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SUPREME COURT TAKES CASE THAT WILL DIRECTLY IMPACT CFPB, FDIC



The Consumer Financial Protection Bureau – which oversees regulations for mortgages and other credit products – and a major bank regulator will be closely watching the Supreme Court this fall, Marketwatch.com reported on Tuesday. The Supreme Court on Monday decided to hear Noel Canning v. NLRB about whether the White House recess appointments for the labor board violated the Constitution. The Court's decision on the case will also impact the appointment of Richard Cordray, who directs the CFPB, since he was installed at the bureau in the same controversial way as the NLRB nominees. All this means that the consumer bureau’s existing rules for mortgages and future rules could be in doubt. Without Cordray, the bureau won’t be able to write or enforce rules on many mortgage lenders, payday lenders, credit-reporting bureaus and debt collectors. However, it could still enforce existing consumer laws on many banks and credit card companies. Cordray is also a Democratic member of the five-person bipartisan Federal Deposit Insurance Corp. A decision by the court to invalidate the NLRB nominations could also impact the validity of any big bank capital rules that Cordray votes to approve as a member of the bank regulator. The D.C. Circuit ruled in January that President Obama lacked the power to make recess appointments without Senate consent. The NLRB appealed that ruling in March. The litigation battle comes after Cordray and the NLRB board nominees cannot win the 60 votes needed to be approved by the Senate over the past couple of years. Read more.

SURVEY: LAWYER FEES INCREASED LAST YEAR



Legal fees rose 10 percent from 2010 to 2012 and increased 4.8 percent last year, according to a survey by Tymetrix and CEB, which looked at billing information from more than 4,800 law firms and 99,000 lawyers, Bloomberg News reported yesterday. Finance and securities rates increased the most last year, at 5.8 percent, while general corporate, intellectual property, and mergers and acquisitions had increases of 4 percent and 5 percent on average, according to the survey. The largest law firms and those in the most expensive U.S. cities had the greatest increases. Large law firms increased their rates by 5.6 percent, on average two times the rate of firms with fewer than 100 lawyers, according to the survey. In New York City, Washington, D.C., Boston, Dallas, Los Angeles and Houston, increases were between 5 percent and 6 percent last year. Read more.

CONSUMER SPENDING IN U.S. REBOUNDS AS INCOMES INCREASE



Consumer spending in the U.S. rebounded in May following the largest drop in more than three years, a sign that the biggest part of the economy will largely affect growth this quarter, Bloomberg News reported today. Household purchases, which account for about 70 percent of the economy, rose 0.3 percent after a 0.3 percent decline the prior month that was the biggest since September 2009, Commerce Department figures showed today. Consumer purchases were trimmed to a 2.6 percent advance – still the fastest in two years – from the 3.4 percent gain estimated last month as Americans cut back on services from vacations to legal advice. The saving rate increased to 3.2 percent from 3 percent. At the same time, wages and salaries climbed 0.3 percent. Disposable income, or the money left over after taxes, increased 0.4 percent after adjusting for inflation, today’s report showed. Read more.

For more on personal consumption figures, be sure to visit the ABI Chart of the Day.

ANALYSIS: COST OF PUBLIC PROJECTS IS RISING, AND PAIN WILL BE FELT FOR YEARS



Interest rates have been inching up everywhere, sending America’s vast market for municipal bonds, a crucial source of financing for roads, bridges, schools and more, into its steepest decline since the dark days of the financial crisis in 2008, the New York Times DealBook blog reported today. For one state, Illinois, the higher interest rates will add up to $130 million over the next 25 years — and that is for just one new round of borrowing. All told, the interest burden of states and localities is likely to grow by many billions, sapping tax dollars that might otherwise have been spent on public services. Over the last few days, Georgia, Philadelphia, the Metropolitan Transportation Authority in New York and others have delayed sales of new bonds, citing the precipitous plunge in prices that is driving up interest rates. Illinois Governor Pat Quinn (D) attributed the extra cost to the state’s failure to shore up its finances, particularly its rickety pension system. Illinois has the lowest credit rating of any state, and as interest rates rise they tend to rise fastest for the weakest borrowers. Read more.

LATEST BLOOMBERG "BILL ON BANKRUPTCY" VIDEO: SUPREME COURT CASES WILL HAVE WIDE IMPACT



The two bankruptcy cases (Stephen Law v. Alfred Siegel and In re Bellingham Insurance Agency) going before the U.S. Supreme Court in the term beginning in October are the first topics of conversation on the video with Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle. Click here to watch.

NEW ABI LIVE WEBINAR ON JULY 15 WILL FOCUS ON THE § 1111(b) ELECTION, PLAN FEASIBILITY AND CRAMDOWN ISSUES



Utilizing a case study, ABI's panel of experts will explore issues surrounding a lender’s decision on whether or not to make an election under § 1111(b), plan feasibility and voting. The abiLIVE panel will also walk attendees through the necessary mathematical analyses used to analyze these issues. The webinar will take place on July 15 from 1-2:15 p.m. ET. Special ABI member rate available! Click here to register.

ABI GOLF TOUR UNDERWAY; NEXT STOP IS THE NORTHEAST BANKRUPTCY CONFERENCE ON JULY 12



The next stop for the ABI Golf Tour is the famed Newport National course in Newport, R.I., in conjunction with the Northeast Bankruptcy Conference on July 12. Final scoring to win the Great American Cup—sponsored by Great American Group—is based on your top three scores at seven scheduled ABI events, so play as many as you can before the tour wraps up at the Winter Leadership Conference in December. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! There's no charge to register or participate in the Tour.

ABI IN-DEPTH

NEW ABI "BANKRUPTCY IN DEPTH" ON-DEMAND CLE PROGRAM LOOKS AT PRINCIPLES OF PROPERTY OF THE ESTATE: DEMYSTIFYING EQUITABLE INTERESTS



In this 90-minute seminar, Profs. Andrew Kull of Boston University School of Law and Scott Pryor of Regent University School of Law provide an in-depth analysis of a legal principle that has become, in their words, "a long-lost area of the law": § 541 of the Bankruptcy Code. Seeking to demystify what is meant by "property of the estate" and, in particular, the distinction between legal or equitable interests of the debtor in property, Kull and Pryor describe the legal entanglements that ensue when legal title belongs to one person but the equitable title belongs to someone else. The cost of the seminar, which includes written materials and qualifies for 1.5 hours of CLE, is $95. To order or to learn more, click here.

ASSOCIATES: ABI'S NUTS & BOLTS ONLINE PROGRAMS HELP YOU HONE YOUR SKILLS WHILE SAVING ON CLE!



Associates looking to sharpen their bankruptcy knowledge should take advantage of ABI's special offer of combining general, business or consumer Nuts & Bolts online programs. Each program features an outstanding faculty of judges and practitioners explaining the fundamentals of bankruptcy, offering procedures and strategies tailored for both consumer and business attorneys. Click here to get the CLE you need at a great low price!

NEW CASE SUMMARY ON VOLO: GROUND IMPROVEMENT TECHNIQUES, INC. V. THE PLAN COMMITTEE (IN RE WASHINGTON GROUP INTERNATIONAL, INC.; 9TH CIR.)



Summarized by Jamie Edmonson of Venable LLP

The Ninth Circuit affirmed the ruling of the district court that § 502(b)(2) does not alter the liability of a nondebtor third party.

There are more than 900 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: SAYING GOODBYE TO FANNIE AND FREDDIE?

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post takes a closer look at the “Secondary Mortgage Market Reform and Taxpayer Protection Act of 2013,” introduced this week by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.). The bill proposes winding down Fannie Mae and Freddie Mac and replacing them with a new government agency called the Federal Mortgage Insurance Company (the “FMIC”).

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

Law firms should provide support for law student-staffed bankruptcy clinics for consumer debtors.

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

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- abiLIVE Webinar

     July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

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

August

- Mid-Atlantic Bankruptcy Workshop

    August 8-10, 2013 | Hershey, Pa.

- Southwest Bankruptcy Conference

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

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

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

    Sept. 18-19, 2013 | New York

- Bankruptcy 2013: Views from the Bench

    Sept. 27, 2013 | Washington, D.C.

October

- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum

    Oct. 4, 2013 | Kansas City, Mo.

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

- Chicago Consumer Bankruptcy Conference

    Oct. 14, 2013 | Chicago, Ill.

November

- Austin Advanced Consumer Bankruptcy Practice Institute

   Nov. 10-12, 2013 | Austin, Texas

- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York

JUSTICE DEPARTMENT ISSUES NEW ATTORNEY FEE GUIDELINES
IN LARGE CHAPTER 11 CASES



The Department of Justice today announced new guidelines for the payment of attorneys’ fees and expenses in large chapter 11 cases in order to enhance disclosure and transparency in the compensation process and to help ensure that attorneys’ fees and expenses are based on actual market rates charged to other clients. The guidelines were originally issued in 1996 and are being updated in phases; the first phase, announced today, governs the USTP’s review of fees and expenses requested by attorneys in chapter 11 cases with $50 million or more in assets and $50 million or more in liabilities. Although the guidelines are not subject to the notice and comment process of the Administrative Procedure Act, the USTP nevertheless modified earlier drafts of the guidelines after two public comment periods and a public meeting. The new guidelines require a showing that the rates charged reflect market rates outside of bankruptcy. The guidelines also provide for the:

• use of budgets and staffing plans;

• disclosure of rate increases that occur during the representation;

• use of rates that are based on the attorney’s home office location;

• submission of billing records in an open, searchable electronic format;

• use of independent fee committees and fee examiners; and

• use of model forms and templates for applications for compensation and expenses.

The updated guidelines apply to attorneys’ fees and expenses in cases filed on or after Nov. 1, 2013, that meet the large-case threshold. Until the USTP adopts additional superseding guidelines over the next phases of revisions, the 1996 guidelines will continue in effect for the review of fee applications filed in larger chapter 11 cases by professionals who are not attorneys, as well as in all chapter 11 cases below the large-case threshold and in cases under other chapters of the Bankruptcy Code. Click here to read the guidelines.

FORMER ENERGY SECRETARY: EXPECT MORE GREEN ENERGY BANKRUPTCIES



Former Energy Secretary Steven Chu told the San Francisco Chronicle in an interview that more green energy companies that received government-backed loan guarantees will go bankrupt. “We’re going to have a few more bankruptcies,” Chu told the Chronicle when asked about the controversial Energy Department loan program. “Sometimes it’ll be like Solyndra where you get 3 cents on the dollar. Others, it’ll be 80 cents, or something like that.” The Energy Department’s green loan program came under fire after the high-profile bankruptcy of the solar company Solyndra in August 2011. The company received a $535 million loan guarantee, and the DOE has yet to recover any of those funds. However, Chu defended the loan program, saying that it was more successful than Wall Street. “This is not widely appreciated, but Congress, with the renewable energy loan program and the advanced [vehicle] manufacturing [program], they appropriated enough for $10 billion in losses,” Chu said. “We’re not going to get to $10 billion. We might get to $2 billion.” Solyndra was not the only green energy firm to go under. Beacon Power filed for bankruptcy in October 2011 after getting a $43 million loan guarantee from the DOE, as well as $29 million more from the federal government and the state of Pennsylvania. Abound Solar also went bankrupt, drawing down on $70 million of a $400 million federal loan. The DOE cut the company off in September 2011 after the Solyndra scandal took off. Read more. (Registration required.)

SEC REVIEWING GUILT-FREE SETTLEMENT POLICY



Mary Jo White, head of the Securities and Exchange Commission (SEC), is "actively reviewing" its policy of not requiring bad actors to admit guilt when settling charges, The Hill reported yesterday. White said yesterday that she was reviewing the agency's policy of allowing banks and others facing SEC charges of wrongdoing to settle those claims without admitting to any guilt, to ensure that the watchdog is "making full appropriate use of its leverage." SEC officials have defended the culpability-free policy in the past, but the agency has come under fire from members of both parties, who argue that putting charges to bed without getting any acknowledgment of wrongdoing is coming up short. In May, Sen. Elizabeth Warren (D-Mass.) wrote letters to several financial regulators, asking them to justify pursuing such settlements, as well as their resistance to taking banks to trial. Read more.

ANALYSIS: SOME BANKS HELPING TO DEFRAUD OLDER CONSUMERS



Federal authorities are concerned with the alarming frequency that reputable banks are involved in schemes that are defrauding older Americans of their money, the New York Times reported today. Despite spotting suspicious activity, Zions Bank and another regional bank that has drawn scrutiny, First Bank of Delaware, served as gateways between dubious Internet merchants and their marks — and made money for themselves in the process, according to newly unsealed court documents reviewed by the New York Times. Last November, First Delaware reached a $15 million settlement with the Justice Department after the bank was accused of allowing merchants to illegally debit accounts more than two million times and siphon more than $100 million. The problems at Zions and First Delaware, where the banks became financial conduits and quiet enablers for questionable businesses, extend well beyond those two institutions, federal authorities say. In all, Zions in effect let roughly $39 million be withdrawn from hundreds of thousands of accounts from 2007 to 2009. Indeed, banks across the country, from some of the largest to smaller regional players, help facilitate billions of dollars of fraud each year, according to interviews with consumer lawyers and state and federal prosecutors. Read more.

LATEST ABI PODCAST LOOKS AT ISSUES SURROUNDING CHIEF RESTRUCTURING OFFICERS



ABI Deputy Executive Director Amy Quackenboss talks with Christopher A. Ward and Melissa Hager, co-authors of a recent ABI publication, The Chief Restructuring Officer's Guide to Bankruptcy. Ward and Hager discuss the book and issues surrounding chief restructuring officers in bankruptcy proceedings. Click here to listen to the podcast.

To purchase The Chief Restructuring Officer's Guide to Bankruptcy from the ABI Bookstore, please click here.

NEW ABI LIVE WEBINAR ON JULY 15 WILL FOCUS ON THE § 1111(b) ELECTION, PLAN FEASIBILITY AND CRAMDOWN ISSUES



Utilizing a case study, ABI's panel of experts on July 15 will explore issues surrounding a lender’s decision on whether or not to make an election under § 1111(b), plan feasibility and voting. The abiLIVE panel will also walk attendees through the necessary mathematical analyses used to analyze these issues. The webinar will take place from 1-2:15 p.m. ET. Special ABI member rate available! Click here to register.

ABI GOLF TOUR UNDERWAY; NEXT STOP IS CENTRAL STATES BANKRUPTCY WORKSHOP ON THURSDAY



Rob Schwartz and Scott Gautier are tied at 34 Stableford Points atop the closely bunched leaderboard after the ABI Golf Tour's first stop at Lake Presidential Golf Club. Next up for the Tour is the famed Bear course at the Grand Traverse Resort at the Central States Bankruptcy Workshop on June 14. Final scoring to win the Great American Cup—sponsored by Great American Group—is based on your top three scores at seven scheduled ABI events, so play as many as you can before the tour wraps up at the Winter Leadership Conference in December. See the Tour page for details and course descriptions. The ABI Golf Tour combines networking with fun competition, as golfers "play their own ball." Including your handicap means everyone has an equal chance to compete for the glory of being crowned ABI's top golfer of 2013! There's no charge to register or participate in the Tour, and women are most welcome.

ABI IN-DEPTH

NEW ABI "BANKRUPTCY IN DEPTH" ON-DEMAND CLE PROGRAM LOOKS AT PRINCIPLES OF PROPERTY OF THE ESTATE: DEMYSTIFYING EQUITABLE INTERESTS



In this 90-minute seminar, Profs. Andrew Kull of Boston University School of Law and Scott Pryor of Regent University School of Law provide an in-depth analysis of a legal principle that has become, in their words, "a long-lost area of the law": § 541 of the Bankruptcy Code. Seeking to demystify what is meant by "property of the estate" and, in particular, the distinction between legal or equitable interests of the debtor in property, Kull and Pryor describe the legal entanglements that ensue when legal title belongs to one person but the equitable title belongs to someone else. The cost of the seminar, which includes written materials and qualifies for 1.5 hours of CLE, is $95. To order or to learn more, click here.

ASSOCIATES: ABI'S NUTS & BOLTS ONLINE PROGRAMS HELP YOU HONE YOUR SKILLS WHILE SAVING ON CLE!



Associates looking to sharpen their bankruptcy knowledge should take advantage of ABI's special offer of combining general, business or consumer Nuts & Bolts online programs. Each program features an outstanding faculty of judges and practitioners explaining the fundamentals of bankruptcy, offering procedures and strategies tailored for both consumer and business attorneys. Click here to get the CLE you need at a great low price!

NEW CASE SUMMARY ON VOLO: GODDARD V. HELDT (IN RE A. HELDT; 10TH CIR.)



Summarized by Lars Fuller of Baker & Hostetler LLP

The Tenth Circuit affirmed the rulings of the district and bankruptcy courts in dismissing a chapter 7 trustee's claim to avoid as fraudulent the debtors’ transfer of title to their sister in the mother's residence. The Tenth Circuit affirmed the lower court’s findings that the debtor's quitclaim to the sister of title had incidental value to the estate and thus was not avoidable as a fraudulent transfer.

There are more than 900 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: FURTHER EXAMINATION OF GE AND CITI'S SETTLEMENTS WITH FHFA

The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A new blog post takes a closer look at the reason behind GE and Citi's recent settlements with the Federal Housing Finance Agency (FHFA).

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

Law firms should provide support for law student-staffed bankruptcy clinics for consumer debtors.

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

INSOL INTERNATIONAL



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

Have a Twitter, Facebook or LinkedIn Account?

Join our networks to expand yours.

2013

June

- Central States Bankruptcy Workshop

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

- INSOL’s Latin American Regional Seminar

     June 13, 2013 | São Paulo, Brazil

- Charity Golf Tournament

     June 14, 2013 | City of Industry, Calif.

July

- Northeast Bankruptcy Conference and Northeast Consumer Forum

     July 11-14, 2013 | Newport, R.I.

- abiLIVE Webinar

     July 11-14, 2013 | Newport, R.I.

- Southeast Bankruptcy Workshop

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

August

- Mid-Atlantic Bankruptcy Workshop

    August 8-10, 2013 | Hershey, Pa.

- Southwest Bankruptcy Conference

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

September

- ABI Endowment Golf & Tennis Outing

    Sept. 10, 2013 | Maplewood, N.J.

- ABI Endowment Baseball Game

    Sept. 12, 2013 | Baltimore, Md.

- Bankruptcy 2013: Views from the Bench

    Sept. 27, 2013 | Washington, D.C.

October

- Midwestern Bankruptcy Institute Program and Midwestern Consumer Forum

    Oct. 4, 2013 | Kansas City, Mo.

- ABI Endowment Football Game

    Oct. 6, 2013 | Miami, Fla.

- Chicago Consumer Bankruptcy Conference

    Oct. 14, 2013 | Chicago, Ill.

November

- Detroit Consumer Bankruptcy Conference

   Nov. 11, 2013 | Detroit, Mich.

December

- ABI/St. John’s Bankruptcy Mediation Training

    Dec. 8-12, 2013 | New York