I had the pleasure of participating in this weekend's very successful Research Symposium on Student Loans organized by Kathleen Engel of Suffolk Law School and Deanne Loonin of the National Consumer Law Center (NCLC) (NCLC, by the way, is looking to hire three attorneys!). In this post I want to mention some of the highlights.

Credit Slips
(posted 12 hours 44 min ago)

Today-In-Bankruptcy (1)Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for April 15th, 2014 Apollo’s Momentive Performance Files for Bankruptcy Brass Instrument Maker S.E. Shires Files for Bankruptcy Mt. Gox founder won’t appear in U.S. for questions about bankruptcy case

(posted 14 hours 48 min ago)

Coldwater_CreekWomen’s clothing retailer Coldwater Creek has filed for bankruptcy.  The business, originally known as a catalog business 30 years ago, recently filed Chapter 11 bankruptcy protection in Delaware. Coldwater had over 300 store locations in operation but cited declining sales and the downturn of the economy.  At one point, the company had revenue peaking at […]

(posted 14 hours 53 min ago)

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Los Angeles Bankruptcy Blog
(posted 16 hours 34 min ago)

CNBC reports that the City of Detroit has reached agreement with its retired police and firefighters on revised pension terms.  The City apparently went in, asking for 6% cuts in annual payouts and an end to cost-of-living increases.   The retirees apparently went in, asking for no concessions.  With the assistance of mediators, they seem to have settled at: no cuts, but "reduced" cost of living increases, and "As part of the deal, Detroit has reportedly agreed to increase the projected return on its pension funds to 6.75 percent, up from 6.25 percent and 6.5 percent, according to USAToday." 

Now that is definitely not a solution anyone has ever thought of before in relation to pension shortfalls -- assume investment performance will compensate for the gap between what the employer pays in and what the retirees are promised to receive.  This is really an approach that everyone should be able take to a difficult financial situation.  For example, why didn't GM or Chrysler think of it? 

Banker: "I am worried that your cash flow is not going to be enough to enable us to meet our obligations to creditors on time."
CEO: " Yeah, I can see how our forecasts might lead you to think that. Let's fix that by just assuming we sell more cars at higher prices."
Banker: "Oh, wow! I never thought of that. I can see why you deserve to be CEO."

And then the banker can employ this solution with regulators, too. 

Necessary and Proper
(posted 16 hours 37 min ago)

The goal is to meet the financial education needs of everyone in the community Â-- whether itÂ's the tech-savvy second-grader, the recent high school graduate getting her first checking account or a retiree learning how to stick to a fixed income.

(posted 17 hours 10 min ago)

I am attaching a link to the Missoulian article about the closure of the Coldwater Creek stores in Billings and Missoula.

(posted 17 hours 32 min ago)

Bankruptcy attorney James Selbach is used to being told he’s overreacting.
That’s because Mr. Selbach, based in upstate New York, spends his days pursuing creditors for legal infractions, like asking someone who has already filed for bankruptcy protection to pay an overdue $80 bill.
Since 2006, Mr. Selbach has focused his practice on defending individuals who are being hounded to pay debts that are in the process of being reduced or discharged in bankruptcy.
His specialty, Mr. Selbach says, is “greatly misunderstood,” mainly because creditors don’t like being dragged into court over something they often claim was an unintentional mistake. They also don’t understand why, after agreeing to stop sending the overdue bills, they are told to pay Mr. Selbach’s $275-an-hour legal tab.
Defense of the so-called automatic stay in bankruptcy, which shields debtors from creditors’ payment demands, comes with a fee-shifting provision that requires losing creditors to pay their opponent’s legal bill. Mr. Selbach argues that without the rule, aggrieved debtors would have no recourse, because the legal bills often end up dwarfing the amount of recovered money.

WSJ.com: Bankruptcy Beat
(posted 17 hours 37 min ago)

The definition of a family famer under § 101(18)(A) of the Bankruptcy Code is convoluted at best:  a family farmer is a farmer whose aggregate noncontingent, liquidated debts arising out of his farming operation make up not less than 50% of his debts; however, the farmer’s debt “for” his principal residence is excluded in making this calculation unless the debt also “arises out of” his farming operation, in which event it is included in making the calculation.    In its opinion in First National Bank of Durango v. Woods (In re Woods), 743 F.3d 689 (10th Cir. 2014), the Tenth Circuit tackled the question of when a debt “for” a principal residence does, and does not, “arise out of” the debtor’s farming operations.
The facts in Woods were straightforward.  The debtors purchased and operated a farm several years before filing chapter 12.  During that time the debtors incurred debts, some of which were related to their farming operations and some of which were not.  The debt in question involved a loan obtained from First National Bank of Durango, some of which was used to pay for the construction of the debtors’ principal residence located on the farmland.  The debtors and bank disagreed whether this construction loan “arose out of” the debtors’ farming operations.  If it did, then the debtors qualified to file a chapter 12 petition.  If it did not, then the debtors would likely have to proceed under chapter 11.

Creditors' Rights
(posted 19 hours 10 min ago)

The proposed Small Lender Mutual cooperative would be expensive for small firms to capitalize, and its securities may get inferior pricing compared to those issued by large banks and nonbanks.

(posted 19 hours 10 min ago)