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COMMENTARY: THE DEBT CEILING ESCAPE HATCH



Last year, when House Republicans pushed the government to the point of default by threatening to block raising the debt limit, there was a lot of frantic talk about using the Constitution as an escape hatch. Because the 14th Amendment prohibits any action that raises doubt about the public debt, the theory went, President Obama could declare the ceiling unconstitutional and simply ignore the House's threat. The idea was endorsed by Bill Clinton and several economic scholars, but it never really caught on among elected Democrats. President Obama expressed skepticism about it, and Democratic leaders decided not to push it. But now that Speaker John Boehner is promising a rerun of the whole fiasco within the next year, the Constitutional option is starting to have a little more appeal, according to a commentary in today's New York Times DealBlog. House Democratic Leader Nancy Pelosi yesterday urged the president to use the 14th Amendment to protect the nation's credit from another extortion attempt. "You cannot put the country through the uncertainty" again, she said. Pelosi's statement is an encouraging sign that Democrats may take a very different approach when Boehner reloads later this year or early next year, whenever the current debt limit is reached. Led by Mr. Obama at his most naïve, according to the commentary, the Democratic reaction to last year's extortion was to negotiate, to seek a grand bargain that inevitably disintegrated when Republicans refused to raise taxes on the rich. What they got instead was a brutal sequester of military and domestic spending—an outcome loathed by virtually everyone in Washington—that threatens to derail the economy when it is implemented next January. If other Democrats begin pushing the idea that the debt limit is unconstitutional, according to the commentary, it might stiffen the president's spine to use the option, particularly now that Republicans have stated they will never again raise the limit without getting huge spending cuts in return. Click here to read the full commentary.

COMMENTARY: CONGRESS NEEDS TO CRACK DOWN ON DEBIT CARDS ON CAMPUS



Given the history of shady dealings between banks and colleges, Congress needs to take a hard look at the increasingly common practice of schools contracting with banks to disburse financial aid dollars to students, according to a commentary in Tuesday's New York Times. In 2008, Congress finally barred student lenders from offering schools kickbacks to steer student business their way. The next year, it required credit card companies marketing to young people—and often paying schools or alumni associations for access—to ensure that applicants had the means to pay before issuing cards. Debit cards have received less federal oversight. In addition, according to a study by the United States Public Interest Research Group Education Fund, an advocacy organization, nearly 900 colleges and universities have card relationships with banks or other financial institutions, some of which manage student aid disbursements by turning student IDs into debit cards. Lawmakers are now pressing for answers about these practices. Citing the study, Sen. Richard Durbin (D-Ill.), along with Sen. Jack Reed (D-R.I.) and Rep. Peter Welch (D-Vt.), sent letters to 15 financial institutions asking each to provide information on campus card fees. Durbin and Rep. George Miller (D-Calif.) have also asked the inspector general of the Department of Education to determine whether the arrangements hurt students or violate federal regulations, and criticized the banks for what they described as "aggressive and misleading marketing" to students and for charging hidden fees that could lead students to quickly deplete their aid accounts. The study says that some of the banking arrangements might well benefit students, but it decries a lack of transparency in the contracts between colleges and the banks. If the colleges can't or won't protect students, according to the commentary, the regulators and Congress will have to, once again, step in. Click here to read the full commentary.

WEAK JOB MARKET WEIGHS ON U.S. ECONOMY, SHOWS LITTLE SIGN OF IMPROVING



The sluggish job market is weighing on the U.S. economy three years after the Great Recession ended, and it doesn't look to be getting much better any time soon, the Associated Press reported today. A measure of the number of people applying for unemployment benefits over the past month is at a six-month high, the government said today. The increase suggests that layoffs are rising and that June will be another tepid month for hiring. Sales of previously occupied homes fell in May, and manufacturing activity in the Philadelphia region contracted for the second straight month in June. The gloomy economic data echoed a more pessimistic outlook from the Federal Reserve Wednesday, and stocks fell sharply after the reports were released. "It appears the slow-growth expansion will be slower," said John Silvia, chief economist at Wells Fargo Securities. The bad news comes a day after the Fed downgraded its outlook for growth and took another step to try and jolt the economy. Click here to read the full article.

CLAIMS FOR U.S. JOBLESS BENEFITS DECLINE SLIGHTLY



The number of Americans filing new claims for unemployment benefits was little changed last week, according to government data on Thursday, suggesting that the labor market is still struggling, Reuters reported today. Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 387,000, the Labor Department said. The prior week's figure was revised up to 389,000 from the previously reported 386,000. The four-week moving average for new claims, considered a better measure of labor market trends, increased 3,500 to 386,250—the highest level since early December. "This confirms the weak labor market we have," said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, N.C. Much of the recent weakness in the labor market has been caused by a decline in hiring, rather than increased layoffs. Click here to read the full article.

ABI IN-DEPTH

WEBINAR NEXT WEEK WILL EXAMINE SUPREME COURT'S RULING IN THE RADLAX CASE



Having already examined the oral argument in a previous ABI media teleconference, panelists will reconvene for an ABI and West LegalEd Center webinar on June 26 to discuss the Supreme Court's ruling in RadLAX Gateway Hotel LLC v. Amalgamated Bank. CLE credit will be available for the webinar, which will be held from 2:00-3:30 p.m. ET.

Experts on the program include:

• Adam A. Lewis of Morrison Foerster, lead counsel for Amalgamated Bank before the Court.

• David Neff of Perkins Coie LLP (Chicago), the counsel of record for petitioner RadLAX Gateway Hotel LLC and participant in the argument.

• Jason S. Brookner of Andrews Kurth LLP (New York), whose article was cited in the brief for the respondent.

• Prof. Charles Tabb, the Alice Curtis Campbell Professor of Law at the University of Illinois College of Law, who recently published a paper titled "Credit Bidding, Security, and the Obsolescence of Chapter 11."

ABI Resident Scholar David Epstein will be the moderator for the webinar.

The webinar costs $115 and purchase provides online access for 180 days. If you are purchasing a live webcast, you will receive complimentary access to the on-demand version for 180 days once it becomes available. Click here for more information.

LATEST CASE SUMMARY ON VOLO: HALO WIRELESS INC. V. ALENCO COMMUNICATIONS INC. (IN RE HALO WIRELESS) (5TH CIR.)



Summarized by Kevin M. Baum of Katten Muchin Rosenman LLP

Affirming the bankruptcy court, the Fifth Circuit held that the governmental police or regulatory power exception to the automatic stay provided in § 362(b)(4) of the Bankruptcy Code applied to numerous pending proceedings that private telephone companies (the "Private Plaintiffs") had brought against Halo Wireless Inc. (the "debtor") in various state public utility commissions (the "PUC Proceedings"). The two main issues on appeal were whether (1) the PUC Proceedings were being "continued by" a governmental unit, and (2) those proceedings were in furtherance of the states' police and regulatory powers. The Fifth Circuit found that "the PUC [Proceedings] [met] the first requirement of the exception to the automatic stay, because they [were] being continued by governmental units" as part of a state regulatory proceeding, without regard to who initially filed the complaint. As to the second issue, the Fifth Circuit found that the PUC Proceedings were in furtherance of the states' police and regulatory powers under both (1) the pecuniary interest test, which asks whether the government primarily seeks to protect a pecuniary governmental interest in the debtor's property, as opposed to protecting the public safety and health, and (2) the public policy test, which asks whether the government is effectuating public policy rather than adjudicating private rights.

More than 500 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: FUTURE BRIGHT FOR COMMUNITY BANKS



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post takes a positive look at the future of community banks, citing consumer concerns over big banks' risky practices and increased regulation.

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.

August

- Mid-Atlantic Bankruptcy Workshop

     August 2-4, 2012 | Cambridge, Md.

September

- Complex Financial Restructuring Program

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

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

FHFA SEEKS TO LIMIT MORTGAGE BUYBACKS AFFLICTING BIG BANKS



The Federal Housing Finance Agency (FHFA), the regulator of Fannie Mae and Freddie Mac, plans to help banks avoid being forced to buy back mortgages out of concern that lenders are tightening standards even for the most creditworthy home buyers, Bloomberg News reported today. The FHFA is also standardizing the data Fannie Mae and Freddie Mac collect on each loan so they have more information when buying mortgages from lenders. Banks are requiring credit scores on government-backed loans that are between 100-200 points higher than the minimums set by Fannie Mae, Freddie Mac and the Federal Housing Administration, after the government-controlled agencies demanded that lenders repurchase more than $80 billion in flawed loans over the past three years. PNC Financial Services Group Inc. said on June 12 that it is increasing reserves by $350 million to cover demands, while Bank of America Corp., the second-biggest U.S. lender, said in May that it will buy back $330 million of home loans from Freddie Mac. Read more.

ANALYSIS: BANKS WORRY AS BREAKUP TALK REVIVED AFTER JPMORGAN LOSS



Congress' inquiry into JPMorgan Chase & Co.'s $2 billion trading loss has reignited the question of whether a bank can grow too large and complex for its own executives to oversee, Bloomberg News reported yesterday. The banking industry is taking notice that a move to cap the size of Wall Street firms is gaining traction on Capitol Hill. "There seems to be growing interest in some type of breakup proposal," said Sheila Bair, a former chairman of the Federal Deposit Insurance Corp. The concept is expected to arise today as JPMorgan Chief Executive Officer Jamie Dimon testifies before the House Financial Services Committee on the trading debacle. Last week he told the Senate that the losses, which carved about $23 billion from the bank’s market value, were due to a poor investing strategy coupled with management failures. Senator Sherrod Brown (D-Ohio) seized on that admission at the hearing. "It appears executives and regulators simply can't understand what is happening in all these offices at once," Brown said during the June 13 hearing. "It demonstrates to me that too-big-to-fail banks are, frankly, too-big-to-manage and too-big-to-regulate." While bank lobbyists say they are still most concerned that JPMorgan's trading loss could prompt regulators to write a stronger U.S. rule against proprietary trading, they are also closely monitoring the emerging talk about too-big-to-manage. Read more.

RATING-FIRM OVERSIGHT TO INCREASE



The head of a new federal office charged with overseeing the credit-rating firms pledged to step up scrutiny of an industry blamed by lawmakers for exacerbating the financial crisis, the Wall Street Journal reported today. Thomas J. Butler, a former brokerage executive, was sworn in Monday as director of the Securities and Exchange Commission's Office of Credit Ratings. The office was created by the Dodd-Frank Act in response to allegations that credit-rating firms had rated too highly many of the mortgage-linked securities at the heart of the housing bubble. As one of his first tasks, Butler said that he will explore whether the office will have its own enforcement, examination and rule-writing staff. Such a step would increase the number of people who would devote their full attention to overseeing credit-rating firms, including Standard & Poor's Ratings Services and Moody's Investors Service. Currently, at least 20 people are dedicated to oversight of the credit-rating firms, working in the SEC's different divisions. Butler said that the SEC's most recent budget granted the new office the power to have around 30 employees. Read more. (Subscription required.)

GM SEEN FUELING PENSION DEALS AS EMPLOYERS FACE SHORTFALL



General Motors Co.'s deal to cut pension obligations by $26 billion and shift plans to Prudential Financial Inc. is poised to fuel more transfers as U.S. firms face a retirement-funding shortfall the size of Greece's debt, Bloomberg News reported today. MetLife Inc. and Prudential are among insurers that expect the GM deal to encourage more corporations to offload plans. Pension liabilities exceed assets by more than $435 billion, according to a Bloomberg review of data disclosed by firms in the Russell 1000 Index of large U.S. companies. Greece, facing demands for austerity measures in exchange for rescue funds, had total debt of about $450 billion at the end of 2011. Employers who endured two stock-market crashes in a decade and 10-year Treasury yields near record lows may be tempted to follow GM’s lead by paying insurers to take the risk that market returns are inadequate or that beneficiaries live longer than expected. GM, the largest automaker, said that most of the 118,000 retirees and surviving beneficiaries affected by the shift will get Prudential annuities, with about 42,000 having the option of lump-sum payments. GM pensions were underfunded by $25.4 billion, the largest gap among the biggest U.S. companies, as of Dec. 31. The Detroit-based firm had global pension obligations of about $134 billion. Read more.

REPORT: CEO PAY IS RISING DESPITE SCRUTINY



Despite a lot of noise from shareholders and a few victories at big names like Citigroup and Hewlett-Packard, CEO pay continues to rise, according to a report in Sunday's New York Times. Median pay of the nation's 200 top-paid CEOs was $14.5 million, equating to a 5 percent raise, according to a study conducted for the New York Times by Equilar, a compensation data firm based in Redwood City, Calif. Because the list includes only the CEOs of public companies, it does not capture the many billions that have been earned by top hedge fund managers and private-equity dealmakers in recent years. But even in the more narrow universe of public companies, the complete Equilar study shows that there were not one, but two executives who had nine-figure paydays last year — the first time that has ever happened, according to Aaron Boyd, Equilar's head of research. Read more.

CREDIT CARD COMPLAINTS TO BE AVAILABLE ONLINE



The Consumer Financial Protection Bureau (CFPB) today is launching the first part of an online database of complaints from customers in the $2.05 trillion credit card industry, the Wall Street Journal reported today. The database will list searchable information about individual complaints, including the name of the company responsible for the credit card, the type of complaint and the customer's ZIP Code. Initially, it will only contain credit card-related complaints the bureau has received as of June 1, which means it is likely to have only 100 or so entries at first, according to a senior CFPB official. The bureau, which has been collecting credit card complaints since last July, will add in older complaints later this year. It may also incorporate complaints about other products, such as mortgages and private student loans, in the future. Read more. (Subscription required.)

ABI IN-DEPTH

WEBINAR NEXT WEEK WILL EXAMINE SUPREME COURT'S RULING IN THE RADLAX CASE



Having already examined the oral argument in a previous ABI media teleconference, panelists will reconvene for an ABI and West LegalEd Center webinar on June 26 to discuss the Supreme Court's ruling in RadLAX Gateway Hotel LLC v. Amalgamated Bank. CLE credit will be available for the webinar, which will be held from 2:00-3:30 p.m. ET.

Experts on the program include:

• Adam A. Lewis of Morrison Foerster, lead counsel for Amalgamated Bank before the Court.

• David Neff of Perkins Coie LLP (Chicago), the counsel of record for petitioner RadLAX Gateway Hotel LLC and participant in the argument.

• Jason S. Brookner of Andrews Kurth LLP (New York), whose article was cited in the brief for the respondent.

• Prof. Charles Tabb, the Alice Curtis Campbell Professor of Law at the University of Illinois College of Law, who recently published a paper titled "Credit Bidding, Security, and the Obsolescence of Chapter 11."

ABI Resident Scholar David Epstein will be the moderator for the webinar.

The webinar costs $115 and purchase provides online access for 180 days. If you are purchasing a live webcast, you will receive complimentary access to the on-demand version for 180 days once it becomes available. Click here for more information.

LATEST CASE SUMMARY ON VOLO: IN RE MAHARAJ (4TH CIR.)



Summarized by Dennis O'Dea of SFS Law Group

The Fourth Circuit affirmed the bankruptcy court's denial of confirmation of an individual chapter 11 plan accepted by two classes of creditors, but rejected by a class of unsecured creditors. The court held, in a case of first impression in the circuit courts of appeal, that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) did not abrogate the absolute priority rule as it applies to individual chapter 11 debtors and that the plan could not be confirmed over the dissenting vote of a class of unsecured creditors if the debtors retained any nonexempt property under a plan in which general creditors were not paid in full.

More than 500 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: IS THE "PONZI SCHEME PRESUMPTION" EXPANDING INTO NEW TERRITORY?



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines the expansion of the "Ponzi scheme presumption" by courts, as well as the case of Stoebner v. Ritchie Capital Management, LLC (In re Polaroid Corp.), 2012 Bankr. LEXIS 1926 (Bankr. D. Minn. April 30, 2012), in which a bankruptcy court applied the presumption of intent to defraud a transferor who was not even directly involved in a Ponzi scheme.

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.

June

- ABI Webinar Examining the Supreme Court's Ruling in the RadLAX Case

     June 26, 2012

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.

August

- Mid-Atlantic Bankruptcy Workshop

     August 2-4, 2012 | Cambridge, Md.

September

- Southwest Bankruptcy Conference

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

- Complex Financial Restructuring Program

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

October

- 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

MAY BANKRUPTCY FILINGS FALL 11 PERCENT FROM 2011, COMMERCIAL FILINGS DROP 21 PERCENT



Total bankruptcy filings in the United States for May 2012 decreased 11 percent compared to the previous year, according to data provided by Epiq Systems, Inc. May bankruptcy filings totaled 109,392, down from the 122,836 filings registered in May 2011. Total commercial filings for May 2012 were 5,259, representing a 21 percent decrease from the 6,631 filings during the same period in 2011. The 104,133 total noncommercial filings for May represented a 10 percent drop from the May 2011 noncommercial filing total of 116,205. “Households have reduced their spending and businesses are benefiting from sustained low interest rates,” said ABI Executive Director Samuel J. Gerdano. “Expect a continued drop in bankruptcy filing rates as families and businesses reinforce their balance sheets and cut costs.” Total commercial chapter 11 filings also decreased in May. Overall, the May total commercial chapter 11 filing total of 682 represented a 6 percent decrease from May 2011’s total of 722, but a 3 percent increase over the April 2012 total of 660. Click here to read the press release.

ANALYSIS: PRIVATE STUDENT LOAN RATES NEARLY EQUAL RATES OF CREDIT CARDS



Unlike the federal student-loan program, which lets consumers borrow at fixed rates directly from the government, private loans from at least 30 banks and other private lenders feature mostly variable rates that can be more than twice what some people pay in the U.S. program, according to a Bloomberg News analysis yesterday. Some private student loans carry rates as high as 10.25 percent. Loans from banks and other private lenders make up about 15 percent of the $1 trillion in outstanding student debt, according to an estimate by Mark Kantrowitz, who runs FinAid.org, a website about college grants and loans. About 2.9 million students have private loans, according to the most recent federal data analyzed by The Institute for College Access and Success, an Oakland, Calif.-based nonprofit group. Private-lending practices are drawing the government’s attention as Congress and the Obama administration look to help students avoid predatory, high-interest loans. "Like mortgages before the financial crisis, many borrowers took on private student-loan debt with terms and conditions they didn’t fully understand," said Rohit Chopra, the student-loan ombudsman at the Consumer Financial Protection Bureau, a federal agency studying the private-loan market. Recent graduates "are now fighting to stay afloat because these loans don’t always have the same repayment options as federal student loans," he said. Read more.

For more on student debt, be sure to listen to ABI’s latest podcast featuring scholars examining issues related to student loans and bankruptcy.

ROMNEY VOWS QUICK EXIT FROM GM STAKE



Republican Presidential candidate Mitt Romney believes President Barack Obama is holding on to the government's stake in General Motors to avoid an embarrassing financial loss before the election, and says he would sell the stock quickly if he wins the White House, the Detroit News reported today. As part of the government's GM bailout, the U.S. Treasury still holds a 26 percent stake in the Detroit automaker, and has been sitting on that share for 35 months. At GM's closing price yesterday of $21.11 a share, the government would lose $16 billion on its $49.5 billion bailout. Last month, Tim Massad, the assistant Treasury secretary who oversees the GM stake, said that the government has no timetable for selling its GM stock. Read more.

FINRA CALLS FOR MORE CONFLICT-OF-INTEREST CURBS FOR ANALYSTS AND INVESTMENT BANKERS



A Wall Street regulator is pushing to extend conflict-of-interest curbs to include analysts and investment bankers who work in the giant market for debt offerings, the Wall Street Journal reported today. Such controls already exist for Wall Street firms dealing with stocks, but the Financial Industry Regulatory Authority (FINRA) plans to submit by year-end proposed rules for debt. The rules could force firms to build firewalls between investment bankers who pitch debt offerings and research analysts who follow companies issuing the debt. The rules would require Securities and Exchange Commission approval. Read more. (Subscription required.)

FREDDIE MAC ANNOUNCES LOWER MODIFICATION INTEREST RATE



Freddie Mac announced on Friday that starting July 1, the GSE's Standard Modification interest rate will come down from 5 percent to 4.625 percent, DSNews.com reported yesterday. The Standard Modification is for borrowers who do not qualify for the government’s Home Affordable Modification Program (HAMP). The modification makes payments more affordable by lowering a borrower’s principal and interest payments by at least 10 percent. The modification includes a trial period, as does HAMP, to ensure that borrowers can maintain modified mortgage payments. The Freddie Mac Standard Modification is part of the Servicing Alignment Initiative, which is an effort to create consistency in how delinquent GSE loans are serviced. Read more.

ABI PODCAST FEATURES SCHOLARS EXAMINING STUDENT DEBT AND BANKRUPTCY



The latest ABI podcast features Profs. Daniel Austin of Northeastern University School of Law and G. Marcus Cole of Stanford Law School talking with ABI Resident Scholar David Epstein about current issues surrounding educational debt and bankruptcy. Click here to access the podcast

TOMORROW! WEBINAR TO EXAMINE HOW TO HANDLE AN ADMINISTRATIVELY INSOLVENT ESTATE



Panelists from one of the top-rated sessions at the 2011 Winter Leadership Conference are going to reconvene for an ABI and West LegalEd Center webinar on June 6 titled, "Handling the Administratively Insolvent Estate: What to Do When Your Chapter 11 Goes South." (Note the change of date: This program will now take place on June 6 rather than the previous date of June 5.) CLE credit will be available for the webinar, which will last from 11 a.m. - 12:30 p.m. ET.

Speakers include:

• Robert J. Feinstein of Pachulski Stang Ziehl & Jones LLP (New York)

• Cathy Rae Hershcopf of Cooley LLP (New York)

• Robert L. LeHane of Kelley Drye & Warren LLP (New York)

Robert J. Keach of Bernstein Shur (Portland, Maine) will be the moderator for the webinar.

The webinar costs $115, and purchase provides online access for 180 days. If you are purchasing a live webcast, you will receive complimentary access to the on-demand version for 180 days once it becomes available. Click here for more information.

ABI IN-DEPTH

WEBINAR ON JUNE 26 TO EXAMINE SUPREME COURT'S RULING IN RADLAX CASE



Having already examined the oral argument in a previous ABI media teleconference, panelists will reconvene for an ABI and West LegalEd Center webinar on June 26 to discuss last week's Supreme Court ruling in RadLAX Gateway Hotel LLC v. Amalgamated Bank. CLE credit will be available for the webinar, which will be held from 2:00-3:30 p.m. ET.

Experts on the program include:

• David Neff of Perkins Coie LLP (Chicago), the counsel of record for petitioner RadLAX Gateway Hotel LLC and participant in the argument.

• Jason S. Brookner of Andrews Kurth LLP (New York), whose article was cited in the brief for the respondent.

• Prof. Charles Tabb, the Alice Curtis Campbell Professor of Law at the University of Illinois College of Law, who recently published a paper titled "Credit Bidding, Security, and the Obsolescence of Chapter 11."

ABI Resident Scholar David Epstein will be the moderator for the webinar.

The webinar costs $115 and purchase provides online access for 180 days. If you are purchasing a live webcast, you will receive complimentary access to the on-demand version for 180 days once it becomes available. Click here for more information.

LATEST CASE SUMMARY ON VOLO: WHITE V. COMMERCIAL BANK AND TRUST CO. (IN RE WHITE; 8TH CIR.)



Summarized by Tony Bisconti of Bienert, Miller & Katzman

Reversing the bankruptcy court's order denying the debtors' motion to avoid Commercial Bank's judicial lien, the Eighth Circuit BAP held that because both debtors' property would be exempt under Arkansas law in the absence of Commercial Bank's judicial lien, the lien was avoidable, and the fact that at the time the judicial lien became fixed the debtors held title to the subject property by tenancy by the entirety, but subsequently created a tenancy in common, did not change the fact that the lien was avoidable. The BAP also held that the appeal of the bankruptcy court's order granting Commercial Bank relief from the automatic stay was moot.

More than 500 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: MORE ON THE SIGNING OF THE TEMPORARY BANKRUPTCY JUDGESHIP EXTENSION ACT



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new post features further details on the "Temporary Bankruptcy Judgeship Extension Act of 2011," (Pub. L. No. 112-121) which was signed by the President on May 25.

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

First-day orders authorizing full and immediate payment of the claims of ‘critical vendors’ should be prohibited; all pre-petition unsecured creditors should be subjected to the same rules. 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.

June

- ABI's "Handling the Administratively Insolvent Estate- What to Do When Your Chapter 11 Goes South" Webinar

     June 6, 2012

- Central States Bankruptcy Workshop

     June 7-10, 2012 | Traverse City, Mich.

- ABI Webinar Examining the Supreme Court's Ruling in the RadLAX Case

     June 26, 2012

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.

August

- Mid-Atlantic Bankruptcy Workshop

     August 2-4, 2012 | Cambridge, Md.

September

- Southwest Bankruptcy Conference

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

- Complex Financial Restructuring Program

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

October

- 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.