Court Administration

REPORT: HAMP INCREASED MORTGAGE RENEGOTIATIONS, BUT ONLY REACHED ONE-THIRD OF TARGETED HOUSEHOLDS



A recent report by academics and Federal Reserve researchers revealed that the 2009 Home Affordable Modification Program generated an increase in the intensity of renegotiations while adversely affecting the effectiveness of renegotiations performed outside the program. Renegotiations induced by the program resulted in a modest reduction in the rate of foreclosures, but did not alter the rate of house price decline, durable consumption or employment in regions with higher exposure to the program. The overall impact of HAMP, according to the report, will be substantially limited since the renegotiations it induces will reach just one-third of its targeted 3 to 4 million indebted households. To read the full report, please click here.

COMMENTARY: TOO MUCH PROTECTION FOR DERIVATIVES IN BANKRUPTCY



Current "safe harbors" in the Bankruptcy Code are too broad and amount to little more than a subsidy to the derivatives industry, according to a commentary by Prof. Stephen Lubben in the New York Times DealBook blog today. The safe-harbor provisions Prof. Lubben addresses are derivatives and repo contracts that are exempt from the automatic stay, the prohibition on termination of contracts with the debtor, the prohibition on constructively fraudulent transfers and the prohibition on obtaining preferential treatment on the eve of bankruptcy. Similar provisions protect "securities contracts," and open up the argument that any transaction that occurs in the general vicinity of a broker-dealer is immune from the normal rules of bankruptcy. Prof. Lubben's concern with the safe harbors is not so much the statutory provisions but the role that courts have come to play in expanding the provisions beyond their already-broad statutory language. Read more.

DEBT COLLECTORS CASHING IN ON STUDENT LOANS



As the number of people taking out government-backed student loans has exploded, so has the number who have fallen at least 12 months behind in making payments — about 5.9 million people nationwide, up about a third in the last five years, the New York Times reported on Sunday. Nearly one in every six borrowers with a loan balance is in default. The amount of defaulted loans — $76 billion — is greater than the yearly tuition bill for all students at public two- and four-year colleges and universities, according to a survey of state education officials. In an attempt to recover money on the defaulted loans, the Education Department paid more than $1.4 billion last fiscal year to collection agencies and other groups to hunt down defaulters. Unlike private lenders, the federal government has extraordinary tools for collection that it has extended to the collection firms. Overall, the government recoups about 80 cents for every dollar that goes into default — an astoundingly high rate, considering that most lenders are lucky to recover 20 cents on the dollar on defaulted credit cards. Read more.

TOUGHER DODD-FRANK FIDUCIARY STANDARD FOR BROKERS STALLED



Despite support from both Wall Street and consumer advocates, a U.S. Securities and Exchange Commission proposal to raise standards for brokers advising retail investors has run aground, Bloomberg News reported yesterday. The SEC, which has been drafting a rule for almost two years, has scheduled no action on the measure as 2012 wanes and a presidential election approaches. SEC Chairman Mary Schapiro, who pushed to include the measure in the Dodd-Frank Act to ensure that clients receive equal treatment from brokers and investment advisers, said that other rules will probably take precedence in coming months. Dodd-Frank instructed the SEC to consider mandating that brokers operate under a fiduciary standard as rigorous as that for investment advisers. Lawmakers sought the uniform standard to eliminate investor confusion over the roles of brokers and advisers, and to protect customers from being overcharged or sold inappropriate products. Schapiro declined to predict when the SEC will act on the rule, which is considered optional under Dodd-Frank. The agency is "steadily working through all the mandated rulemakings," she said. Read more.

SOME EXPERTS SEE AIG BAILOUT SUCCESS AS A DOUBLE-EDGED SWORD



The Treasury Department estimated yesterday that its pending sale of shares in global insurance giant American International Group would put taxpayers in the black, four years after the government rescued the company in one of the largest bailouts of the financial crisis, according to a Washington Post report today. Officials estimated that after the sale, the Treasury and the Federal Reserve will have netted $194.7 billion from its AIG investment, about $12 billion more than the government committed in aid. The stock sale would leave Treasury with approximately 317 million shares in AIG — a 21.5 percent stake in the company, down from a high of 92 percent — and leave open the possibility for future additional profit as the government exits the company. However, some experts insist that even a largely successful bailout comes with its own set of circumstances. "It creates perverse incentives,” said Prof. William Black of the University of Missouri-Kansas City Law School. "There's an enormous danger to providing bailouts to systemically dangerous institutions and, in particular, bailing out their creditors 100 cents on the dollar." Christy Romero, the special inspector general for the government’s bailout fund, the Troubled Assets Relief Program, shares concerns that the success of the AIG bailout could lead investors to expect the government to rescue other firms whose failure could threaten the economy and thereby does not adequately discourage excessively risky practices. Read more.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: IN RE KNIGHT-CELOTEX LLC (7TH CIR.)



Summarized by Attorney Karl Johnson

Affirming the district court, the Seventh Circuit held that the bankruptcy court did not abuse its discretion by finding that a trustee was not judicially estopped from assigning claims against the principal of corporate debtors due to the trustee's failure to state an intent to pursue or abandon those claims in an application to employ counsel; instead, the omission was found to be a harmless violation of the disclosure requirements of Section 327(a) and Rule 2014(a) because the claims had been prominent in prior court records and because it "defie[d] belief to think that the trustee would abandon a possible multimillion dollar recovery on behalf of the companies’ creditors without a word."

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: SECOND CIRCUIT TO WEIGH IN ON TRADING OF BANKRUPTCY CLAIMS



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines how the Second Circuit Court of Appeals recently heard arguments in a case that could have substantial implications on the trading of bankruptcy claims. While the court could choose to resolve the case, Longacre Master Fund, Ltd. v. ATS Automation Tooling Systems Inc., based on a straightforward analysis of New York contract law, it may also take the opportunity to consider the controversial claims trading case of Enron v. Springfield Associates decided several years ago by the district court for the Southern District of New York.

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 have unfettered discretion in adjusting fee applications, even when no party-in-interest has raised objections.

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.

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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.

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

     September 27, 2012

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

     September 28, 2012 | Chicago, Ill.

October

- Nuts & Bolts for Young and New Practitioners - KC

     October 4, 2012 | Kansas City, Mo.

- Midwestern Bankruptcy Institute Program, Midwestern Consumer Forum

     October 5, 2012 | Kansas City, Mo.

- Bankruptcy 2012: Views from the Bench

     October 5, 2012 | Washington, D.C.

- Chicago Consumer Bankruptcy Conference

     October 8, 2012 | Chicago, Ill.

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

October 15, 2012

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

November

- U.S./Mexico Restructuring Symposium

     November 7, 2012 | Mexico City, Mexico

- Professional Development Program

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

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.

- Winter Leadership Conference

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

December

- Forty-Hour Bankruptcy Mediation Training

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

2013

February

- Kansas City Advanced Consumer Bankruptcy Practice Institute

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

NINTH CIRCUIT HOLDS BANKRUPTCY COURTS LACK AUTHORITY TO ENTER FINAL JUDGMENT IN FRAUDULENT CONVEYANCE ACTIONS



In a decision issued today in Executive Benefits Insurance Agency v. Arkison (In re Bellingham Insurance Agency, Inc., Case No. 11-35162), the Ninth Circuit held that bankruptcy courts lack authority to enter final judgment in fraudulent conveyance actions against nonclaimants. Relying upon the U.S. Supreme Court's decision in Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989) and Stern v. Marshall (131 S. Ct. 2594 (2011), the appellate court noted that the public rights exception to the rule of Article III adjudication does not encompass federal-law fraudulent conveyance claims, even though Congress designated such claims as core proceedings. Instead, bankruptcy courts have the power to hear fraudulent conveyance cases and submit reports and recommendations to the district court. The panel also held that the right to a hearing in an Article III court is waivable, and that the nonclaimant defendant in this case, by not objecting earlier on in the case, consented to the bankruptcy judge's adjudication of the fraudulent conveyance claim. To view a summary of the decision and read the full text of the opinion, visit ABI's VOLO here.

ANALYSIS: FINANCIALLY SICK FIRMS OFTEN GRANT BONUSES IN MONTHS BEFORE BANKRUPTCY FILING



More than 1,600 insiders—executives and others controlling a company—received bonuses, salaries, fees and other compensation totaling more than $1.3 billion in the months before their companies filed for chapter 11, according to a Wall Street Journal analysis of more than 80 bankruptcy cases over the past five years. Financially ailing companies such as Hostess Brands often pay bonuses and other compensation to executives and private-equity owners before filing for bankruptcy protection. Hostess's bankruptcy judge said during a Nov. 29 hearing that the payments "will definitely be looked at" as he approved the company's request to start liquidating and laying off more than 18,000 employees. Hostess was exploring a potential bankruptcy filing in July 2011 when its board voted to boost the salary of its chief executive and other high-level officers, according to creditors. Five months later, it filed for chapter 11, its second bankruptcy filing in a decade. Financially ailing companies often pay bonuses and other compensation to executives, directors and private-equity owners in the months before filing for bankruptcy protection. Federal law prevents "retention" bonuses paid to such "insiders" after a bankruptcy case is filed but not before. Read more. (Subscription required.)

OBAMA RECESS APPOINTMENTS FACE FIRST APPEALS COURT TEST



President Barack Obama’s authority to make appointments without U.S. Senate approval is being considered by an appeals court for the first time in a test of so-called pro-forma sessions set up by Republican lawmakers, Bloomberg News reported on Saturday. To prevent Obama from appointing officials after Congress started a holiday break last December, House and Senate Republicans refused to adopt a resolution to formally adjourn. Congressional Republicans opposed to the powers granted the Consumer Financial Protection Bureau were seeking to block the president from appointing former Ohio Attorney General Richard Cordray as the new agency’s first head, having refused a confirmation vote since he was nominated in July. Obama also appointed Cordray on Jan. 4. His appointment is being contested in a Washington, D.C., lawsuit while the validity of the president's naming of three National Labor Relations Board members on Jan. 4 has been raised in at least three other cases. Read more.

COMMENTARY: THE MORTGAGE CHALLENGE



The biggest economic policy error of President Obama's first term was the failure to address foreclosures effectively, according to a New York Times editorial on Sunday. By favoring the voluntary cooperation of banks in reducing monthly payments for hard-pressed borrowers, Obama’s policies did more to shield the banks from losses than to help homeowners and stabilize the market. Recent signs of a housing recovery aside, nearly three million loans are now in or near foreclosure, according to Moody’s Analytics. In addition, some five million borrowers who are current in their payments have high-rate mortgages that they have not refinanced, in part because of excessive bank fees. In all, nearly 12 million borrowers collectively owe $600 billion more on their mortgages than their homes are worth, a loss of wealth and a load of debt that make a strong and steady economic recovery all but impossible. The question now is whether Obama will use his second term to push through effective mortgage reform, according to the editorial. A first test of his resolve will be the swift nomination of a new director for the agency that oversees Fannie Mae and Freddie Mac, the government-controlled mortgage companies that own or back most mortgages. While new leadership at Fannie Mae and Freddie Mac is a key to more relief, the push for more help also could be strengthened through support of legislation that would expand refinancings and principal reductions. A sound mortgage-relief agenda, according to the editorial, also requires an enforcement plan. Read more.

COMMENTARY: BANKRUPTCY FOR DETROIT LOOMS AS UNIONS AND THE CITY COUNCIL RESIST REFORM



Michigan lawmakers have kept Detroit on life support for the past six months and may need to do so indefinitely barring a miraculous economic recovery, according to a Wall Street Journal editorial today. The city will run out of cash this month unless the state releases $30 million in bond proceeds, which are being held in escrow under a consent agreement that council members reluctantly approved in April. The rescue package ties $137 million in state aid to reforms and lets Mayor Dave Bing redo labor contracts. The city has already drawn $40 million from the state and may soon be cut off since council members last month rejected a contract for a legal firm to advise the mayor, a condition of further aid. Read more. (Subscription required.)

STUDENT-LOAN COLLECTION TARGETED FOR OVERHAUL IN CONGRESS



Congress will consider overhauling debt collection in the $100 billion-a-year U.S. student loan program, replacing it with automatic withdrawals from borrowers' paychecks tied to their income, Bloomberg News reported today. Rep. Tom Petri (R-Wis.) plans to introduce legislation as soon as this week that would require employers to withhold payments from wages in the same way they do taxes. Payments would be capped at 15 percent of borrowers’ income after basic living expenses. The bill follows growing concern about the burden of $1 trillion in outstanding student loans, which now exceed credit- card debt. Under the new system, the government would no longer need to hire private debt-collection companies and charge fees that add as much as 25 percent to borrowers' loan balances, leaving defaulted former students even deeper in the hole. Read more.

In related news, Rep. George Miller (D-Calif.), the ranking Democrat on the House Education Committee, is looking into student-loan practices by private lenders that he says resemble the runaround homeowners were given by mortgage lenders, CongressDaily reported yesterday. He is asking the Government Accountability Office to examine problems reported by student borrowers and has asked Sallie Mae Inc., Wells Fargo, the Pennsylvania Higher Education Assistance Agency, and Citigroup for information on their practices.

For more on the issue of student loan practices, be sure to listen to ABI’s latest podcast.

LATEST ABI PODCAST FEATURES STUDY ON STUDENT LOAN DISCHARGES AND THE UNDUE HARDSHIP STANDARD



The latest ABI Podcast features ABI Resident Scholar Susan Hauser speaking with Jason Iuliano, the author of "An Empirical Assessment of Student Loan Discharges and the Undue Hardship Standard." Iuliano, a graduate of Harvard Law School and currently a Ph. D. candidate at Princeton University, discusses the methodology of his study and a few of the conclusions that can be drawn from it about student loan discharges and the undue hardship standard in bankruptcy. Click here to listen.

ABI IN-DEPTH

ABI'S INTERACTIVE BANKRUPTCY CODE AND RULES SITE UPDATED TO INCLUDE AMENDMENTS EFFECTIVE DEC. 1



ABI's Bankruptcy Code and Rules site has been updated with all proposed amendments to Federal Rules of Bankruptcy Procedure 1007, 2015, 3001, 7054 and 7056 that took effect Dec. 1. Use the most current Code and Rules by going to http://law.abi.org/.

WEBCASTS NOW AVAILABLE OF CHAPTER 11 COMMISSION EVENTS, CONCERT DEDICATED TO ABI MEMBER STEVEN GOLICK



Looking to learn about ABI’s Chapter 11 Commission’s efforts in 2013? Catch the final 2012 public hearing of the Commission? Listen to a concert by ABI’s Indubitable Equivalents dedicated to Steven Golick? Follow the links below to access the webstreams of these recent events:

• ABI's media teleconference held Dec. 3: "Teleconference to Look at Chapter 11 Commission to Date: What Have We Learned?" Click here.

• Final public hearing of ABI's Commission to Study the Reform of Chapter 11 that took place on Nov. 30 at ABI’s Winter Leadership Conference. Click here.

• Performance of ABI’s Indubitable Equivalents dedicated to ABI member, leader and band mate, Steven Golick, who has recently undergone successful surgery to remove a brain tumor. Watch the concert at www.abiband.com.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: SUPREME COURT SEEKS VIEW OF SOLICITOR GENERAL IN BANKRUPTCY EXEMPTION CASE



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog explores the decision by the U.S. Supreme Court yesterday to ask the U.S. solicitor general to provide perspective on whether a bankruptcy court has the power to levy a financial charge against a chapter 7 debtor's residential property, which he has claimed falls under the homestead exemption (Stephen Law v. Alfred Siegel, No. 12-5196, U.S. Sup.).

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.

LATEST BLOOMBERG LAW VIDEO: BILL ON BANKRUPTCY- PATRIOT COAL CASE KICKED FROM MANHATTAN TO ST. LOUIS



The decision sending the Patriot Coal Corp. reorganization to St. Louis will focus debate on the near impossibility of convincing a judge in New York or Delaware to send a bankruptcy somewhere else, as Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss on their new video. Click here to watch.

ABI Quick Poll

A licensee of a trademark has the right to retain the license even when a debtor rejects the underlying contract creating the license. (Sunbeam Products, 7th Cir.)

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

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

January

- Western Consumer Bankruptcy Conference

     January 21, 2013 | Las Vegas, Nev.

- Rocky Mountain Bankruptcy Conference

     January 24-25, 2013 | Denver, Colo.

February

- Caribbean Insolvency Symposium

     February 7-9, 2013 | Miami, Fla.

- Kansas City Advanced Consumer Bankruptcy Practice Institute

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

- VALCON 2013

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

March

- Bankruptcy Battleground West

     March 22, 2012 | Los Angeles, Calif.

FEBRUARY BANKRUPTCY FILINGS DECREASE 21 PERCENT FROM PREVIOUS YEAR, COMMERCIAL FILINGS FALL 29 PERCENT



Total bankruptcy filings in the United States decreased 21 percent in February over last year, according to data provided by Epiq Systems, Inc. Bankruptcy filings totaled 82,285 in February 2013, down from the February 2012 total of 104,537. Consumer filings declined 21 percent to 78,611 from the February 2012 consumer filing total of 99,378. Total commercial filings in February 2013 decreased to 3,674, representing a 29 percent decline from the 5,159 business filings recorded in February 2012. Total commercial chapter 11 filings also decreased 21 percent, to 609 filings in February from the 756 commercial chapter 11 filings recorded in February 2012.

While bankruptcies were down from a year ago, February’s bankruptcy filings trended upward from January. Total bankruptcy filings for the month of February represented a 5 percent increase over the 78,565 total filings registered in January 2013. The total noncommercial filings for February also represented a 5 percent increase from the January 2013 noncommercial filing total of 74,831. Although the February commercial filing total represented a 2 percent decline from the January 2013 commercial filing total of 3,734, February commercial chapter 11 filings represented a 27 percent increase when compared to the 481 filings the previous month. Read the ABI press release.

STATES, PRIVATE PLAINTIFFS PRESS SUIT AGAINST WALL STREET REFORM LAW



The plaintiffs that are challenging the constitutionality of the Wall Street reform law and the leadership of the Obama administration's new consumer protection agency are fighting to keep alive a suit in Washington, D.C., federal district court, the Legal Times reported on Friday. The private plaintiffs, including advocacy group Competitive Enterprise Institute and Texas-based State National Bank of Big Spring, on Feb. 27 responded to the U.S. Justice Department's effort to end the litigation. The 11 states that have joined the suit include Texas, South Carolina, Oklahoma, Michigan, and Ohio. The attorneys for the private plaintiffs, including O'Melveny & Myers partner Gregory Jacob and C. Boyden Gray, said in their court papers that the plaintiffs have presented sufficient evidence that the Dodd-Frank Wall Street Reform and Consumer Protection Act gave "unchecked and unprecedented powers" to federal agencies, including the newly created Consumer Financial Protection Bureau (CFPB). The states that joined the lawsuit are only challenging the government's ability to liquidate the largest banks, not the composition of the CFPB. Read more.

COMMENTARY: BLEEDING THE BORROWER DRY



Though 15 states have banned predatory, high-interest loans that payday lenders commonly use to pillage low-income borrowers, offshore lenders increasingly get around state laws by issuing predatory loans over the Internet, according to an editorial in yesterday's New York Times. About 12 million borrowers turn to payday lenders each year. A new study by the Pew Charitable Trusts found that only about 14 percent of borrowers can afford to take enough out of their monthly budget to repay the average payday loan. Instead, average borrowers carry a debt for five months, during which time they pay repeated fees to renew the loan. By the fifth month, someone who borrowed $375 will have paid about $520 in interest alone. Many also resort to borrowing from additional payday lenders. Not surprisingly, payday borrowers are more likely than others to default on credit card debt, to file for bankruptcy or to lose their bank accounts because of abuse of overdraft privileges. A bill pending in the Senate known as the Safe Lending Act would require all online lenders to comply with state laws that provide stronger consumer protections than the federal statutes. It would establish once and for all that payday loan borrowers have the right to stop lenders from raiding their bank accounts. State and federal regulators also need to prohibit banks from giving payday lenders access to the automatic payment system in states where predatory, high-interest loans are illegal. Read the full editorial.

REPORT: YOUNG ADULTS RETREAT FROM PILING UP DEBT



Young people are racking up larger amounts of student debt than ever before, but fresh data suggest they are becoming warier of other kinds of borrowing: Total debt among young adults dropped in the last decade to the lowest level in 15 years, the Wall Street Journal reported today. A typical young U.S. household—defined as one led by someone under age 35—had $15,000 in total debt in 2010, down from $18,000 in 2001 and the lowest since 1995, according to a recent Pew Research Center report and government data. Total debt includes mortgage loans, credit cards, auto lending, student loans and other consumer borrowing. In addition, fewer young adults carried credit card balances, and 22 percent did not have any debt at all in 2010—the most since government tracking began in 1983. Read more. (Subscription required.)

ANALYSIS: MOST BIG M&A DEALS FACED LEGAL CHALLENGES IN 2012



A study released by Cornerstone Research on Thursday found that it was rare for a merger or acquisition deal in 2012 to escape legal challenges from shareholders, Corporate Counsel reported on Friday. Nearly 96 percent of M&A deals valued at more than $500 million and 93 percent of those valued at more than $100 million engendered suits, according to Cornerstone's report titled, "Shareholder Litigation Involving Mergers and Acquisitions." On average, the report found that deals attracted more than 4.8 suits per transaction, with some filed within hours after an announcement. The average time between announcement of a deal and commencement of a legal challenge was 14 days, the report said. Read more.

DON’T MISS THE ABI LIVE WEBINAR ON APRIL 5 - "LEGACY LIABILITIES: DEALING WITH ENVIRONMENTAL, PENSION, UNION AND SIMILAR TYPES OF CLAIMS"



A panel of experts has been assembled for a webinar on April 5 from 1-2:15 p.m. ET to discuss environmental and pension liabilities, the statutory schemes under which these liabilities arise and the key players involved. Are non-monetary environmental claims dischargeable? Do post-petition expenditures for environmental cleanup constitute administrative expenses? When can an employer terminate a pension plan in bankruptcy, what is the process and what are the consequences? Learn the answer to these questions and more from the comfort of your own office. Special ABI member rate is available! Register here as this webinar is sure to sell out.

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



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



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

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

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

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

ABI IN-DEPTH

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



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

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

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

NEW BANKRUPTCY PROFESSIONALS: DON'T MISS THE NUTS AND BOLTS PROGRAM AT ABI'S ANNUAL SPRING MEETING! SPECIAL PRICING IF YOU ARE AN ASM REGISTRANT!



An outstanding faculty of judges and practitioners explains the fundamentals of bankruptcy in a one-day Nuts and Bolts program on April 18 being held in conjunction with ABI's Annual Spring Meeting. Ideal training for junior professionals or those new to this practice area!

The morning session covers concepts all bankruptcy practitioners need to know, and the afternoon session splits into concurrent tracks, focusing on consumer and business issues. The session will include written materials, practice tip sessions with bankruptcy judges, continental breakfast and a reception after the program. Click here to register!

LATEST CASE SUMMARY ON VOLO: PAUL V. ALLRED (IN RE PAUL; 8TH CIR.)



Summarized by Michael Tamburini of Polsinelli Shughart, PC

The BAP affirmed the order of the bankruptcy court concluding that the debtor had abandoned the subject property as his homestead, and therefore was not permitted to claim a homestead exemption on it.

There are more than 750 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: ASSIGNMENT OF RENTS: GOVERNMENT BENEFIT CARDS CAN OPEN DOORS TO BANKING SYSTEM

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. Cards preloaded with unemployment insurance, child support, food stamps and other government benefits can be viewed as potential bank accounts, waiting to be opened by people with the fewest quality opportunities to connect to the financial mainstream, according to a recent blog post.

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

ABI Quick Poll

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

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

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

March

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

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

- Bankruptcy Battleground West

     March 22, 2013 | Los Angeles, Calif.

April

- 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.

BIG U.S. BANKS GET THREE-MONTH EXTENSION FOR "LIVING WILLS"



The Federal Reserve and Federal Deposit Insurance Corp. gave large U.S. banks an additional three months to draw up "living wills" to assist regulators in winding them down in case of a future insolvency, Bloomberg News reported yesterday. The agencies also provided new details on what information the living wills should contain, including obstacles that might arise from taking the banks apart safely under the Bankruptcy Code, according to a statement today from the regulators. The documents, originally due July 1, are now due Oct. 1. Institutions with non-bank assets greater than $250 billion had to file their plans last year. Those 11 banks, including JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc., must now provide a second version of the living will, and a group of the next-largest banks must file for the first time. Regulators are looking for more detailed information on "global issues, financial market utility interconnections, and funding and liquidity… to provide analysis to support the strategies and assumptions contained in the firms' resolution plans," according to the statement. Read more.

COMMENTARY: PUBLIC PENSIONS IN BANKRUPTCY COURT



Devastated by the recession, the city of Stockton, Calif., is trying to renegotiate its debts in a bankruptcy case that could set an important precedent on whether courts can forcibly reduce the pensions of government employees, according to a New York Times editorial on Sunday. Even after drastic cuts to city services that have sent the crime rate soaring, the city of 300,000 people about 80 miles east of San Francisco has an annual budget deficit of $26 million. It has laid off a quarter of its police force, which has meant that officers often respond only to crimes in progress. To fix its finances, Stockton is asking the bankruptcy court to restructure debts totaling about $250 million. But the city’s creditors, which include bondholders and insurance companies that have guaranteed some of its bonds, want the city to reduce the $30 million it spends annually on pension benefits for its 2,400 retirees. The California Public Employees’ Retirement System, which manages Stockton’s pensions, argues that the state’s Constitution and court rulings forbid state and local governments from ever lowering the pensions of retirees and current employees. The creditors assert that federal bankruptcy law, which lets judges break contracts, should trump state law. So far, city officials have said they do not intend to trim pensions, though they have reduced health benefits for retirees. Many legal analysts say that the Stockton case could eventually be appealed to the Supreme Court. While a Supreme Court decision would help clarify an important area of the law, a drawn-out court case is the last thing Stockton needs, according to the editorial. The way to get the city back on its feet is for city officials, creditors and retirees to negotiate a fair settlement quickly. Read the full editorial.

AMERICAN DREAM ELUDING THOSE WITH STUDENT DEBT BURDENS



Two-thirds of student loans are held by people under the age of 40, according to the Federal Reserve Bank of New York, blocking millions of them from taking advantage of the most affordable housing market on record, Bloomberg News reported on Saturday. The number of people in that age group who own homes fell by 4.6 percent in the fourth quarter from the third, the biggest drop in records dating to 1982. The issue is being exacerbated by an explosion in the $150 billion private market for student debt, with interest rates for some existing loans surpassing 12 percent. Unlike mortgage-holders, borrowers have little hope of refinancing at lower rates. Interest on some new federal loans is set to double to 6.8 percent in July if Congress does not extend the current rate, as it did last year. Read more.

COMMENTARY: CAN DODD-FRANK FIX MORTGAGE SERVICING IF WE DO NOT KNOW WHAT WENT WRONG?



A new obstacle has arrived for those seeking justice for past wrongdoing in the mortgage-servicing industry and those looking to prevent trouble in the future: federal regulators blocking the release of records they have collected documenting illegal abuses, according to a commentary in the Washington Post on Sunday. A heated exchange broke out at a Senate hearing last week, when Sen. Elizabeth Warren (D-Mass.) asked regulators from the Office of the Comptroller of the Currency (OCC) and the Federal Reserve why they were not sharing the results of their investigations into mortgage-servicing abuses and illegal activities with Congress and the people who were subject to abuses. These investigations began two years ago, after the OCC found that there were "violations of applicable federal and state law" that had "widespread consequences" in the servicer markets at 14 large banks. This Independent Foreclosure Review (IFR) wrapped up suddenly earlier this year, and it is not clear what it found, according to the commentary, although the servicers did manage to spend $2 billion on consultants. According to the latest letter from Warren and Rep. Elijah Cummings (D-Md.), regulators at the Federal Reserve argued that their documents showing illegal behavior are "trade secrets" of mortgage-servicing companies, while the OCC argues that this violates disclosure requirements. Click here to read the full commentary.

RECORD-LOW DEFAULTS MAY NOT BE GOOD NEWS



In December 2008, investors expected a default Armageddon after global "junk" bond yields spiked to over 20 percent, but the last decade has seen the lowest default rate on record in the modern era, according to an analysis by the Wall Street Journal today. The power of central banks and governments lies behind this remarkable turnaround—but it may come with a price. The average annual Moody's default rate since 2003 for single-B rated companies, the largest part of the high-yield market, stands at just 1.6 percent, Deutsche Bank noted. That's the lowest rolling 10-year rate since the market became full-fledged in the early 1980s, and compares with an annual average of 5 percent since 1983. In fact, nine of the past 10 years have seen single-B defaults mostly at below average, with six of them defaults of 1 percent or below—a rate never achieved between 1980 and 2003. The decade falls into two halves: From 2003 to 2007, the credit bubble drove default rates down, but since early 2009, central banks and governments have re-inflated this bubble, pushing down yields and making refinancing possible on easy terms for high-yield companies—despite sharply lower growth and, indeed, a renewed recession in Europe. Read more. (Subscription required.)

LATEST ABI PODCAST EXPLORES THE DEPTHS OF DEEPENING INSOLVENCY



The latest ABI podcast features ABI Resident Scholar Prof. Scott Pryor talking with Prof. Jack Williams and Kathy Phelps, the authors of ABI's publication The Depths of Deepening Insolvency: Damage Exposure for Officers, Directors and Others. Williams and Phelps offer a historical analysis of the “deepening insolvency” principle, its significance in calculating damages in a variety of liability scenarios, and the interplay of the doctrine with the fiduciary duties of company executives. Click here to listen to the podcast.

To order a copy of The Depths of Deepening Insolvency: Damage Exposure for Officers, Directors and Others, click on the banner below:

ASM MOBILE WEB APP NOW AVAILABLE FOR SMARTPHONES AND TABLETS!



The official Annual Spring Meeting mobile web app, sponsored by Diamond McCarthy LLP, is now available for iOS, Android and Blackberry devices! Utilize the app during ASM next week to view your personal schedule, browse what programs are taking place or to search for information related to the meeting. The mobile web app stores the schedule data locally on your phone for offline access too.

To take advantage of the ASM web app, bookmark the following address on your device’s browser: http://31stannualspringmeeting2013.sched.org/mobile

Haven’t registered for next week’s Annual Spring Meeting? Hurry, the hotel block at the Gaylord National Resort and Convention Center in National Harbor, Md., is almost sold out! 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

NEW ABI LIVE WEBINAR ON MAY 29 WILL FOCUS ON CONSUMER CLASS ACTIONS



Class action lawsuits in chapter 13 cases are becoming more prevalent. Are you wondering whether your client's claims would be better pursued in a class action? If your client is a defendant in a consumer class action, do you know what your client's best defenses are against class certification? ABI's panel of experts on May 29 from 1-2:15 p.m. ET will explore the potential benefits and pitfalls of class actions by debtors/trustees against creditors in chapter 13 cases by highlighting two recent appeals court decisions. Special ABI member rate available! Click here to register.

LATEST CASE SUMMARY ON VOLO: STEPHEN V. MAY (IN RE STEPHEN; 9TH CIR.)



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

Affirming the bankruptcy court, the Ninth Circuit Bankruptcy Appellate Panel held that the bankruptcy court did not err in dismissing the debtor's case because the debtor did not establish that he was entitled to relief from automatic dismissal for his failure to file a complete list of creditors and schedule of assets and liabilities within 45 days of the filing of his bankruptcy petition.

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: SECTION 903 - IN CHAPTER 9, DOES FEDERAL LAW TRUMP STATE LAW, OR VICE VERSA?

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines the fight that is brewing in San Bernardino, Calif., regarding the scope of §903 of the Bankruptcy Code. It stems from the motions filed by the San Bernardino Public Employees Association (SBPEA), the San Bernardino Police Officers Association (SBPOA) and the San Bernardino City Professional Firefighters (SBCPF) in response to the city’s motion to reject collective bargaining agreements with these unions.

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

TEE OFF ON THE NEW ABI GOLF TOUR!



Starting with the Annual Spring Meeting, ABI will offer conference registrants the option to participate in the ABI Golf Tour. The Tour will take place concurrently with all conference golf tournaments. The Tour is designed to enhance the golfing experience for serious golfers, while still offering a fun networking opportunity for players of any ability. As opposed to the format used at ABI’s regular conference events, Tour participants will "play their own ball." They will be grouped on the golf course separately from other conference golf participants and will typically play ahead of the other participants, expediting Tour play. Tour participants will be randomly grouped in foursomes, unless otherwise requested of the Commissioner in advance of each tournament. Prizes will be awarded for each individual Tour event, which are sponsored by Great American Group. The grand prize is the "Great American Cup," also sponsored by Great American Group, which will be awarded to the top player at the end of the Tour season. Registration is free. Click here for more information and a list of 2013 ABI Golf Tour event venues.

ABI Quick Poll

The scope of protection of "financial contracts" in bankruptcy should be rolled back to what it was before BAPCPA expanded it in 2005.

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

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

April

- "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

- 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.

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.

SUPREME COURT WILL HEAR BANKRUPTCY CASE INVOLVING CHARGE ON DEBTOR'S PROPERTY



The U.S. Supreme Court yesterday granted certiorari in a case involving the question of whether a bankruptcy court has the power to levy a financial charge against a chapter 7 debtor's residential property, which the debtor claims falls under the homestead exemption, Mealey's Daily News Service reported yesterday. In 2004, Stephen Law filed for chapter 7 bankruptcy in the U.S. Bankruptcy Court for the Central District of California. He listed his home property value as $363,348 and sought a homestead exemption. The chapter 7 trustee, Alfred Siegel, did not object to the homestead exemption, but two years later the trustee moved to surcharge Law's homestead exemption $75,000. Law argued that he was not properly served in the process. The trustee countered that Law defrauded his creditors by filing a phony lien against his home to take value out of the property. The bankruptcy court granted the trustee's surcharge, and Law appealed to the U.S. Bankruptcy Appellate Panel (BAP) for the Ninth Circuit. The BAP reversed the surcharge order, concluding that it was "not warranted." The trustee appealed to the Ninth Circuit U.S. Court of Appeals, which reversed the BAP's ruling and determined that the surcharge was proper. Law then appealed to the Supreme Court, arguing that the Court should reverse the Ninth Circuit's ruling and order the trustee to pay him the $75,000 surcharge pertaining to the homestead exemption. The U.S. Solicitor General suggested that the Supreme Court not hear the case, contending that it did not present the question on which courts of appeals are divided. The case is Stephen Law v. Alfred Siegel, No. 12-5196, U.S. Sup. Read more.

CREDIT CARD DELINQUENCIES DECLINED IN MAY FOR MAJOR LENDERS



Late credit card payments declined for major lenders in May, continuing a steady performance that has been bolstered by recent signs that the U.S. economic recovery is gradually gaining traction, Dow Jones Newswires reported yesterday. Capital One Financial Corp., Discover Financial Services, JPMorgan Chase & Co., Bank of America Corp. and Citi said yesterday that their credit card delinquencies declined in May from April. At the same time, they also said that their net charge-off rates, which measure loans lenders deem uncollectible, fell during the month. American Express Co. said that its delinquency rate stayed flat at 1.1 percent in May while its net charge-off rate declined to 1.9 percent from 2.1 percent in April. Historically, major credit card lenders have experienced delinquency and loss rates of between 3 and 5 percent on average under what analysts consider to be a "normal" economic environment. Read more.

ANALYSIS: LAWMAKERS TO FOCUS ON FUTURE OF FANNIE MAE, FREDDIE MAC



Congress is gearing up to tackle an issue that has been mostly ignored for nearly five years: What to do with Fannie Mae and Freddie Mac, the bailed-out-but-now-profitable mortgage companies, according to an analysis in yesterday's Wall Street Journal. In the Senate, Republicans and Democrats have begun work on a bipartisan bill that would replace Fannie and Freddie within five years with a new "public guarantor" as part of a broader framework designed to gradually ease the government out of its outsized role of backstopping the nation's $10 trillion mortgage market. The effort is being led by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), although a formal bill has not been introduced. The Corker-Warner proposal would maintain a potentially significant federal role in the mortgage market by replacing Fannie and Freddie with a new system in which private entities would purchase mortgages from lenders and issue them to investors as securities. The bill would allow private entities to purchase an explicit government guarantee to cover catastrophic losses on mortgages issued as bonds from a new guarantor, called the Federal Mortgage Insurance Corp. But the new issuers would first have to raise a significant amount of capital that would take all losses before the federal guarantee would be triggered. The new "FMIC" would oversee the broader market, much like the Federal Deposit Insurance Corp. regulates banks and provides deposit insurance to minimize bank runs. Read more. (Subscription required.)

MUNICIPAL DEBT MARKET SEEN AS MORE INTERESTED IN FOMC THAN DETROIT



The $3.7 trillion U.S. municipal market looked beyond Detroit's default on some of its debt payments yesterday and instead remained focused on any signals as to how the Federal Reserve may scale back its stimulus measures, Reuters reported yesterday. Detroit Emergency Manager Kevyn Orr on Friday, who said that the financially troubled city faces even odds of a bankruptcy filing, announced a moratorium on some of the city's principal and interest payments, including a $39.7 million payment on $1.43 billion of pension certificates of participation, which he said was due last Friday. Orr also said that holders of Detroit's unsecured debt would be paid less than 10 cents on the dollar, although some creditors would get more based on revenues. About $11.5 billion of the city's debt is unsecured and $7 billion is secured, according to Orr, who aims to meet with creditors over the next 30 days. But the muni market yesterday did not dwell on Orr's plan, said Josh Gonze, co-manager of six municipal debt mutual funds with $10 billion in assets at Thornburg Investment Management in Santa Fe, N.M. "We knew this day was coming," Gonze said, noting Detroit's insured general obligation bonds traded on Monday at 94 to 98 cents on the dollar depending on coupon and maturity. Instead, Orr's plan opens up opportunities for distressed-debt investors and for picking up Detroit's essential services bonds, Gonze added. As dramatic as Orr's proposals may be, the muni market is more interested in cues regarding the potential end of easy-money policies that come out of the Federal Open Market Committee (FOMC) – the Federal Reserve’s policy-setting body – this week, said Billy Schmohl, a vice president at muni market-focused broker-dealer Alamo Capital in Walnut Creek, Calif. Read more.

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



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

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



The next stop for the ABI Golf Tour is the famed Newport National course in Newport, R.I., in conjunction with the Northeast Bankruptcy Conference on July 12. Final scoring to win the Great American Cup—sponsored by Great American Group—is based on your top three scores at seven scheduled ABI events, so play as many as you can before the tour wraps up at the Winter Leadership Conference in December. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! There's no charge to register or participate in the Tour, and women are most welcome.

ABI IN-DEPTH

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



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

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



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

NEW CASE SUMMARY ON VOLO: DAILEY V. MOSTOLLER (IN RE DALEY; 6TH CIR.)



Summarized by Faisal Delawalla of Burr & Forman LLP

The decisions of the bankruptcy court and the district court were reversed by the Sixth Circuit. The circuit court ruled that the debtor is entitled to a statutory presumption that his IRA is tax-exempt. Though the debtor was granted a lien in his IRA to Merrill Lynch, the circuit court found that the debtor did not use his IRA to obtain credit from Merrill Lynch.

There are more than 900 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: FURTHER ANALYSIS OF LAW V. SIEGEL

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new blog post examines the Supreme Court's grant of certiorari yesterday in the case of Law v. Siegel, which involves a debtor asking the Court to review the decision of a bankruptcy court to surcharge his homestead exemption under section 105.

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

ABI Quick Poll

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

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

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- abiLIVE Webinar

     July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

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

August

- Mid-Atlantic Bankruptcy Workshop

    August 8-10, 2013 | Hershey, Pa.

- Southwest Bankruptcy Conference

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

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

- Bankruptcy 2013: Views from the Bench

    Sept. 27, 2013 | Washington, D.C.

October

- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum

    Oct. 4, 2013 | Kansas City, Mo.

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

- Chicago Consumer Bankruptcy Conference

    Oct. 14, 2013 | Chicago, Ill.

November

- Austin Advanced Consumer Bankruptcy Practice Institute

   Nov. 10-12, 2013 | Austin, Texas

- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York

ANALYSIS: NEARLY A THIRD OF COMPANIES THAT FILED FOR CHAPTER 11 DID NOT DISCLOSE PLANS IN ADVANCE



More than two dozen companies in the past five years did not disclose chapter 11 bankruptcy preparations to investors, according to a Wall Street Journal analysis of regulatory filings. The companies, including Eastman Kodak Co. and American Airlines parent AMR Corp., refrained from warning investors about potentially seeking chapter 11 protection from creditors despite facing dire financial straits or, in some cases, hiring restructuring advisers to make the preparations. Some of the firms only disclosed later in court documents that they had laid the groundwork for the filings in advance. The law is murky in this area: Federal securities laws and regulations do not require disclosure of bankruptcy preparations in most circumstances, even though such information could be deemed "material" to investors, according to securities-law specialists. The Financial Accounting Standards Board is working on proposing a rule that would require executives under certain circumstances to be responsible for disclosing issues related to a company's ability to continue as a going concern. Under current rules, auditors determine whether companies must make that sort of disclosure. The "going concern" disclosure is separate from other general bankruptcy-preparation notifications a company could choose to make. Read more. (Subscription required.)

U.S. CONSUMER CREDIT EXPANDS IN SEPTEMBER



Federal Reserve data released yesterday showed that U.S. consumer credit grew $11.36 billion in September, although Americans appeared to use their credit cards more sparingly, Reuters reported yesterday. So far this year, overall consumer credit has expanded in eight of nine months. Nonrevolving credit, which includes student and auto loans, rose $14.27 billion in September. Student loans made by the government rose 27.9 percent in the 12 months through September, slightly less than the 12-month growth posted through August. The figures also showed a contraction in revolving credit, which mostly measures credit card use. That category dropped to $2.90 billion in September. Read more.

TARIFFS UPHELD, BUT MAY NOT HELP U.S. SOLAR INDUSTRY'S STRUGGLES



Though the U.S. International Trade Commission decided yesterday to uphold tariffs of about 24 to 36 percent on most solar panels imported from China, the action might not do much to aid the financially struggling U.S. solar panel industry, according to a report from today's New York Times. Domestic solar manufacturers said that the duties, to be in place for five years, would make up for unfair business practices by Chinese companies that had harmed the domestic market and allow homegrown companies to hire more workers and thrive. Because the duties apply to panels made of Chinese-produced solar cells, Chinese companies are already avoiding the duties by assembling their panels from cells produced elsewhere, like Taiwan, even if the cell components come from China. The case is also unlikely to have much effect on the central market dynamic that analysts say is driving companies out of business: oversupply. About a dozen panel makers in the United States have gone bankrupt or closed factories since the start of last year. "There have been a few bankruptcies and a few plant closures and so on, but at this point it's just a drop in the bucket," said Shayle Kann, the head of GTM Research, a unit of Greentech Media. Read more.

VIDEO AND PREPARED WITNESS STATEMENTS FROM THE CHAPTER 11 COMMISSION'S 11/3 HEARING NOW AVAILABLE



The video recording of ABI's Chapter 11 Reform Commission’s hearing on 11/3 at TMA's annual conference is now available. Additionally, prepared witness statements can also be downloaded. Click here to watch the video and access the prepared witness statements.

The next public hearing will be Thursday, Nov. 15, at the CFA Annual Convention in Phoenix. For future Commission hearings, please click here: http://commission.abi.org/.

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

ELECTION ANALYST AND AUTHOR LARRY SABATO TO DISSECT THE 2012 ELECTION RESULTS AT ABI’S 24TH ANNUAL WINTER LEADERSHIP CONFERENCE!



Don't miss ABI's 24th Annual Winter Leadership Conference, taking place Nov. 29 - Dec. 1 at the JW Marriott Starr Pass Resort & Spa in Tucson, Ariz. This year's conference will feature insights from some of the top insolvency and restructuring experts on issues confronting the profession in 2013, including four specialized tracks geared toward business, consumer, financial advisor and professional development. The featured keynote speaker will be election analyst and author Larry Sabato. ABI's Great Debates a field hearing of ABI’s Commission to Study the Reform of Chapter 11 and 10 committee educational sessions will also be taking place at the conference. Panel sessions include:

Business Track:

• Fraudulent Conveyance Litigation from Soup to Nuts

• Pushing the Envelope

• The Role of the Hedge Fund in Corporate Restructurings: White Knight or Villain?

• Social Networking and Bankruptcy Issues

Financial Advisors Track

• Advising the Corporate Entity

• How to Create Value for the Estate from Your First Client Meeting until Entry of a Final Decree

Consumer Track

• From Infants to Toddlers: Bankruptcy Rules 3001 and 3002.1 Experience First-Year Growing Pains

• The National Mortgage Settlement: How Will It Affect Consumer Bankruptcy Cases?

Professional Development Track

• Litigation Skills: Mock Expert Examination

• “I'm Shocked—Shocked!—to Find that Unethical Conduct Is Going On in Here!”: A Tale of Ethics in Bankruptcy

The conference will also include a final night dinner featuring impressionist, comedian and singer Jeff Tracta, and the sounds of ABI's rock-n-roll band, the Indubitable Equivalents. Register by Monday to save $50 on your registration!

TUCK SCHOOL OF BUSINESS WINS NINTH ANNUAL CORPORATE RESTRUCTURING COMPETITION



A team from Tuck School of Business at Dartmouth College won the Bettina M. Whyte Trophy at the Ninth Annual ABI Corporate Restructuring Competition, held Nov. 1-2 at the University of Pennsylvania Wharton School of Business in Philadelphia. The second-year MBA student winners also shared a $6,000 cash prize. Students from the University of Chicago Booth School of Business won the second-place award of $3,500, while a team from the University of Virginia Darden School of Business received the $2,500 prize for third place. Click here to read the full press release.

LATEST CASE SUMMARY ON VOLO: MICHIGAN STATE UNIVERSITY V. ASBESTOS SETTLEMENT TRUST (IN RE THE CELOTEX CORP.; 11TH CIR.)



Summarized by Jeffrey Snyder of Bilzin Sumberg Baena Price & Axelrod LLP

The Eleventh Circuit ruled that although a district court, at its discretion, may review interlocutory judgments and orders of a bankruptcy court pursuant to 28 U.S.C. §158(a), a court of appeals only has jurisdiction over final judgments and orders entered by a district court or bankruptcy appellate panel sitting in review of a bankruptcy court pursuant to 28 U.S.C. §158(d).

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: SECOND CIRCUIT ADOPTS DEFERENTIAL ABUSE OF DISCRETION STANDARD OF REVIEW FOR EQUITABLE MOOTNESS APPEALS



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines how the U.S. Court of Appeals for the Second Circuit, in R2 Investments v. Charter Communications, Inc., recently affirmed the dismissal of an appeal from the confirmation order in the bankruptcy of cable company Charter Communications, concluding that the deferential abuse of discretion standard of review was applicable.

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

- 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.

STATES SHIFT FORECLOSURE-SUIT FUNDS



When states received $2.5 billion from big banks in a mortgage-foreclosure settlement earlier this year, the expectation was that most of it would be used to aid distressed homeowners, but a new report claims that less than half of the money has been designated for that cause so far, the Wall Street Journal reported today. States used much of the settlement money to help close budget gaps, says a report scheduled for release Thursday. In March, 49 states reached a $25 billion settlement with five of the nation's largest mortgage lenders over charges that they had improperly processed foreclosures. The agreement allowed the banks—Ally Financial Inc., Bank of America Corp., Citibank Inc., JPMorgan Chase & Co. and Wells Fargo & Co.—to pay $20 billion of the settlement in the form of relief to distressed homeowners. The states received $2.5 billion of the total. Only about $1 billion of the state funds have been designated for some type of homeowner aid, while $1 billion will go toward state general funds. States haven't decided how to spend the remaining $500 million, according to the report by Enterprise Community Partners, a housing nonprofit. Only 14 states plan to spend their entire allotment on housing relief, according to the report. Read more. (Subscription required.)

DUELING REPORTS LEAVE CONGRESS CONTINUING TO FIGHT OVER "TOO BIG TO FAIL"



Republican and Democratic leaders on the House Financial Services Committee are continuing their battle over the Dodd-Frank financial reform law in a pair of competing reports, The Hill reported yesterday. Nearly two and half years after the Wall Street overhaul was signed into law, the two parties remain entrenched on one of its fundamental questions: Does the law end the problem of firms being "too big to fail" and requiring bailouts? Rep. Barney Frank (D-Mass.), a key author of the law and top Democrat on the committee, on Monday released a report intended to rebut GOP arguments that Dodd-Frank codifies "too big to fail" and explicitly identifies banks as such. “The Wall Street Reform and Consumer Protection Act clearly establishes a framework that allows large financial firms to fail while preventing catastrophic harm to the broader economy," according to the report, compiled by Democratic committee staff. Just two days later, Committee Chairman Spencer Bachus (R-Ala.) fired back with a report of his own. While shorter, this report contended that the law actually codified essential firms that the government would have to bail out. One provision of the law allows regulators to identify banks and other institutions as "systemically significant." Republicans contend that this label hands out an advantage to the singled-out firms and that the government has effectively identified them as "too big to fail." But the Democrats contend in their study that this designation comes with increased regulation and oversight, as well as a requirement that the institutions establish "living wills" that would detail how they could be unraveled if they were on the brink of collapse. Read more.

COMMENTARY: WHY THE FDIC'S APPROACH TO FINANCIAL FAILURES MAKES SENSE



The FDIC's single receivership approach offers a better way to avoid an uncoordinated and destabilizing series of insolvencies for systemically important financial institutions, according to a commentary in yesterday's New York Times DealBook blog by Michael H. Krimminger, the former general counsel of the Federal Deposit Insurance Corp. The agency proposes, if it is appointed and where possible, to close the financial holding company, but keep the viable subsidiaries operating. Subsidiaries that are not viable would be closed and gradually wound down to prevent a sudden collapse, as occurred in the case of Lehman, according to Krimminger. The holding company would be restructured into a bridge entity that can continue to provide financing to viable subsidiaries. Access to funding is critical to continued operations. Dodd-Frank provides for this financing from an "orderly liquidation fund," and it must be paid back from the sale of the subsidiaries or from assessments from the industry. The shareholders and creditors of the holding company – which owned the subsidiaries – bear the losses for the failure as no losses can be borne by taxpayers, according to Krimminger's commentary. Read more.

REGULATORS PROPOSE CAPITAL RULES FOR DERIVATIVES TRADING



Federal authorities moved a step closer to overhauling the derivatives market yesterday, as regulators proposed tougher standards for the nation's biggest banks, the New York Times DealBook blog reported. Firms like Goldman Sachs and JPMorgan Chase would have to bolster their capital cushion and post additional collateral for certain derivatives trades. The Securities and Exchange Commission proposed the crackdown as part of a broader effort to rein in the opaque derivatives business, a main player in the financial crisis. "These rules are intended to make the financial system safer, and the derivative markets fairer, more efficient, and more transparent," SEC chair Mary L. Schapiro said. Schapiro and the agency's commissioners voted unanimously, 5-0, to advance the plan. It now enters a 60-day public comment period, after which the SEC and other federal regulators must finalize the rules. Read more.

ABI IN-DEPTH

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



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

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



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

LATEST CASE SUMMARY ON VOLO: IN RE GLEASON (11TH CIR.)



Summarized by Michael Pugh of Thompson, O'Brien, Kemp & Nasuti, PC

The U.S. Court of Appeals for the Eleventh Circuit affirmed the order entered by the bankruptcy court and upheld on appeal by the U.S. District Court for the Southern District of Florida that suspended an attorney who practiced bankruptcy law from practice before the bankruptcy court for 60 days. The Court of Appeals ruled that the sanctions order did not violate the attorney's First Amendment right to free speech or Fifth Amendment right to due process, and that the bankruptcy court did not clearly err in determining that the attorney's actions amounted to bad faith that warranted the imposition of sanctions.

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: AIDING AND ABETTING CLAIMS IN PONZI CASES ARE STILL ALIVE AND WELL



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines how aiding and abetting claims against banks in Ponzi scheme cases continue to gain traction in the case 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

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

     October 19, 2012 | Queens, N.Y.

- ABI Program at NCBJ's Annual Conference

     October 26, 2012 | San Diego, Calif.

- 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.

FORECLOSURE STARTS DOWN ON ANNUAL BASIS IN OCTOBER



U.S. homes are entering the foreclosure process at a slower pace than a year ago, and fewer properties are being repossessed by lenders, the Associated Press reported today. Between January and October, 971,533 homes were placed on the path to foreclosure, down 8 percent from the same period last year, foreclosure listing firm RealtyTrac Inc. said today. At the other end of the foreclosure process, banks repossessed 559,063 homes through the end of last month, a decline of nearly 19 percent from a year earlier. That puts lenders on pace to complete 650,000 foreclosures this year, down from 800,000 in 2011, the firm said. The data, however, also shows that there are signs at the state level that more homes could end up in foreclosure in the coming months. The trend is most evident in judicial-process states such as New York, Florida and New Jersey. Fourteen states saw an annual increase in foreclosure activity, which RealtyTrac measures as the number of homes receiving a default notice, scheduled for auction or repossessed by the bank. Read more.

To see the percentage of loans in foreclosure by state (judicial v. non-judicial) for 3Q 2012, please visit ABI's Chart of the Day page.

MAJOR RETAILERS SELLING FINANCIAL PRODUCTS, CHALLENGING BANK OFFERINGS



As the nation's largest banks remain stingy with credit offerings following the financial downturn, major retailers are stepping in to fill the void, the New York Times reported today. Customers can now withdraw cash at an ATM with a prepaid card from Walmart, take out a loan at Home Depot for a kitchen renovation or kick-start a new venture with a small-business loan from Sam’s Club. This year, Walmart even started to test selling a life insurance policy. Consumer advocates are torn about the growth of this shadow banking industry. Financial products are making it into the hands of people who might not otherwise qualify for them, but these products are not always subject to the same regulations as bank products are. And to turn a profit, retailers generally have to charge more to people with poor credit or none at all. Read more.

SEC REPORT FINDS FAULTS WITH CREDIT RATERS



The Securities and Exchange Commission (SEC) said in a report today that the credit-ratings industry remains plagued by failures in meeting its own standards, weak oversight and poor documentation of its rating decisions, despite years of heightened scrutiny after the financial crisis, the Wall Street Journal reported. In its second annual report on the nine credit-rating firms registered with the agency, the SEC said that Standard & Poor's Ratings Services, Moody's Investors Service and Fitch Ratings still do not always follow their own standards for rating deals. The firms are required by the SEC to disclose and follow their methodologies for assigning ratings to securities so that investors know how those deals are being judged. The Dodd-Frank financial overhaul legislation required the SEC to conduct annual examinations of the registered rating firms, and deliver a report on its findings. Read more. (Subscription required.)

Click here to read the SEC's report.

REGULATORS SEEK CHANGES IN HOW MONEY-MARKET FUNDS OPERATE



The government on Tuesday inched closer to tightening its oversight of the $2.6 trillion money-market industry when a panel of top financial regulators put forward options for addressing the industry’s vulnerabilities, the Washington Post reported yesterday. The industry immediately expressed frustration with the proposal, saying that it resembles a plan that failed to gain support from the Securities and Exchange Commission. That plan, vigorously opposed by the industry, stalled when three of the SEC’s five commissioners said they would reject it. Under the recommendations put forward on Tuesday by the Financial Stability Oversight Council, the funds would have to set aside reserves as a buffer for times of crisis, restrict how quickly investors can redeem their money, or allow the value of a fund’s shares to fluctuate. Currently, one share of a money market fund is generally valued at $1. The funds have been popular with investors because they seem as stable and reliable as a bank account. But unlike bank accounts, they are not federally insured, and that image of security was shattered during the 2008 financial crisis when the Reserve Primary Fund, the nation’s first money-market fund, "broke the buck" because its value fell below $1 a share. 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.

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: STOEBNER V. SAN DIEGO GAS & ELECTRIC CO. (IN RE LGI ENERGY SOLUTIONS INC.; 8TH CIR.)



Summarized by Eric Lockridge of Kean Miller LLP

The Eighth Circuit ruled that where the debtor acted as a payment intermediary between a utility and a customer and the contract between the debtor and customer required the debtor to remit funds to the utility, the contract created a trust obligation in favor of the utility. Consquently, for purposes of § 547, the utility was a creditor of the debtor because the creditor (1) had unsecured claims for breach of trust and (2) was an intended beneficiary. Further, for purposes of calculating subsequent new value, the issue was not the subsequent services provided by the utility to the customer, but the subsequent payments from the customer to the debtor.

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: BOFA VS. MBIA AND THE FUTURE OF PRIVATE LABEL SECURITIZATION



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines the ongoing litigation between BofA and MBIA and its effect on the future of mortgage-backed securities.

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.

ANALYSIS: WHITE HOUSE DERIVATIVES TAX PROPOSAL PUTS WALL STREET IN THE CROSSHAIRS



The Obama administration yesterday proposed that derivatives be taxed under "mark-to-market" accounting rules on an annual basis, a move that takes aim at Wall Street and could give a lift to a similar plan circulated by House Republicans, the Wall Street Journal reported today. "The disparate treatment of derivatives under current tax rules, which have evolved sporadically over more than 50 years, has created a regime that is essentially elective," the Treasury Department wrote in its companion piece to the budget that contains more detail about tax proposals. "Sophisticated taxpayers can use these instruments to achieve the timing and character that meets their objectives. At the same time, the wide variance in the tax treatment of derivatives contracts that are economically similar leads to uncertainty about how the tax rules apply." The plan would raise about $18.9 billion over 10 years. House Ways and Means Committee Chairman Dave Camp (R-Mich.) has circulated a similar proposal. The main difference between the two plans is that Treasury's plan would be tied to whether or not derivatives were being actively traded in the market. The new treatment would apply to derivatives contracts entered into after Dec. 31, 2013. Read more. (Subscription required.)

A related New York Times editorial yesterday looked at several bills to pre-empt the regulation of derivatives that are the focus of a hearing today in the House Financial Services Capital Markets and Government Sponsored Enterprises Subcommittee. The bills, which have already passed the Agriculture Committee, should be stopped to curb reckless risk-taking by banks, according to the editorial. As it turns out, House Financial Services Chairman Jeb Hensarling (R-Texas) could be the member of Congress to stop them. Hensarling recently outlined a free-enterprise approach to bank regulation that sensibly supported "greater capital and liquidity standards" and better "ring-fencing, fire-walling — whatever metaphor you want to use — between an insured depository institution and a noninsured investment bank." One of the bills before his committee would do the opposite of what he envisions. It would gut a provision of the Dodd-Frank financial reform law that effectively requires banks to spin off their riskiest derivatives transactions into separately capitalized uninsured subsidiaries, according to the editorial. The spinoff provision, which is being phased in this year, is important for shielding taxpayers from future bailouts. Read more.

To view the witness list and prepared testimony for today's House Financial Services Capital Markets and Government Sponsored Enterprises Subcommittee hearing titled, "Legislative Proposals Regarding Derivatives and SEC Economic Analysis," please click here.

COMMENTARY: WHAT'S WRONG WITH THE CHAPTER 14 PROPOSAL



While not a proponent of Dodd-Frank's orderly liquidation authority, Prof. Stephen Lubben of Seton Hall University Law School writes in the New York Times DealBook blog today why he opposes the "Chapter 14" proposal put forth by the Hoover Institute group at Stanford. First, Lubben writes that the chapter 14 proposal throws away most of the benefits of using the existing bankruptcy system by calling for cases to be heard by Federal District Court judges. Next, the chapter 14 proposal has an ill-conceived financing mechanism, according to Lubben, as it is based on the assumption that private debtor-in-possession financing will be available in times of financial distress, especially in the size a large financial institution would need. But the even bigger problem with chapter 14, which has gotten little coverage, is its effort to penalize the provider of DIP financing if the new financing is used to "overpay" creditors. For example, if a counterparty received a 50 percent upfront recovery made possible by the debtor-in-possession financing, and unsecured creditors later received only 35 percent in the chapter 14 case, the proposal would subordinate the debtor-in-possession lenders’ claim by that extra 15 percent. That pretty much kills off any chance of private debtor-in-possession financing, and even raises some serious doubts about future government debtor-in-possession financing too, according to Lubben. Read the full commentary.

HOUSING ADMINISTRATION MIGHT NEED $943 MILLION BAILOUT, ACCORDING TO WHITE HOUSE



The Obama administration said yesterday that the cash-strapped Federal Housing Administration will probably require a $943 million taxpayer bailout to cover expected losses on loans it insured as the U.S. housing bubble was deflating, Reuters reported yesterday. It would be the first bailout of the government's mortgage insurer in its nearly 80-year history. The White House estimated that the FHA has about $30 billion on hand but said its cash reserves would probably be depleted by souring loans. FHA Commissioner Carol Galante said that the agency might still be able to avoid taking aid from the U.S. Treasury, despite the financial hole projected in President Obama’s 2014 budget proposal. It has until Sept. 30 to decide whether it needs a cash infusion. In November, an independent audit found that the FHA faced a projected deficit of $16.3 billion. Since then, the agency has taken steps to shore up its finances, including raising the premiums that borrowers pay. Read more.

BANKS LOOK TO SHIFT RISK TO FUNDS



Banks are trying to boost their capital cushions by shifting risk to investment funds, even as global regulators threaten to clamp down on such transactions, the Wall Street Journal reported today. In recent weeks, Citigroup Inc., Switzerland's Credit Suisse AG and France's Société Générale SA have marketed "synthetic securitizations" in which investors, for a fee, agree to absorb future losses on portfolios of assets. The transactions are designed to thicken the banks' capital buffers by reducing the riskiness of their balance sheets. Citigroup wants to cap its exposure to shipping loans, Credit Suisse wants to curtail the risk of small Swiss businesses defaulting on loans, and Société Générale is aiming to reduce the credit risk in a derivatives portfolio. Read more. (Subscription required.)

LATEST BLOOMBERG "BILL ON BANKRUPTCY" VIDEO: RESCAP REPORT, A BARGAIN AT $83 MILLION



Why the Residential Capital LLC examiner's report will cost almost $83 million is the first item on the new Bloomberg bankruptcy video with Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle. Click here to watch the video.

ASM MOBILE WEB APP NOW AVAILABLE FOR SMARTPHONES AND TABLETS!



The official Annual Spring Meeting mobile web app, sponsored by Diamond McCarthy LLP, is now available for iOS, Android and Blackberry devices! Utilize the app during ASM next week to view your personal schedule, browse what programs are taking place or to search for information related to the meeting. The mobile web app stores the schedule data locally on your phone for offline access too.

To take advantage of the ASM web app, bookmark the following address on your device’s browser: http://31stannualspringmeeting2013.sched.org/mobile

Haven’t registered for next week’s Annual Spring Meeting? Hurry, the hotel block at the Gaylord National Resort and Convention Center in National Harbor, Md., is almost sold out! ASM features a roster of the best national speakers, while the depth and scope of topics offer something for everyone. Specifically, four concurrent workshops will cover various “tracks,” including programs for attorneys in commercial cases, a track for restructuring professionals, a track of professional development programming and a track dealing solely with consumer issues. More than 16 hours of CLE/CPE is offered in some states, along with ethics credit totaling 3 hours, making the cost only about $50 per credit. In addition, committee sessions will drill down on other topics to provide you with the most practical and varied CLE/CPE experience ever. Sessions include:

• 17th Annual Great Debates

• Mediation: An Irrational Approach to a Rational Result

• Creditors’ Committees and the Role of Indenture Trustees and Related Issues

• Current Issues for Financial Advisors in Bankruptcy Cases

• The Individual Conundrum: Chapter 7, 11 or 13?

• The Power to Veto Bankruptcy Sales

• Real Estate Issues in Health Care Restructurings

• How to Be a Successful Expert

• The Ethical Compass: Multiple Ethical Schemes Applicable to Financial Advisors

• Chapter 9s, Nonprofits and Other Nontraditional Restructuring Processes

• And much more!

The Spring Meeting will also feature a field hearing of the ABI Commission to Study the Reform of Chapter 11, a report from the ABI Ethics Task Force, a luncheon panel discussion moderated by Bill Rochelle of Bloomberg News, and a Final Night Gala Dinner featuring a concert by Joan Jett and the Blackhearts!

Make sure to register today!

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: TEED V. THOMAS & BETTS POWER SOLUTIONS LLC (7TH CIR.)



Summarized by Steven Schwartz of the U.S. Bankruptcy Court for the District of Delaware

The Seventh Circuit ruled that successor liability is appropriate in suits to enforce federal labor or employment laws – even when the successor disclaimed liability when it acquired the assets, unless there is a good reason to withhold such liability (i.e., lack of notice of potential liability, maintaining priorities of competing creditors). Increasing the cost to the buyer is not a good reason to withhold successor-liability suits in federal labor or employment law cases.

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: FIRST QUARTER 2013 U.S. LEVERAGED LOAN MARKET ANALYSIS

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post provides an analysis of the leveraged loan market during the first quarter of 2013.

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

TEE OFF ON THE NEW ABI GOLF TOUR!



Starting with the Annual Spring Meeting, ABI will offer conference registrants the option to participate in the ABI Golf Tour. The Tour will take place concurrently with all conference golf tournaments. The Tour is designed to enhance the golfing experience for serious golfers, while still offering a fun networking opportunity for players of any ability. As opposed to the format used at ABI’s regular conference events, Tour participants will "play their own ball." They will be grouped on the golf course separately from other conference golf participants and will typically play ahead of the other participants, expediting Tour play. Tour participants will be randomly grouped in foursomes, unless otherwise requested of the Commissioner in advance of each tournament. Prizes will be awarded for each individual Tour event, which are sponsored by Great American Group. The grand prize is the "Great American Cup," also sponsored by Great American Group, which will be awarded to the top player at the end of the Tour season. Registration is free. Click here for more information and a list of 2013 ABI Golf Tour event venues.

ABI Quick Poll

The scope of protection of "financial contracts" in bankruptcy should be rolled back to what it was before BAPCPA expanded it in 2005.

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

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

April

- "Nuts and Bolts" Program at ASM

     April 18, 2013 | National Harbor, Md.

- Annual Spring Meeting

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

May

- "Nuts and Bolts" Program at NYCBC

     May 15, 2013 | New York, N.Y.

- ABI Endowment Cocktail Reception

     May 15, 2013 | New York, N.Y.

- New York City Bankruptcy Conference

     May 16, 2013 | New York, N.Y.

- Litigation Skills Symposium

     May 21-24, 2013 | Dallas, Texas

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

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

August

- Mid-Atlantic Bankruptcy Workshop

    August 8-10, 2013 | Hershey, Pa.

MORTGAGE-RELIEF PLAN IS EXTENDED



The Obama administration announced today that its signature consumer-mortgage modification initiative, due to expire at the end of the year, will be extended for two more years, the Wall Street Journal reported today. Senior administration officials said yesterday that, despite a growing housing-market recovery, it did not make sense to dismantle the Home Affordable Modification Program (HAMP) given the real estate bust's lingering damage. About 1.1 million borrowers were still in some stage of foreclosure at the end of April, according to a report released yesterday by CoreLogic, and banks have been completing nearly 52,000 foreclosures a month. Read more. (Subscription required.)

REALTYTRAC: FORECLOSURE SALES TUMBLE IN FIRST QUARTER



Sales of U.S. homes in foreclosure fell in the first quarter, a report from RealtyTrac showed today, the latest data to suggest that the housing market is on the mend, Reuters reported. There were 190,121 properties sold that were in the foreclosure process or already seized by lenders, down 18 percent from the last quarter of 2012 and a 22 percent decrease from the first quarter the year before. That accounted for 21 percent of all home sales, down from 25 percent in the first quarter of 2012. It was also well off the peak of 45 percent seen during the first quarter of 2009 as the housing market was still reeling from its collapse and the global financial crisis. Read more.

U.S. TRUSTEE PROGRAM REPORT SHOWS EFFORTS CONTINUE TO REIN IN EXECUTIVE BONUSES IN BANKRUPTCY



In a self-generated report card, the U.S. Trustee Program said that it has made significant accomplishments in many areas of monitoring the bankruptcy system and expects that its efforts will continue to rein in executive bonuses in bankruptcy, the Wall Street Journal reported yesterday. According to the U.S. Trustee Program, the executive bonus plans that many companies are putting forth for court approval today aren’t true incentives. Instead, trustees argue, the bonus plans set easily achievable goals, making them disguised—and illegal—retention payments. One focus of the program has been to crack down on the bonuses that companies in chapter 11 seek to pay to their executives while other obligations go unpaid—an effort in which trustees have a 66.7 percent success rate, according to a recently filed annual report. The report showed that U.S. Trustees earned better grades for their role objecting to professional fees (94.7 percent success rate), bringing motions to appoint an independent trustee or examiner (90.3 percent), asking that a chapter 11 case be dismissed or converted to a chapter 7 liquidation (97.9 percent) and chapter 11 plan objections (95.3 percent). Read more.

Click here to read the annual report.

DETROIT SURVIVAL DEPENDS ON SPEED OF DESTRUCTION, ACCORDING TO HOMEBUILDER



Homebuilder William Pulte says that the only way to truly save Detroit and get the housing market functioning properly again is to destroy large swaths of the city as quickly as possible, Bloomberg News reported today. Pulte, a scion of the family that created PulteGroup Inc., the largest U.S. homebuilder by revenue, has already knocked down 10 blocks in Detroit’s Southeast section of the city as part of the nonprofit Detroit Blight Authority program, which Pulte co-created with Detroit Mayor David Bing. It’s a preview of the effort he says is needed to get ahead of the metal strippers and arsonists devastating the city’s property values. Housing markets in Detroit and other rustbelt cities such as Cleveland and Buffalo are hampered by decaying, vacant homes, even as sales of existing homes hover around a three-year high nationally. In addition, pilfering of vacant units in urban areas cut the number of U.S. homes with complete plumbing by about 10.4 percent from 2008 to 2011, according to U.S. Census data compiled by Bloomberg, including 66,722 such homes in Detroit alone. Read more.

FITCH: U.S. STATES' RECOVERY TO REMAIN SLOW, STEADY



Fitch Ratings released a report yesterday stating that the economic recovery will continue at a slow pace in fiscal 2014 for most U.S. states, with federal budget deals and health care reforms creating uncertainty in many budgets, Reuters reported yesterday. For most states, the new fiscal year starts July 1 and legislators and governors are putting the final touches on their budgets. Fitch found that the automatic federal spending cuts that began on March 1, known as "sequestration," have had a limited effect on states' economies and finances. According to a report released yesterday by the Economic Policy Institute (EPI), a liberal-leaning think tank, states will lose out on $5.1 billion in grants this federal fiscal year, which ends in September, under sequestration. In recent years, they have received more than $600 billion in federal grants, according to EPI. Read more.

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



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

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



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

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



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

ABI IN-DEPTH

NEW CASE SUMMARY ON VOLO: THE MAJESTIC STAR CASINO LLC V. BARDEN DEVELOPMENT INC. (IN RE THE MAJESTIC STAR CASION LLC; 3D CIR.)



Summarized by John Eggum of Foran Glennon Palandech Ponzi & Rudloff

The Third Circuit ruled that the debtor lacked standing to challenge the nondebtor parent/shareholder's revocation of an election to S Corp status. Rejecting cases from other circuits, the Third Circuit found that S Corp status is not a property interest. Alternatively, even if S Corp status were a property interest, S Corp status is not an interest of the debtor entity because the right to revoke S Corp status belongs to the shareholder parent.

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: WORKERS’ COMPENSATION BENEFITS IN BANKRUPTCY

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post looks at case law and issues surrounding workers’ compensation benefits 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.

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2013

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

- INSOL’s Latin American Regional Seminar

     June 13, 2013 | São Paulo, Brazil

- Charity Golf Tournament

     June 14, 2013 | City of Industry, Calif.

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

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

August

- Mid-Atlantic Bankruptcy Workshop

    August 8-10, 2013 | Hershey, Pa.

- Southwest Bankruptcy Conference

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

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

- Bankruptcy 2013: Views from the Bench

    Sept. 27, 2013 | Washington, D.C.

October

- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum

    Oct. 4, 2013 | Kansas City, Mo.

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York