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U.S. FORECLOSURE FILINGS DOWN 10 PERCENT IN JULY



Market researcher RealtyTrac reported that the number of U.S. properties with foreclosure filings slipped 10 percent in July from a year earlier, the Wall Street Journal reported today. There were 191,925 U.S. properties with default notices, scheduled auctions and bank repossessions in July, a 3 percent decrease from the prior month. One in every 686 U.S. housing units had a foreclosure filing last month, RealtyTrac reported. U.S. foreclosure activity has now decreased on a year-over-year basis for 22 consecutive months, according to the report. The latest month's decline was driven primarily by a 21 percent decline in bank repossessions from a year earlier. Properties starting the foreclosure process increased on an annual basis for the third straight month in July, rising 6 percent last month. Foreclosure starts rose on a year-over-year basis in 27 states. Read more. (Subscription required.)

CONSUMERS CUT BACK ON CREDIT CARD USE IN JUNE, BUT OVERALL BORROWING CONTINUES TO RISE



Americans cut back on credit card use in June, a sign that high sustained unemployment and slow growth have made some more cautious about spending, the Associated Press reported yesterday. Still, total consumer borrowing increased as many took on loans to buy cars and attend school. Consumer borrowing rose by $6.5 billion from May to June totaling $2.58 trillion, the Federal Reserve said on Tuesday. Auto and student loans rose by $10.2 billion to $1.71 trillion in June. Credit card debt fell $3.7 billion to $865 billion. Household debt, including mortgages and home equity lines of credit, has declined for 16 straight quarters to $12.9 trillion in March, according to the Fed. That is down from $13.8 trillion in March 2008. Read more.

REPORT: WEAK CREDIT QUALITY OF U.S. CITIES IS BIGGER CONCERN THAN BANKRUPTCIES



Morgan Stanley's municipal debt strategists said on Tuesday that weaker local credit quality should be a greater concern for municipal debt investors than chapter 9 filings, Reuters reported on Wednesday. "Our updated case study analysis of recent chapter 9 filings affirms that bankruptcies may pick up somewhat, but the ongoing deterioration of local credit quality is a more relevant systemic risk," Morgan Stanley Research's Michael Zezas and Meghan Robson said in a report. The researchers said that chapter 9 filings and municipalities flirting with bankruptcy are "likely to remain modest and idiosyncratic." Even so they urged scrutinizing state and local credits, adding that they favor enterprise revenue debt over general obligation bonds. Read more.

ANALYSIS: UPPER-MIDDLE-INCOME HOUSEHOLDS SEE BIGGEST JUMPS IN STUDENT LOAN BURDEN



According to a Wall Street Journal analysis of recently released Federal Reserve data, households with annual incomes of $94,535 to $205,335 saw the biggest jump in the percentage of households with student-loan debt from 2007-10, the latest figures available. The Journal's analysis defined upper-middle-income households as those with annual incomes between the 80th and 95th percentiles of all households nationwide. Among this group, 25.6 percent had student loan debt in 2010, up from 19.5 percent in 2007. For all households, the portion with student loan debt rose to 19.1 percent in 2010 from 15.2 percent in 2007. The amount borrowed by upper-middle-income families, meanwhile, has soared. They owed an average of $32,869 in college loans in 2010, up from $26,639 in 2007, after adjusting for inflation, according to the Journal's analysis. Read more. (Subscription required.)

ANALYSIS: RECESSION GENERATION OPTS TO RENT – NOT BUY – BIG TICKET ITEMS



Confronting a jobless rate above 8 percent since 2009 and student-loan debt hitting about $1 trillion, 20-to-34-year-olds are renting apartments, cars and even clothing to save money and stay flexible, Bloomberg News reported yesterday. As the Great Depression shaped the attitudes of a generation from 1929 until the early years of World War II, so have the financial crisis and its aftermath affected the outlook of young consumers, said Cliff Zukin, a professor of public policy and political science at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. College graduates earned less coming out of the recession, according to a May study by the John J. Heldrich Center for Workforce Development at Rutgers. Those graduating during 2009-11 earned a median salary in their starting job $3,000 less than the $30,000 seen in 2007. The majority of students owed $20,000 to pay off their education, and 40 percent of the 444 college graduates surveyed said their loan debt is causing them to delay major purchases such as a house or a car. Read more.

LAX BANKING LAW OBSCURED MONEY FLOW IN STANDARD CHARTERED'S MONEY LAUNDERING CASE



The list of global banks that have been accused in recent years of laundering foreign transactions totaling billions of dollars has been growing — Credit Suisse, Lloyds, Barclays, ING, HSBC — and now Standard Chartered, the New York Times reported today. The details in each case are different, with the international banks suspected of using their American subsidiaries to process tainted money for clients that included Iran, Cuba, North Korea, sponsors of terrorist groups and drug cartels. What the cases have in common is that the accused banks took advantage of a law that was not changed until 2008 and that allowed banks to disguise client identities and move their money offshore. The cases, including one filed this week by New York’s banking regulator against Standard Chartered, also cast a harsh light on just how much activity with Iran was permitted in the years leading up to 2008 and whether the practices had violated the spirit, if not the letter, of the law. Foreign banks until 2008 were allowed to transfer money for Iranian clients through their American subsidiaries to a separate offshore institution. In these so-called U-turn transactions, the banks could provide scant information about the client to their American units as long as they stated they had thoroughly vetted the transactions for suspicious activity. Read more.

LATEST ABI PODCAST EXPLORES HEALTH CARE INSOLVENCIES



ABI Executive Director Samuel J. Gerdano talks with Leslie A. Berkoff of Moritt Hock & Hamroff LLP and Robert A. Guy, Jr. of Frost Brown Todd LLC, the lead editors of ABI's Health Care Insolvency Manual, Third Edition. Berkoff and Guy discuss current issues surrounding health care insolvencies, the new health care law and the need to release this year’s new edition of the Health Care Insolvency Manual. To listen to the podcast, please click here.

For more information and to purchase ABI's Health Care Insolvency Manual, please click here.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: NATIONAL BANK OF ARKANSAS V. PANTHER MOUNTAIN LAND DEVELOPMENT, LLC (IN RE PANTHER MOUNTAIN LAND DEVELOPMENT, LLC; 8TH CIR.)



Summarized by Adam Ballinger of Lindquist & Vennum, PLLP

The Eighth Circuit ruled that the automatic stay does not apply to an action against a debtor's improvement districts formed under Arkansas law because the improvement districts are property of neither the debtor nor the debtors themselves. The doctrine of equitable laches does not apply because there is no showing of detrimental reliance of the debtor upon a party's failure to raise this particular challenge.

Nearly 600 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: SURVEY SHOWS EMPLOYEES USE INTERNAL CHANNELS FOR REPORTING MISCONDUCT



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. Amid concerns that the SEC whistleblower rules will encourage employees to bypass internal protocols and take allegations of misconduct directly to the Commission, a recent blog post reported on a survey by the nonprofit Ethics Resource Center that found that only one out of six employees ever reported misconduct to regulators or other outside channels.

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 Twombly/Iqbal rule for pleading ‘plausible’ claims has been applied too stringently in dismissing avoidance actions for failure to state a claim.

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

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



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

INSOL INTERNATIONAL



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

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September

- Complex Financial Restructuring Program

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

- Southwest Bankruptcy Conference

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

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

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

- 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.

- International Insolvency and Restructuring Symposium

     October 18, 2012 | Rome, Italy

November

- U.S./Mexico Restructuring Symposium

     November 7, 2012 | Mexico City, Mexico

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.