC RECOVERY



Roughly 39 million Americans have a total of $966 billion in educational debt—a sum that has tripled since 2004, the Federal Reserve Bank of New York finds, according to an analysis in the Financial Times Tuesday. It was the only type of borrowing that expanded through the Great Recession, and in 2010 it jumped ahead of car loans, credit card debt and home equity credit to become the largest source of indebtedness behind mortgages. Faced with tighter scrutiny from banks and their own cautious behavior about running up balances, this new generation of borrowers has cut back on spending. They keep their credit cards in their wallets, put off purchasing houses and cars, and delay starting savings accounts for their own children's education. Experts warn that this trend raises the possibility that the explosion in student debt will sap economic growth in the U.S., where consumer spending accounts for around 70 percent of gross domestic product. "Consumers with large student debt burdens may spend less and are more likely to have difficulty securing a mortgage," the U.S. Treasury's Office of Financial Research said in its 2012 annual report. "These factors could significantly depress demand for mortgage credit and dampen consumption." Those fears have been supported by recent studies, such as a Pew Research Center report last month showing that young adults are less likely to own homes, cars and other "big-ticket consumer durables," such as refrigerators and washing machines, than their peers were in 2001. Simply put, more people are paying more money for school. Click here to read the full analysis (subscription required).

HOMEOWNERS ARE INCREASINGLY TURNING TO SHORT SALES OVER FORECLOSURES



The number of American homes that end up in foreclosure has started to decline, a welcome development that partly reflects an improving housing market. But a look at data that tracks distressed home sales reveals another reason why foreclosures are becoming less prevalent: More homeowners are turning to so-called short sales—where they sell their homes for less than what they owe in mortgage debt and the bank typically eats the difference, the Wall Street Journal reported Tuesday. In the past, short sales were rare. Now they are becoming increasingly common in part because lenders, homeowners and real estate agents have become more experienced at marketing and pricing the properties, and because short sales are considered a more efficient way than foreclosure to sell underwater properties. The shift is helping the housing market pare the backlog of distressed mortgages while cutting the amount of time that vacant homes sit empty. That in turn has helped keep home prices firm at a time when the real estate industry is still recovering from its multiyear slump. Foreclosures accounted for 11.5 percent of total home sales in October, down from 17.3 percent in October 2011 and close to 30 percent during the depths of the recession, according to CoreLogic, a real estate research firm that tracks foreclosure and home-sales data. Over the same period, short sales have climbed to 10.4 percent from 8.1 percent. From an economic perspective, short sales leave everyone better off: Banks and investors see narrower losses, homeowners incur less damage to their credit, and neighboring homes are less likely to be dragged down in value because of the typically higher sale prices and reduced vacancy times. But despite the progress being made in the housing market in general, there are still millions of homeowners who are in some form of pre-foreclosure distress—a "shadow inventory" that could hit the market and spell trouble for the housing recovery. Click here to read the full article (subscription required).

U.S. HOUSEHOLD WEALTH AT HIGHEST LEVEL SINCE LATE '07



The net worth of U.S. families rose by $1.17 trillion at the end of 2012 to the highest level since late 2007, as rising home values and gains in stock holdings boosted household balance sheets, the Wall Street Journal reported today. The net worth of U.S. households—the value of homes, stocks and other investments minus debts and other liabilities—rose 1.8 percent to $66.07 trillion from October through December, the highest level since the fourth quarter of 2007, according to a Federal Reserve report released Thursday. The recession began in December 2007 and ended in June 2009.
Household net worth was up 9 percent at the end of 2012 compared with the fourth quarter of 2011, the latest sign that Americans are repairing their balance sheets in the wake of the financial crisis. Stocks have recovered from their sluggish performance in the fourth quarter. Americans also have much more equity in their homes. A measure of owners' equity in household real estate as a percentage of household real estate hit 46.6 percent, the highest since the first quarter of 2008. The Fed report also showed that household debt grew at an annual rate of 2.4 percent in the fourth quarter after contracting in the third quarter. Click here to read the full article (subscription required).

DON’T MISS THE ABI LIVE WEBINAR ON APRIL 5 - "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 as this webinar is sure to sell out.

ABI'S ANNUAL SPRING MEETING: CONSUMER PROGRAMMING WITH CROSS-OVER APPEAL



With four session tracks looking at issues geared toward chapter 11 restructurings, financial advisors, professional development and consumer bankruptcy, a number of sessions at ABI's Annual Spring Meeting have cross-over appeal for both consumer and business practitioners. Sessions include:



• The Appellate Process: This distinguished panel will explore recent issues in appellate practice that are of interest to both consumer and business practitioners, including the ability to bypass intermediary appellate courts and take appeals directly to the circuit courts.

• Consumer Class Actions: This panel will explore the potential benefits and pitfalls of class actions by debtors/trustees against creditors in chapter 13 cases, which are highlighted by two recent decisions of the Fifth Circuit. Many of the issues discussed during this panel will be useful in business cases as well.

• The Individual Conundrum - Chapter 7, 11 or 13?: Deciding on the appropriate chapter for a high net worth individual contemplating a bankruptcy filing can be a daunting task. This panel will explore the considerations that guide the practitioner in advising individual clients in making this decision.

To register for the Annual Spring Meeting and to see the full schedule of program tracks and events, please click here.

ABI IN-DEPTH

MARK YOUR CALENDARS FOR APRIL 10 TO TAKE PART IN ABI’S LIVE WEBINAR "STUDENT LOANS: BANKRUPTCY MAY NOT HAVE THE ANSWERS – BUT DOES CONGRESS?"



Do not miss the "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?" webinar presented by ABI's Consumer Bankruptcy Committee on April 10 from noon-1:15 ET. ABI's panel of experts will provide an overview of the student loan industry, examine the numbers behind and causes of student loan debt, and discuss federal loan programs as well as federal consolidation and forgiveness programs. Faculty on the webinar includes:

• Prof. Daniel A. Austin of Northeastern University School of Law (Boston)
  
  
  
• Edward "Ted" M. King of Frost Brown Todd LLC (Louisville, Ky.)
  
  
  
• Craig Zimmerman of the Law Offices of Craig Zimmerman (Santa Ana, Calif.)

CLE credit will be available for the webinar. This webinar is sure to sell out; register now for the special ABI member rate of $75!

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: IN RE ALABAMA AIRCRAFT INDUSTRIES INC. (3D CIR.)



Summarized by John Eggum of Foran Glennon Palandech Ponzi & Rudloff

A transfer of a cause of action to a litigation trust, in accordance with the terms of an asset purchase agreement, can be insulated from attack on appeal pursuant to § 363(m). In this case, the Third Circuit found that invalidating the transfer of the cause of action would invalidate the related sale, since the value of the assets sold would be altered if the cause of action was not transferred in accordance with the terms of the applicable asset purchase agreement. Accordingly, the Third Circuit dismissed the appeal as moot.

There are more than 750 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: WHEN CAN AUTOMATIC STAY BE EXTENDED TO NONDEBTOR THIRD PARTY?

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post discusses whether the automatic stay can be extended to protect nondebtor third parties by examining the case of In re Brier Creek Corp. Center Assocs. LP (Bankr. E.D.N.C.).

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

As a result of the RadLAX decision, the right to credit-bid will likely chill bidding at auctions, as potential purchasers may be dissuaded from participating in the bidding process.

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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Join our networks to expand yours.

2013

March

- Bankruptcy Battleground West

     March 22, 2013 | Los Angeles, Calif.

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.

OBAMA TO PUSH CONGRESS ON MORTGAGE RELIEF



President Obama yesterday called on Congress to act on home mortgage relief when it returns for a brief legislative session in September, The Hill reported today. The housing market is widely believed to be the most significant drag on the economy, and Obama was under fire in a recent New York Times front-page story for the inability of his administration to address the burden of homeowner debt. "We are going to be pushing Congress to see if it can pass a refinancing bill that puts $3,000 in the pocket of the average family that has not yet refinanced their mortgage," he said. The White House is supporting a trio of Senate Democratic bills that streamline refinancing:

• Sens. Robert Menendez (D-N.J.) and Barbara Boxer (D-Calif.) in May introduced the “Responsible Homeowners Refinancing Act of 2012.” The bill would streamline refinancing for Fannie Mae and Freddie Mac borrowers by eliminating upfront fees and appraisal costs, among other changes.

• Sen. Jeff Merkley (D-Ore.) has a bill called the “Rebuilding Equity Act” for loans of 20 years or less. It would require Fannie Mae or Freddie Mac to pay all closing costs.

• Sen. Dianne Feinstein (D-Calif.) has a bill to aid underwater homeowners by allowing them to receive Federal Housing Administration mortgage insurance.

While significant, the White House-backed legislation falls short of the extensive housing action urged by some. Liberal groups and unions want Obama to replace Edward DeMarco — acting director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac — to force the agency to approve principal mortgage reductions. Others want legislation to allow bankruptcy judges to approve principal reductions in chapter 13. Read more.

CASE AGAINST FORMER FREDDIE MAC EXECUTIVES HINGES ON DEFINITION OF "SUBPRIME"



Figuring out the definition of a "subprime mortgage" by a U.S. judge could determine whether three former Freddie Mac executives misled investors about loans backed by the mortgage giant before it sank, the Wall Street Journal reported today. Lawyers for the former executives, including Chief Executive Richard Syron, sparred at a hearing with the Securities and Exchange Commission over the definition of "subprime" and "subprime-like." The fight came as lawyers for the former Freddie Mac executives urged U.S. District Judge Richard Sullivan to throw out an eight-month-old fraud lawsuit by the SEC alleging that the former executives made "materially false and misleading public disclosures" about the company's housing-market exposure in 2007 and 2008. Lawyers for Syron, Patricia Cook, a former Freddie Mac executive vice president, and Donald Bisenius, a former senior vice president, asked the judge to dismiss the suit because Freddie Mac told investors it did not classify single-family loans using the words "prime" or "subprime." Instead, Freddie Mac provided investors with tables outlining the characteristics of loans, allowing investors to draw their own inferences about loan quality, the lawyers said. The lawyers cited an investor document that said the amount of loans that would have been subprime if the term that Freddie Mac used was "not significant." Suzanne Romajas, a lawyer for the SEC, agreed that there is no universally accepted definition of "subprime," but she said Freddie Mac used a combination of factors to decide whether a certain loan was high-risk, and the former executives should have disclosed all of the mortgages that were vulnerable to potential default. For example, including mortgages with "subprime-like" characteristics would have increased Freddie Mac's overall high-risk loan exposure to 10 percent of its portfolio, not the 0.1 percent claimed by the company, she added. Read more. (Subscription required.)

SUPREME COURT CASE COULD CURB DEBT-COLLECTION LAWSUITS



Fearing that the legal playing field could be tilted against consumers, a group of federal and private consumer agencies have filed briefs in a U.S. Supreme Court case that threatens to shift the cost of a lawsuit to consumers in debt-collection cases, CreditCards.com reported today. In the past, collectors have absorbed court costs in "good faith" suits by consumers, even if the consumer loses, unless the consumers sued in bad faith or for purposes of harassment. Without this protection from fee shifting, people would be discouraged from suing debt collectors, say the Federal Trade Commission, the Consumer Financial Protection Board and a group of private consumer advocacy groups in legal briefs filed this month. There has been a surge in the number of cases filed against debt collectors under the Fair Debt Collection Practices Act, the 1977 federal law that regulates the activities of third-party debt collectors. The case that made it to the Supreme Court, though, could discourage such suits, the agencies say. The case, known as Marx v. General Revenue Corp., revolves around the experience of Olivea Marx, a Colorado woman who racked up student debt and failed to pay it, then was contacted by a debt collector. Marx, a single mother with two young children and a low-paying job, claimed that the collector's vigor went beyond the limits of the law. The collector called her several times a day, she said, and illegally threatened to garnish half her wages and sent a collection-related fax to her employer. She sued, but the lower court disagreed, finding that the debt collector's contact with the woman's employer did not violate the law because it did not specifically mention her debt. The court ordered her to pay $4,543 in costs -- nearly all of which compensated the debt collector for hiring a court reporter and bringing in witnesses. Read more.

TRANSUNION: U.S. AUTO LOAN DELINQUENCY RATE IN SECOND QUARTER AT LOWEST LEVEL



Credit-information company TransUnion Corp. said that the national delinquency rate of auto loans in the U.S. hit its lowest level for the second consecutive quarter since the firm began tracking the data in 1999, Dow Jones Newswires reported today. Auto loan delinquency rates in the second quarter dropped to 0.33 percent, down from 0.36 percent in the first quarter and 0.44 percent in the period a year ago. In addition to increased demand in new and used autos, bank auto debt per borrower rose to $13,427 in the second quarter from $12,689 in the previous year. TransUnion said that despite growing bank auto debt, the majority of states and cities are experiencing declines in their auto loan delinquency rates. Read more.

REGIONAL AIRLINES FACE CLOSINGS, BANKRUPTCY



Regional airlines operate half the nation's scheduled flights, but several of those carriers are being closed or are in bankruptcy court protection, USA Today reported today. They face significant challenges, as the big airlines they often fly for are phasing out smaller and costlier regional jets and cutting some low-traffic regional routes to focus on those that are more lucrative. Delta, the largest operator of 50-seat aircraft among U.S. airlines, will shutter regional carrier Comair after Sept. 29. Pinnacle Airlines, with subsidiaries such as Colgan that have flown for United, US Airways and Delta, filed for bankruptcy protection in April. AMR, the parent company of American Airlines and regional carrier American Eagle, filed for bankruptcy protection in November. "Airlines are finding these smaller jets just don't make them any money," says industry analyst Mike Boyd. "That's why they're shutting down Comair. That's why Pinnacle is in bankruptcy. It's a sector of (the) industry that provides a type of aircraft that's rapidly becoming obsolete." Read more.

ORCHESTRAS FIGHT HARD TIMES THROUGH BANKRUPTCY SEEKING NEW MODEL



Orchestras across the country continue to struggle financially, and some are following the lead of the Philadelphia Orchestra, Bloomberg News reported today. The Philadelphia Orchestra was the biggest among at least five U.S. symphonies to seek court protection in the wake of the 2008 economic collapse. Others include music organizations in Louisville, Ky., Syracuse, N.Y., Albuquerque, N.M., and Honolulu. Though subject to the same harsh realities of bankruptcy as corporations, the recent reorganization in Philadelphia -- and the decreased debt and expenses the group emerged with -- may serve as a model for other symphonies struggling with fewer donors and lower ticket sales. With its turnaround plan approved, the Philadelphia Orchestra Association exited court protection on July 30 after 15 months, having resolved $100 million in claims with a $5.5 million settlement, shrinking its payroll and winning a release from its pension obligations. Read more.

Click here to listen to an ABI podcast that focuses on orchestra bankruptcies.

DON'T MISS THE "WHEN IS AN INDIVIDUAL CHAPTER 11 THE BEST FIT?" WEBINAR ON SEPT. 27!



Chapter 11 can offer significant relief for certain individuals who need a restructuring of their finances. Learn when and how to use this tool in a 75-minute live webinar on Sept. 27 at noon ET. An expert panel will guide you through a successful individual chapter 11 and discuss key issues such as plan confirmation, modification and treatment of future income and secured debt.

Panelists on the webinar include:

• James F. Molleur of the Molleur Law Office (Biddeford, Maine)

• John P. Fitzgerald, III, of the Office of the U.S. Trustee (Boston)

• Raymond J. Obuchowski of Obuchowski & Emens-Butler, PC (Bethel, Vt.)

• Jennifer Rood of Bernstein Shur (Manchester, N.H.)

This panel was the highest rated at ABI's Northeast Bankruptcy Conference in July. The webinar is available to ABI members for $75. To register, please click here.

ABI IN-DEPTH

ABI MEMBERS WELCOME TO ATTEND ACB'S FREE HALF-DAY "BANKRUPTCY: BACK TO THE FUTURE" PROGRAM IN SEPTEMBER



The American College of Bankruptcy invites you to attend a free half-day program on Sept. 28 in Chicago for a discussion of many of the challenging topics facing current bankruptcy and reorganization professionals. Topics to be addressed include recent decisions of the U.S. Supreme Court and Court of Appeals, important work of the Advisory Committee on Bankruptcy Rules, and developments in the field of bankruptcy ethics. The nation’s leading judges, academics and bankruptcy professionals are among the speakers for the program. While there is no cost to attend, seating is limited, so early reservation is suggested. For more information and to register, please click here.

LATEST CASE SUMMARY ON VOLO: NUVEEN MUNICIPAL TRUST V. WITHUMSMITH BROWN, P.C. (3D CIR.)



Summarized by Matthew Heimann of Porzio, Bromberg & Newman, PC

Affirming the district court, the Third Circuit held that the district court did have "related to" jurisdiction under 28 U.S.C. § 1334(b) to adjudicate Appellant's action against the debtor’s accounting firm and counsel regarding an audit report and opinion letter that was prepared for the pre-petition transaction. The Third Circuit enunciated the principles of "related to" jurisdiction and its "conceivability" inquiry that applies to such analyses.

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: FURTHER EXAMINATION OF THE FIFTH CIRCUIT’S RULING IN THE PILGRIM’S PRIDE CASE



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 the Pilgrim's Pride case. The court ruled in the case that a $1 million “enhancement fee" is OK after the company's reorganization plan paid a 100 percent dividend to unsecured creditors.

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 Twombly/Iqbal rule for pleading ‘plausible’ claims has been applied too stringently in dismissing avoidance actions for failure to state a claim.

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.

September

- 7th Annual Golf and Tennis Outing

     September 11, 2012 | Maplewood, N.J.

- Complex Financial Restructuring Program

     September 13-14, 2012 | Las Vegas, Nev.

- Southwest Bankruptcy Conference

     September 13-15, 2012 | Las Vegas, Nev.

- 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization

     September 19-20, 2012 | New York, N.Y.

- "When Is an Individual Chapter 11 the Best Fit?" Live Webinar

     September 27, 2012

- 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

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

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.

ANALYSIS: DOCTORS BEING DRIVEN INTO BANKRUPTCY



As many doctors struggle to keep their practices financially sound, some are buckling under money woes and are being pushed into bankruptcy, CNNMoney.com reported yesterday. It is a trend that has accelerated in recent years, industry experts say, with potentially serious consequences for doctors and patients. Some physicians are still able to keep practicing after bankruptcy, but for others, it's a career-ending event. Chapter 11 bankruptcy filings by physician practices have spiked recently, noted Bobby Guy, co-chair of the American Bankruptcy Institute's Health Care Committee, who tracks bankruptcy trends tied to distressed businesses. The weak economy has taken a toll on doctors' revenue, as consumers cut back on office visits and lucrative elective procedures, said Guy. Doctors also blame shrinking insurance reimbursements, changing regulations, and the rising costs of malpractice insurance, drugs and other business necessities for making it harder to keep their practices afloat. Read more.

For more on medical insolvencies, be sure to pick up a copy of ABI’s Health Care Insolvency Manual, Third Edition, of which Mr. Guy is a co-author. Click here for more information.

NEW FEE ON BANKRUPTCY TRADES WILL BOOST COURTS' REVENUE



A new fee tied to trades of bankruptcy claims will bring in hundreds of thousands of dollars in revenue for the nation's bankruptcy courts when it takes effect next month, Dow Jones Daily Bankruptcy Review reported yesterday. Starting May 1, those who trade claims against companies under bankruptcy court protection will have to pay a $25 fee for each transaction they file with the court, according to the Administrative Office of the U.S. Courts. Last year saw 18,632 trades of claims worth more than $41 billion in 500 bankruptcy cases, according to SecondMarket Inc. If the fees had been in effect, bankruptcy courts would have earned $465,800 from those trades. For more information from the AOUSC on the fees, effective May 1, please click here.

REGULATORS CONCERNED ABOUT MUNICIPAL-BOND DEALS



U.S. regulators are probing whether securities firms are circumventing the rules that were implemented in the wake of the financial crisis to protect municipalities against potentially biased investment advice, the Wall Street Journal reported today. At issue is whether banks are attempting to skirt post-crisis rules, including those restricting firms that provide financial advice to municipalities from underwriting certain municipal-bond transactions. Lawmakers and regulators implemented the changes to avoid situations similar to those leading up to the crisis in which some municipalities were steered into risky and complex deals that municipal officials did not fully understand. The 2010 Dodd-Frank law stipulates that banks hired as financial advisers act as fiduciaries, or in their clients' best interests. Regulators have also restricted banks from underwriting municipal-bond transactions if they were initially hired to advise on the deals. Yet the Securities and Exchange Commission is concerned that banks may be mischaracterizing their role in order to preserve their ability to underwrite bonds. The SEC is investigating several municipal contracts entered into by banks, including such banks as Goldman Sachs Group Inc., Piper Jaffray Cos., Robert W. Baird & Co. and Stifel Financial Corp. Read more. (Subscription required.)

INVESTORS PUT UP MILLIONS OF DOLLARS TO FUND LAWSUITS



A new generation of investors is plunging into "litigation finance" opportunities, putting up millions of dollars to fund lawsuits in hopes of collecting when the verdicts come down, the Wall Street Journal reported yesterday. Established financiers are expanding into new areas, including loans to law firms, and are finding clients among the biggest American companies. Law firms themselves are starting to jump on the bandwagon, seeking funding arrangements for clients who need help going after opponents with deeper pockets or who simply want to keep litigation costs off their balance sheets. Critics complain that the trend will enable frivolous lawsuits, and they have argued—including at a congressional hearing last month—that the government should step in to regulate funders of litigation. But as corporate legal budgets shrink, litigation-finance options are proliferating. One of the latest entrants is Gerchen Keller Capital LLC, a Chicago-based team that includes former lawyers from Gibson Dunn & Crutcher LLP and Bartlit Beck Herman Palenchar & Scott LLP. The group has raised more than $100 million and says there is plenty of room for newcomers given the size of the U.S. litigation market, which they put at more than $200 billion, measuring the money spent by plaintiffs and defendants on litigation. Read more. (Subscription required.)

DEMAND RETURNS FOR COMMERCIAL MORTGAGE-BACKED SECURITIES



Growing demand for subordinated commercial-mortgage debt is the latest example of investors seeking new opportunities for yield, the Wall Street Journal reported today. After years of near-zero benchmark interest rates, under which most fixed-income investments offer little return, some investors are becoming more willing to take risks. Despite the risks of subordinated commercial-mortgage debt, Cerberus Capital Management and other hedge funds are being lured by annual returns that typically top 20 percent for the least-safe portions of commercial mortgage-backed securities (CMBS). Cerberus is the latest large hedge fund to expand into this emerging hot market, which is raising concerns that lenders may make loans on properties with weak credit profiles to produce volume—a phenomenon that spun out of control in the mortgage markets during the years leading up to the financial crisis. The firm aims to launch the "Cerberus CMBS Opportunities Fund," which plans to both buy up and short commercial mortgage debt. Read more. (Subscription required.)

SENATE FINANCE COMMITTEE CHAIR MOVES TO RESHAPE TAX CODE



Last month, Senate Finance Committee Chairman Max Baucus (D-Mont.) summoned members of the committee to a closed-door meeting to discuss the first full-scale rewrite of the 5,600-page U.S. tax code in more than 25 years, the Washington Post reported yesterday. Baucus agrees with Sen. Orrin G. Hatch (R-Utah), the ranking Republican on the panel, that the committee should aim to produce a tax-reform plan by August, when Congress will once again need a deal to justify raising the legal limit on the $16.8 trillion in federal debt. Privately, senior Democrats dismiss Baucus's activities, saying that tax reform will not happen unless President Obama strikes a broad deal with Republicans that includes $600 billion more in taxes over the next decade. But Republicans are unlikely to agree to higher revenue without a tax code rewrite; aides said House Ways and Means Committee Chairman Dave Camp (R-Mich.) is pressing GOP leaders to demand tax reform in exchange for supporting a higher federal debt limit. Read more.

TOMORROW! DON’T MISS ABI’S LIVE WEBINAR, "STUDENT LOANS: BANKRUPTCY MAY NOT HAVE THE ANSWERS – BUT DOES CONGRESS?"



ABI's Consumer Bankruptcy Committee tomorrow presents the "Student Loans: Bankruptcy May Not Have the Answers – But Does Congress?" webinar from noon-1:15 ET. A panel of experts will provide an overview of the student loan industry, examine the numbers behind and causes of student loan debt, and discuss federal loan programs as well as federal consolidation and forgiveness programs. Faculty on the webinar includes:

• Prof. Daniel A. Austin of Northeastern University School of Law (Boston)

• Edward "Ted" M. King of Frost Brown Todd LLC (Louisville, Ky.)

• Craig Zimmerman of the Law Offices of Craig Zimmerman (Santa Ana, Calif.)

CLE credit will be available for the webinar. Register now for the special ABI member rate of $75!

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: COMMODITY FUTURES TRADING COMMISSION V. WALSH (2D CIR.)



Summarized by Carrie Hardman of Winston & Strawn LLP

The Second Circuit held that (1) securities fraud victims may be considered "similarly situated" for purposes of pro rata distributions when they are similarly situated in relationship to the fraud, losses, fraudsters and nature of their investments in a uniform Ponzi scheme; (2) absent further disparate treatment of the victim-investors, for purposes of distribution, there is no difference between victims that invested in a regulated entity versus a related non-regulated entity, as the protections afforded by regulation were designed not for the victim investors' benefit, but for the benefit of others; and (3) Till v. SCS Credit Corp., 541 U.S. 465, 477 (2004), does not apply in the securities fraud context, and no statutory provision exists to require the receiver to adjust distributions on account of inflation.

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: EXPLORING WHEN CONSUMERS SHOULD FILE FOR CHAPTER 11 VS. CHAPTER 13

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post explores situations in which a consumer should consider filing for chapter 11 protection rather than chapter 13.

Want to explore further perspectives on consumer filing choices? Be sure to register for ABI's Annual Spring Meeting, which will feature a session on the Consumer Bankruptcy Track titled "The Individual Conundrum—Chapter 7, 11 or 13?" For more information or to register, be sure to click here.

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: "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.