In an astonishing breakthrough in Constitutional jurisprudence, U.S. District Judge Royce Lambeth yesterday discovered that, if Congress uses either of two magic words "receivership" or "Conservatorship", it can authorize the U.S. Treasury to take over any company in America and extract all of its profits, past, present or future. without having to compensate the owners for a "taking" under the Fifth Amendment to the Constitution. 

Dismissing a lawsuit by several investors who held stock in Fannie Mae and/or Freddie Mac that was outstanding in July, 2008 when Congress passed the statute under which the Federal Housing Finance Authority launched its conservatorship of the GSEs in September 2008, Lambeth first construed the statute to bar all judicial review of actions taken by FHFA during the conservatorship. 

Those actions included FHFA entering into an agreement, years after the terms of the U.S. Treasury's financing support had first been agreed, to transfer all of the GSE's net worth in perpetuity into the U.S. Treasury's coffers.  The Judge further held that the impact of that depletion on the liquidation preference attendant upon the preferred shares held by plaintiffs was not "ripe" for judicial intervention, diplomatically side-stepping the question as to when something occurring in perpetuity would become ripe for review.

Necessary and Proper
(posted 2 hours 41 min ago)

“That ain’t right. Baby, that ain’t right at all.”
– Nat King Cole
Every now and then, an adversary makes an argument that you think just can’t possibly be right, but no authority exist to support what seems so obvious (presumably because nobody has been willing to litigate from such a position in the past). The debtor’s counsel in a recent case out of the United States Bankruptcy Court for the Northern District of Texas likely found himself in that exact situation when a creditor argued that the action it brought against the debtor had not violated the automatic stay. Though the bankruptcy case in which the creditor sued the debtor was not the debtor’s bankruptcy case, the creditor argued the action was nonetheless “kosher” under the Bankruptcy Code because the other case was pending before the same bankruptcy court. Come again?
Background

(posted 4 hours 47 min ago)

The complexity of the Volcker Rule means that it will be nearly impossible for banks to comply with its requirements within set time framesÂ--and regulators risk wasting a lot of time trying to enforce the unenforceable.

BankThink
(posted 5 hours 17 min ago)

Here at Shenwick & Associates, many of our clients are understandably concerned about how to protect their assets from creditors––especially their home. While there are limits on how much asset protection we can provide clients when presented with an immediate crisis (i.e. a foreclosure sale), with advance planning, there are several strategies debtors can use to protect their most valuable asset. Let's look at a few of these asset protection techniques and devices:

1. The homestead exemption. Most, but not all states provide a homestead exemption (for example, New Jersey has no state law homestead exemption, forcing debtors to use federal bankruptcy exemptions, which are currently $22,975 per debtor, to retain any equity in their home). On the other end of the protections spectrum are states like Texas and Florida, which place no limit on home equity that can be protected from creditors. In New York State, the homestead exemption varies by region of the state, but for downstate counties, the homestead exemption is $150,000 per debtor. While that's a significant amount, given the value of real estate in the New York metropolitan area, many homeowners have much more equity in their homes than can be protected under the homestead exemption.

Shenwick & Associates
(posted 6 hours 56 min ago)
Tactical Firearms

A bankrupt gun retailer and shooting range in suburban Houston that loudly filed for bankruptcy in June—blaming President Obama and bank executives on its sign in its front yard—could get an even bigger megaphone with a new reality television show.
Lawyers for Tactical Firearms, which filed for bankruptcy to stop foreclosure proceedings, said that the U.S. division of British production giant ITV Studios has approached manager Jeremy Alcede with a proposal to film the Katy, Texas-based shop’s operations, according to documents in U.S. Bankruptcy Court in Houston. It’s unclear whether the business, which employs about 30 people, would be paid for opening itself up to film crews.

WSJ.com: Bankruptcy Beat
(posted 6 hours 57 min ago)

As the industry turns to online-only banking and partnerships with third-party retail distributors, it's getting harder to use geographical boundaries to define the communities that banks serve. That's why the CRA needs an update.

BankThink
(posted 7 hours 17 min ago)

  According to Joliet Bankruptcy Lawyer, David Siegel, Joliet has always been a tough, blue-collar, hard-working town in Will County, Illinois. When times are tough in the state of Illinois, they are especially tough in Joliet. And times have been really tough lately. The housing market has not recovered in this area. The job market+ Read More
The post Joliet Bankruptcy Lawyer States “You Need Not Struggle Anymore” appeared first on David M. Siegel.

(posted 7 hours 31 min ago)
Getty Images

Brookfield Asset Management won the auction for Atlantic City, N.J.’s bankrupt Revel Casino Hotel with a winning bid of $110 million following a marathon session that ended Wednesday morning, according to a person familiar with the deal. The Wall Street Journal has the Daily Bankruptcy Review article here.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)

WSJ.com: Bankruptcy Beat
(posted 7 hours 47 min ago)

Receiving Wide Coverage ...

If You Love PayPal, Set It Free: The split between eBay and PayPal appears to be the celebrity breakup of the business world, prompting excited speculation and in-depth analysis. eBay says the payments landscape has changed significantly in recent months and that the companies' parting of ways will "free PayPal to more easily reach agreements with companies that compete with eBay's online marketplace," thereby eliminating potential conflicts of interest, the Wall Street...

BankThink
(posted 8 hours 19 min ago)

Posted by Kathy Bazoian Phelps
    Below is a summary of the activity reported for September 2014. The reported stories reflect: 4 guilty pleas or convictions in pending cases; over 239 years of newly imposed sentences for people involved in Ponzi schemes; at least 11 newly discovered schemes involving over 135,000 victims and more than $328 million; and an average age of approximately 51 for the alleged Ponzi schemers in the stories reported. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.
    Eric Aronson, 46, pleaded guilty to defrauding investors of $30 million in a Ponzi scheme that he ran through Permapave Industries and Permapave USA Corp. The scheme defrauded more than 200 investors by promising returns as high as 400% for financing the importation of ecologically friendly paving stones from Australia.

The Ponzi Blog
(posted 22 hours 33 min ago)