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If you could make one change to the bankruptcy code, what would it be?
If I could make one change to the bankruptcy code, I would take a close second look at the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.



Posted 3 weeks 4 days ago

If you could make one change to the bankruptcy code, what would it be?
In 2005, after eight years of drafting and a fair amount of political wrangling, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act. Widely supported by lenders and other institutions, BAPCPA was largely intended make it more difficult for some consumers to file for bankruptcy under Chapter 7. The qualitative data remains far from clear as to whether BAPCPA has achieved its desired aims in the consumer realm. Two other so-called reforms, however, significantly changed the landscape of Chapter 11. I believe both deserve scrutiny and serious consideration of future modification.



Posted 3 weeks 4 days ago

If you could make one change to the bankruptcy code, what would it be?
This month’s inquiry on national bankruptcy reform was not unexpected—after all, the question comes on the eve of the release of the report from the American Bankruptcy Institute’s Commission to Study the Reform of Chapter 11. Nor should anyone be surprised that the question was directed to a group that includes several of the commissioners (including myself) who have spent the last three years considering bankruptcy reform alongside several hundred business leaders, investors, lenders, suppliers, lessors, judges, lawyers, financial advisers, academics, consultants and other constituents. When issued, the report will speak for itself—this Examiners response represents only a personal point of view.



Posted 3 weeks 4 days ago

Latin American Nextel carrier NII Holdings Inc. has asked for a bankruptcy judge’s permission to pay executives and other top-level employees as much as $9 million in bonuses. Read 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.”)
The Detroit News reports that Detroit’s emergency manager, Kevyn Orr, said the city needs to move forward into a post-crisis era.
The House of Representatives passed a bill that would let banks voluntarily start bankruptcy proceedings, MarketWatch reports.
MoneyBeat reports on how falling oil prices could lead to major junk-bond defaults.



Posted 3 weeks 4 days ago

When Congress tweaked the bankruptcy code nearly a decade ago, seeds of discontent were sown.
Critics of the Bankruptcy Abuse Prevention and Consumer Protection Act, or BAPCPA, were many, targeting everything from the amount of time businesses were given to reorganize to who the law said was eligible to file certain chapters of bankruptcy.
Other than BAPCPA, which took effect in 2005, the bankruptcy laws that govern restructuring companies remain largely unchanged from their creation in 1978. Yet the landscape for distressed companies has changed dramatically in the past several decades—among the new phenomenon they must confront are hedge funds and other investors that are very different from the big banks that historically were the key players in restructuring negotiations.
In light of these changes, restructuring pros have begun exploring how the law can better reflect today’s reality. Notably, the American Bankruptcy Institute launched a commission to propose ways to modernize Chapter 11 of the bankruptcy code, and the group is expected to publicly release its recommendations next week. In light of the report, we thought we’d ask our panel of restructuring experts, the Examiners, to weigh in on this question:
If you could make one change to the bankruptcy code, what would it be?
Feel free to share your ideas in the comments, and come back to Bankruptcy Beat throughout the week as we post the Examiners’ responses.



Posted 3 weeks 5 days ago

City leaders in Stockton, Calif., are urging a federal judge to let the city exit bankruptcy with a court-approved reorganization plan, despite an appeal of that proposal filed by mutual-fund giant Franklin Templeton Investments. 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.”)
Standard General LP said it would give up some of its stake in RadioShack Corp., WSJ reports.
LightSquared investor Phil Falcone is stepping down as chairman and chief executive Harbinger Group Inc., Bloomberg reports.



Posted 3 weeks 5 days ago

Gaspari Nutrition Inc.s muscle-building formulas.
Gaspari Nutrition

A nutritional supplement business led by former professional bodybuilder Rich Gaspari has collapsed into bankruptcy under the weight of $16 million in debt.
Annual sales for Gaspari Nutrition Inc.’s muscle-building formulas like “Aminolast,” “Super Pump,” and “MyoFusion Advanced” have fallen from a peak of $78 million in 2011, said lawyers who put the New Jersey company into Chapter 11 protection. The company, which sells its products online and at The Vitamin Shoppe , expects to make $45 million in sales this year.
An affiliate of the U.K.-based Body Temple Ltd. has offered to pay $5 million in cash for the business, which is located—where else?—near the Jersey Shore in Lakewood. At least one other buyer put in an offer for the company, which means that the business will be put up for auction on Monday, said Gaspari Nutrition lawyer Joshua Klein.



Posted 3 weeks 5 days ago

Russian Anna Chapman, who was deported from the U.S. in July 2010 on charges of espionage, poses on the red carpet at the opening ceremony of the 35th Moscow International Film Festival in June 2013.
Associated Press

John Altorelli, an outspoken former Dewey & LeBoeuf LLP partner sued for $12.9 million in the wake of the law firm’s collapse, filed for personal bankruptcy Tuesday to halt the collection efforts.
In a lengthy statement issued Wednesday announcing his decision, an attorney for Mr. Altorelli said he has been unable to reach a settlement of the lawsuit  “after weeks of negotiations.”
Mr. Altorelli couldn’t immediately be reached for comment.



Posted 4 weeks 3 days ago

An organization that coached public-relations professionals on how to master crisis communications may need to take some of its own advice after its recent bankruptcy filing.
Bulldog Reporter, an Oakland, Calif.-based company that provided training and services for public relations professionals, recently filed for bankruptcy protection in California with liabilities of less than $1 million and assets of $178,220.
Under the Bulldog Reporter and PR University brands, the company produced media directories, a daily online newsletter, webinars, live conferences and awards programs. Facing a severe cash shortage in August, the company laid off virtually all of its staff and shut down operations, filings show.
Despite bringing in nearly $950,000 in sales as of this August and $1.48 million in sales last year, the company hadn’t turned a profit since at least 2012, it said in court filings.
Jim Sinkinson, the publisher and founder of Bulldog Reporter owner Sirius Information, said in a bankruptcy court declaration that he brought in a turnaround specialist in October to explore ways to revive the company. That person, Mr. Sinkinson said, estimated he would need at least $50,000 in short-term funding, which “was not viable.” Reached Wednesday, Mr. Sinkinson declined to comment on the bankruptcy.



Posted 4 weeks 3 days ago

An 1830 first edition of the Mormon scripture, “Book of Mormon,” is displayed at the Church of Jesus Christ of Latter-Day Saints Church History Library in Salt Lake City, Utah, in September 2014.
Getty Images

An Illinois resident who files for bankruptcy doesn’t have to give up the family Bible to pay down debt, thanks to state law.
And yes, that includes a first edition of the Book of Mormon from 1830—possibly worth tens of thousands of dollars—that Anna Robinson has kept in a plastic bag.
A federal judge ruled earlier this month that Ms. Robinson, who is a member of the Church of Jesus Christ of Latter-Day Saints, doesn’t have to sell the book in order to pay the roughly $23,400 she owed to individuals and businesses when she filed for bankruptcy last year. (h/t Credit Slips). A court-appointed official sought to require the sale.



Posted 4 weeks 3 days ago