Consumer Debt

ANALYSIS: MORE HOMEOWNERS EMERGE FROM "UNDERWATER" STATUS



Rising home values have lifted more borrowers out of the hole of owing more than their properties are worth, an encouraging sign for an economy still closely tied to the health of the housing market, the Wall Street Journal reported today. The number of "underwater" homeowners in the fourth quarter of 2012 declined by 1.7 million from a year earlier, meaning 1.7 million U.S. households have regained home equity, according to data released Tuesday by CoreLogic, a research company. Overall, the company said 21.5 percent of households with a mortgage were underwater at the end of 2012, down from 25.2 percent at the end of 2011. While the trends are encouraging, some newly above-water households are just barely at breakeven and therefore are a long way off from being able to change their finances in any significant way. And the overall ranks of those underwater remain large, at about 10.4 million, down from 12.1 million at the end of 2011, according to CoreLogic. Read more. (Subscription required.)

To see a state-by-state analysis of CoreLogic's 4Q 2012 data, be sure to check out ABI's Chart of the Day site.

FANNIE MAE SEES WAY TO REPAY BILLIONS TO U.S. TREASURY



The rebounding housing market has helped return Fannie Mae to profitability and now might allow the government-controlled mortgage-finance company to repay as much as $61.5 billion in rescue funds to the U.S. Treasury, the Wall Street Journal reported. The potential payment would be the upshot of an accounting move whereby the company would reclaim certain tax benefits that were written down shortly after the company was placed under federal control in 2008. The potential move was disclosed last week in a regulatory filing in which the company said that it would delay the release of its annual report, due yesterday, as it tries to reach a resolution with its accountants and regulator over the timing of the accounting move. The debate about when Fannie should be allowed to reclaim the deferred-tax assets comes as Fannie and its smaller sibling, Freddie Mac, are likely to show large profits in the coming quarters as the housing market gradually recovers from its prolonged bust. The potential payment also has political implications as lawmakers and regulators wrangle over the fate of the firms, which were placed into a federal conservatorship amid soaring losses. The Obama administration has publicly said that the two companies eventually would be wound down and has blocked them from retaining profits, but has done little to de-emphasize their role in the mortgage market. Read more. (Subscription required.)

CFPB ISSUES PROPOSAL TO SUPERVISE STUDENT LOAN SERVICERS



The Consumer Financial Protection Bureau on Friday issued a proposal to supervise nonbank servicers of private and federal student loans that qualify as "larger participants" in the student loan servicing market, according to an analysis yesterday by Ballard Spahr LLP. The proposal represents an attempt by the CFPB to significantly expand its supervisory authority over student loan servicers. Because it already has supervisory authority over larger banks and nonbank private student lenders, the CFPB believes it should oversee student loan servicing by those entities. The CFPB's current authority to supervise nonbank private student lenders, however, does not allow it to supervise the nonbank student loan servicers that do not offer or provide private student loans. The proposal would allow the CFPB to supervise servicing of private and federal student loans by such nonbank servicers. Comments on the proposal will be due 60 days after its publication in the Federal Register. Click here to read the proposal.

OBAMA CUTS STUDENT-DEBT COLLECTOR COMMISSIONS TO AID BORROWERS



President Barack Obama's administration slashed the commissions paid to private collection companies that chase overdue student loans, reducing an incentive to squeeze borrowers, Bloomberg News reported today. Previously, the U.S. Education Department paid a commission as high as 16 percent of the entire loan amount only if collectors convinced defaulted borrowers to make stiff monthly payments. Starting this month, the fee dropped to as low as 11 percent, regardless of payment size. With $77.4 billion worth of student loans in default, the federal government turns to an army of private collectors to pursue borrowers. These companies, which receive about $1 billion annually in commissions, have sparked growing complaints that they insist on high payments, even when borrowers qualify for leniency. Under the new schedule, collectors will no longer have an incentive to avoid offering affordable payments tied to borrowers' incomes. Read more.

PLASTIC-SHY YOUNG IN U.S. SPUR MOVE TO USE NEW CREDIT DATA



Thirty-nine percent of undergraduate students between the ages of 18 and 24 owned a credit card in 2012, down from 49 percent in 2010, a Sallie Mae and Ipsos Public Affairs survey found, Bloomberg News reported today. And young adults who do have credit cards are carrying smaller balances: A median of $1,600 in 2010 compared with $2,500 in 2001 for under-35 households, according to Federal Reserve data. The trend, rooted in stricter lending rules and weaker job outlooks for young Americans since the 2008-09 recession, has implications for the strength of the economy. Fewer are building the traditional credit histories that would help them obtain financing for the purchases of homes and cars, which is critical to economic growth. Credit bureaus and the lending industry are stepping up their search for new ways to bolster credit files, and young people who do not pay credit card bills often do pay mobile phone bills. As reporting agencies gather data from telephone, rent and other payments, some scoring models incorporate this information to help assess candidates' creditworthiness. Read more.

ANALYSIS: WORKERS SAVING TOO LITTLE TO RETIRE



Workers and employers in the U.S. are bracing for a retirement crisis, even as the stock market sits near highs and the economy shows signs of improvement, the Wall Street Journal reported today. New data show that powerful financial and demographic forces are combining to squeeze individuals and companies that are trying to save for the future and make their money last. Fifty-seven percent of U.S. workers surveyed reported less than $25,000 in total household savings and investments excluding their homes, according to a report to be released Tuesday by the Employee Benefit Research Institute. Only 49 percent reported having so little money saved in 2008. The survey also found that 28 percent of Americans have no confidence they will have enough money to retire comfortably—the highest level in the study's 23-year history. Read more. (Subscription required.)

NUMBER OF CASES FILED BY SEC SLOWS



The Securities and Exchange Commission is filing significantly fewer civil fraud cases this year as its efforts to punish misconduct related to the financial crisis start to ebb, the Wall Street Journal reported yesterday. The agency is likely to fall short this fiscal year of its record-breaking number of enforcement actions in the previous two years. The expected drop in the numbers could be a headache for Mary Jo White, the former prosecutor nominated by President Barack Obama to be SEC chairman. A Senate panel is set to approve White's appointment today, the last step before the full Senate votes on it. White last week told a Senate hearing that she would strengthen the SEC's enforcement function to ensure that "all wrongdoers … will be aggressively and successfully called to account." The slowdown in enforcement actions reflects changes in the economic cycle, according to SEC officials. "We're at a point of inflection in our enforcement program," George Canellos, acting SEC enforcement head, said last month. Market meltdowns on the scale of the 2008 crisis, when companies implode and trillions of dollars are wiped off asset values, tend to expose major frauds and produce big cases, Canellos said. "We're now in a different era," he added. Read more. (Subscription required.)

NEW ABI BOOK EXPLORES THE DEPTHS OF DEEPENING INSOLVNECY



Any company executive juggling the competing demands of the troubled firm and its obligations to investors, as well as litigators practicing on either side of the insolvency aisle, will be interested in ABI’s latest publication, The Depths of Deepening Insolvency: Damage Exposure for Officers, Directors and Others. Authors Kathy Bazoian Phelps (Diamond McCarthy LLP) and Prof. Jack F. Williams (Mesirow Financial) wrote the book from both the plaintiffs' and defendants' perspectives to offer a deep analysis of the legal principle known as "deepening insolvency." The book also provides potential defenses that may be asserted to deepening insolvency allegations, as well as a state-by-state list of significant case law on this issue. To find out more about the book or to pre-order your copy, please click here. (Make sure to log in using your ABI member credentials to obtain the ABI member discount.)

DON'T MISS ACB'S FREE EVENT, "THE AUTO BANKRUPTCIES: CHECKING THE REARVIEW MIRROR," ON MARCH 22!



ABI members are encouraged to register for the American College of Bankruptcy's "The Auto Bankruptcies: Checking the Rearview Mirror" on March 22 at Boston College Law School in Newton, Mass. The afternoon event will feature key players looking back at the events that led to GM and Chrysler being placed into bankruptcy and the lessons that have been learned from the cases. Panelists include:

• Corinne Ball of Jones Day (New York), who served as lead bankruptcy counsel to Chrysler.

• Matthew A. Feldman of Willkie Farr and Gallagher LLP (New York), who served as chief legal advisor to the Obama administration's Task Force on the Auto Industry.

• Hon. Arthur J. Gonzalez, a Senior Fellow at New York University School of Law and formerly the Chief Bankruptcy Judge for the U.S. Bankruptcy Court for the Southern District of New York, who presided over the Chrysler chapter 11 proceedings.

• Harvey R. Miller of Weil, Gotshal & Manges LLP (New York), who served as lead bankruptcy counsel to GM.

The moderator will be Mark N. Berman of Nixon Peabody LLP (New York).

Registration for the afternoon event is free, so be sure to sign up today before it reaches capacity!

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

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 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 in the regular ABI 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 randomly be 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, and 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.

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: GORDON V. PAPPALARDO (IN RE GORDON; 1ST CIR.)



Summarized by Jennifer L. Saffer of J.L. Saffer, P.C.



In this appeal by a debtor in her chapter 13 case, the Bankruptcy Appellate Panel (BAP) for the First Circuit affirmed, after de novo review, the bankruptcy court’s order sustaining the chapter 13 trustee’s objection to the debtor's claimed exemption in a scheduled remainder interest in real estate. Affirming the decision of the bankruptcy court, the BAP determined that the property claimed as exempt was not "owned" by the debtor as required by and within the meaning of Mass. Gen. Laws ch. 188, § 3(a); the debtor had elected Massachusetts exemption rules rather than the federal, as was her option under 11 U.S.C. § 522(b).

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: CONGRESS, NOT FHFA, SHOULD BE REFORMING THE GSEs

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post found that while there is an emerging bipartisan consensus on the way forward for the secondary mortgage market, Congress has punted on what should be done with Fannie Mae and Freddie Mac, and the (Federal Housing Finance Agency) FHFA is taking significant steps without hearings or public discussion.

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

Who will win the NCAA basketball tournament?

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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2013

March

- Bankruptcy Battleground West

     March 22, 2013 | Los Angeles, Calif.

- ACB's Free Event, "The Auto Bankruptcies: Checking the Rearview Mirror" Program

     March 22, 2013 | Newton, Mass.

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.

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.

PBGC SAYS PENSION DEFICIT WIDENS TO RECORD $34 BILLION



The Pension Benefit Guaranty Corp. (PBGC) said that its deficit increased to $34 billion by the end of the most recent fiscal year, its largest ever, Dow Jones Daily Bankruptcy Review reported yesterday. As a result of plan failures, the PBGC said last week that its obligations totaled $119 billion by the end of fiscal 2012, while it has $85 billion in assets on hand to cover them. PBGC Director Joshua Gotbaum said that the agency continues its work to preserve pensions but "continuing financial deficits will ultimately threaten its ability to pay benefits." Read more. (Subscription required.)

BANKS SAY THEY HAVE GIVEN $26 BILLION IN HOMEOWNER RELIEF TO DATE



The nation's biggest banks provided more than $26 billion in relief to struggling homeowners between March 1 and Sept. 30, as part of a settlement earlier this year with state and federal officials over widespread foreclosure abuses, the Washington Post reported today. Joseph A. Smith Jr., the former North Carolina banking commissioner hired by the government to ensure the banks follow through on their promises, reported that more than 300,000 homeowners have benefitted so far, for an average of roughly $84,385 per borrower. The aid undertaken by the five banks involved in the settlement — Bank of America, JPMorgan Chase, Wells Fargo, Ally Financial and Citigroup — has taken various forms, from lowering loan balances to completing growing numbers of short sales to helping refinance many homeowners into mortgages with much lower interest rates. Each bank is responsible for providing a set amount of aid under the terms of the settlement, but different kinds of relief receive different amounts of credit. In general, banks received more credit for providing aid during the first year of the settlement and for activities such as reducing principal on loans and refinancing mortgages. Read more.

In related news, big banks are giving billions of dollars to distressed California homeowners through a landmark mortgage settlement — but mostly to get people out of their homes rather than help them stay, the Los Angeles Times reported today. Short sales should be reserved for homeowners who couldn't afford to live in a home even with a lower principal or for people who need to move, said UC Irvine law professor Katherine Porter, who was appointed by the state attorney general's office to monitor the deal. The preponderance of short sales in California may change, Porter said, as banks begin delivering other types of mandated relief, namely principal reduction. In California, the three biggest mortgage servicers — Wells Fargo & Co., Bank of America Corp. and JPMorgan Chase & Co. — promised to contribute $12 billion worth of homeowner aid. Bank of America is on the hook for the biggest portion of that agreement, $8 billion. Read more.

COMMENTARY: WHEN WILL FANNIE AND FREDDIE PAY TAXPAYERS BACK?



Fannie Mae and Freddie Mac owe American taxpayers nearly $140 billion — and there seems to be no plan on any front to pay it back, according to a commentary in yesterday's New York Times. In the midst of the housing crisis and the Great Recession in 2008, Congress agreed to spend $600 billion in public money to rescue major American banks, insurers, automakers and, yes, the GSE's — fearing an even deeper and longer recession if these companies failed. Since then, most of these bailed-out firms have paid taxpayers back, but not Fannie or Freddie. Even more remarkable than their $140 billion public debt (the money lent to the agencies minus dividends paid) is that there seems to be no active plan to reimburse taxpayers. Read more.

SHADOW BANKING GROWS TO $67 TRILLION INDUSTRY, REGULATORS SAY



The shadow banking industry has grown to about $67 trillion, $6 trillion bigger than previously thought, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight, Bloomberg news reported on Sunday. The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off-balance sheet investment vehicles, "can create systemic risks" and "amplify market reactions when market liquidity is scarce," the Financial Stability Board said in a report, which utilized more data than last year’s probe into the sector. While watchdogs have reined in excessive risk-taking by banks in the wake of the collapse of Lehman Brothers Holdings Inc. in 2008, they are concerned that lenders might use shadow banking to evade the clampdown. Read more.

ANALYSIS: MIXED RESULTS FOR SEC IN FINANCIAL CRISIS CASES



Last week was a study in contrasts in how the Securities and Exchange Commission has been able to pursue cases from the financial crisis, according to an analysis yesterday in the New York Times DealBook blog. The regulator has been successful in extracting large settlements from banks that were at the heart of the meltdown in the mortgage market, but it has not done as well in proving any significant wrongdoing by individuals. The SEC announced settlements on Friday with JPMorgan Chase and Credit Suisse over their dealings in residential mortgage-backed securities. JPMorgan will pay $296.9 million and Credit Suisse $120 million in disgorgement and penalties. But it had a much worse week in dealing with individuals accused of securities fraud as a federal jury in New York on Nov.12 largely absolved Bruce Bent Sr. and his son, Bruce Bent II, for statements they made about the money market fund they oversaw, the Reserve Primary Fund. That collapsed at the height of the financial crisis in September 2008. Read more.

OPEN PUBLIC HEARING ON CHAPTER 11 REFORM AT ABI'S WINTER LEADERSHIP CONFERENCE



ABI's Commission to Study the Reform of Chapter 11 will hold a public hearing on Friday, Nov. 30, at 11:15 a.m. (MT) during the Winter Leadership Conference in Tucson, Ariz., at the JW Marriott Starr Pass Resort. Members are welcome to provide testimony on their suggestions for ways to improve the operation of chapter 11. The hearing is the fifth in a series of public field hearings. Statements and video from all the recent hearings can be found at the Commission website at http://commission.abi.org.

Interested members should contact Sam Gerdano at sgerdano@abiworld.org for more details about in-person testimony. Those interested may also file written statements of any length for consideration by the Commission. All materials will be part of the Commission's record to be transmitted to Congress following the two-year investigation and report. Please consider this great opportunity to become part of the legal reform of the Bankruptcy Code.

LATEST ABI PODCAST EXAMINES BANKRUPTCY'S EFFECTS ON MANUFACTURING SUPPLY CHAINS



ABI’s latest podcast features ABI Resident Scholar Prof. Susan Hauser speaking with the authors of Interrupted! Understanding Bankruptcy's Effects on Manufacturing Supply Chains. John T. Gregg, Deborah L. Thorne and Patrick E. Mears of Barnes & Thornburg LLP discuss the book and the issues that arise when suppliers are unable to make deliveries of promised parts due to financial problems. Click here to listen to the podcast.

To purchase Interrupted! Understanding Bankruptcy's Effects on Manufacturing Supply Chains, please make sure to visit the ABI Book Store at http://bookstore.abi.org.

RICHMOND BAR CALLING FOR NOMINATIONS TO FILL JUDICIAL VACANCY; SUBMISSIONS MUST BE RECEIVED BY DEC. 13



The Judiciary Committee of the Richmond (Va.) Bar Association invites ABI members to submit nominations to fill a judicial vacancy in the U.S. Bankruptcy
Court for the Eastern District of Virginia. The court is looking to fill the vacancy left by the retirement of Bankruptcy Judge Douglas O. Tice, Jr.

Suggestions must be in writing and should be mailed to Virginia H. Grigg, Esq., c/o Richmond Bar Association, P.O. Box 1213, Richmond, Virginia 23218 or hand-delivered to her at the Bar office located at 707 E. Main Street, Suite 1620, Richmond, VA 23219. Nominations must be received by 4:00 p.m. ET on Thursday, December 13, 2012, in order to be considered.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: HAWKS HOLDINGS LLC V. KALINOWSKI (IN RE KALINOWSKI; 10TH CIR.)



Summarized by Steven T. Mulligan of Bieging Shapiro & Barber LLP

The 10th Circuit ruled that since debtor was the de facto manager of an LLC, he stood in a fiduciary relationship to the creditor of that LLC under a New Mexico statute that created a technical trust. Since the debtor’s participation in the mismanagement of funds paid to the LLC for the construction of homes constituted defalcation, the debt was thus excepted from discharge.

There are nearly 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: NINTH CIRCUIT RULES POST-PETITION PAYMENTS RECEIVED BY DEBTOR ARE NOT PROCEEDS OF "PAYMENTS TO BECOME DUE"



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines a recent decision by the Ninth Circuit in LID Acquisition LLC v. Lake at Las Vegas Joint Venture, LLC (In re Lake at Las Vegas Joint Venture, LLC) affirmed the lower courts' rulings that, pursuant to §552(a) of the Bankruptcy Code, a pre-petition security agreement that gives a lender a security interest in "payments" or "future payments" does not give a lender a security interest in post-petition payments.

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

Despite the "free and clear" language of Sect. 363(f), purchasers of assets in 363 sales may still be liable for injuries to unidentifiable future claimants. (In re Grumman Olson Indus, S.D.N.Y.).

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.

November

- Winter Leadership Conference

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

December

- Forty-Hour Bankruptcy Mediation Training

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

2013

January

- 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.

- Kansas City Advanced Consumer Bankruptcy Practice Institute

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

- VALCON 2013

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

COURT RULING PUTS CLOUD OVER CONSUMER FINANCIAL PROTECTION BUREAU AS WORK SLOWS



A court ruling that cast doubt on the authority of its director has hampered the U.S. Consumer Financial Protection Bureau, slowing some enforcement, impeding recruitment of a second-in-command and delaying joint ventures with the states, Bloomberg News reported yesterday. President Obama last year appointed Richard Cordray director when the Senate was not in session, the same day he made appointments to the National Labor Relations Board. The U.S. Court of Appeals in Washington on Jan. 25 concluded that the NLRB moves were unconstitutional, which could also affect Cordray. The Obama administration has appealed to the Supreme Court. House Republicans have said they will not take testimony from Cordray in the meantime. The Senate cannot move on Cordray’s renomination because Republicans will not permit an up or down vote. A Native American tribe has refused to supply information about its online lending business, claiming Cordray is not a legitimate director. In addition, candidates to be Cordray’s deputy will not pursue the job while his fate is unclear. The bureau’s plans to cooperate on enforcement with state attorneys general under the 2010 Dodd-Frank law also have not panned out, said Greg Zoeller, the attorney general of Indiana. “There has not been the gearing-up on consumer protection that I’d expected because of the cloud over the CFPB’s authority,” Zoeller, a Republican, said in an interview. The headwinds have not stopped the bureau’s work. Since it was established by Dodd-Frank, the agency has obtained $425 million in restitution for consumers and has imposed fines, including $15 million on mortgage insurers over kickbacks. The bureau has also warned banks about the consequences of discriminatory auto lending, released data on consumer complaints and published a study on payday lending. Read more.

SURVEY: NUMBER OF AMERICANS IN FORECLOSURE DOWN 25 PERCENT



Survey data by Lender Processing Services (LPS) shows that the number of Americans in the foreclosure process has fallen by almost 25 percent since April 2012, The Hill reported yesterday. Delinquency rates have also dropped, falling below 6.5 percent for the first time since July 2008. In line with LPS data, the National Association of Realtors reported yesterday that distressed homes – foreclosures and short sales – accounted for 18 percent of sales in April, down from 21 percent in March and 28 percent in April 2012. But while lower foreclosure rates are a sign that the economy and household finances are recovering, economists have blamed the dearth of foreclosures for some of the lackluster gains in the housing market recently. Existing and new home sales have both been constrained by tight inventory, according to experts, driving prices up in markets across the country and stunting a more solid recovery. Read more.

WALL STREET SEEKS DODD-FRANK CHANGES THROUGH TRADE TALKS



U.S. bankers and insurers are trying to use trade deals, which can trump existing legislation, to weaken parts of the Dodd-Frank Act designed to prevent a repeat of the 2008 financial crisis, Bloomberg News reported today. While the companies say that they are seeking agreements that preserve strong regulations and encourage economic growth, their effort is drawing fire from groups who argue that Wall Street wants to make the trade negotiations a new front in its three-year campaign to stop or alter the law. Sen. Elizabeth Warren (D-Mass.) said in a May 7 statement that there are “growing murmurs” about Wall Street’s efforts to “do quietly through trade agreements what they can’t get done in public view with the lights on and people watching.” The U.S. has embarked on three major negotiations aimed at reducing barriers to international commerce, one with the European Union covering most types of trade and investment, and a similar one with Asia-Pacific nations including Japan. A third set of talks, covering only services, is under way at the World Trade Organization. The Coalition of Service Industries, a trade association whose website lists Citigroup Inc., JPMorgan Chase & Co., American International Group Inc. and The Chubb Corp. as members, told the Office of the U.S. Trade Representative in a May 10 letter that “more compatible regulations for services” should be part of the EU deal. In separate letters on the EU and Asia-Pacific pacts, the industry coalition said that negotiators should draft rules limiting what regulators can do in the name of protecting financial stability. The letters also urged using the pacts to curb extra-territorial rules that can reach beyond U.S. borders, like ones currently being considered on financial derivatives. Read more.

COMMENTARY: WHY THE SEC NEEDS "NO-ADMIT" SETTLEMENTS



Last week, in a letter to the heads of the Securities and Exchange Commission, the Department of Justice and the Federal Reserve, Sen. Elizabeth Warren (D-Mass.) criticized the SEC practice of settling its civil litigation without requiring the defendant to admit wrongdoing, according to a commentary in today's Wall Street Journal. Warren said that this practice reduces the Wall Street regulator's leverage and forces it "to settle on terms that are much more favorable to the wrongdoer." Warren's criticism has long been shared by others on Capitol Hill and the courts who believe that "no-admit" settlements let defendants off without sufficient accountability, obscure the public record, and deprive private plaintiffs of the ability to piggyback on admissions to win monetary damage awards. In one prominent case in 2011, Judge Jed Rakoff of the district court in Manhattan took the rare step of refusing to sign off on a $285 million settlement between the SEC and Citigroup, calling it "pocket change" for the bank. That refusal has been appealed, and a decision is expected soon. The SEC and defense lawyers counter that no-admit settlements allow the agency to secure prompt and certain sanctions that are comparable to what regulators could reasonably attain through costly litigation—litigation that the SEC might actually lose. They contend that even without admissions, SEC settlements typically involve greater transparency and accountability than civil settlements by other federal agencies, some of which not only don't require an admission of wrongdoing, but actually allow the settling party to explicitly deny any wrongdoing. Read the full commentary. (Subscription required.)

LATEST BLOOMBERG VIDEO EXPLORES DEWEY CASE AND PROSPECT OF FUTURE LAW FIRM FAILURES



While failed law firms make for notoriously difficult bankruptcy cases, Dewey & LeBoeuf's time in bankruptcy court was quicker and easier than other notable law firms. Joe Samet, head of restructuring at Baker & McKenzie, and Al Togut, founding partner at Togut, Segal & Segal, talk with Bloomberg Law's Lee Pacchia about why Dewey's case went so smoothly compared to others, the prospects for other large law firm failures and how managing partners can keep their firms out of bankruptcy. Click here to watch the video.

ABI LIVE WEBINAR NEXT WEEK WILL FOCUS ON CLASS ACTIONS IN BOTH BUSINESS AND CONSUMER CASES



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

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



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

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



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

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



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

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: GENTILE V. DEGIACOMO (IN RE GENTILE; 1ST CIR.)



Summarized by Nathaniel Hull of Verrill Dana LLP

The First Circuit BAP dismissed the debtors’ appeal of a bankruptcy court order granting the chapter 7 trustee’s motion to sell real estate that was fully encumbered by a disputed lien for lack of appellate standing. The BAP concluded that the debtors failed to meet their burden of demonstrating that nullification of the sale would be likely to result in an overall surplus in the chapter 7 estate to which the debtors would become entitled once the bankruptcy case is closed.

There are nearly 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: STUDENT LOANS MAY NOW BE DISCHARGED MORE EASILY IN BANKRUPTCY IN THE 9TH CIR.

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new post examines the Ninth Circuit Court of Appeals' opinion in Hedlund v. The Educational Resources Institute, Inc. and Pennsylvania Higher Education Assistance Agency, Case 12-35258 (D.C. 6:11-cv-6281AA), suggesting that the opinion (and other pending decisions) may have made it a little easier on some student loan debtors to have their student loans discharged in bankruptcy.

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

ABI Quick Poll

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

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

INSOL INTERNATIONAL



INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

May

- ABI Live Webinar: Consumer Class Actions

     May 29, 2013

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

- INSOL’s Latin American Regional Seminar

     June 13, 2013 | São Paulo, Brazil

- Charity Golf Tournament

     June 14, 2013 | City of Industry, Calif.

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

     July 18-21, 2013 | Amelia Island, Fla.

August

- Mid-Atlantic Bankruptcy Workshop

    August 8-10, 2013 | Hershey, Pa.

- Southwest Bankruptcy Conference

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

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

- Bankruptcy 2013: Views from the Bench

    Sept. 27, 2013 | Washington, D.C.

October

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York

CFPB CITES PROBLEMS WITH CREDIT CARDS, MORTGAGES AND CREDIT REPORTS



The Consumer Financial Protection Bureau (CFPB) reported yesterday that it is finding problems with credit cards, credit bureau reporting and mortgages, CongressDaily reported today. Specifically, the CFPB said that it found that credit card holders under the age of 21 were raising their credit limits without the consent of their co-applicants, inaccurate information reported to credit bureaus was causing consumers to be charged too much or denied credit, and clear mortgage disclosures with proper rates and timely information regarding payments was not being provided to homeowners. The bureau said that the findings have prompted a compliance review and sparked fines totaling $435 million in refunds to 5.7 million consumers. Click here to read the CFPB's fall summary report.

COMMENTARY: AFTER BAILOUT, LARGE BANKS ALLOWED TO DOMINATE THE MORTGAGE BUSINESS



The broken mortgage market is the unintended consequence of the banking bailout and the regulatory response in the aftermath of the financial crisis, according to a commentary in the New York Times yesterday. In the third quarter, both Wells Fargo and JPMorgan Chase reported that they earned robust profits from the mortgage business. It would be foolish to blame Wells Fargo and JPMorgan for this situation, according to the commentary, but the government allowing takeovers without forcing weak competitors to get healthy quickly leads to an oligopoly. Instead, the two companies’ main competitors, Citigroup and Bank of America, are pulling out. Read the full commentary.

OBAMA SUGGESTS "SECRETARY OF BUSINESS" IN A SECOND TERM



President Barack Obama signaled that if he wins a second term, he would appoint a Secretary of Business to oversee newly consolidated government agencies, including the Small Business Administration, the Wall Street Journal reported on Tuesday. "We should have one Secretary of Business, instead of nine different departments that are dealing with things like giving loans to SBA or helping companies with exports," Obama said on Monday. Read more. (Subscription required.)

COMMENTARY: "TOO BIG TO FAIL" REMAINS VERY REAL



While it is tempting to think that very large financial institutions are no longer too big to fail thanks to the Dodd-Frank Act and regulation, this idea is completely at odds with the facts, according to an op-ed by Prof. Simon Johnson of the M.I.T. Sloan School of Management in Monday's New York Times. In a high-profile paper prepared recently at the behest of the Securities Industry and Financial Markets Association, the lobbying group for the securities industry, Federal Financial Analytics Inc., argues that "too big to fail" has effectively been ended. In theory, “too big to fail” should have been removed by the recent reforms or eliminated by the passage of time. But as a practical matter — looking at what investors really believe — “too big to fail” is still with us, according to Johnson. This implicit government guarantee lowers the funding costs for very large financial institutions because investors are convinced that debt issued by these firms is less risky than, for example, debt issued by small and medium-size banks. In effect, the government is providing a form of insurance that encourages financial institutions to become even bigger — and thus even more likely to be protected by some combination of the Federal Reserve, the Treasury and other agencies. This is an unfair, nontransparent government subsidy that encourages excessive risk-taking, according to Johnson, and creates a very large potential downside for the nonfinancial side of our economy. Read the full op-ed.

HURRICANE SANDY ESTIMATED TO COST INSURERS UP TO $20 BILLION



Hurricane Sandy may cost the insurance industry up to $20 billion, which would put this week's devastating storm second only to 2005's Hurricane Katrina for insured losses, according to a new damage estimate, the Wall Street Journal reported today. Disaster-modeling firm Eqecat Inc. said insured losses likely range from $10 billion to $20 billion and said that the total cost of the storm, including damage that was not insured by private companies, would be between $30 billion and $50 billion. In addition, the closure of major roads, tunnels and the New York City subway system are likely to drive claims higher, the firm said. Read more. (Subscription required.)

TRANSCRIPT OF CHAPTER 11 COMMISSION’S 10/17 HEARING NOW AVAILABLE



A full transcript of ABI's Chapter 11 Reform Commission’s hearing on 10/17 at the LSTA Conference in New York is now available. The transcript can be downloaded by clicking here.

The next public hearing will be Saturday from noon-2 p.m. ET at the 24th Annual TMA Annual Conference in Boston. For future Commission hearings, please click here.

MEMBERS ENCOURAGED TO WEIGH IN ON REAPPOINTMENT OF BANKRUPTCY JUDGE JUDITH WIZMUR



The current 14-year term of office for Judith H. Wizmur, U.S. Bankruptcy Judge for the District of New Jersey at Camden, is due to expire on Sept. 4, 2013. The U.S. Court of Appeals for the Third Circuit is considering the reappointment of the judge to a new 14-year term of office. Members of the bar and the public are invited to submit comments for consideration by the Court of Appeals regarding the reappointment of Bankruptcy Judge Wizmur. All comments should be directed to one of the following addresses: by e-mail at Wizmur_Reappointment@ca3.uscourts.gov or by mail to the Office of the Circuit
Executive, 22409 U.S. Courthouse, 601 Market St., Philadelphia, PA 19106-1790.
Comments must be received no later than noon on Monday, December 3, 2012.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: SHAFFER V. U.S. DEPARTMENT OF EDUCATION (IN RE SHAFFER; 8TH CIR.)



Summarized by William Joanis of JoanisLaw

The Eighth Circuit ruled that the debtor met the burden of proving by preponderance of evidence that educational loans were discharged on basis of undue hardship. The court employed a "totality of circumstances" test (i.e., past, present and future resources, reasonableness of living expenses, and other relevant facts, etc.). While the court noted that each loan needed to be evaluated separately, this issue was not properly raised on appeal.

There are nearly 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: RECAP OF DISCUSSIONS AT THE NCBJ ANNUAL CONFERENCE



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post highlights some of the topic discussions from the panels at last week's NCBJ annual meeting.

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

Despite the "free and clear" language of Sect. 363(f), purchasers of assets in 363 sales may still be liable for injuries to unidentifiable future claimants. (In re Grumman Olson Indus, SDNY).

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.

November

- U.S./Mexico Restructuring Symposium

     November 7, 2012 | Mexico City, Mexico

- Professional Development Program

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

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.

- Winter Leadership Conference

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

December

- Forty-Hour Bankruptcy Mediation Training

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

2013

January

- 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.

- Kansas City Advanced Consumer Bankruptcy Practice Institute

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

- VALCON 2013

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

HOUSE COMMITTEE APPROVES STUDENT LOAN FIX



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

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

EDITORIAL: NEW YORK TARGETING PENSION PREDATORS



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

INVESTORS FLOOD INTO LOAN FUNDS



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

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



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

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



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

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



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

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



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

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



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

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



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

ABI IN-DEPTH

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



Summarized by Samuel Ari Mushell of Americans United for Government Reform

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

There are more than 800 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: BROWN-VITTER BILL A POTENTIAL CAPITAL FIX FOR TROUBLED MARKETS

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

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

ABI Quick Poll

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

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

INSOL INTERNATIONAL



INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

May

- Litigation Skills Symposium

     May 21-24, 2013 | Dallas, Texas

- ABI Live Webinar: Consumer Class Actions

     May 29, 2013

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

- INSOL’s Latin American Regional Seminar

     June 13, 2013 | São Paulo, Brazil

- Charity Golf Tournament

     June 14, 2013 | City of Industry, Calif.

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

     July 18-21, 2013 | Amelia Island, Fla.

August

- Mid-Atlantic Bankruptcy Workshop

    August 8-10, 2013 | Hershey, Pa.

- Southwest Bankruptcy Conference

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

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

October

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York

ANALYSIS: MORE HOMEOWNERS EMERGE FROM "UNDERWATER" STATUS



Rising home values have lifted more borrowers out of the hole of owing more than their properties are worth, an encouraging sign for an economy still closely tied to the health of the housing market, the Wall Street Journal reported today. The number of "underwater" homeowners in the fourth quarter of 2012 declined by 1.7 million from a year earlier, meaning 1.7 million U.S. households have regained home equity, according to data released Tuesday by CoreLogic, a research company. Overall, the company said 21.5 percent of households with a mortgage were underwater at the end of 2012, down from 25.2 percent at the end of 2011. While the trends are encouraging, some newly above-water households are just barely at breakeven and therefore are a long way off from being able to change their finances in any significant way. And the overall ranks of those underwater remain large, at about 10.4 million, down from 12.1 million at the end of 2011, according to CoreLogic. Read more. (Subscription required.)

To see a state-by-state analysis of CoreLogic's 4Q 2012 data, be sure to check out ABI's Chart of the Day site.

FANNIE MAE SEES WAY TO REPAY BILLIONS TO U.S. TREASURY



The rebounding housing market has helped return Fannie Mae to profitability and now might allow the government-controlled mortgage-finance company to repay as much as $61.5 billion in rescue funds to the U.S. Treasury, the Wall Street Journal reported. The potential payment would be the upshot of an accounting move whereby the company would reclaim certain tax benefits that were written down shortly after the company was placed under federal control in 2008. The potential move was disclosed last week in a regulatory filing in which the company said that it would delay the release of its annual report, due yesterday, as it tries to reach a resolution with its accountants and regulator over the timing of the accounting move. The debate about when Fannie should be allowed to reclaim the deferred-tax assets comes as Fannie and its smaller sibling, Freddie Mac, are likely to show large profits in the coming quarters as the housing market gradually recovers from its prolonged bust. The potential payment also has political implications as lawmakers and regulators wrangle over the fate of the firms, which were placed into a federal conservatorship amid soaring losses. The Obama administration has publicly said that the two companies eventually would be wound down and has blocked them from retaining profits, but has done little to de-emphasize their role in the mortgage market. Read more. (Subscription required.)

CFPB ISSUES PROPOSAL TO SUPERVISE STUDENT LOAN SERVICERS



The Consumer Financial Protection Bureau on Friday issued a proposal to supervise nonbank servicers of private and federal student loans that qualify as "larger participants" in the student loan servicing market, according to an analysis yesterday by Ballard Spahr LLP. The proposal represents an attempt by the CFPB to significantly expand its supervisory authority over student loan servicers. Because it already has supervisory authority over larger banks and nonbank private student lenders, the CFPB believes it should oversee student loan servicing by those entities. The CFPB's current authority to supervise nonbank private student lenders, however, does not allow it to supervise the nonbank student loan servicers that do not offer or provide private student loans. The proposal would allow the CFPB to supervise servicing of private and federal student loans by such nonbank servicers. Comments on the proposal will be due 60 days after its publication in the Federal Register. Click here to read the proposal.

OBAMA CUTS STUDENT-DEBT COLLECTOR COMMISSIONS TO AID BORROWERS



President Barack Obama's administration slashed the commissions paid to private collection companies that chase overdue student loans, reducing an incentive to squeeze borrowers, Bloomberg News reported today. Previously, the U.S. Education Department paid a commission as high as 16 percent of the entire loan amount only if collectors convinced defaulted borrowers to make stiff monthly payments. Starting this month, the fee dropped to as low as 11 percent, regardless of payment size. With $77.4 billion worth of student loans in default, the federal government turns to an army of private collectors to pursue borrowers. These companies, which receive about $1 billion annually in commissions, have sparked growing complaints that they insist on high payments, even when borrowers qualify for leniency. Under the new schedule, collectors will no longer have an incentive to avoid offering affordable payments tied to borrowers' incomes. Read more.

PLASTIC-SHY YOUNG IN U.S. SPUR MOVE TO USE NEW CREDIT DATA



Thirty-nine percent of undergraduate students between the ages of 18 and 24 owned a credit card in 2012, down from 49 percent in 2010, a Sallie Mae and Ipsos Public Affairs survey found, Bloomberg News reported today. And young adults who do have credit cards are carrying smaller balances: A median of $1,600 in 2010 compared with $2,500 in 2001 for under-35 households, according to Federal Reserve data. The trend, rooted in stricter lending rules and weaker job outlooks for young Americans since the 2008-09 recession, has implications for the strength of the economy. Fewer are building the traditional credit histories that would help them obtain financing for the purchases of homes and cars, which is critical to economic growth. Credit bureaus and the lending industry are stepping up their search for new ways to bolster credit files, and young people who do not pay credit card bills often do pay mobile phone bills. As reporting agencies gather data from telephone, rent and other payments, some scoring models incorporate this information to help assess candidates' creditworthiness. Read more.

ANALYSIS: WORKERS SAVING TOO LITTLE TO RETIRE



Workers and employers in the U.S. are bracing for a retirement crisis, even as the stock market sits near highs and the economy shows signs of improvement, the Wall Street Journal reported today. New data show that powerful financial and demographic forces are combining to squeeze individuals and companies that are trying to save for the future and make their money last. Fifty-seven percent of U.S. workers surveyed reported less than $25,000 in total household savings and investments excluding their homes, according to a report to be released Tuesday by the Employee Benefit Research Institute. Only 49 percent reported having so little money saved in 2008. The survey also found that 28 percent of Americans have no confidence they will have enough money to retire comfortably—the highest level in the study's 23-year history. Read more. (Subscription required.)

NUMBER OF CASES FILED BY SEC SLOWS



The Securities and Exchange Commission is filing significantly fewer civil fraud cases this year as its efforts to punish misconduct related to the financial crisis start to ebb, the Wall Street Journal reported yesterday. The agency is likely to fall short this fiscal year of its record-breaking number of enforcement actions in the previous two years. The expected drop in the numbers could be a headache for Mary Jo White, the former prosecutor nominated by President Barack Obama to be SEC chairman. A Senate panel is set to approve White's appointment today, the last step before the full Senate votes on it. White last week told a Senate hearing that she would strengthen the SEC's enforcement function to ensure that "all wrongdoers … will be aggressively and successfully called to account." The slowdown in enforcement actions reflects changes in the economic cycle, according to SEC officials. "We're at a point of inflection in our enforcement program," George Canellos, acting SEC enforcement head, said last month. Market meltdowns on the scale of the 2008 crisis, when companies implode and trillions of dollars are wiped off asset values, tend to expose major frauds and produce big cases, Canellos said. "We're now in a different era," he added. Read more. (Subscription required.)

NEW ABI BOOK EXPLORES THE DEPTHS OF DEEPENING INSOLVNECY



Any company executive juggling the competing demands of the troubled firm and its obligations to investors, as well as litigators practicing on either side of the insolvency aisle, will be interested in ABI’s latest publication, The Depths of Deepening Insolvency: Damage Exposure for Officers, Directors and Others. Authors Kathy Bazoian Phelps (Diamond McCarthy LLP) and Prof. Jack F. Williams (Mesirow Financial) wrote the book from both the plaintiffs' and defendants' perspectives to offer a deep analysis of the legal principle known as "deepening insolvency." The book also provides potential defenses that may be asserted to deepening insolvency allegations, as well as a state-by-state list of significant case law on this issue. To find out more about the book or to pre-order your copy, please click here. (Make sure to log in using your ABI member credentials to obtain the ABI member discount.)

DON'T MISS ACB'S FREE EVENT, "THE AUTO BANKRUPTCIES: CHECKING THE REARVIEW MIRROR," ON MARCH 22!



ABI members are encouraged to register for the American College of Bankruptcy's "The Auto Bankruptcies: Checking the Rearview Mirror" on March 22 at Boston College Law School in Newton, Mass. The afternoon event will feature key players looking back at the events that led to GM and Chrysler being placed into bankruptcy and the lessons that have been learned from the cases. Panelists include:

• Corinne Ball of Jones Day (New York), who served as lead bankruptcy counsel to Chrysler.

• Matthew A. Feldman of Willkie Farr and Gallagher LLP (New York), who served as chief legal advisor to the Obama administration's Task Force on the Auto Industry.

• Hon. Arthur J. Gonzalez, a Senior Fellow at New York University School of Law and formerly the Chief Bankruptcy Judge for the U.S. Bankruptcy Court for the Southern District of New York, who presided over the Chrysler chapter 11 proceedings.

• Harvey R. Miller of Weil, Gotshal & Manges LLP (New York), who served as lead bankruptcy counsel to GM.

The moderator will be Mark N. Berman of Nixon Peabody LLP (New York).

Registration for the afternoon event is free, so be sure to sign up today before it reaches capacity!

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

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 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 in the regular ABI 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 randomly be 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, and 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.

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: GORDON V. PAPPALARDO (IN RE GORDON; 1ST CIR.)



Summarized by Jennifer L. Saffer of J.L. Saffer, P.C.



In this appeal by a debtor in her chapter 13 case, the Bankruptcy Appellate Panel (BAP) for the First Circuit affirmed, after de novo review, the bankruptcy court’s order sustaining the chapter 13 trustee’s objection to the debtor's claimed exemption in a scheduled remainder interest in real estate. Affirming the decision of the bankruptcy court, the BAP determined that the property claimed as exempt was not "owned" by the debtor as required by and within the meaning of Mass. Gen. Laws ch. 188, § 3(a); the debtor had elected Massachusetts exemption rules rather than the federal, as was her option under 11 U.S.C. § 522(b).

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: CONGRESS, NOT FHFA, SHOULD BE REFORMING THE GSEs

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post found that while there is an emerging bipartisan consensus on the way forward for the secondary mortgage market, Congress has punted on what should be done with Fannie Mae and Freddie Mac, and the (Federal Housing Finance Agency) FHFA is taking significant steps without hearings or public discussion.

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

Who will win the NCAA basketball tournament?

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

March

- Bankruptcy Battleground West

     March 22, 2013 | Los Angeles, Calif.

- ACB's Free Event, "The Auto Bankruptcies: Checking the Rearview Mirror" Program

     March 22, 2013 | Newton, Mass.

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.

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.

DELINQUENT PAYMENTS EDGE UP FOR CREDIT CARD ISSUERS



JPMorgan Chase, Discover Financial Services, American Express Co. and Capital One Financial Corp. each reported higher delinquency rates for September in regular monthly filings with the Securities and Exchange Commission, Dow Jones Newswires reported today. Delinquency rates, typically measured as a percentage of loans for which borrowers are at least 30 days late on a payment, have fallen drastically since the financial crisis as consumers have been cautious about taking on new debt and card issuers have purged troubled accounts from their books. Analysts have predicted that this progress will begin to diminish, though, since there is little room for the rates to fall further and as some banks get back into subprime lending. Read more.

COMMENTARY: CFPB'S RECENT PROPOSAL DOES NOT GO FAR ENOUGH TO ADDRESS FORECLOSURE ABUSES



The Consumer Financial Protection Bureau's (CFPB) recent proposal to regulate the foreclosure process is a disappointment as it retreats from many existing requirements, according to a New York Times editorial today. The CFPB's proposal does not impose any meaningful standards for loan modifications beyond those already required by various federal programs and agreements, many of which will expire in the future and none of which apply to the entire industry, according to the editorial. In place of concrete standards, the bureau’s proposal largely relies on procedural reforms, like requiring servicers to establish reasonable policies for managing paperwork and answering phone calls from borrowers, to contact borrowers at an early stage of delinquency, and to adhere to deadlines for responding to borrowers who need help. What is needed, according to the editorial, are requirements to make sure that all borrowers facing hardship are considered for loan modifications according to specific, publicly available criteria, and that loans are modified for all eligible borrowers. Read more.

OBAMA, ROMNEY SQUARE OFF ON AUTO BAILOUT IN FINAL DEBATE



In their third and final presidential debate ahead of the Nov. 6 election, President Obama said that if Mitt Romney's position on the $85 billion federal auto bailout had been in place, the U.S auto industry would have ceased to exist, the Detroit News reported today. Romney rejected Obama's claims, saying that he would not have allowed Detroit's Big Three automakers to liquidate. In his November 2008 New York Times column titled "Let Detroit Go Bankrupt," Romney said that he would support some aid but only after a bankruptcy filing. "The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk," he wrote. Click here to read more.

Click here to read Romney's op-ed that appeared in the New York Times in 2008.

LATEST ABI PODCAST FEATURES EXPERTS LOOKING AT U.S./MEXICO CROSS-BORDER INSOLVENCY ISSUES



In advance of ABI's Inaugural Mexico Restructuring Symposium on Nov. 7 in Mexico City, ABI Executive Director Sam Gerdano speaks with panelists Richard J. Cooper of Cleary, Gottlieb, Steen & Hamilton LLP (New York) and Thomas S. Heather of Heather & Heather (Mexico City). Cooper and Heather provide a preview of their panel's discussion about similarities and differences between insolvency laws in the U.S. and Mexico. Click here to listen to the podcast.

SHOW YOUR SUPPORT FOR STEVEN GOLICK, A COLLEAGUE AND ABI LEADER FACING MAJOR SURGERY TODAY



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

ABI IN-DEPTH

MEMBERS WILL NOT WANT TO MISS ABI'S PROGRAM AT NCBJ'S ANNUAL MEETING ON FRIDAY



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

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



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

LATEST CASE SUMMARY ON VOLO: HADDAD V. ALEXANDER, ZELMANSKI, DANNER & FIORITTO, PLLC (6TH CIR.)



Summarized by Scott J. Whitacre

In a nonbankruptcy debt-collection matter, the Sixth Circuit reversed the district court and held that a condominium association assessment was a “debt” regulated by the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.) where the owner purchased the condominium as a residence and used it as such for 13 years but later leased it out to others.

There are more than 650 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: SIXTH CIRCUIT FIRST COURT OF APPEALS TO ADDRESS FRAUDULENT TRANSFERS IN LIGHT OF STERN



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post found that in deciding Onkyo Electronics v. Global Technovations Inc. (In re Global Technovations Inc.), the U.S. Court of Appeals for the Sixth Circuit became the first court of appeals to considered whether, following the Supreme Court’s decision in Stern v. Marshall, a bankruptcy court has jurisdiction to enter a final judgment on a fraudulent transfer action. The Sixth Circuit held that the bankruptcy court in question had jurisdiction to enter a final judgment on a fraudulent transfer because the creditor had filed a proof of claim. The holding, however, implied that the Sixth Circuit would not have held that the bankruptcy court had such authority if the creditor had not filed a proof of claim.

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

ABI Quick Poll

Section 523(a)(8) should be amended to allow private student loans to be discharged in bankruptcy.

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

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



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

INSOL INTERNATIONAL



INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

October

- ABI Program at NCBJ's Annual Conference

     October 26, 2012 | San Diego, Calif.

- ABI Endowment Event at Peter Max Gallery

     October 29, 2012 | New York, N.Y.

November

- U.S./Mexico Restructuring Symposium

     November 7, 2012 | Mexico City, Mexico

- Professional Development Program

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

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.

- Winter Leadership Conference

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

December

- Forty-Hour Bankruptcy Mediation Training

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

2013

January

- Rocky Mountain Bankruptcy Conference

     January 24-25, 2013 | Denver, Colo.

February

- Caribbean Insolvency Symposium

     February 7-9, 2013 | Miami, Fla.

- Kansas City Advanced Consumer Bankruptcy Practice Institute

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

- VALCON 2013

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

ANALYSIS: TROUBLED HOME EQUITY LOANS LOOM ON THE HORIZON



Even a strong recovery is unlikely to rescue many homeowners who are struggling under the weight of multiple mortgages, the New York Times reported today. At Wells Fargo, for example, in the quarter ended March 31, nearly 44 percent of the bank's home equity borrowers paid only the minimum amount due. The Office of the Comptroller of the Currency published in its spring 2012 "Semiannual Risk Perspective" that almost 60 percent of all home equity line balances would start requiring payments of both principal and interest between 2014 and 2017. The amounts owed in these lines of credit climb significantly in coming years. While $11 billion in home equity lines are starting to require principal and interest payments this year, the amount jumps to $29 billion by 2014, the office said. That is followed by a surge to $53 billion in 2015 and $73 billion in 2017. For 2018 and beyond, it is $111 billion. The properties backing many of these loans are no longer worth the amounts borrowed on them. In the first quarter of 2012, the top four banks held $295.1 billion in revolving residential lines of credit, according to Amherst Securities. Using data from the Federal Reserve, Amherst said that Bank of America held $101.4 billion; Wells Fargo, $93.3 billion; JPMorgan Chase, $84.4 billion; and Citigroup, $15.9 billion. As a result, the risks to borrowers cited in the comptroller's office report will also be faced by their lenders. Read more.

"UNDERWATER" MORTGAGE REFINANCING GROWS, BUT CRITICS PRESS FOR MORE ASSISTANCE



The number of homeowners refinancing their mortgages under a revamped federal program grew in May, but critics are still pressing a federal regulator to do more, the Wall Street Journal reported today. For the first five months of 2012, more than 78,000 homeowners who owe more than 105 percent of their property's value have refinanced using the government’s Home Affordable Refinance Program (HARP). That was up from about 60,000 in all of 2011, the Federal Housing Finance Agency said in a report yesterday. In May alone, 21,605 homeowners who owe more than 105 percent of their home's current value completed refinances through HARP. That was up from 15,371 in April and only 4,168 in May 2011. However, relatively few homeowners who are deeply "underwater"—meaning they owe more on their properties than their homes are worth—have completed the refinancing process. Only about 11,000 homeowners who owe more than 125 percent of their home's value have refinanced under HARP to date. Those numbers may rise further since a method to package those loans into mortgage-backed securities became available on June 1. Nevertheless, critics and analysts note that some of the biggest lenders are only refinancing their existing borrowers. They also say that the HARP rules make it hard for borrowers to refinance their loans with new lenders, causing consumers to pay higher-than-necessary rates. Read more. (Subscription required.)

ANALYSIS: NEBRASKA, NOT CALIFORNIA, IS THE OVERALL LEADER OF MUNICIPAL COLLAPSES



Quirks in local, state and federal law have made Nebraska home to almost one-fifth of the more than 220 chapter 9 bankruptcies filed in the U.S. since 1981, according to a nationwide review of federal court records, Bloomberg News reported yesterday. California, with more than 20 times Nebraska's population, is second, followed by Texas and Alabama. California may soon add to its total, as San Bernardino is considering whether to seek court protection this week. The main difference between Nebraska and other states is the kind of governmental bodies that file for bankruptcy: No town, city or county has sought court protection in the state. All 45 of Nebraska’s chapter 9 cases were by special tax districts, most of them owned by residential subdivision developers who used property-tax revenue to pay for streets, sewers and other infrastructure. Read more.

HSBC EXECUTIVES GRILLED IN U.S. SENATE AMID MONEY LAUNDERING ALLEGATIONS



HSBC Holdings Plc executives were grilled by lawmakers over claims that bank affiliates gave terrorists, drug cartels and criminals a portal into the U.S. financial system by failing to guard against money laundering, Bloomberg News reported today. Irene Dorner, president and chief executive officer of HSBC North America Holdings Inc., and other executives appeared in front of the Senate's Permanent Subcommittee on Investigations today at a hearing following the panel’s 335-page report that described a decade of compliance failures by Europe's biggest bank. One of the executives, David Bagley, HSBC's head of group compliance, said at the hearing that he would resign. London-based HSBC enabled drug lords to launder money in Mexico, did business with firms linked to terrorism and concealed transactions that bypassed U.S. sanctions against Iran, Senate investigators said in the report. "The problem here is that some international banks abuse their U.S. access," Senator Carl Levin (D-Mich.), who heads the subcommittee, said at the start of the hearing. “The end result is that the U.S. affiliate can become a sinkhole of risk for an entire network of bank affiliates and their clients around the world playing fast and loose with U.S. rules." Read more.

Click here to read the prepared witness testimony.

CAPITAL ONE SEES CREDIT CARD DELINQUENCIES INCREASE IN JUNE



Capital One Financial Corp. said that delinquencies at its U.S. credit card business rose in June, reversing a four-month decline, while charge-offs eased, MarketWatch.com reported yesterday. Capital One's 30-day delinquency rate for U.S. credit cards edged up to 3.16 percent last month from 3.14 percent in May, according to a filing with the Securities and Exchange Commission. At its international credit card business, the rate increased to 4.84 percent from 4.83 percent a month earlier. Auto-loan delinquencies fell to 5.55 percent from 5.76 percent. Read more.

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: PEARSON EDUCATION, INC. V. ALMGREN (8TH CIR.)



Summarized by Sarah Smegal of Bartlett Hackett Feinberg P.C.

The Eighth Circuit Court of Appeals affirmed the orders of the bankruptcy court striking the appellants' demand for a jury trial on the amount of damages in relation to copyright infringement claims and denying an award of attorney's fees sought pursuant to 17 U.S.C. Sect. 505.

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: REACTIONS TO THE CREDIT CARD SETTLEMENT



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post looks at reactions to a proposed deal, announced late on Friday, that would transfer almost $7.5 billion from the credit card networks to merchants. In exchange for that payoff, Visa and MasterCard will get a wide-ranging release from future litigation.

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 anti-modification rule for home mortgages in chapter 13 should be repealed, subjecting mortgage debts to bifurcation like any other secured claim.

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

- 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

NEW LENDERS SPRING UP TO CATER TO SUBPRIME SECTOR

A crop of new lenders is jumping into the subprime personal-loan market, wooing consumers with flawed credit who have been neglected since the financial crisis, the Wall Street Journal reported today. Many lenders backed away from borrowers with poor credit histories after record defaults on subprime home loans helped trigger the recession in 2008. According to credit-data provider Equifax Inc., issuance of consumer loans and credit cards to people with credit scores below 660 -- subprime by the firm's widely used definition -- peaked at $87 billion in 2006 before dropping to a low of $28 billion in 2010. Subprime consumer lending climbed to $36 billion last year through October, according to the most recent data available from Equifax. Among firms that recently began originating loans for people with subprime credit is Lending Club, a peer-to-peer platform in which investors pool money to make consumer loans. In addition, Microsoft co-founder Paul Allen's firm, Vulcan Ventures, invested $125 million in FreedomPlus, a San Mateo, Calif., lender that opened its doors in mid-February. FreedomPlus, an offshoot of Freedom Financial Network, is targeting about 80 million people who have credit scores between 600 and 700. Read more. (Subscription required.)

ANALYSIS: CONSUMER FINANCIAL PROTECTION BUREAU ISN'T OUT OF THE WOODS YET

While the Consumer Financial Protection Bureau may be two-and-a-half years old, Republicans in the House of Representatives are still taking aim at the agency, according to an analysis in the Washington Post last Friday. The House passed (232-182) a package of bills last Thursday that would replace the bureau's single director with a five-person commission, prevent it from collecting consumer credit card information, and make it easier for the Treasury's Financial Stability Oversight Council to overrule CFPB regulations. House Republicans have been trying to pass many of these proposals for years, which hobbled the fledgling agency's effectiveness by putting it on the defensive even though they never became law. Perhaps the most important component has to do with money: The legislation would change the CFPB's funding mechanism so that its budget comes from Congress rather than the Federal Reserve. It authorizes $300 million for each of the next two years, or about two-thirds of what the bureau has been spending annually. Prospects for the bill are not favorable, as the bill would not likely clear the Democratically-controlled Senate, and the White House has already promised not to sign it. Read more.

Click here to view H.R. 3193.

JUSTICES MAY LIMIT SECURITIES FRAUD SUITS

The Supreme Court yesterday seemed ready to impose new limits on securities fraud suits that would make it harder for investors to band together to pursue claims that they were misled when they bought or sold securities, but the justices did not seem inclined to issue a ruling that would put an end to most such suits, the New York Times DealBook blog reported yesterday. The new limits would be in keeping with earlier decisions from the court led by Chief Justice John G. Roberts Jr., which has made it more difficult for workers and consumers to pursue class actions. The decision in the case argued yesterday, expected by June, seems likely to do something similar in cases brought by investors. Companies facing fraud class actions prefer to address as many issues as they can before judges decide whether to certify a class. Once a class is certified, they say, the damages sought are often so enormous that the only rational calculation is to settle even if the chances of losing at trial are small. "Once you get the class certified, the case is over," Justice Antonin Scalia said yesterday in the oral argument of Halliburton Co. v. Erica P. John Fund, Inc. Several justices suggested that this phenomenon could be partly addressed through a proposal in a supporting brief filed by two law professors, which argued that plaintiffs should be required to show at an early stage "whether the alleged fraud affected market price." Read more.

For more on the case, please click here.

LOOKING TO SEE WHAT IS IN STORE FOR ABI'S 32ND ANNUAL SPRING MEETING? WATCH HERE

Register today!

NEW ABILIVE WEBINAR ON MARCH 20 EXAMINES HOW TO DRAFT LOAN WORKOUT AGREEMENTS

The next abiLIVE webinar will take place on March 20 from 1-2:30 p.m. ET and will examine how to draft loan workout agreements. Learn the purpose and legal underpinnings of the various component parts of frequently used workout documents such as forbearance agreements, intercreditor agreements and restructuring/override agreements. The panel will focus on real-world examples of good and bad provisions of workout documents and will provide drafting tips. Group discounts available! Click here to register.

LEADING SCHOLARS TO PRESENT RESEARCH AND PROPOSALS FOR POTENTIAL CHAPTER 11 REFORMS AT THE ABI ILLINOIS SYMPOSIUM ON CHAPTER 11 REFORM APRIL 3-5

Advancing the dialogue on important reform issues in conjunction with ABI's Commission to Study the Reform of Chapter 11, ABI and the University of Illinois College of Law have assembled leading scholars to present academic papers on issues related to the Commission's work. Scholars will present papers and debate the consequences of the increased importance of secured credit to modern restructuring law to members of the Commission and fellow scholars at the ABI Illinois Symposium on Chapter 11 Reform at the Kirkland & Ellis Conference Center in Chicago on April 3-5. The papers presented at the Symposium will be published in a forthcoming issue of the University of Illinois Law Review.



The purpose of ABI's Commission to Study the Reform of Chapter 11 is to study and propose reforms to chapter 11 and related statutory provisions that will better balance the goals of facilitating the effective reorganization of business debtors -- with the attendant preservation and expansion of jobs -- and maximizing and realizing asset values for all creditors and stakeholders. In addition to the papers presented at the Symposium, the Commission, made up of 22 commissioners and 13 advisory committees, is reviewing testimony provided at hearings over the past two years in preparation for delivery of a Final Report to Congress at the end of 2014.



The ABI-Illinois Symposium on Chapter 11 Reform will include the following papers:



- Creditor Conflict and the Efficiency of the Corporate Reorganization Process

- The Value of Soft Assets in Corporate Reorganizations

- Statutory Erosion of Secured Creditors' Rights: Some Insights from the U.K.

- Judicial Oversight of Financing in Detroit's Restructuring and Beyond

- The Logic and Limits of Liens

- An Empirical Investigation of Leases and Executory Contracts

- Default Penalties in Chapter 11

- When Does Some Federal Interest Require a Different Result? An Essay on the Use and Misuse of Butner v. United States

- What Is a Lien? Lessons from Municipal Bankruptcy

- Derivatives and Collateral: Balancing Remedies and Systemic Risk

- Rules of Thumb for Intercreditor Agreements

- The (Il?) legitimacy of Bankruptcies for the Benefit of Secured Creditors

- DIP Financing: The Good, The Bad and The Ugly

- The Bankruptcy Clause, the Fifth Amendment, and the Limited Rights of Secured Creditors in Bankruptcy

- Priority in Going-Concern Surplus

- The Board's Duty to Keep Its Options Open

- The Role of Secured Credit in Chapter 11 Cases: An Empirical View



For a schedule containing a list of all presenters and commentators at the Symposium, please click here.

ABI IN-DEPTH

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

Summarized by Laury Macauley of Macauley Law Group

The Bankruptcy Appellate Panel of the Ninth Circuit affirmed in part the judgment of the bankruptcy court determining the nondischargeability of a claim under Bankruptcy Code § 523(a)(2)(A) (false pretenses), while reversing a determination of nondischargeability under Code § 523(a)(4) (embezzlement) because the money at issue had been loaned, it no longer belonged to the lender, and it could not be the subject of an embezzlement claim.

There are more than 1,200 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI's Volo website.

NEW ON ABI'S BANKRUPTCY BLOG EXCHANGE:  MT. GOX'S BANKRUPTCY CASE WILL BE UNLIKE ANY OTHER

A recent blog post examines the Mt. Gox bankruptcy case, which involves a company that seemed to operate with only a few employees and almost no presence in the countries across the globe where it did business, and takes a look at cross-border bankruptcy law.

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 U.S. Trustee should generally appoint a single creditors' committee in jointly administered bankruptcy cases.

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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2014

March
- Bankruptcy Battleground West
    March 11, 2014 | Los Angeles, Calif.
- Alexander L. Paskay Memorial
Bankruptcy Seminar
    March 13-15, 2014 | Tampa, Fla.
- abiLIVE Webinar: How to Draft Loan Workout Agreements
    March 20, 2014

April
- ABI Illinois Symposium on Chapter 11 Reform
    April 3-5, 2014 | Chicago

- 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

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

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

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

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

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

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.

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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.