NEWS AND ANALYSIS
JULY FORECLOSURE ACTIVITY DOWN 32 PERCENT OVER LAST YEAR
RealtyTrac reported that foreclosure filings last month -- including default notices, auctions and bank repossessions -- increased 2 percent from their 78-month low in June but were still down 32 percent from a year ago, USA Today reported today. Foreclosure starts -- the beginning of the process -- were up 6 percent from June but 38 percent lower year over year. Overall, foreclosure activity in July touched almost 131,000 homes. That's down 64 percent from the peak of foreclosure activity in early 2010, but still 54 percent above the average monthly foreclosure activity before the 2006 housing bust. Read more.
U.S. HOUSEHOLD DEBT DECLINED SLIGHTLY DURING SECOND QUARTER
The Federal Reserve Bank of New York reported yesterday that U.S. household debt fell 0.7 percent during the second quarter as a drop in mortgage balances outpaced a rise in borrowing to finance cars and education, Bloomberg News reported yesterday. Consumer indebtedness declined $78 billion to $11.15 trillion, according to a quarterly report on household debt and credit released today by the Fed district bank. Mortgage balances decreased $91 billion to $7.84 trillion, and home-equity lines of credit fell by $12 billion to $540 billion. Americans have slashed their debt from a peak of $12.68 trillion in the third quarter of 2008, according to the New York Fed. Non-housing borrowing increased by 0.9 percent as car loan balances rose by $20 billion, and student loan and credit card borrowing each increased by $8 billion, the report said. Auto-loan debt has grown by $108 billion in the last nine quarters, according to the New York Fed. Read more.
ANALYSIS: STUDENT-LOAN LOAD KILLS STARTUP DREAMS
The rising mountain of student debt, recently closing in on $1.2 trillion, is forcing some entrepreneurs to abandon startup dreams and others to radically reshape their business plans, the Wall Street Journal reported yesterday. The average student who borrows has piled up about $40,000 in debt by graduation, including parents' loans -- nearly double the levels of a decade ago, according to Edvisors.com, which runs college-planning and financial-aid websites. Recipients of graduate and professional degrees who borrow carry an average of more than $55,000 in debt at graduation, including undergraduate loans but not parent loans. That is up from $40,800 some 10 years ago. Some academic experts say that leftover loans are the biggest impediment to upstart entrepreneurship by those who recently received college or graduate degrees. At least one state has taken steps to alleviate the pressures. California this year enacted legislation that will reduce college costs for middle-class Californians who attend its public universities. Similarly, the Rhode Island Student Loan Authority (RISLA), a quasigovernmental nonprofit group, is looking at whether it is feasible to temporarily forbear or reduce payments for recent graduates who start a businesses or go to work for a new venture. The aim is to give recent graduates "the opportunity to try working for a startup or creating a startup instead of having to run off to Arizona and start working for Intel," says Charles P. Kelley, RISLA executive director. Read more. (Subscription required.)
STATES RECEPTIVE TO PROPOSALS AIMED AT BREAKING UP BIG BANKS
Sen. Elizabeth Warren's (D-Mass.) effort to break up Wall Street banks through proposals to resurrect the Glass-Steagall Act may not have a lot of support in Congress, but it has a sympathetic audience in state capitals across the country, Politico reported yesterday. Lawmakers in at least 18 states have introduced resolutions this year calling on Congress to split up banking giants by putting back in place a wall between commercial banking, taking deposits and making loans, and investment banking, the world of traders and deal-makers. "We on the state level have been looking for an Elizabeth Warren -- someone to carry this banner for us," said Illinois state Rep. Mary Flowers, a Democrat who is the lead sponsor on a resolution introduced in May that urges Congress to reinstate Glass-Steagall, which was repealed in 1999. Read more.
abiLIVE WEBINAR NEXT TUESDAY: HOW WILL THE NEW U.S. TRUSTEE FEE GUIDELINES IMPACT YOU?
The new U.S. Trustee Fee Guidelines will affect all attorneys and firms who work on larger chapter 11 cases filed on or after Nov. 1. ABI's Ethics & Professional Compensation Committee will present a panel of experts, including Clifford J. White, the director of the U.S. Trustee Program, to discuss some of the ways the new guidelines could change day-to-day operations in firms, issues relating to the new market rate benchmarks, and how these changes might alter insolvency practice. Register today to hear government, attorney and academic perspectives speak on this important and timely topic.
ABI GOLF TOUR UNDERWAY; NEXT STOP IS THE SOUTHWEST BANKRUPTCY CONFERENCE NEXT WEEK
The 6th stop for the ABI Golf Tour is on Aug. 22 at the Incline Village Champion course, held in conjunction with ABI's Southwest Bankruptcy Conference. 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 at July's Southeast Bankruptcy Workshop. 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: WILLIAM EDWIN LINDSEY V. PINNACLE NATIONAL BANK, ET AL. (IN RE LINDSEY; 6TH CIR.)
Summarized by Dean Langdon of DelCotto Law Group PLLC
The Sixth Circuit Court of Appeals dismissed the appeal for lack of jurisdiction, holding that the district court's affirmation of the bankruptcy court order declining to confirm a proposed chapter 11 plan was not a final order under 11 U.S.C. § 158(d)(1), and no party had sought certification under § 158 (d)(2). The Court joined the Second, Eighth, Ninth and Tenth Circuits in holding that an order denying confirmation was not a final order under § 158(d)(1), and it rejected contrary decisions from the Third, Fourth and Fifth Circuits.
There are nearly 1,000 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.
NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: EFFECT OF THE DOJ'S LAWSUIT IN AMR'S BANKRUPTCY
The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post examines the effect that DOJ's anti-merger lawsuit will have on AMR's attempts to emerge from 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 43 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.
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