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Judge Proposes Fast Pace in Detroit Bankruptcy Case

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ABI Bankruptcy Brief | July 30, 2013


 


  

July 30, 2013

 

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  NEWS AND ANALYSIS   

DETROIT

JUDGE PROPOSES FAST PACE IN DETROIT BANKRUPTCY CASE



Bankruptcy Judge Steven Rhodes today set key dates in Detroit's bankruptcy case that indicate his intention to accelerate the process, the Detroit Free Press reported today. Judge Rhodes proposed an Aug. 19 deadline for all motions arguing against Detroit's eligibility for chapter 9 bankruptcy and that a trial on that question will begin Oct. 23rd. Detroit Emergency Manager Kevyn Orr asked the judge to set a one-month deadline for objections to the city's right to file for bankruptcy. The eligibility question has taken more than a year to resolve in some of the municipal bankruptcies of the last five years. Attorneys for the city have argued in court filings that they negotiated "in good faith" with the city's creditors before filing for bankruptcy. The city also argued that it is insolvent, one key criteria allowing municipalities to file for bankruptcy. Several creditors, including labor groups, have signaled they plan to challenge the city's eligibility to file for bankruptcy. The city's pension boards have accused Orr's team of failing to negotiate in good faith over changes to retiree pensions. Judge Rhodes also proposed March 1 as a deadline for the city to file a plan of adjustment. Judge Rhodes plans to consider any questions or concerns about his proposed schedule on Friday during a court hearing in Detroit. Read more.

Looking for this court document or the referenced state statutes in the Detroit bankruptcy case? The latest news stories and analysis? Audio and video of experts examining the issues of the case? ABI has all those items and more on ABI's Detroit Bankruptcy Resources webpage. As new developments break and filings are registered with the court throughout the proceeding, ABI's Detroit webpage will keep you up-to-date on the proceeding. Make sure to bookmark and regularly visit http://news.abi.org/detroit.

ANALYSIS: DETROIT BANKRUPTCY UNDERSCORES RIFT BETWEEN CITY, SUBURBS



A generations-long divide between Detroit, where the per-capita income is $15,261, and its suburbs, such as Birmingham, Mich., where it's $67,580, is raising questions about how affluence can co-exist alongside poverty, and whether urban areas with declining populations can thrive, according to a Bloomberg News analysis yesterday. Detroit became the fourth-largest U.S. city by 1950 with the growth of the auto industry, when the companies that are now General Motors Co., Ford Motor Co. and Chrysler Group LLC churned out cars. Since then, 1 million residents have left for places such as Oakland County, where the population more than tripled to 1.2 million. That county is the state's wealthiest, according to the U.S. Bureau of Economic Analysis statistics. Cities such Birmingham and Bloomfield Hills, where auto executives and former Republican presidential candidate Mitt Romney lived, are about 20 miles from Detroit. The disparity between rich and poor increased over the past decade as Detroit "got hammered" during the longest recession since the 1930s, said Kurt Metzger, director of Data Driven Detroit, a nonprofit organization that tracks social, economic and environmental indicators. Read more.

U.S. REGULATORS MOVING CAUTIOUSLY ON MORTGAGE REFORMS

U.S. bank regulators, wary of upsetting the fragile housing market, are moving cautiously in fashioning dozens of new rules to prevent reckless underwriting and other mortgage market abuses, Reuters reported yesterday. In implementing the 2010 Dodd-Frank financial reform law, regulators have said that they are sensitive to arguments from a rare alliance of both lenders and consumer groups that too-tough rules could hamper credit availability. A cooperative relationship has developed between banks and the newly created Consumer Financial Protection Bureau (CFPB), which has broad authority to regulate mortgage lending. Consumer groups and lenders said that the CFPB struck a balance with its first major mortgage rules, including a requirement released in January that lenders be able to verify that borrowers could repay loans. Since then, bank lobbyists say bureau officials remain attuned to their concerns about complying with the many new rules. In some cases, the bureau has even revisited final rules and amended technical aspects in response to banks' comments. Read more.

COMMENTARY: NOT TOO BIG TO FAIL



New rules on bank capital, recently proposed by the Federal Deposit Insurance Corp. and other bank regulators, are a welcome step toward a safer and sounder financial system, according to an editorial in yesterday's New York Times. Big banks will likely argue that the new rules will impede their ability to thrive and, in the process, harm the economy. But their profits are soaring, even as the economy is slowing down, a situation that makes their shopworn anti-regulatory argument all the more threadbare, according to the editorial. It is not the banks that need protection from regulation, but rather it is the public that needs protection from banks that are regarded as too big to fail. The new rules would require the nation's biggest banks to hold significantly more capital than is required under international agreements. Higher capital requirements are a start, according to the editorial, but tighter regulations reducing complexity and risks are also necessary, including an iron-clad Volcker Rule prohibiting excessive speculation. Read the full editorial.

CITIES BEGIN HIRING AGAIN



Cities across the U.S. are starting to hire new teachers, firefighters and police officers, as a prolonged slide in local-government employment appears to have bottomed out, four years after the recession ended, the Wall Street Journal reported today. Municipal police academies in Massachusetts are running at capacity as communities train new officers, while Minneapolis recently added nearly two dozen firefighters, ending a five-year hiring freeze. The school district for Clark County, Nev., which includes Las Vegas, is hiring 700 new teachers this year, the first sizable boost in its workforce in five years. Monthly jobs data from the Labor Department show that local governments, which make up about 65 percent of the overall government workforce, added workers in seven of the past eight months, the longest such streak in five years. So far this year, 46,000 new jobs have been created on a seasonally adjusted basis. Local-government employment through June stood at 14.08 million, the highest level in more than a year and a half, though still well below a peak of 14.61 million in mid-2008. Read more. (Subscription required.)

IN CASE YOU MISSED IT - abiLIVE WEBINAR DISCUSSING § 1111(b) ELECTION, PLAN FEASIBILITY AND CRAMDOWN ISSUES RECORDING IS NOW AVAILABLE!



If you were not able to join Monday's well-attended abiLIVE webinar examining § 1111(b), a recording of the program is now available for downloading! Utilizing a case study, ABI's panel of experts explored the issues surrounding a lender's decision on whether or not to make an election under § 1111(b), plan feasibility and voting. The abiLIVE panel also walked attendees through the necessary mathematical analyses used to examine these issues. The 90-minute recording is available for the special price of $75 and can be purchased here.

ABILIVE WEBINAR ON SEPT. 24 TO EXAMINE THE COMPLEX REQUIREMENTS AND ETHICAL DUTIES OF REPRESENTING CONSUMER DEBTORS



The abiLIVE webinar on Sept. 24 will feature a panel of experts discussing the ethical and compensation issues that can arise while representing chapter 7 and 13 debtors as well as individual chapter 11 debtors. Topics covered include client fraud and an attorney's duty to verify client information, attorney fee structures, and complex issues in individual chapter 11 cases. The panel includes perspectives from the attorneys and trustees, as well as the academic reporter for the ABI Ethics Task Force. Click here to register.

ABI GOLF TOUR UNDERWAY; NEXT STOP IS THE MID-ATLANTIC BANKRUPTCY WORKSHOP NEXT WEEK



The 5th stop for the ABI Golf Tour is the Hershey Country Club, in conjunction with next week's Mid-Atlantic Bankruptcy Workshop. 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! A 22-handicapper won the tour event last week at Amelia Island, Fla.! There's no charge to register or participate in the Tour.

ABI IN-DEPTH

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: WILLMS V. SANDERSON (9TH CIR.)



Summarized by Tom Phinney of Parkinson Phinney

The Ninth Circuit held that the 60-day time limit provided in Bankruptcy Rule 4007(c) for filing a nondischargeability complaint under § 523 was improperly extended sua sponte by the bankruptcy court where (1) the creditor's motion for extension referenced §§ 727 and 707, and did not reference § 523; and (2) no cause for the extension was shown. The Ninth Circuit ordered the nondischargeability complaint dismissed with prejudice as having been untimely filed.

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: WHAT HAPPENS TO A CORPORATION'S ATTORNEY/CLIENT PRIVILEGE IN BANKRUPTCY?

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines what happens to a corporation's attorney/client privilege when the corporation files for 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

A class of claims should not be considered impaired for purposes of § 1129(a)(10) if the impairment results from the plan proponents' exercise of discretion (i.e., artificial impairment) and not driven by economic need. (In re Village at Camp Bowie I LP).

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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  CALENDAR OF EVENTS
 

2013

August

- Mid-Atlantic Bankruptcy Workshop

    August 8-10, 2013 | Hershey, Pa.

- abiLIVE Webinar: How Will the New U.S. Trustee Fee Guidelines Impact You?

     August 20, 2013

- Southwest Bankruptcy Conference

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

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

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

    Sept. 18-19, 2013 | New York

- abiLIVE Webinar: Complex Requirements and Ethical Duties of Representing Consumer Debtors

     Sept. 24, 2013

- 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.

- Professional Development Program

    Oct. 11, 2013 | New York, N.Y.


  


- Chicago Consumer Bankruptcy Conference

    Oct. 14, 2013 | Chicago, Ill.

- International Insolvency & Restructuring Symposium

    Oct. 25, 2013 | Berlin, Germany

November

- Complex Financial Restructuring Program

   Nov. 7, 2013 | Philadelphia, Pa.

- Corporate Restructuring Competition

   Nov. 7-8, 2013 | Philadelphia, Pa.

- 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


 
 

ABI BookstoreABI Endowment Fund ABI Endowment Fund
 


Detroit Bankruptcy Judge Urged Not to Halt Tax Appeals

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Detroit’s $18 billion bankruptcy shouldn’t halt efforts by property owners to lower their taxes, a company that advises them said in a court filing seeking an exemption from federal court rules, Bloomberg News reported yesterday. Michigan Property Tax Relief LLC filed a motion asking Steven Rhodes, the judge overseeing the bankruptcy, to let property owners file tax appeals. The company has several dozen clients that have been blocked by the Michigan Tax Tribunal from appealing their tax bills because of the bankruptcy, the company said in a court filing. The company’s “clients desire to simply adjudicate the amount of their tax liability,” Michigan Property Tax Relief said in court papers filed yesterday. “They are not seeking to file any collection actions or pursue any tax refunds at this time.”

Analysis Naming Mediator Brings Authority to Fractious Detroit Bankruptcy Case

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Of all the legal maneuvers so far in Detroit’s bankruptcy case by unions or the city’s emergency manager, the one that may have the most impact was when the judge decided to name a mediator, according to a Reuters analysis today. In a July 23 filing, Bankruptcy Judge Steven Rhodes said that he would appoint another federal judge, Gerald Rosen, as a mediator. “I think that’s going to be the key move in the case, in terms of getting it toward a solution,” said Bankruptcy Judge Christopher Klein, who is overseeing the bankruptcy of the town of Stockton, Calif., during an ABI media teleconference last week. Rosen is the chief district judge of the U.S. District Court for the Eastern District of Michigan. Judge Rhodes in his court filing deemed a mediator “necessary and appropriate” but did not specify which issues he feels should be mediated. He has scheduled a hearing on his proposal for Friday.

New Red Wing Stadium Should Be Unaffected by Detroit Bankruptcy

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As Detroit settles in for a long, tortuous trip through bankruptcy court, the public financing deal for a new arena to house the Red Wings will likely skate by intact, the Wall Street Journal’s Bankruptcy Blog reported on Friday. “I don’t see this being the death knell of the arena project,” said Brian Holdwick, executive vice president for the Detroit Economic Growth Corporation, which staffs the DDA and is helping structure the deal. Michigan’s state legislature on Wednesday approved a $450 million bond offering that would form the public backbone of Ilitch’s Holding’s $650 million entertainment center and development district near the heart of downtown Detroit. The bonds will be floated by the Michigan Strategic Fund, which handles all of the state’s private development funds. The $283 million public portion of the bonds will come from the Downtown Development Authority, which earmarks a slice of downtown property taxes for reinvestment there.

Michigan AG to Defend Public Pensions State Constitution in Detroit Bankruptcy

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Taking an opposing side to that of Gov. Rick Snyder (R) and Detroit emergency manager Kevyn Orr, Michigan Attorney General Bill Schuette said Saturday that he will defend the state’s constitutional protection of public pensions in Detroit’s bankruptcy filing, the Detroit Free-Press reported on Saturday. Invoking his role as “the people’s attorney,” Schuette said that he will submit a filing today to intervene in the city’s federal bankruptcy proceedings, even after his office opposed efforts in a state court earlier this month to halt the bankruptcy filing in challenges brought by pensioners and lawyers for the city’s pension funds. Schuette said that he will intervene “on behalf of southeast Michigan pensioners who may be at risk of losing their hard-earned benefits,” in accordance with his responsibility as attorney general to defend the Michigan Constitution.

Detroits Orr Welcomes Offer of Bankruptcy Mediator

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Kevyn Orr, Detroit’s emergency manager, endorsed a mediation proposal by the judge in the city’s record $18 billion bankruptcy, saying it could prompt a “real discussion” with creditors after earlier talks failed, Bloomberg News reported yesterday. “I’m hoping the mediator provides a process by which we can stop talking past each other,” Orr said yesterday. Orr also said that he has already met most of the conditions required to ask the judge to impose cuts on creditors if talks fail, a procedure available to the court under the U.S. Bankruptcy Code. Bankruptcy Judge Steven Rhodes in Detroit has proposed appointing U.S. District Judge Gerald Rosen to mediate discussions between the city and its creditors, which include bondholders and current and retired city employees.

No Bailout Senators Look to Pre-empt U.S. Aid to Detroit

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Republicans in the U.S. Senate want to make sure the federal government does not become involved in the financial maelstrom hitting Detroit, which filed for the largest municipal bankruptcy in U.S. history last week, Reuters reported yesterday. They have proposed at least three “No Bailout” amendments to spending bills that the Senate is currently considering, all of which would limit the U.S. government's ability to help cities in fiscal crisis. Even though the amendments will likely fail in the Democrat-dominated chamber, cities and counties are alarmed by legislation they say that could jeopardize funding for hundreds of local governments and are pushing back. Sen. Lindsey Graham (R-S.C.) yesterday introduced an amendment to a financial services and general spending bill that would bar the use of federal funds to buy or guarantee a municipal asset or obligation from a locality that has defaulted or is at risk of defaulting. It also would prohibit the U.S. government from issuing lines of credit to those municipalities or providing other aid to prevent bankruptcy.

Teleconference Recording Now Available Experts Examine Detroits Chapter 9 Filing and What Lies Ahead

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July 25, 2013

 
home  |  newsroom  |  chart of the day  |  blogs  |  bankruptcy code and rules  |  statistics  |  legislative news  |  volo
  NEWS AND ANALYSIS   

DETROIT

TELECONFERENCE RECORDING NOW AVAILABLE: EXPERTS EXAMINE DETROIT'S CHAPTER 9 FILING AND WHAT LIES AHEAD

ABI held a media teleconference yesterday to examine Detroit's chapter 9 filing and what lies ahead for the bankrupt city. Experts on the teleconference discussed some of the factors that led to Detroit's filing and the early legal issues over the city's eligibility to file. Speakers on the program included Bankruptcy Judge Christopher M. Klein (E.D. Calif.; Sacramento), who is presiding over the chapter 9 case of Stockton, Calif.; Deborah L. Fish of Allard & Fish PC (Detroit); and Patrick Darby of Bradley Arant Boult Cummings LLP (Birmingham, Ala.), who represents Jefferson County, Ala., the largest chapter 9 case prior to Detroit's filing with more than $4 billion of municipal debt. The program was moderated by Prof. Juliet M. Moringiello of Widener University School of Law (Harrisburg, Pa.). To listen to a recording of the media teleconference, please click here.

For more information on municipal distress and chapter 9 bankruptcy, see ABI's Municipalities in Peril: The ABI Guide to Chapter 9, Second Edition, from the ABI Bookstore.

COMMENTARY: FACING UP TO AMERICA'S PENSION WOES

While Michigan Circuit Judge Rosemarie Aquilina's rulings to stop Detroit's chapter 9 did not stand before a state court of appeals panel and the federal bankruptcy judge assigned to the case, Judge Aquilina did correctly identify public pension promises as the key issue in the case, according to a commentary by Prof. David Skeel of the University of Pennsylvania Law School in the Wall Street Journal today. As recently as three years ago, the conventional wisdom held that public-pension promises, no matter how extravagant, are sacrosanct even if a city files for chapter 9 protection. The first hint that this thinking might be impractical came after Vallejo, Calif., filed for bankruptcy in 2008, according to Skeel. Vallejo successfully restructured its collective-bargaining agreements, and, as then-City Manager Robert Stout reported, the city believed that chapter 9 gave Vallejo the legal authority to alter its pensions as well. But CalPERS, which administers California's state and local pensions, threatened litigation. The city concluded that any reduced pension costs wouldn't be great enough to offset the legal costs, so it backed off. Since Vallejo, the pension question has become increasingly hard to avoid. When Central Falls, R.I., filed for bankruptcy in 2011, the small town made it clear that significant pension cuts were its only hope for recovery. In the end, Central Falls reduced its pension costs by 50 percent. The status of pension obligations is also at issue in the bankruptcies of the California cities of Stockton and San Bernardino, so it is possible that Detroit Bankruptcy Judge Steven Rhodes will have the benefit of previous rulings on the issue when he rules on the Detroit case. Emergency manager Kevyn Orr has signaled that every constituency needs to sacrifice, and Detroit's public workers to this point aren't yielding an inch. If Detroit can make at least modest adjustments to its pensions, and restructure its other obligations as well, Skeel says that the city and other municipalities in dire financial straits may have a fighting chance. Read more. (Subscription required.)

ANALYSIS: PENSION BONDS RAISE RED FLAGS ON MUNIS

Of the $18 billion pile of liabilities Detroit faces in its bankruptcy proceedings, $1.4 billion of it consists of bonds issued in 2005 and 2006 to shore up the city's pension systems, the Wall Street Journal reported today. The fact that Detroit -- or any municipality -- issued these bonds could have been a red flag to investors that there was potential trouble brewing ahead. With Detroit's Chapter 9 bankruptcy filing, the city's retirees could see their pensions slashed, officials have warned. And Detroit says its pensions are still underfunded by another $3.5 billion. Some of the other municipalities that have issued similar pension bonds in recent years are among the most problematic: Stockton, Calif., which filed for bankruptcy last year; Puerto Rico, which has struggled through a prolonged recession and was recently downgraded to near junk; and Illinois, which was charged with securities fraud for misleading investors about how it funds its pensions. In fact, Illinois holds the record for the largest pension bond deal ever, selling $10 billion in bonds in 2003, according to Thomson Reuters. If successful, a municipality that sells pension bonds can save money on its pension costs. But if returns on the pension investments are lower than expected, the municipality can actually lose money. In December, credit-rating firm Moody's Investors Service went so far as to say that pension bonds "rarely improve the credit quality of the state or the local government that issues them." Read more. (Subscription required.)

EDITORIAL: THE STUDENT LOAN DEBACLE

Over the last decade, Congress sensibly replaced a system of variable-rate loans with fixed rates that allowed families to know what their loans would cost, according to a New York Times editorial yesterday. It set the rate on both subsidized and unsubsidized loans at 6.8 percent, but later ordered the rate on subsidized loans -- two-thirds of which go to families with incomes under $50,000 -- to gradually decline by half. The refusal, according to the editorial, of Republicans in both houses to renew the lower rate means that students who start college this fall and finish in four years will be saddled, on average, with an extra $4,000 in debt. An analysis by the Congressional Budget Office estimated that the new, higher rate would earn the government about $184 billion over the next decade after taking into account program costs, including potential defaults. The editorial advocates that in the long term, the loan program needs to be restructured so that the loans are closely linked to the government's actual cost of borrowing, which could reduce rates for students. Read more.

HOUSE FINANCIAL SERVICES COMMITTEE APPROVES HOUSING FINANCE BILL

The House Financial Services Committee approved a Republican housing bill that would liquidate U.S.-owned financiers Fannie Mae and Freddie Mac and limit government mortgage guarantees, Bloomberg News reported yesterday. The bill, offered by House Financial Services Chair Jeb Hensarling (R-Texas), was passed on a mostly party-line vote of 30-27. Hensarling's legislation would eliminate Washington-based Fannie Mae and Freddie Mac within five years and replace them with a National Mortgage Market Utility to securitize mortgages. Unlike a similar bill in the Senate, the House measure would not include U.S. backing for securitized loans, though it would let the Federal Housing Administration play an expanded guarantee role in the event of an economic crisis. Hensarling said that he is eager to bring his measure to a vote on the House floor and will meet with House Republican leaders next week. Read more.

COMMENTARY: TREASURY'S FANNIE MAE HEIST

The federal government currently is seizing the substantial profits of government-chartered mortgage firms Fannie Mae and Freddie Mac, taking for itself the property and potential gains of private investors that the government induced to help prop up these companies, according to a commentary yesterday by former U.S. Solicitor General Theodore Olson in the Wall Street Journal. Earlier this month Olson filed a lawsuit to stop this seizing of profits, now known as Perry Capital v. Lew, and other lawsuits challenging the government's authority to demolish private investment are stacking up. When the nationwide mortgage crisis first took hold in 2007 and 2008, Fannie and Freddie shored up their balance sheets with some $33 billion in private capital, much of it from community banks, which had been encouraged by federal regulators to invest in the companies. As the crisis deepened, the government determined that Fannie and Freddie also needed substantial assistance from taxpayers. Congress passed the Housing and Economic Recovery Act of 2008, and under that law the government ultimately plowed $187 billion into the companies. Taxpayers should get their investment back, but once they do, according to Olson, so should the private investors who first came to Fannie and Freddie's aid. Read more. (Subscription required.)

IN CASE YOU MISSED IT - abiLIVE WEBINAR DISCUSSING § 1111(b) ELECTION, PLAN FEASIBILITY AND CRAMDOWN ISSUES RECORDING IS NOW AVAILABLE!

If you were not able to join Monday's well-attended abiLIVE webinar examining § 1111(b), a recording of the program is now available for downloading! Utilizing a case study, ABI's panel of experts explored the issues surrounding a lender's decision on whether or not to make an election under § 1111(b), plan feasibility and voting. The abiLIVE panel also walked attendees through the necessary mathematical analyses used to examine these issues. The 90-minute recording is available for the special price of $75 and can be purchased here.

ABILIVE WEBINAR ON SEPT. 24 TO EXAMINE THE COMPLEX REQUIREMENTS AND ETHICAL DUTIES OF REPRESENTING CONSUMER DEBTORS

The abiLIVE webinar on Sept. 24 will feature a panel of experts discussing the ethical and compensation issues that can arise while representing chapter 7 and 13 debtors as well as individual chapter 11 debtors. Topics covered include client fraud and an attorney's duty to verify client information, attorney fee structures, and complex issues in individual chapter 11 cases. The panel includes perspectives from the attorneys and trustees, as well as the academic reporter for the ABI Ethics Task Force. Click here to register.

ABI GOLF TOUR UNDERWAY; NEXT STOP IS THE MID-ATLANTIC BANKRUPTCY WORKSHOP IN AUGUST

The 5th stop for the ABI Golf Tour is the Hershey Country Club, in conjunction with the Mid-Atlantic Bankruptcy Workshop. 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! A 22-handicapper won the tour event last week at Amelia Island, Fla.! There's no charge to register or participate in the Tour.

ABI IN-DEPTH

NORTON JUDICIAL EXCELLENCE AWARD NOMINATIONS OPEN UNTIL JULY 29

Nominations are now open for the 8th Annual Judge William L. Norton Judicial Excellence Award, to be presented during the ABI luncheon at the annual meeting of the National Conference of Bankruptcy Judges on Nov. 1, 2013. The award is presented by ABI and Thomson Reuters each year to the current or retired bankruptcy judge whose career embodies the same continued dedication and outstanding contributions to the insolvency community as the award’s namesake, Judge Norton. Nominations are considered by a committee made up of representatives from the Norton treatise and past ABI presidents. Nomination forms, which must be submitted by July 29, are available from Clay Mattson at Thomson Reuters (clay.mattson@thomsonreuters.com).

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: MORT RANTA V. GORMAN (4TH CIR.)

Summarized by John Bollinger of the Boleman Law Firm, PC

Holding that "for both above-median income and below-median income debtors, Social Security income is excluded from the calculation of 'projected disposable income' under § 1325(b)(2)," the Fourth Circuit Court of Appeals vacated the order of the district court and remanded the case to the district court with instructions to remand to the bankruptcy court for further proceedings consistent with the opinion.

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: TIME TO DUST OFF THE OLD "GOOD BANK-BAD BANK" PLAN

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post said that governments need to consider the advantages of a good bank-bad bank restructuring as loan assets currently have determinable and probably higher values than earlier in the financial crisis.

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

A class of claims should not be considered impaired for purposes of § 1129(a)(10) if the impairment results from the plan proponents' exercise of discretion (i.e., artificial impairment) and not driven by economic need. (In re Village at Camp Bowie I LP).

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.

  

 

NEXT EVENT:

 

 

MA 2013
Register Today!

 

 

COMING UP

 

 

abiLIVE WEBINAR:

abiLIVEAugust
Register Today!

 

 

SW 2013
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  CALENDAR OF EVENTS
 

2013

August
- Mid-Atlantic Bankruptcy Workshop
    August 8-10, 2013 | Hershey, Pa.
- abiLIVE Webinar: How Will the New U.S. Trustee Fee Guidelines Impact You?
     August 20, 2013
- Southwest Bankruptcy Conference
    August 22-24, 2013 | Incline Village, Nev.

September
- ABI Endowment Golf & Tennis Outing
    Sept. 10, 2013 | Maplewood, N.J.
- ABI Endowment Baseball Game
    Sept. 12, 2013 | Baltimore, Md.
- Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization
    Sept. 18-19, 2013 | New York
- abiLIVE Webinar: Complex Requirements and Ethical Duties of Representing Consumer Debtors
     Sept. 24, 2013
- 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.
- Professional Development Program
    Oct. 11, 2013 | New York, N.Y.
- Chicago Consumer Bankruptcy Conference
    Oct. 14, 2013 | Chicago, Ill.
- International Insolvency & Restructuring Symposium
    Oct. 25, 2013 | Berlin, Germany

November
- Complex Financial Restructuring Program
   Nov. 7, 2013 | Philadelphia, Pa.
- 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

 

 
 
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Article Tags

Detroit Bankruptcy Judge Suspends State Legal Challenges

Submitted by webadmin on

A U.S. bankruptcy court judge on Wednesday dealt a blow to Detroit’s public employee unions and pension funds opposed to the city’s historic bankruptcy filing by suspending legal challenges in Michigan state courts while he reviews the city’s petition for protection from creditors, Reuters reported yesterday. Bankruptcy Judge Steven Rhodes ordered three lawsuits filed by city workers, retirees and pension funds be halted and extended that stay to suits against Michigan’s governor, treasurer and Detroit’s emergency manager. Rhodes’s action ensures that the only path to fight the city’s chapter 9 bankruptcy petition runs through his courtroom in downtown Detroit. The city’s unions and pension funds had hoped to keep the fight in state court, where they felt Michigan’s constitutional protections of retiree benefits would prevail against efforts by Orr to scale them back. Now, barring an appeal of the Judge Rhodes ruling, their fight likely turns to convincing the judge that Detroit emergency manager Kevyn Orr has not negotiated with them in good faith since he was appointed by state officials in March.
http://www.reuters.com/article/2013/07/24/usa-detroit-idUSL1N0FU14G2013…

In related news, Bankruptcy Judge Steven Rhodes has proposed appointing a federal judge as mediator to hash out the most difficult disputes as the city struggles to resolve more than $18 billion in bond and pension obligations, Reuters reported yesterday. Judge Rhodes has proposed appointing federal judge Gerald Rosen to oversee confidential mediation, if it is needed. The proposal filed on Tuesday was included in a list of issues to be heard on Aug. 2. The proposed mediation order would allow Judge Rhodes to send any matters to Judge Rosen or another mediator of Judge Rosen’s choosing. The mediation sessions would be confidential and protected from discovery, according to the court filing.
http://www.reuters.com/article/2013/07/24/usa-detroit-mediator-idUSL1N0…

Latest Bloomberg Bill on Bankruptcy Video Harvey Miller Detroit Will Be In Bankruptcy For A Long Time

Submitted by webadmin on

Harvey Miller, partner at Weil, Gotshal & Manges, tells Bloomberg Law’s Lee Pacchia that Detroit’s recently filed chapter 9 bankruptcy case will not be an easy restructuring. In addition to the profound economic challenges facing the city and the limited ability of a bankruptcy court to force changes on its government, the fundamental tension between bondholders, pensioners and taxpayers could mean Detroit will remain tangled up in litigation for a long time. To watch the video, please click here: http://www.youtube.com/watch?v=CLKmYqSMUyU&list=PL_500m6Wb0wjRwfUjzisq9…