Skip to main content

%1

Reverse-Mortgage Rule on Surviving Spouse Tossed by Judge

Submitted by webadmin on



ABI Bankruptcy Brief | October 1, 2013


 


  

October 1, 2013

 

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

REVERSE-MORTGAGE RULE ON SURVIVING SPOUSE TOSSED BY JUDGE

A rule of the U.S. Department of Housing and Urban Development governing repayments of reverse mortgages by surviving spouses conflicts with federal law, a U.S. District Judge has ruled, Bloomberg News reported yesterday. HUD erred "when it insured the reverse mortgages of plaintiffs' spouses pursuant to regulation, which permitted their loan obligations to come due upon their death regardless of whether their spouses were still alive," U.S. District Judge Ellen Huvelle said yesterday. The widowers who sued HUD cited a federal law that defers an obligation to pay off such loans until the homeowner's death and defines "homeowner" to include the surviving spouse. HUD rules make it more likely that a surviving spouse will end up in foreclosure, according to the suit, which was filed in 2011. The language HUD used when implementing the law states that the loan comes due "if a mortgagor dies and the property is not the principal residence of at least one surviving mortgagor." Read more.

COMMENTARY: OBAMA'S DETROIT BAILOUT

The White House announced on Friday a $320 million aid package for the bankrupt city of Detroit because of "exceptional" circumstances. According to an editorial in today's Wall Street Journal, the action creates a slippery slope, because other struggling cities will also want a financial infusion. The federal funds, which were cobbled together from programs including TARP and the Federal Emergency Management Agency, are supposedly intended to encourage private investment. The aid includes $150 million to remove blight and spur redevelopment; $30 million for public safety and to hire 150 firefighters; and $140 million to improve transportation. The administration is also offering its technical expertise to help overhaul the city's dysfunctional computer systems. Foundations such as Kresge, Ford, Knight and Skillman have already poured more than $70 million this year into initiatives to rebuild Detroit. Kresge alone has committed $35 million for the city's new street-car system and $150 million over five years to implement the Detroit Future City plan to revive downtrodden neighborhoods. Two weeks ago, NCB Capital Impact and Kresge announced a $30.25 million fund to support development along the street-car line. Read the full editorial. (Subscription required.)

CLOCK STARTS ON SEC'S CEO PAY DISCLOSURE RULE

The Securities and Exchange Commission is set to publish a rule requiring companies to disclose how much they pay their top executives, and has started the clock on a two-month comment period for the contentious proposal, The Hill reported yesterday. Unveiled earlier this month, the draft rule is required under the Dodd-Frank Wall Street reform law. The statute calls for regulations forcing companies to reveal the median income of rank-and-file employees and the salaries of chief executives. Firms would also be required to calculate the pay ratio reflecting the difference between the two figures. Proponents of the rule argue it would help shame companies that heap exorbitant salaries on their top officers and give lower-level employees more leverage to negotiate for higher pay. But business groups and banks warn that the cost of complying with the new regulations would be overly burdensome, with some estimates placing the price tag at $100 million for a single multinational firm. To allay those concerns, the draft regulations call for a flexible approach to calculating the figures, with firms able to choose from a series of alternative compliance options. Read more.

Click here to view the draft regulations.

COMMENTARY: TOO BIG TO BAIL APPEARS TO TAKE HOLD FOR BANKS

While there are currently many experts who share the view that taxpayers would have to bail out the world's largest banks if another financial crisis hit, that view may be flawed, at least judging by the behavior of the bond market and the behind-the-scenes work of policymakers, according to an analysis in today's Wall Street Journal. Five years after the painful discovery that some firms were "too big to fail," regulators and banks remain incapable of coping with teetering financial behemoths. Any hope of avoiding a repeat of the messy actions of 2008 rests on two premises: that there is a credible plan to take over a failing financial firm and that market participants understand that losses will fall on them and not taxpayers. In short, according to the commentary, investors have to believe that banks are "too big to bail." On the first point, the Federal Deposit Insurance Corp. believes it has a plan ready to go when the next big bank gets close to failure. The FDIC would take over the bank's holding company while trying to keep alive its operating subsidiaries -- the units that run its branches and its trading and wealth-management operations, etc. This variation on the "bad bank/good bank" split should have the advantage of staving off a potential run on the institution. Shareholders would be wiped out, creditors -- even those holding senior debt -- would sustain losses, and top executives probably would be fired. Read more. (Subscription required.)

NEWEST TITLE IN ABI'S BOOKSTORE EXAMINES ISSUES SURROUNDING STUDENT LOANS AND BANKRUPTCY

ABI's newest publication, Graduating with Debt: Student Loans under the Bankruptcy Code, tackles issues surrounding bankruptcy and student loan debt. Student loan debt in the U.S. exceeds $1.1 trillion -- more than any other type of consumer debt except for mortgage loans -- while new education lending continues at an explosive pace. Profs. Daniel A. Austin of Northeastern University (Boston) and Susan E. Hauser of North Carolina Central University School of Law (Durham, N.C.) authored the book with both borrowers and creditors in mind to introduce readers to the basics of student loan debt, including different types of loans and loan-forgiveness programs, delinquency and default, and administrative and nonjudicial remedies for borrowers having trouble repaying their loans. Graduating with Debt covers Bankruptcy Code provisions governing student loans, relevant case law and judicial precedent in all federal circuits, local practices and policies, partial discharge of student loan debt, and specialized treatment of student loan debt in chapter 13. The soft-cover, 250-page book also includes extensive appendices replete with sample pleading and discovery forms. To receive special ABI member pricing, be sure to log in to the ABI Bookstore when pre-ordering.

TOMORROW! ABI'S UNSECURED TRADE CREDITORS COMMITTEE INVITES YOU TO A DISCUSSION ABOUT CLAIM-TRANSFER TRANSACTIONS

Members are encouraged to join ABI's Unsecured Trade Creditors' Committee in a discussion tomorrow at 4 p.m. ET about considerations that arise out of claim-transfer transactions. Bankruptcy claim transfers are an active part of the bankruptcy process in today's marketplace, and for this reason, the Judicial Conference of the United States imposed a new fee on each transfer, effective May 1, 2013. The moderator for the call, Neil B. Glassman of Bayard, P.A. (Wilmington, Del.), will lead a discussion focusing on the steps in a claim-sale transaction, standard provisions in the transaction documents, developments in the industry, and tricks and traps creditors' counsel can avoid. If you would like to participate on the free committee call, please contact Martha Cannon at mcannon@abiworld.org.

THURSDAY! ABILIVE WEBINAR LOOKS AT THE INTERSECTION OF INTELLECTUAL PROPERTY AND BANKRUPTCY: KODAK, NORTEL AND OTHER CASES

IP experts will shed light on the mysteries of understanding IP law and navigating the often puzzling sales processes, drawing from their experiences in Nortel, Kodak and other important cases, in an abiLIVE webinar on Oct. 3 from 1:00-2:15 p.m. ET. Speakers will include David Berten (Global IP Law Group, LLC; Chicago), Pauline K. Morgan (Young Conaway Stargatt & Taylor, LLP; Wilmington, Del.), Cassandra M. Porter (Lowenstein Sandler LLP; Roseland, N.J.), Kelly Beaudin Stapleton (Alvarez & Marsal; New York) and Christopher Burton Wick (Hahn Loeser & Parks LLP; Cleveland). To register, click here.

ABI LAW REVIEW/ST. JOHN'S SYMPOSIUM ON FRIDAY TO EXAMINE HEDGE FUNDS IN BANKRUPTCY- FREE PROGRAM!

ABI Law Review and St. John's School of Law Center for Bankruptcy Studies invite members to attend the Fall 2013 "Hedge Funds in Bankruptcy" Symposium on Oct. 4 The free program will be held at St. John's School of Law in Queens, N.Y., from 9 a.m. to 2:30 p.m. ET. Distinguished scholars and professionals in the hedge fund and bankruptcy fields will discuss the growing role that hedge funds now play in the bankruptcy process and to assess the desirability of maintaining, expanding, limiting, or otherwise changing this role by means of changes in bankruptcy law, policy or practice. While there is no fee to attend the symposium, advance registration is required. To register, please complete and submit the online registration form.


FIRST ABI WORKSHOP PROGRAM LOOKS AT RISKY TIMES FOR SECURED LENDERS AND SERVICERS! 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.

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: HOPE V. ACORN FINANCIAL INC. (11TH CIR.)

Summarized by Paul Avron of Berger Singerman PA

A chapter 13 trustee who, depsite having actual knowledge that a secured creditor's lien was unperfected as of the date the debtor filed the bankruptcy case, and who affirmatively recommended confirmation of the debtor's chapter 13 plan which treated the creditor as secured, is bound by the order confirming the plan and cannot thereafter bring suit against the creditor to avoid its lien.

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: FORECLOSURE CRISIS UPDATE

The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent blog post examines the trends and developments that have emerged over the course of the past six years since the foreclosure crisis began.

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.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

  

 

THIS WEEK:

 

 

MW2013

Register Today!

 

 

 

MW2013

Register Today!

 

 

 

COMING UP

 

 

 

Mid-Level PDP 2013

Register Today!

 

 

 

Detroit

Register Today!

 

 

 

Detroit

Register Today!

 

 

 

CFRP13

Register Today!

 

 

 

CFRP13

Register Today!

 

 

 

CRC13

Register Today!

 

 

 

ACBPIA13

Register Today!

 

 

 

Detroit

Register Today!

 

 

 

Delaware

Register Today!

 

 

 

WLC

Register Today!

 

 

 

40-Hour Mediation Program

Register Today!

 

 

 

Western Consumer Bankruptcy Conference

Register Today!

 

 

 

 

19th Annual Rocky Mountain Bankruptcy Conference and Rocky Mountain Consumer Workshop

Jan. 23-24, 2014


Register Today!

 

   
  CALENDAR OF EVENTS
 

2013

October

- abiLIVE Webinar: The Intersection of Intellectual Property and Bankruptcy: Kodak, Nortel and Other Cases

     Oct. 3, 2013

- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum

    Oct. 4, 2013 | Kansas City, Mo.

- Professional Development Program

    Oct. 11, 2013 | New York, N.Y.

- Chicago Consumer Bankruptcy Conference

    Oct. 14, 2013 | Chicago, Ill.

- International Insolvency & Restructuring Symposium

    Oct. 25, 2013 | Berlin, Germany

November

- 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.

- Austin Advanced Consumer Bankruptcy Practice Institute

   Nov. 10-12, 2013 | Austin, Texas

  






- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

- Delaware Views from the Bench

   Nov. 25, 2013 | Wilmington, Del.

December

- Winter Leadership Conference

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

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York

January

- Western Consumer Bankruptcy Conference

    Jan. 20, 2014 | Las Vegas, Nev.

- Rocky Mountain Bankruptcy Conference

    Jan. 23-24, 2014 | Denver, Colo.


 
 

ABI BookstoreABI Endowment Fund ABI Endowment Fund
 


Bankrupt Stockton Plan Favors Retirees over Creditors

Submitted by webadmin on

Stockton, Calif., unveiled its plan to exit bankruptcy by raising taxes and paying some creditors less than they are owed while maintaining its pension obligations to city employees, Bloomberg News reported on Saturday. Under the proposed plan of adjustment posted yesterday on Stockton’s website, bondholder Franklin Resources Inc. would have the option of settling with the city or taking control of a park and two golf courses that were pledged as collateral for $35.1 million the company is owed. The city says that it can only pay $500,000 of the $2.9 million it owes every year on the bonds. Stockton has “the outlines of a negotiated settlement” with creditor Assured Guaranty Corp., which insured $164.7 million in bonds that the city has said in the past it cannot fully repay.

SEC Official Says Public Pension Disclosures Remain Under Scrutiny

Submitted by webadmin on

A top SEC official said yesterday that the U.S. Securities and Exchange Commission's scrutiny of public pension liabilities will not let up any time soon, Reuters reported yesterday. Pension disclosure will be "a continuing and very significant theme of the SEC," said John Cross, head of the SEC's Office of Municipal Securities. The SEC has cracked down on pension and disclosure problems, hitting Illinois in March with charges for not adequately informing investors about the liabilities. The SEC had brought similar charges against New Jersey in 2010. Both states settled the charges without admitting or denying them. The SEC has also caught Harrisburg, Pa., and Miami in its regulatory net for allegedly making misleading statements and omissions in bond documents. The Pew Center on the States has reported that bigger cities faced a collective pension liability of $217 billion in fiscal 2009, while states had a shortfall of $757 billion for retiree pensions in fiscal 2010.

White House to Help Bankrupt Detroit Demolish Buildings Hire Firefighters

Submitted by webadmin on

The White House will send a group of top officials to Detroit today to offer millions in assistance for knocking down empty buildings, hiring firefighters and adding buses to the city fleet, Reuters reported today. The federal aid has been tapped from a variety of existing programs and is part of a patchwork of grants complementing investments by the city, state and private foundations. "We're going to continue to support the efforts under way in Detroit and ensure the federal government is an active partner in supporting the revitalization of the city," said Gene Sperling, director of the White House National Economic Council, who has led federal discussions with Detroit on how best to help. Sperling and cabinet officials will discuss the plan at a meeting with Michigan Governor Rick Snyder, Detroit Mayor Dave Bing, the city's emergency manager Kevyn Orr, members of the Michigan congressional delegation and other leaders. The plan includes about $150 million to tear down dilapidated properties and revitalize blighted neighborhoods. Some of those funds will come from the federal government, with other funds coming from the city, state, businesses and the Ford, Kresge and Skillman foundations.

Detroit Eyes Freezing Pensions Probes Citys Financial Dysfunction

Submitted by webadmin on

Detroit's emergency manager proposed freezing pension benefits for some current city workers starting in 2014 and will launch a two-month probe into the city's dysfunctional and error-prone handling of employee benefits, Reuters reported yesterday. A copy of Kevyn Orr's proposal was released by one of Detroit's two pension boards yesterday, the same day the city's auditors posted a report that shed light on how Detroit overpaid benefits, including unemployment compensation for almost two years to 58 people who never worked for the city. The report also raised the question of whether there was fraud in doling out some unemployment claims. The auditors' review of nearly two years of unemployment compensation claims found that 13 percent were likely fraudulent and another 36 percent were highly questionable and required investigation. In his pension proposal, Orr would close the general retirement fund, which represents non-uniform city workers, to all future city workers and freeze it for current workers as of Dec. 31. The city would replace the pensions with 401(a) and 457(b) retirement plans.

Detroit Spent Billions Extra on Pensions

Submitted by webadmin on

Detroit’s municipal pension fund made payments for decades to retirees, active workers and others above and beyond normal benefits, costing the struggling city billions of dollars and helping push it into bankruptcy, the New York Times DealBook blog reported yesterday. The payments, which were not publicly disclosed, included bonuses to retirees, supplements to workers not yet retired and cash to the families of workers who died before becoming eligible to collect a pension, according to reports by an outside actuary and other people with knowledge of the matter. Available records suggest that the trustees approving the payments did not discriminate; nearly everybody in the plan received them. Most of the trustees on Detroit’s two pension boards represent organized labor, and for years they could outvote anyone who challenged the payments. Since June, Detroit’s auditor general and inspector general have been examining the pension system for possible fraud or malfeasance, and their report is expected to be released today.

Bankrupt Stockton to Unveil Adjustment Plan on Friday

Submitted by webadmin on

The bankrupt city of Stockton, Calif., will present a draft plan on Friday to adjust its debt while it keeps negotiating with bondholders, a lawyer for the city told Reuters on Tuesday. Stockton's city council will review the draft next week and a final version could be filed with the bankruptcy court on or shortly after Oct. 4, marking a milestone in the city's efforts to put its finances in order, attorney Marc Levinson said. Levinson later told Bankruptcy Judge Christopher Klein during a hearing on Stockton's chapter 9 municipal bankruptcy case that it was not clear whether agreements with bondholders would be part of the plan. But Levinson added he was hopeful ongoing confidential talks with Stockton's capital markets creditors will lead to agreements with them.

Detroit Accident Victim Not Exempt from Stay on Lawsuits Bankruptcy Judge Rules

Submitted by webadmin on

Bankruptcy Judge Steven Rhodes denied a request by a car accident victim who wanted his case against the city to move forward despite an automatic stay that affects lawsuits while Detroit is under chapter 9 protection, the Detroit Free Press reported today. Michael Beydoun filed a motion Aug. 8 seeking relief from the stay for his judgment. He won a $2-million award in his lawsuit that the city appealed. The matter is pending before the Michigan Supreme Court. On Sept. 10, Beydoun’s lawyer argued that the city acted in bad faith by filing for bankruptcy to avoid paying the judgment award. Jeffrey Ellman, a lawyer for the city, said the totality of the city’s debts and not any one issue drove the city to file for bankruptcy. The city also argued that “allowing the continuation of actions such as this would undermine the protections of the automatic stay and jeopardize the city’s efforts to restructure.”

Commentary Is Richmond Calif.s Mortgage Seizure Scheme Even Legal

Submitted by webadmin on



ABI Bankruptcy Brief | September 24, 2013


 


  

September 24, 2013

 

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

COMMENTARY: IS RICHMOND, CALIF.'S MORTGAGE SEIZURE SCHEME EVEN LEGAL?

The possibility of using eminent domain to reduce underwater mortgage debt in the city of Richmond, Calif., survived several tough challenges a week ago, according to a Washington Post commentary on Sunday. The Richmond City Council decided to go ahead with the process after a long hearing that could have possibly derailed it. Meanwhile an attempt by Wells Fargo and Deutsche Bank to have the action shut down even before it properly started was tossed out by a U.S. district court. The arguments will now proceed to the two parts of eminent domain law: demonstrating public purpose for the takings and offering fair value. If the case succeeds, according to the commentary, it is likely that other cities that have been hesitant to adopt the tactic will consider moving forward. The biggest remaining worry, according to the commentary, is whether or not this proposal will permanently harm the ability of people in Richmond to obtain new mortgages. One of the main arguments from the banks is that the housing market is recovering at a rapid clip, and if this process scares off lenders, then it could hurt both future homeowners and the fragile economic recovery. Read more.

ANALYSIS: RETHINKING FANNIE, FREDDIE -- AND THE 30-YEAR MORTGAGE

While Congress debates how to replace Fannie Mae and Freddie Mac, an additional question has surfaced as to whether all Americans should continue to have relatively easy access to the pre-payable, 30-year, fixed-rate mortgage, the Wall Street Journal reported yesterday. The 30-year mortgage provides payments that are stable for the life of the loan, which makes finances easier to manage. In many other countries, homes are financed with adjustable-rate mortgages, where payments rise and fall with prevailing interest rates. The government plays an unusually large role in the U.S. mortgage market because banks don't like holding 30-year mortgages. During the 1980s, many savings-and-loan associations failed when rates jumped because the interest they had to pay to depositors soared above the payments they received on those 30-year mortgages (known as "interest-rate risk"). While Fannie and Freddie take on the risk by buying the mortgages from lenders, package them into securities and sell those to investors, they also promise to make investors whole when mortgages default. Those who want the government out of the mortgage business say the 30-year fixed isn't all it's cracked up to be. Because borrowers pay a lot of interest during the first few years of the loan, it's hard to build equity quickly. Defenders, however, say it's the wrong time to push more people into adjustable-rate loans because interest rates are likely to increase over the coming decade. Read more. (Subscription required.)

STRUGGLING SAN JOSE TESTS A WAY TO CUT BENEFITS

San Jose, the third-largest city in California, now spends one-fifth of its $1.1 billion general fund on pensions and retiree health care, and the amount keeps rising, the New York Times reported today. To free up the money, services have been cut, libraries and community centers closed, the number of city workers trimmed, salaries reduced, and new facilities left unused for lack of staff. From potholes to home burglaries, the city's problems are growing. The situation in San Jose is not anywhere near as dire as it is in Detroit or two other California cities, Stockton and San Bernardino, which are already in bankruptcy. But government officials and municipal bankruptcy experts across the country are watching San Jose closely because of a plan to reduce benefits, which was drafted by Mayor Chuck Reed (D) and passed by 70 percent of voters in a referendum last year. The plan is being opposed in court by unions that say that it is illegal under state law. It would introduce a second tier for new city employees involving much lower pension and health benefits. It would also alter pension benefits for existing workers, allowing them to choose either a similar, second-tier benefits plan or to pay significantly more out of their own pockets for the benefits they have come to expect. Read more.

SOME SMALLER BANKS STILL OWE TARP MONEY

Five years after the financial crisis, 113 small to midsize U.S. banks still owe taxpayers about $2.7 billion, turning what was supposed to be a short-term government lifeline into a long-term source of capital, the Wall Street Journal reported today. The banks, which received funds through the Troubled Asset Relief Program (TARP), pose a challenge for the Treasury Department, which is eager to get rid of its financial stakes but is finding many of the banks too weak to forgo government capital. Repaying the government is about to get harder, as quarterly dividend payments owed to the Treasury are set to nearly double to 9 percent. The institutions left in TARP highlight an incongruity in the banking sector: While much of the industry has returned to health, some smaller banks -- particularly those with heavy exposure to commercial real estate loans -- still are clawing their way back. Many of the banks are so weak that they have been unable to make required dividend or interest payments to the government: Seventy-nine of the remaining banks are behind, owing about $217 million to the government, according to the Treasury. Of those, 63 have missed 10 or more payments, which can be a harbinger of trouble: Anchor BanCorp Wisconsin Inc., which had a $110 million TARP infusion, missed at least 17 payments before filing for bankruptcy in August, wiping out the taxpayers' shares in the bank. California's Saigon National Bank owes roughly $1.5 million, plus an additional $390,000 in missed dividend payments. It has missed 18 of those payments, more than any other bank in the program. Read more. (Subscription required.)

ABI'S UNSECURED TRADE CREDITORS COMMITTEE INVITES YOU TO TAKE PART IN ITS OCT. 2 DISCUSSION: CONSIDERATIONS ARISING OUT OF CLAIM-TRANSFER TRANSACTIONS

Members are encouraged to join ABI's Unsecured Trade Creditors' Committee in a discussion on Oct. 2 at 4 p.m. ET about considerations that arise out of claim-transfer transactions. Bankruptcy claim transfers are an active part of the bankruptcy process in today's marketplace, and for this reason, the Judicial Conference of the United States imposed a new fee on each transfer, effective May 1, 2013. The moderator for the call, Neil B. Glassman of Bayard, P.A. (Wilmington, Del.), will lead a discussion focusing on the steps in a claim-sale transaction, standard provisions in the transaction documents, developments in the industry, and tricks and traps creditors' counsel can avoid. If you would like to participate on the committee call, please contact Martha Cannon at mcannon@abiworld.org.

ABILIVE WEBINAR NEXT WEEK LOOKS AT THE INTERSECTION OF INTELLECTUAL PROPERTY AND BANKRUPTCY: KODAK, NORTEL AND OTHER CASES

IP experts will shed light on the mysteries of understanding IP law and navigating the often puzzling sales processes, drawing from their experiences in Nortel, Kodak and other important cases, in an abiLIVE webinar on Oct. 3 from 1:00-2:15 p.m. ET. Speakers will include David Berten (Global IP Law Group, LLC; Chicago), Pauline K. Morgan (Young Conaway Stargatt & Taylor, LLP; Wilmington, Del.), Cassandra M. Porter (Lowenstein Sandler LLP; Roseland, N.J.), Kelly Beaudin Stapleton (Alvarez & Marsal; New York) and Christopher Burton Wick (Hahn Loeser & Parks LLP; Cleveland). To register, click here.


FIRST ABI WORKSHOP PROGRAM LOOKS AT RISKY TIMES FOR SECURED LENDERS AND SERVICERS! 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.

RECORDING AVAILABLE OF THE ABILIVE WEBINAR EXAMINING THE NEW U.S. TRUSTEE FEE GUIDELINES!

If you were not able to join ABI's recent well-attended abiLIVE webinar examining the U.S. Trustee Fee Guidelines for chapter 11 cases filed on or after Nov. 1, a recording of the program is now available for downloading! A panel of experts, including Clifford J. White, the director of the U.S. Trustee Program, discussed some of the ways the new guidelines could change day-to-day operations in firms, issues relating to the new market rate benchmarks, and how these changes might alter insolvency practice. The 90-minute recording is available for the special ABI member price of $75 and can be purchased 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: BANK OF AMERICA, N.A. V. ARMSTRONG (IN RE ARMSTRONG; 8TH CIR.)

Summarized by Bruce Weiner of Rosenberg, Musso & Weiner

The Eighth Circuit BAP affirmed the bankruptcy court's ruling that the debt owed by the debtor to Bank of America was nondischargeable under § 523(a)(4). The debtor received insurance checks payable to his business and the mortgage-holder on the property owned by the business. The debtor used almost all the money for personal expenses instead of repairs or paying it to the mortgage-holder. Bank of America succeeded the rights of the mortgage-holder. Because the mortgage-holder was a loss payee on the policy, it was the owner of the insurance proceeds, and therefore when the debtor failed to remit the funds or even inform the mortgage-holder about the funds, he knowingly took funds that he knew belonged to the mortgage-holder. The debtor was not lawfully entitled to use the funds, and therefore the obligation of the debtor to Bank of America was nondischargeable under § 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: BANKRUPTCY COURT DECIDES IRS FORM 1099-C CONSTITUTES ADMISSION THAT BANK CANCELLED CLAIM

The Bankruptcy Blog Exchange is a free ABI service that tracks more than 80 bankruptcy-related blogs. A recent blog post examines a decision from the U.S. Bankruptcy Court for the Eastern District of Tennessee that highlights the interplay between bankruptcy and tax issues. In In re Reed, Judge Richard Stair, Jr. held that an Internal Revenue Service "Cancellation of Debt" Form 1099-C delivered by a bank to a debtor, who as a result of which reported cancellation-of-debt income, constituted an admission by the bank that its claim had been cancelled. The court emphasized that the issuance of Form 1099-C itself did not discharge the debt. Rather, the issuance of the form "reflects" the discharge or cancellation of the debt.

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

Success fees for financial advisors should be prohibited.

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.

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

  

 

FRIDAY:

 

 

VFB2013

Register Today!

 

 

COMING UP

 

 

MW2013

Register Today!

 

 

 

MW2013

Register Today!

 

 

 

Mid-Level PDP 2013

Register Today!

 

 

 

Detroit

Register Today!

 

 

 

Detroit

Register Today!

 

 

 

CFRP13

Register Today!

 

 

 

CFRP13

Register Today!

 

 

 

CRC13

Register Today!

 

 

 

ACBPIA13

Register Today!

 

 

 

Detroit

Register Today!

 

 

 

Delaware

Register Today!

 

 

 

WLC

Register Today!

 

 

 

40-Hour Mediation Program

Register Today!

 

   
  CALENDAR OF EVENTS
 

2013

September

- Bankruptcy 2013: Views from the Bench

    Sept. 27, 2013 | Washington, D.C.

October

- abiLIVE Webinar: The Intersection of Intellectual Property and Bankruptcy: Kodak, Nortel and Other Cases

     Oct. 3, 2013

- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum

    Oct. 4, 2013 | Kansas City, Mo.

- Professional Development Program

    Oct. 11, 2013 | New York, N.Y.

- Chicago Consumer Bankruptcy Conference

    Oct. 14, 2013 | Chicago, Ill.

- International Insolvency & Restructuring Symposium

    Oct. 25, 2013 | Berlin, Germany

November

- 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.

- Austin Advanced Consumer Bankruptcy Practice Institute

   Nov. 10-12, 2013 | Austin, Texas

- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

- Delaware Views from the Bench

   Nov. 25, 2013 | Wilmington, Del.

December

- Winter Leadership Conference

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

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York


 
 

ABI BookstoreABI Endowment Fund ABI Endowment Fund
 


Bankruptcy Judge Delays Hearing on Detroit Swaps Deal

Submitted by webadmin on

Bankruptcy Judge Steven Rhodes granted a motion by Detroit to delay a hearing on a controversial deal between the city and banks aimed at ending interest-rate swap agreements, Reuters reported yesterday. In his order, Judge Rhodes said that the hearing that had been slated to start on Tuesday will be adjourned to a date to be determined. The ruling came after Detroit earlier yesterday requested the court give it additional time to negotiate with bond insurers, retirees, pension funds and some bond holders who objected to the city's deal with swaps counterparties Merrill Lynch Capital Services and UBS AG. The city aims to end the swaps at a discount and free up casino tax revenue used as collateral for the swap agreements. The city could use casino revenue, which totals as much as $180 million a year, in debtor-in-possession financing that would enable Detroit to settle with swaps counterparties and provide more funds toward the city’s financial recovery.
http://www.reuters.com/article/2013/09/23/usa-detroit-swaps-idUSL2N0HJ1…

In related news, Bankruptcy Judge Steven Rhodes scheduled a hearing for Oct. 2 to consider the NAACP’s argument that its ongoing challenge to the state’s emergency manager law should be allowed to proceed outside of bankruptcy court, the Detroit Free Press reported today. The Michigan and Detroit chapters of the NAACP joined with Donnell White, Thomas Stallworth III, Rashida Tlaib and Maureen Taylor to file a lawsuit in May seeking to overturn the emergency manager law as unconstitutional because it infringes on voter rights. Their lawsuit, filed in May in the U.S. Eastern District Court of Michigan, was immediately delayed by Detroit’s bankruptcy case. The plaintiffs told Judge Rhodes that their lawsuit should be allowed to proceed because they are “not seeking any damages, contractual claims or similar related relief that would implicate the city’s finances.”
http://www.freep.com/article/20130923/NEWS01/309230078/NAACP-Kevyn-Orr-…