Mortgage

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.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

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.

ANALYSIS: BETTER LENDING STANDARDS HELPING TO REDUCE FORECLOSURE STARTS



While numerous foreclosure prevention efforts at the national, state and local levels, along with rising home values, have helped drop U.S. foreclosure starts to a six-year low in January, the fundamental factor driving the reduction is better lending practices, according to a Forbes.com commentary yesterday. More than 5 percent of still-active loans originated in 2006 were in some stage of foreclosure as of the fourth quarter of 2012 -- the highest foreclosure rate of any year going back to 2000. That was followed by 2007 vintage loans with a 4.75 percent foreclosure rate, 2005 vintage loans with a 3.52 percent foreclosure rate, and 2008 vintage loans with a 2.95 percent foreclosure rate. The only other loan vintage with a foreclosure rate above 2 percent was 2004, with a 2.16 percent foreclosure rate. The foreclosure rate on 2009 vintage loans dropped to 1.11 percent, and the foreclosure rate has steadily decreased on loans originated in the three years since -- all of which have foreclosure rates below 1 percent. Read more.

COMMENTARY: THE SECOND-MORTGAGE SHELL GAME



Though the federal government and 49 state attorneys general reached a $25 billion deal last February with the country's five largest mortgage servicers (Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial), it is now clear that the settlement has not worked as planned, according to a commentary in yesterday's New York Times. Banks have dragged their feet on modifying first mortgages, much less agreeing to forgive part of the principal on homes that are underwater. A lesser-known but equally grave problem is that banks have been given a backdoor mechanism to continue foreclosures at the same pace as before. The problem involves second mortgages, which millions of homeowners took out during the housing bubble. It is estimated that as much as a quarter of all mortgage debt in the U.S. is in the form of second mortgages. Some of these loans were taken out to finance home improvements, others were part of a subprime product known as an "80/20 mortgage," in which 80 percent of the purchase price was covered by a first, adjustable-rate mortgage, and the remainder by a second mortgage, often with a much higher interest rate. The second mortgages have given the banks a loophole: each dollar a bank forgives goes toward fulfilling its obligation under last year’s settlement. But many lenders have made it a point to almost exclusively modify secondary loans while all but ignoring the troubled, primary mortgages, according to the commentary. Read the full commentary.

SHIFTING STRATEGY, PROSECUTORS BUILD NEW CASES AGAINST BIG BANKS



Criticized for letting Wall Street off the hook after the financial crisis, the Justice Department is building a new model for prosecuting big banks, the New York Times DealBook Blog reported today. In a recent round of actions that shook the financial industry, the government pushed for guilty pleas, rather than just the usual fines and reforms. Prosecutors now aim to apply the approach broadly to financial fraud cases, according to officials involved in the investigations. So far, the Justice Department has extracted guilty pleas only from remote subsidiaries of big foreign banks, a move that has inflicted reputational damage but little else. The new strategy first materialized in recent settlements with UBS and the Royal Bank of Scotland, which were accused of manipulating interest rates to bolster profit. As part of a broader deal, the banks' Japanese subsidiaries pleaded guilty to felony wire fraud. Read more.

ANALYSIS: FISCAL TROUBLE AHEAD FOR MOST FUTURE RETIREES



For the first time since the 1930s, a majority of Americans are headed toward a retirement in which they will be financially worse off than their parents, jeopardizing a long era of improved living standards for the nation’s elderly, the Washington Post reported yesterday. The Great Recession and the weak recovery darkened the retirement picture for significant numbers of Americans. The economic downturn exacerbated long-term factors that were already eroding the financial standing of aging Americans: an inexorable rise in health care costs, growing debt among older Americans and a shift in responsibility from employers to workers to plan for retirement. The consequence is that the nation is facing a huge retirement savings deficit -- as much as $6.6 trillion, or about $57,000 per household, according to a U.S. Senate report. Using data on household finances collected by the Federal Reserve, the Center for Retirement Research estimates that 53 percent of American workers 30 and older are on a path that will leave them unprepared for retirement. That marks a sharp deterioration since 2001, when 38 percent of Americans were at risk of declining living standards in old age. In 1989, 30 percent faced that risk. Read more.

REGULATOR PROBES "DARK POOL" INVESTING



The Financial Industry Regulatory Authority (FINRA) in late 2012 sent examination letters to about 15 dark-pool operators seeking information such as how the trading systems handle customer orders, what they disclose to clients and whether affiliates of the pool operators have access to client trading information, the Wall Street Journal reported on Saturday. In dark-pool investing, investors post buy-and-sell orders away from the public market. Most of the letters have been returned, and the regulator is evaluating the responses, said John Malitzis, executive vice president of market regulation at FINRA. Unlike stock exchanges, which are regulated by the Securities and Exchange Commission, the trading venues in dark pools are not required to regularly tell market regulators details about how they handle orders. Dark pools have become controversial as their share of stock trading has increased. One area of concern is whether certain dark-pool clients get more information than other investors about how the venues operate, giving them an edge, said Malitzis. "We asked a lot of questions about disclosure," he said. "We're trying to get a sense of what firms are doing and how they're doing it." Read more. (Subscription required.)

LIVE STREAM AVAILABLE FOR THURSDAY'S CHAPTER 11 COMMISSION HEARING AT VALCON 2013



For those not able to attend the VALCON 2013 conference starting tomorrow in Las Vegas, there will be a live webstream of Thursday's Chapter 11 Commission field hearing looking at valuation issues. The hearing will take place from 2-4 p.m. PT (5-7 p.m. ET) and will be streamed live at http://commission.abi.org.

JUST ADDED FOR APRIL! ABI 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!

EXPLORE CURRENT ISSUES FOR FINANCIAL ADVISORS IN BANKRUPTCY CASES AND MORE AT ABI'S 31ST ANNUAL SPRING MEETING



The 2013 Annual Spring Meeting, to be held April 18-21, 2013, at the Gaylord National Resort and Convention Center in National Harbor, Md., 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

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

• The Power to Veto Bankruptcy Sales

• Real Estate Issues in Health Care Restructurings

• Law Firm Bankruptcies

• 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!

Click here to register today!

ABI IN-DEPTH

DON'T MISS THE 9TH ANNUAL WHARTON RESTRUCTURING AND DISTRESSED INVESTING CONFERENCE ON FEB. 22!



The University of Pennsylvania's Wharton School of Business will be holding the 9th Annual Wharton Restructuring and Distressed Investing Conference on Feb. 22 at the Hyatt at The Bellevue in Philadelphia. The theme of this year's conference is “Health of Nations: Distress, Recovery or Revival?” It will offer a unique opportunity to hear from a distinguished gathering of keynote speakers and panelists in their discussion of the current economic climate and issues of debt, investing, and restructuring across the globe. To register, please click here.

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: BLACK V. BONNIE SPRINGS FAMILY LTD. PARTNERSHIP (IN RE BLACK; 9TH CIR.)



Summarized by Tom Phinney of Parkinson Phinney

The Ninth Circuit BAP affirmed the summary judgment in favor of the creditor, which excepted debts from discharge under § 523(a)(6) based on the preclusive effect of a Nevada state court judgment for abuse of process, nuisance and "oppression."

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: S CORPORATION MAY NOT PAY SHAREHOLDERS' POST-PETITION TAX OBLIGATIONS



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. Finding that it would violate the absolute priority rule, the U.S. Bankruptcy Court for the Western District of North Carolina in In re Carolina Internet Ltd. held that an insolvent S corporation may not pay post-petition taxes on behalf of its shareholders because a corporation’s creditors have priority over its shareholders, 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.

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Join our networks to expand yours.

2013

February

- VALCON 2013

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

- 9th Annual Wharton

Restructuring and Distressed Investing Conference

     February 22, 2013 | Philadelphia, Pa.

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: "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.

FORECLOSURE FILINGS INCREASE IN 60 PERCENT OF LARGE U.S. CITIES



RealtyTrac Inc. reported that foreclosure filings rose in almost 60 percent of large U.S. cities in the first half of 2012, indicating that many areas will have more distressed homes on the market later this year, Bloomberg News reported today. More than 1 million homes in metropolitan areas with populations of at least 200,000 received notices of default, auction or repossession, up 1.5 percent from the last six months of 2011, the Irvine, Calif.-based data provider said today. Among the 20 largest markets, Tampa, Fla., Philadelphia, Chicago and New York City had the biggest percentage increases in filings. Across the nation, one in 126 households received a foreclosure notice in the first half of the year, RealtyTrac said. Of the 212 metro areas with at least 200,000 residents, 125 cities had an increase in filings from the latter half of 2011. Read more.

DEMOCRATS PROPOSE BILL TO PROTECT WAGES, BENEFITS IN BANKRUPTCY



Congressional Democrats are proposing legislation that could double employees' and retirees' recoveries when their employers file for chapter 11 protection, Dow Jones Daily Bankruptcy Review reported yesterday. Led by Sen. Dick Durbin (D-Ill.) and Rep. John Conyers (R-Mich.), the "Protecting Employees and Retirees in Business Bankruptcies Act" introduced on July 12 would amend the Bankruptcy Code to double, to $20,000, the maximum claim for wages and benefits that workers and retirees can assert in their employers' chapter 11 cases. Rep. Conyers and Sen. Durbin have introduced similar legislation twice already, in 2007 and 2010, but neither version made it before the full House or Senate. Read more. (Subscription required.)

To read the text of the "Protecting Employees and Retirees in Business Bankruptcies Act," please click here.

COMMENTARY: BETTER DISCLOSURE FOR PRIVATE LOANS NEEDED



About two-thirds of bachelor’s degree recipients borrow to complete their educations, but only the fortunate among them rely on federal loans that offer a low, fixed-interest rate and broad consumer protections that allow them to defer payments if they lose their jobs, according to a New York Times editorial today. However, many students have to turn to private student loans that have variable interest rates and few consumer protections. A new study issued jointly last week by the Consumer Financial Protection Bureau and the Department of Education makes it clear that the government, Congress in particular, can do a better job of educating families about the significant differences between private and federal loans while making sure that colleges and lenders are up-front and honest about risks. The study's most distressing finding is that more than 40 percent of students who borrowed privately were in fact eligible to borrow from the safer and generally less costly federal program. The study says that the poor economy has made it hard for many student borrowers of private loans to meet their obligations, and many are at risk of default. At a minimum, Congress should revisit the 2005 amendments to the bankruptcy law, but it should also pass a pending bill sponsored by Sens. Richard Durbin (D-Ill.) and Tom Harkin (D-Iowa) that would require colleges and lenders to thoroughly explain borrowing options to students. Read the full editorial.

MAJOR RETAILERS OPPOSE SWIPE FEE SETTLEMENT



Many analysts considered the $7.25 billion credit card interchange fee settlement to be a significant victory for retailers, but the world's two largest retailers, Walmart and Target, have both come out against the proposed settlement, Forbes.com reported today. They join the National Association of Convenience Stores and the National Retail Federation, two organizations which immediately denounced the settlement when it was first announced on July 13. These organizations feel that the settlement has left credit card issuers with too much control over swipe fees. As part of the landmark agreement–the largest antitrust class-action settlement in history–MasterCard, Visa and major banks agreed to pay more than $6 billion to resolve accusations that they engaged in anticompetitive practices and price fixing in payment processing. In addition, credit card companies agreed to reduce swipe fees for eight months, an adjustment valued at $1.2 billion. The settlement would also allow retailers to charge higher prices to their customers for paying with credit cards. Before this settlement, the card companies prohibited retailers from adding this type of surcharge. Read more.

STATES SEEK CONGRESSIONAL ASSISTANCE TO COLLECT INTERNET SALES TAXES



More than 21 states have simplified how they collect taxes in hopes of recovering an estimated $20 billion in sales taxes that go uncollected by out-of-state online merchants every year, but the nation's governors say that they still need help from Congress, the Associated Press reported today. Speaking on behalf of the National Governors Association, Tennessee Gov. Bill Haslam (R) told the House Judiciary Committee on Tuesday that it is not fair to local businesses that online sellers are not required to collect and distribute state sales taxes for purchases made where they don't have a physical presence. Through the Streamlined Sales and Use Tax coalition, nearly 21 states are in full compliance with the laws and regulations set forth by the cooperative and have agreed to implement the policies and software technology that would make it easy for even the smallest businesses to collect and forward sales taxes across state lines. Reps. Steve Womack (R-Ark.) and Jackie Speier (D-Calif.) urged the House to pass the Marketplace Equity Act of 2011, which is co-sponsored by 48 House lawmakers from both parties. The act was in response to a 1992 Supreme Court decision that restricted states from collecting sales taxes on Internet transactions from online retailers that did not have a physical connection with the state. Read more.

LATEST ABI PODCAST EXAMINES CALIFORNIA COUNTY'S CONTROVERSIAL PROPOSAL TO USE EMINENT DOMAIN TO PROVIDE RELIEF FOR UNDERWATER HOMEOWNERS



The latest ABI podcast features ABI Executive Director Sam Gerdano talking with former ABI Resident Scholar Prof. Mark Scarberry from the Pepperdine University School of Law about a controversial proposal being considered by a few localities in California to provide relief to underwater homeowners. Officials from San Bernardino County, Calif., along with two other cities are considering a proposal to use eminent domain to reclaim underwater, but performing, mortgages to then rewrite the mortgage and lower the monthly payments. The county would then pay investors what they consider "fair value" for the mortgage. Scarberry, who continues to analyze various approaches to the foreclosure crisis, talks about the proposal and the potential legal ramifications of using eminent domain to provide relief from the foreclosure crisis. Click here to listen to the podcast.

“SUBJECTING BUSINESS PROJECTIONS TO SCRUTINY IN VALUATION DISPUTES” WEBINAR TO BE HELD ON JULY 30!



Reassembling the speakers from the highest-rated panel at the New York City Bankruptcy Conference this year, ABI will be holding a live webinar on July 30 at 11 a.m. ET titled, "Subjecting Business Projections to Scrutiny in Valuation Disputes." Panelists include:

• Moderator David Pauker of Goldin Associates, LLC (New York)
• Martin J. Bienenstock of Proskauer (New York)
• David M. Hillman of Schulte Roth & Zabel LLP (New York)
• Bankruptcy Judge Robert E. Gerber (S.D.N.Y.)

The panel will address:

• How much deference should management projections be accorded?
• How do you determine whether projections are unrealistically optimistic or pessimistic?
• What is the relevance of "market consensus?"
• How do management’s incentives impact projections?

The webinar is available to ABI members for $75 and is approved for 1.0 CLE hours in Calif., Ga., Hawaii, Ill., N.Y. (approved jurisdiction policy) S.C. and Texas. CLE approval is pending in Del., Fla., Pa. and Tenn. To register, please click here.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: MORRIS V. BROWN (IN RE BROWN; 6TH CIR.)



Summarized by Robert Hillyer of Butler Snow O'Mara Stevens & Cannada PLLC

The Sixth Circuit affirmed a lower court order granting summary judgment in favor of appellee Brown dismissing the adversary complaint filed by appellants Morris and Lynch seeking determination that Brown's debt to them was nondischargeable under 11 U.S.C. § 523(a)(6).

More than 570 appellate opinions are summarized on Volo typically within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: MORTGAGE MODIFICATIONS IN BANKRUPTCY HELP HOMEOWNERS



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post advocates for more bankruptcy courts to start using the Mortgage Modification Mediation Program first started by Judge Robert Drain in the Southern District of New York.

Strong opinions on mortgage modification in bankruptcy proceedings? Make sure to vote on ABI's latest Quick Poll below!

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

ABI Quick Poll

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

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

IS YOUR ABI MEMBERSHIP PROFILE CURRENT?



Keeping a current profile will allow you to benefit from one of ABI's most important services - networking. When you update your profile, you are putting your most valuable information in the membership directory. Be sure to include your areas of expertise, firm information, education and join any other committees that are of interest. Click here to update your profile.

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

July

-Valuation Webinar, July 30 at 11 a.m. ET

August

- Mid-Atlantic Bankruptcy Workshop

     August 2-4, 2012 | Cambridge, Md.

September

- Complex Financial Restructuring Program

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


- Southwest Bankruptcy Conference

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

- 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization

     September 19-20, 2012 | New York, N.Y.

October

- Nuts & Bolts for Young and New Practitioners - KC

     October 4, 2012 | Kansas City, Mo.

- Midwestern Bankruptcy Institute Program, Midwestern Consumer Forum

     October 5, 2012 | Kansas City, Mo.

- Bankruptcy 2012: Views from the Bench

     October 5, 2012 | Washington, D.C.

- Chicago Consumer Bankruptcy Conference

     October 8, 2012 | Chicago, Ill.

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

November

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.

MORTGAGE DELINQUENCY RATE IN U.S. DECREASES TO 2008 LEVELS



The U.S. mortgage delinquency rate declined in the first quarter to the lowest level since 2008 as lower consumer spending and tighter lending standards resulted in fewer defaults, Bloomberg News reported yesterday. The share of home loans at least 30 days late dropped to 7.4 percent from 7.58 percent in the previous three months, according to a report today from the Mortgage Bankers Association (MBA). The rate peaked at 10.1 percent in the first quarter of 2010 and reached its lowest point since the third quarter of 2008, when it was 6.99 percent. The share of homes that had received a foreclosure notice and had not been seized by banks increased to 4.39 percent, up 1 basis point, or 0.01 percentage point, from the previous quarter, the MBA reported. Read more.

FITCH WARNS BANKS MUST RAISE $566 BILLION IN NEW CAPITAL



The world's largest banks must raise a combined $566 billion to satisfy new capital requirements, Fitch Ratings said today, as the authorities demand that banks hold more cash in reserve to protect against future financial shocks, the New York Times' DealBook blog reported. The figure represents a 23 percent increase on what the banks currently hold in reserve and will most likely reduce return on equity, a critical figure used to gauge a firm's profitability, Fitch said. The banks affected are the 29 "systemically important financial institutions" as designated by the global Financial Stability Board. Read more.

U.S. SENATE PANEL TO LOOK AT DERIVATIVES REGULATION NEXT WEEK



Derivatives regulators are likely to be questioned about their oversight of complex trades at JPMorgan Chase & Co., which resulted in a more than $2 billion loss, at a Senate Banking Committee hearing scheduled for next Tuesday, Dow Jones Newswires reported today. Securities and Exchange Commission Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler are scheduled to appear at a hearing about implementation of the derivatives regulatory regime laid out in the 2010 Dodd-Frank financial overhaul law. On Monday, the panel's Democratic chairman, Sen. Tim Johnson (S.D.), announced upcoming hearings on financial regulation at which the JPMorgan trades are "expected to be discussed," but not a specific inquiry into the company's loss. Sen. Mike Johanns (R-Neb.) on Tuesday called for JPMorgan Chief Executive James Dimon to come to the Hill for a hearing specifically to look into the trades. The House Financial Services Committee has not yet scheduled a hearing, but Rep. Randy Neugebauer (R-Texas) on Tuesday called for one to look into the losing trades. Read more.

COMMENTARY: THE DANGER WITH BIG BANKS



Taxpayer safety nets such as the FDIC should be available only to banks that are in the loan business, not those in the investment business, according to a commentary in yesterday's Wall Street Journal. In 1970, according to data from the Federal Reserve Bank of Dallas, the five largest U.S. institutions owned 17 percent of banking industry assets; in 2010 that share was 52 percent. As the financial crisis of 2008 showed, the very diversification, structure and size of most of our largest banks put the their assets at tremendous risk, according to the commentary, leaving the government no recourse but to rescue them. Harvey Rosenblum, the Dallas Federal Reserve Bank's executive vice president and director of research, wrote last year that "these rescues have penalized equity holders while protecting bondholders and, to a lesser extent, bank managers." In other words, by protecting people from the consequences of their errors, the bailouts raised the risk that the same errors will be made in the future. Taxpayer safety-net programs, such as the Federal Deposit Insurance Corporation (FDIC), should be available only to banks in business to provide insured deposits, according to the commentary. Financial institutions that primarily provide investment, hedging and speculative services do not deserve protection either by the FDIC's explicit guarantees or by an implicit understanding that taxpayers will bail them out because there is no other alternative. Read the full commentary. (Subscription required.)

MORTGAGE-BOND TRANSPARENCY PLAN MEETS RESISTANCE FROM TRADERS



The Financial Industry Regulatory Authority's (FINRA) latest plan to increase transparency in a corner of the $6.5 trillion mortgage-bond market is meeting resistance from Wall Street’s largest lobbying group, Bloomberg News reported today. Investors and dealers are concerned that the level of detail FINRA proposes to publish on trades of government-backed securities as so-called specified pools will reveal shifts in strategy because individual bonds are often owned by only one holder, according to the Securities Industry and Financial Markets Association. The group is pushing for a "masking" of a bond's unique identifier, known as a CUSIP, as FINRA adds trade-by-trade disclosures including prices to its Trade Compliance and Reporting Engine. Read more.

REGISTER FOR THE LABOR & EMPLOYMENT COMMITTEE'S "EVOLVING LABOR ISSUES IN CHAPTER 11" WEBINAR



Make sure to mark your calendars for May 23 from 2-3:30 p.m. ET for the ABI Labor and Employment Committee's "Evolving Labor Issues in Chapter 11" Webinar. A panel of experts will be discussing timely developments in several large complex bankruptcy cases, including Hostess, Kodak, Nortel and American Airlines. The expert panel includes Babette A. Ceccotti of Cohen, Weiss & Simon LLP (New York), former chief counsel of the PBGC Jeffrey B. Cohen of Bailey & Ehrenberg PLLC (Washington, D.C.), Marc Kieselstein of Kirkland & Ellis LLP (New York) and Ron E. Meisler of Skadden, Arps, Slate, Meagher & Flom LLP.
Sam Alberts of SNR Denton (Washington, D.C.) will be the moderator for the program. Issues to be discussed include:

• Hostess' efforts to eliminate their multi-employer pension plan contribution liability through motions to reject their labor agreements under Section 1113.

• Kodak's attempt to terminate retiree health benefits.

• The effect of the automatic stay upon efforts by the U.K. Pension Protection Fund and the U.K. Nortel Pension Plan to enforce its powers under the U.K. Pensions Act.

• American Airlines' efforts to reduce legacy costs in bankruptcy.

Click here to register.

COMMENT PERIOD CLOSES MONDAY ON THE U.S. TRUSTEE PROGRAM’S PROPOSED GUIDELINES FOR ATTORNEY COMPENSATION IN LARGE CHAPTER 11 CASES



The U.S. Trustee Program has re-opened the comment period until May 21, 2012, on proposed guidelines for reviewing applications for attorney compensation in large chapter 11 cases ("fee guidelines"). The USTP also scheduled a public meeting for June 4, 2012, at the U.S. Department of Justice in Washington, D.C. on the proposed fee guidelines. Click here for more information on submitting comments or attending the public hearing.

ABI IN-DEPTH

JUNE 5 WEBINAR WILL EXAMINE HOW TO HANDLE AN ADMINISTRATIVELY INSOLVENT ESTATE



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

Speakers include:

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

• Cathy Rae Hershcopf of Cooley LLP (New York)

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

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

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

LATEST CASE SUMMARY ON VOLO: SENIOR TRANSEASTERN LENDERS V. OFFICIAL COMMITTEE OF UNSECURED CREDITORS (IN RE TOUSA INC.; 11TH CIR.)



Summarized by Summer Chandler of McKenna Long & Aldridge LLP

The Eleventh Circuit reversed the order of the district court, affirmed the liability findings of the bankruptcy court, and remanded to the district court for further proceedings consistent with its opinion. Specifically, the Eleventh Circuit held that the bankruptcy court did not clearly err when it found that certain debtor subsidiary entities (the "Conveying Subsidiaries”) of debtor TOUSA, Inc. (TOUSA) had not received reasonably equivalent value in exchange for the liens they conveyed to secure loans used to pay a debt owed only by TOUSA, such that the liens could be avoided as fraudulent transfers; and (2) the Transeastern Lenders (defined below) who had received loan proceeds secured by such liens were entities “for whose benefit” the Conveying Subsidiaries transferred the liens, such that recovery could be sought from the Transeastern Lenders pursuant to 11 U.S.C. 550(a)(1). Finally, the Eleventh Circuit declined to consider the remedies ordered by the bankruptcy court and matters related to judicial assignment and consolidation because those issues had not yet been considered by the district court and remanded to the district court for further proceedings.

More than 500 appellate opinions are summarized on Volo typically within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: FURTHER EXAMINATION OF RESCAP'S BANKRUPTCY FILING



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post provides further examination of Ally Financial Inc’s mortgage unit, Residential Capital's (ResCap), bankruptcy filing on Monday.

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

ABI Quick Poll

The Constitutional scheme of uniform federal bankruptcy is a bad idea; the states should have more leeway to adopt their own different approaches to financial distress, at least for their own individual citizens and companies with purely intra-state operations. 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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May

- ABI Labor and Employment Committee's "Evolving Labor Issues in Chapter 11" Webinar

     May 23, 2012



June

- Memphis Consumer Bankruptcy Conference

     June 1, 2012 | Memphis, Tenn.

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

     June 5, 2012

- Central States Bankruptcy Workshop

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

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 12-15, 2012 | Bretton Woods, N.H.

- Southeast Bankruptcy Workshop

     July 25-28, 2012 | Amelia Island, Fla.

August

- Mid-Atlantic Bankruptcy Workshop

     August 2-4, 2012 | Cambridge, Md.

BANKRUPTCY CASES TO BE CONSIDERED BY SUPREME COURT PREVIEWED IN NEW "BANKRUPTCY IN DEPTH" VIDEO

ABI's next "Bankruptcy In Depth" video features ABI Resident Scholar Kara Bruce talking with Eric Brunstad of Dechert LLP (Hartford, Conn.) to preview the bankruptcy cases that the Supreme Court will consider during its 2013 term. Brunstad, who has argued many cases before the Court and is an expert in bankruptcy appellate practice, discusses in depth Law v. Siegel, which questions whether the court may use its general equitable authority under §105 of the Bankruptcy Code to surcharge a debtor's exempt assets, and Executive Benefits Insurance Agency v. Arkison (In re Bellingham), which will address the bankruptcy court's authority to adjudicate Article III matters. He also provides a candid view of what it is like to argue a case before the Court and an in-depth analysis of the issues involved with the upcoming cases. Click here to watch a preview of the forthcoming ABI "Bankruptcy In Depth" video.

FEDERAL JUDICIARY BUDGET INCREASES IN LAST-MINUTE BUDGET DEAL

The budget deal Congress approved yesterday to reopen the government and raise the debt ceiling provides $51 million in additional funding to the judiciary and to federal defenders, the Legal Times reported today. Federal court officials and members of the Senate Judiciary Committee greeted the increase as good news, although it is small when compared to $350 million in budget cuts earlier this year as part of sequestration. The extra funding would primarily go to pay the backlog of attorney fees under the Criminal Justice Act, which funds court-appointed private counsel. Payments were suspended in mid-September, when funding ran out two weeks before the end of the fiscal year. The bill also includes $4.8 billion for judiciary salaries and expenses. That amounts to a $25 million annual increase over FY2013, court officials said. The legislation gives judiciary officials the ability to float those funds among accounts to respond to the most urgent budget needs as they arise. Overall, the judiciary budget would rise from about $6.65 billion to about $6.7 billion. Read more.

PROPERTY TAXES, SKIPPED PENSION PAYMENTS BOOST DETROIT'S CASHFLOW

A report released yesterday showed that Detroit's revenue dropped by 9 percent in the first quarter of fiscal 2014 compared with the same period in fiscal 2013, but an influx of property taxes and skipped pension contributions boosted the city's cashflow, Reuters reported yesterday. In his quarterly report to Michigan officials, Kevyn Orr, Detroit's state-appointed emergency manager, said the city ended the quarter on Sept. 30 with a cash balance of $128.5 million that exceeded projections by $56.7 million. However, Orr said that Detroit's financial condition "continues to be dire" as it works its way through bankruptcy court, where its eligibility to remain there will be the subject of a trial next week. City revenue for the quarter, including property, income and gambling taxes, totaled $220.2 million, a drop of about $22 million from fiscal 2013's first quarter. Expenses also fell by about $11 million as the city's headcount dropped to approximately 9,322 workers at the quarter's end from 10,325 in the same period last year, according to the report. Read more.

LATEST SETTLEMENT REPORT FINDS BANKS GIVING TIMELY MORTGAGE RELIEF

The $25 billion national mortgage settlement, intended to help homeowners affected by the housing crisis, appears to be running ahead of schedule, according to a new report by the monitor of the program, the New York Times reported today. However, the number of households helped by the settlement has fallen short of the original predictions, and critics complained that too much relief was given to people who gave up their homes in short sales and not enough to help people retain their homes. Early last year, five banks signed on to the settlement over their use of mass-produced, faulty documents to evict homeowners. As of Dec. 31, they had provided $38.7 billion in relief in raw dollar terms, the report said. But because not every type of relief is counted the same way under the settlement's terms, they had fulfilled only about 80 percent of their total obligation. Prior to yesterday, banks had self-reported their progress in raw dollar terms. The new report is the first in which the monitor, Joseph A. Smith Jr., has disclosed the amount of credit they have earned toward the settlement obligation. The report credited them $4.1 billion for principal reduction on primary mortgages, $2.2 billion for principal reductions in second mortgages, and $5.4 billion in short sales or deeds in lieu of foreclosure, in which the homeowner is allowed to sell the house for less than what is owed or simply hand it over to the bank. It also credited $2.6 billion for allowing people who owed more on their mortgage than their home was worth to refinance at lower interest rates. Read more.

FANNIE MAE SURVIVAL IS BACK ON THE TABLE FOR POLICYMAKERS

The consensus in Washington, D.C., that Fannie Mae and Freddie Mac should be dismantled is weakening amid opposition from hedge funds, regional banks and others who could benefit if the companies survive in some form, Bloomberg News reported yesterday. President Barack Obama and lawmakers from both parties have called for the two mortgage-finance companies to be replaced by a new U.S. housing system. While the official position hasn't changed, a bipartisan group of U.S. senators writing legislation is grappling with how to ensure that changes to Fannie Mae and Freddie Mac don't disrupt the recovering housing market. Some Democrats said that they are leery of engineering a switch that would liquidate the government-sponsored enterprises (GSEs), leaving it to private entities to risk their own capital on home loans. Since they nearly collapsed during the 2008 credit crisis, the two companies have drawn $187.5 billion from taxpayers and have been considered too politically toxic to be preserved. While the U.S. holds controlling stakes, the outcome will affect private investors including hedge funds Perry Capital and Paulson and Co., which have accumulated preferred shares and have spent months lobbying for Fannie Mae and Freddie Mac to be recapitalized. The hedge funds gained little traction in early meetings with senators such as Bob Corker (R-Tenn.), who publicly rejected their pleas in the spring. As the legislative process advances and involves a wider group of lawmakers, some are listening to the argument that an entirely new system could risk instability in the market. Read more.

FED WEIGHS SURCHARGE ON BANKS' PHYSICAL COMMODITY BUSINESSES

Federal Reserve officials are considering imposing a new capital surcharge on Wall Street banks that own oil pipelines, metals warehouses and other lucrative physical-commodities assets, the Wall Street Journal reported today. Such an approach could encourage banks to pare back their involvement in physical commodities, which has increasingly raised concerns among regulators and lawmakers. While no decision has been made, imposing a surcharge would allow the Fed to sidestep a legal jam caused by existing laws that set Goldman Sachs Group Inc. and Morgan Stanley apart from peers and give the former investment banks broad leeway to own commodities. The Fed has been considering scaling back the ability of banks to own such assets amid concerns that commodities ownership has expanded beyond what regulators originally envisioned. To avoid a regulatory situation where only some banks can own commodities, the Fed is considering a surcharge that would ensure that all banks hold more capital to account for potential risks posed by the assets they own or lease. Read more. (Subscription required.)

ABI LAUNCHES SIXTH ANNUAL WRITING COMPETITION FOR LAW STUDENTS

Law school students are invited to submit a paper between now and March 4, 2014 for ABI's Sixth Annual Bankruptcy Law Student Writing Competition. ABI will extend a complimentary one-year membership to all students who participate in this year's competition. Eligible submissions should focus on current issues regarding bankruptcy jurisdiction, bankruptcy litigation, or evidence issues in bankruptcy cases or proceedings. The first-place winner, sponsored by Invotex Group, Inc., will receive a cash prize of $2,000 and publication of his or her paper in the ABI Journal. The second-place winner, sponsored by Jenner & Block LLP, will receive a cash prize of $1,250 and publication of his or her paper in an ABI committee newsletter. The third-place winner, sponsored by Thompson & Knight LLP, will receive a cash prize of $750 plus publication of his or her paper in an ABI committee newsletter. For competition participation and submission guidelines, please visit http://papers.abi.org.

RISKY TIMES FOR SECURED LENDERS AND SERVICERS TO BE FOCUS OF FIRST ABI WORKSHOP PROGRAM- ATTEND IN PERSON OR VIA LIVE WEBSTREAM!

You will not want to miss the abiWorkshops series' inaugural program, "Risky Times for Secured Lenders and Servicers." The program is cosponsored by TMA (Chesapeake), IWIRC (D.C./Greater Maryland) and RMA (Potomac), and will be held on Nov. 6 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 6 program include:



- Living with the New CFPB Mortgage Servicing Rules

-
Business Lending: Navigating What Lies Ahead

- Business Lending: Recent Legal Developments



For more information or to register for the "Risky Times for Secured Lenders and Servicers" abiWorkshop on Nov. 6, please click here.

EXPERTS TO EXAMINE STUDENT LENDING AND BANKRUPTCY AT ABI WORKSHOP PROGRAM ON NOV. 15

Experts will tackle the hot topic of student lending issues in bankruptcy on the abiWorkshops series' new program, "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" The program will be held on Nov. 15 from 9 a.m. to 3 p.m. ET in the ABI Headquarters Conference Center in Alexandria, Va. The abiWorkshops series provides attendees two great ways of participating: You can register to attend in person at the ABI Conference Center, or you can participate via a live webstream! Topics that will be covered on the Nov. 15 program include:

- Student Lending Today: Who Borrows, How Much, Delinquency & Default Trends

- Repayment Options: Income Based Repayment and New Lender/Servicer Programs

- Litigation under Sect. 523(a)(8): What Proofs Are Needed? Evidence Demonstration

For more information or to register for the "You Can't Discharge Student Loans in Bankruptcy - Or Can You?" abiWorkshop on Nov. 15, please click here.

ABI GOLF TOUR UNDERWAY; LAST STOP FOR 2013 IS WINTER LEADERSHIP CONFERENCE IN DECEMBER

The 7th and final stop for the 2013 ABI Golf Tour is on Dec. 5 at the Trump National Golf Club, held in conjunction with ABI’s Winter Leadership Conference. Final scoring to win the Great American Cup — sponsored by Great American Group — is based on your top three scores from the seven ABI events. 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

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

Summarized by Hilda Montes de Oca of the U.S. Bankruptcy Court for the Central District of California



Applying California partnership law, the Ninth Circuit Bankruptcy Appellate Panel reversed the bankruptcy court because it erred when it decided that a partnership existed between the debtor defendant and plaintiff creditor based upon the terms of a loan agreement. As there was no partnership, the debtor owed no fiduciary obligations to the creditor. The BAP further found that the bankruptcy court used the wrong mens rea standard for defalcation. As a result, the bankruptcy court erred in determining that debtor's debt to creditor was excepted from discharge as a defalcation by a fiduciary pursuant to § 523(a)(4).

There are more than 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: OCC'S COMMERCIAL REAL ESTATE LENDING HANDBOOK MISSES THE MARK ON POTENTIAL LEGAL ISSUES

The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent blog post finds the new version of the Office of the Comptroller of the Currency's (OCC) Commercial Real Estate Lending Handbook to be lacking in addressing potential legal issues associated with risks in commercial real estate lending.

The abiWorkshops series' inaugural program, "Risky Times for Secured Lenders and Servicers," on Nov. 6 will cover potential legal issues associated with commercial lending. Attend in person or via live webstream.

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

Does the bankruptcy court's Section 105 power enable it to surcharge the debtor's exempt property?

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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2013

October

- International Insolvency & Restructuring Symposium

    Oct. 25, 2013 | Berlin, Germany

November

- abiWorkshop: "Risky Times for Secured Lenders and Servicers"

   Nov. 6, 2013 | Alexandria, Va.

- Complex Financial Restructuring Program

   Nov. 7, 2013 | Philadelphia, Pa.

- Corporate Restructuring Competition

   Nov. 7-8, 2013 | Philadelphia, Pa.

- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

-abiWorkshop: "You Can't Discharge Student Loans in Bankruptcy - Or Can You?"

   Nov. 15, 2013 | Alexandria, Va.

- Delaware Views from the Bench

   Nov. 25, 2013 | Wilmington, Del.

December

- Winter Leadership Conference

    Dec. 5-7, 2013 | Rancho Palos Verdes, Calif.

January

- Western Consumer Bankruptcy Conference

    Jan. 20, 2014 | Las Vegas, Nev.

- Rocky Mountain Bankruptcy Conference

    Jan. 23-24, 2014 | Denver, Colo.

NEW LENDERS SPRING UP TO CATER TO SUBPRIME SECTOR

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

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

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

Click here to view H.R. 3193.

JUSTICES MAY LIMIT SECURITIES FRAUD SUITS

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

For more on the case, please click here.

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

Register today!

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

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

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

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



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



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



- Creditor Conflict and the Efficiency of the Corporate Reorganization Process

- The Value of Soft Assets in Corporate Reorganizations

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

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

- The Logic and Limits of Liens

- An Empirical Investigation of Leases and Executory Contracts

- Default Penalties in Chapter 11

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

- What Is a Lien? Lessons from Municipal Bankruptcy

- Derivatives and Collateral: Balancing Remedies and Systemic Risk

- Rules of Thumb for Intercreditor Agreements

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

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

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

- Priority in Going-Concern Surplus

- The Board's Duty to Keep Its Options Open

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



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

ABI IN-DEPTH

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

Summarized by Laury Macauley of Macauley Law Group

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

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

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

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

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

ABI Quick Poll

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

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

INSOL INTERNATIONAL

INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 43 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

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2014

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

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

- Annual Spring Meeting
    April 24-27, 2014 | Washington, D.C.

May
- Credit & Bankruptcy Symposium
    May 1-2, 2014 | Uncasville, Conn.

- New York City Bankruptcy Conference
    May 15, 2014 | New York, N.Y.

- Litigation Skills Symposium
    May 20-23, 2014 | Dallas, Texas

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

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

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

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

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

ANALYSIS: TROUBLED HOME EQUITY LOANS LOOM ON THE HORIZON



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

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



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

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



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

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



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

Click here to read the prepared witness testimony.

CAPITAL ONE SEES CREDIT CARD DELINQUENCIES INCREASE IN JUNE



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

ABI IN-DEPTH

“SUBJECTING BUSINESS PROJECTIONS TO SCRUTINY IN VALUATION DISPUTES” WEBINAR TO BE HELD ON JULY 30!



Reassembling the speakers from the highest-rated panel at the New York City Bankruptcy Conference this year, ABI will be holding a live webinar on July 30 at 11 a.m. ET titled, "Subjecting Business Projections to Scrutiny in Valuation Disputes." Panelists include:

• Moderator David Pauker of Goldin Associates, LLC (New York)
• Martin J. Bienenstock of Proskauer (New York)
• David M. Hillman of Schulte Roth & Zabel LLP (New York)
• Bankruptcy Judge Robert E. Gerber (S.D.N.Y.)

The panel will address:

• How much deference should management projections be accorded?
• How do you determine whether projections are unrealistically optimistic or pessimistic?
• What is the relevance of "market consensus?"
• How do management’s incentives impact projections?

The webinar is available to ABI members for $75 and is approved for 1.0 CLE hours in Calif., Ga., Hawaii, Ill., N.Y. (approved jurisdiction policy) S.C. and Texas. CLE approval is pending in Del., Fla., Pa. and Tenn. To register, please click here.

LATEST CASE SUMMARY ON VOLO: PEARSON EDUCATION, INC. V. ALMGREN (8TH CIR.)



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

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

More than 550 appellate opinions are summarized on Volo typically within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: REACTIONS TO THE CREDIT CARD SETTLEMENT



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

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

ABI Quick Poll

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

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

IS YOUR ABI MEMBERSHIP PROFILE CURRENT?



Keeping a current profile will allow you to benefit from one of ABI's most important services - networking. When you update your profile, you are putting your most valuable information in the membership directory. Be sure to include your areas of expertise, firm information, education and join any other committees that are of interest. Click here to update your profile.

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

July

- Southeast Bankruptcy Workshop

     July 25-28, 2012 | Amelia Island, Fla.

-Valuation Webinar, July 30 at 11 a.m. ET

August

- Mid-Atlantic Bankruptcy Workshop

     August 2-4, 2012 | Cambridge, Md.

September

- Complex Financial Restructuring Program

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


- Southwest Bankruptcy Conference

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

- 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization

     September 19-20, 2012 | New York, N.Y.

October

- Nuts & Bolts for Young and New Practitioners - KC

     October 4, 2012 | Kansas City, Mo.

- Midwestern Bankruptcy Institute Program, Midwestern Consumer Forum

     October 5, 2012 | Kansas City, Mo.

- Bankruptcy 2012: Views from the Bench

     October 5, 2012 | Washington, D.C.

- Chicago Consumer Bankruptcy Conference

     October 8, 2012 | Chicago, Ill.

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

DELINQUENT PAYMENTS EDGE UP FOR CREDIT CARD ISSUERS



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

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



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

OBAMA, ROMNEY SQUARE OFF ON AUTO BAILOUT IN FINAL DEBATE



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

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

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



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

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



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

ABI IN-DEPTH

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



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

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



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

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



Summarized by Scott J. Whitacre

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

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

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



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

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

ABI Quick Poll

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

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

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



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

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

October

- ABI Program at NCBJ's Annual Conference

     October 26, 2012 | San Diego, Calif.

- ABI Endowment Event at Peter Max Gallery

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

November

- U.S./Mexico Restructuring Symposium

     November 7, 2012 | Mexico City, Mexico

- Professional Development Program

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

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.

- Winter Leadership Conference

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

December

- Forty-Hour Bankruptcy Mediation Training

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

2013

January

- Rocky Mountain Bankruptcy Conference

     January 24-25, 2013 | Denver, Colo.

February

- Caribbean Insolvency Symposium

     February 7-9, 2013 | Miami, Fla.

- Kansas City Advanced Consumer Bankruptcy Practice Institute

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

- VALCON 2013

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

ANALYSIS: MORE HOMEOWNERS EMERGE FROM "UNDERWATER" STATUS



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

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

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



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

CFPB ISSUES PROPOSAL TO SUPERVISE STUDENT LOAN SERVICERS



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

OBAMA CUTS STUDENT-DEBT COLLECTOR COMMISSIONS TO AID BORROWERS



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

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



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

ANALYSIS: WORKERS SAVING TOO LITTLE TO RETIRE



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

NUMBER OF CASES FILED BY SEC SLOWS



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

NEW ABI BOOK EXPLORES THE DEPTHS OF DEEPENING INSOLVNECY



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

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



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

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

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

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

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

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

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

HOTEL BLOCK FOR ABI'S ANNUAL SPRING MEETING ALMOST SOLD OUT! REGISTER TODAY!



The hotel block at the Gaylord National Resort and Convention Center in National Harbor, Md., is almost sold out for ABI’s 2013 Annual Spring Meeting! Held April 18-21, 2013, ASM features a roster of the best national speakers, while the depth and scope of topics offer something for everyone. Specifically, four concurrent workshops will cover various “tracks,” including programs for attorneys in commercial cases, a track for restructuring professionals, a track of professional development programming and a track dealing solely with consumer issues. More than 16 hours of CLE/CPE is offered in some states, along with ethics credit totaling 3 hours, making the cost only about $50 per credit. In addition, committee sessions will drill down on other topics to provide you with the most practical and varied CLE/CPE experience ever. Sessions include:

• 17th Annual Great Debates

• Mediation: An Irrational Approach to a Rational Result

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

• Current Issues for Financial Advisors in Bankruptcy Cases

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

• The Power to Veto Bankruptcy Sales

• Real Estate Issues in Health Care Restructurings

• How to Be a Successful Expert

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

• Chapter 9s, Nonprofits and Other Nontraditional Restructuring Processes

• And much more!

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

Make sure to register today!

ABI IN-DEPTH

TEE OFF ON THE NEW ABI GOLF TOUR!



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

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



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

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

LATEST CASE SUMMARY ON VOLO: GORDON V. PAPPALARDO (IN RE GORDON; 1ST CIR.)



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



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

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

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: CONGRESS, NOT FHFA, SHOULD BE REFORMING THE GSEs

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

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

ABI Quick Poll

Who will win the NCAA basketball tournament?

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

INSOL INTERNATIONAL



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

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2013

March

- Bankruptcy Battleground West

     March 22, 2013 | Los Angeles, Calif.

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

     March 22, 2013 | Newton, Mass.

April

- ABI Live Webinar: "Legacy Liabilities : Dealing with Environmental, Pension, Union and Similar Types of Claims"

     April 5, 2013

- ABI Live Webinar: "Student Loans: Bankruptcy May Not Have the Answers - But Does Congress?"

     April 10, 2013

- "Nuts and Bolts" Program at ASM

     April 18, 2013 | National Harbor, Md.

- Annual Spring Meeting

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

May

- "Nuts and Bolts" Program at NYCBC

     May 15, 2013 | New York, N.Y.

- ABI Endowment Cocktail Reception

     May 15, 2013 | New York, N.Y.

- New York City Bankruptcy Conference

     May 16, 2013 | New York, N.Y.

- Litigation Skills Symposium

     May 21-24, 2013 | Dallas, Texas

June

- Memphis Consumer Bankruptcy Conference

     June 7, 2013 | Memphis, Tenn.

- Central States Bankruptcy Workshop

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

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

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

REPORT: CONSUMER DEBT DECREASES 14.6 PERCENT IN FIRST HALF OF 2012



Overall consumer debt fell 14.6 percent to an average of $12,986 in the first half of 2012, according to a report released today by Bills.com. The report found that credit card debt remains the most common type of consumer debt at 53 percent. Nationally, average credit card debt grew 2 percent to $5,600 in the first half of 2012, but peaked in the holiday debt period of January and February at $7,600. The number of both student loans and home loans fell slightly, as did average loan balances. The average home loan balance dropped significantly, falling 11 percent to $149,200, according to the report. The number and size of collections accounts continues to grow with 11 percent of consumers in collections and an 18 percent increase in average collection balances. Read more.

BIG-FOUR BANKS SEE MORTGAGE ORIGINATIONS CLIMB 37 PERCENT IN SECOND QUARTER



Mortgage originations at the big-four banks increased 37 percent in the second quarter from last year because of the expanded Home Affordable Refinance Program, HousingWire.com reported on Friday. Wells Fargo, JPMorgan Chase, Bank of America and Citigroup wrote $205.8 billion in new mortgages in the three months ending June 30, according to their combined financial filings. Originations also increased 7 percent from the first quarter. Wells Fargo continued to lead the way: The San Francisco-based bank wrote $131.9 billion in new loans during the quarter, more than double the originations from the same period last year. Wells Fargo said that 16 percent of those new loans came through the Home Affordable Refinancing Program. Read more.

COMMENTARY: FINDING RECOURSE WHEN INVESTORS ARE CHEATED



Whether it comes to falsifying documents or fudging an interest rate quote, many of the actors of recent financial scandals knowingly cheated in some form or another, but the federal government may need to find new ways of providing some recourse for investors who are victims of fraud, the New York Times DealBook blog reported yesterday. While the JPMorgan derivatives and the Libor scandal have led to much hand-wringing over what regulators should have done, it is Russell R. Wasendorf Sr. and the now-bankrupt futures firm Peregrine Financial Group who probably employed the most blatant forms of cheating. Wasendorf's decision to cheat, as he called it, may well send him to jail for the rest of his life while costing his customers millions of dollars. Any proposal to adopt comprehensive insurance for futures and securities investors is sure to meet significant resistance from investment firms that would have to pay for the programs. However, the commentary advocates for Congress to provide some form of safety net for investors to protect them from fraud. Read the full commentary.

TRUST IN FINANCIAL SYSTEM FALLS BACK TO 2009 LEVELS



Americans' trust in the financial system dropped in June to the lowest point since the financial crisis, the Wall Street Journal reported today. Just 21 percent of Americans trust the financial system, the fewest since March 2009, according to the latest quarterly measure by the Chicago Booth/Kellogg School Financial Trust Index released today. The overall decline was driven largely by a drop in the trust of national banks, which fell two percentage points to 23 percent. Trust in local banks rose four percentage points to 55 percent, while trust in credit unions increased five percentage points to 63 percent. Read more.

For more, be sure to check out ABI's Chart of the Day.

COMMENTARY: WALL STREET MAY BE TOO BIG TO REGULATE



The Barclays interest-rate scandal, HSBC's openness to money laundering by Mexican drug traffickers, and the epic blunders at JPMorgan Chase are all episodes that raise questions of whether the big banks can really be regulated, according to an op-ed in yesterday's New York Times. Some economists in and around the University of Chicago who founded the modern conservative tradition had a surprisingly different take: When it comes to the really big fish in the economic pond, some felt, the only way to preserve competition was to nationalize the largest ones, which defied regulation. One of the most important Chicago School leaders, Henry C. Simons, judged in 1934 that "the corporation is simply running away with our economic (and political) system." The central problem, then as now, according to the op-ed, was that very large corporations could easily undermine regulatory and antitrust strategies. The Nobel laureate George J. Stigler demonstrated how regulation was commonly "designed and operated primarily for" the benefit of the industries involved. And numerous conservatives, including Simons, concluded that large corporate players could thwart antitrust "break-them-up" efforts. Recent history confirms another Chicago School judgment: While a breakup might work in the short term, the most likely course is what happened with Standard Oil and AT&T, which were broken up only to essentially recombine a few decades later. Read more.

“SUBJECTING BUSINESS PROJECTIONS TO SCRUTINY IN VALUATION DISPUTES” WEBINAR TO BE HELD ON JULY 30!



Reassembling the speakers from the highest-rated panel at the New York City Bankruptcy Conference this year, ABI will be holding a live webinar on July 30 at 11 a.m. ET titled, "Subjecting Business Projections to Scrutiny in Valuation Disputes." Panelists include:

• Moderator David Pauker of Goldin Associates, LLC (New York)
• Martin J. Bienenstock of Proskauer (New York)
• David M. Hillman of Schulte Roth & Zabel LLP (New York)
• Bankruptcy Judge Robert E. Gerber (S.D.N.Y.)

The panel will address:

• How much deference should management projections be accorded?
• How do you determine whether projections are unrealistically optimistic or pessimistic?
• What is the relevance of "market consensus?"
• How do management’s incentives impact projections?

The webinar is available to ABI members for $75 and is approved for 1.0 CLE hours in Calif., Ga., Hawaii, Ill., N.Y. (approved jurisdiction policy) S.C. and Texas. CLE approval is pending in Del., Fla., Pa. and Tenn. To register, please click here.

ABI IN-DEPTH

ABI RECEIVES APPROVAL TO BECOME AN ACCREDITED NEW YORK CLE PROVIDER



The New York State Continuing Legal Education Board recently approved ABI to become an accredited New York continuing legal education (CLE) provider for live educational events. The approval is retroactive to July 2, 2012 through July 2015. Practitioners who attended ABI's Northeast Bankruptcy Conference from July 12-15 are eligible to receive New York CLE credit. If you have any questions or would like further clarifications, please contact ABI's Continuing Education Manager Jannine J. Henderson via e-mail at jhenderson@abiworld.org or by calling 703-894-5966.

LATEST CASE SUMMARY ON VOLO: SEARCH MARKET DIRECT INC. V. JUBBER (IN RE PAIGE; 10TH CIR.)



Summarized by Neal Paul Donnelly of the U.S. Bankruptcy Court for the District of Delaware

The Tenth Circuit affirmed the lower court ruling that the confirmed chapter 11 plan was proposed in good faith and was fair and equitable. A proposed competing plan could not have been confirmed because it was not feasible, according to the court. The Tenth Circuit also ruled that the automatic stay was violated when the debtor sold an Internet domain name to a creditor after filing for bankruptcy. Turnover of the domain name to the bankruptcy estate was an appropriate remedy for the stay violation.

More than 570 appellate opinions are summarized on Volo typically within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: SEVENTH CIRCUIT'S TAKE ON § 365(n) OF THE BANKRUPTCY CODE



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines special protections afforded to a licensee of intellectual property in a recent Seventh Circuit decision concerning § 365(n) of the Bankruptcy Code in Sunbeam Products Inc. v. Chicago American Manufacturing LLC.

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

ABI Quick Poll

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

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

IS YOUR ABI MEMBERSHIP PROFILE CURRENT?



Keeping a current profile will allow you to benefit from one of ABI's most important services - networking. When you update your profile, you are putting your most valuable information in the membership directory. Be sure to include your areas of expertise, firm information, education and join any other committees that are of interest. Click here to update your profile.

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

July

- Southeast Bankruptcy Workshop

     July 25-28, 2012 | Amelia Island, Fla.

-Valuation Webinar, July 30 at 11 a.m. ET

August

- Mid-Atlantic Bankruptcy Workshop

     August 2-4, 2012 | Cambridge, Md.

September

- Complex Financial Restructuring Program

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


- Southwest Bankruptcy Conference

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

- 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganization

     September 19-20, 2012 | New York, N.Y.

October

- Nuts & Bolts for Young and New Practitioners - KC

     October 4, 2012 | Kansas City, Mo.

- Midwestern Bankruptcy Institute Program, Midwestern Consumer Forum

     October 5, 2012 | Kansas City, Mo.

- Bankruptcy 2012: Views from the Bench

     October 5, 2012 | Washington, D.C.

- Chicago Consumer Bankruptcy Conference

     October 8, 2012 | Chicago, Ill.

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

November

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.