The new Apple Watch is pictured during an Apple event at the Flint Center for the Performing Arts in Cupertino, Calif., in this file picture taken Sept. 9.
Stephen Lam

GT Advanced Technologies Inc. and Apple Inc. announced Thursday they reached an agreement on terms for the wind-down of sapphire-materials production in GT’s Mesa, Ariz., and Salem, Mass., locations. 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 17 hours 28 min ago)

Receiving Wide Coverage ... Prepping for Stress Tests: The Financial Times and Wall Street Journal each serves up a curtain raiser on next year's Fed-conducted stress tests, playing off the instructions the Fed released on Thursday, as well as the European Central Bank's stress test results that are due to be released on Sunday. Among the stressful scenarios to which U.S. banks will be theoretically tested are oil prices rising to $110 per barrel, and increasedÂ...

BankThink
(posted 18 hours 28 min ago)

Sperry Assoc. Fed. Credit Union v. US Bank Nat’l Ass’n (In re White), 514 B.R. 365 (Bankr. E.D.N.Y. 2014) – A junior mortgagee sought to subordinate the senior mortgage loan based on an argument that modification of the senior loan … Continue reading →

(posted 20 hours 44 min ago)

The evolution of start-up investing, especially in the last decade or so, shows the trend of opportunities and changing attitudes towards investment. In fact, down cycles breeds entrepreneurships and investors are still interested.
Read what some experts are saying about the longevity of the entrepreneurial “trend” and investor reactions, here.
Print

(posted 1 day 11 hours ago)
Texas entrepreneur Sam Wyly arrives at federal court in New York in May for closing arguments at his civil trial.
Associated Press

Samuel Wyly, the 80-year-old onetime Texas billionaire who recently filed for bankruptcy, wants to continue writing books that will “leave for the future what he has learned,” his lawyer said.
But for a man hit with $198.1 million judgment for securities fraud, paying two personal writing assistants at $32,000 a month might not be in the budget, a federal bankruptcy judge said on Wednesday.
Chief Judge Barbara Houser said Wednesday that Mr. Wyly’s budget “needs to be carefully scrubbed” and she wants to know if Mr. Wyly will make any money from his endeavor.
“Unless that’s a profit center, that may not be an appropriate use of funds during a Chapter 11 case,” Judge Houser said at a hearing in the U.S. Bankruptcy Court in Dallas, Texas.

WSJ.com: Bankruptcy Beat
(posted 1 day 13 hours ago)

Outside of section 506(b) of the Bankruptcy Code, which affords secured creditors a right to enforce their contractual entitlements to fees, the Bankruptcy Code does not expressly give creditors a right to seek reimbursement of fees incurred during a debtor’s bankruptcy. Section 503(b)(3)(D) of the Bankruptcy Code, however, permits a creditor to seek reimbursement of fees and expenses incurred by the creditor in making a “substantial contribution” to the case. In assessing a creditor’s “substantial contribution,” where does the bankruptcy court draw the line between the consequences of a creditor acting out of self-interest to capture the maximum value from the debtor’s estate as opposed to the effects of a creditor acting to uphold the integrity of the bankruptcy system? Does the motive even matter if the results benefit the estate? In a recent decision, the Bankruptcy Court for the Eastern District of Pennsylvania adopted a framework for answering these questions.
Background

(posted 1 day 14 hours ago)

Small banks and credit unions should work together to put pressure on legislators and regulators to reduce unnecessary and cumbersome regulations.

BankThink
(posted 1 day 14 hours ago)

One of the most frequent questions I get is: "How am I going to pay the attorney's fees and costs for a bankruptcy?"

Yes, we know you're seemingly strapped, but you actually have more resources than you realize.

Here are some:

1) Stop paying on the debt you are going to discharge anyway. In bankruptcy, almost all debts are dischargeable (wiped out). (There are a few, such as governmental fines, recent taxes, etc., but your bankruptcy attorney will identify them and discuss them with you.) The majority, such as credit cards, unsecured lines of credit, judgments, will be gone. Stop paying immediately and save up that money to finance your case. These are professional lenders, they understand.

And, by the way, once you hire an lawyer, you can stop the collector calls by simply telling them you have hired a bankruptcy attorney to prepare a case. Give them the name of your attorney, because they will call to confirm, and the calls will stop.

Professional lenders know they will be violating a court order by calling once you have filed, and since they don't know when you will file, as a matter of company policy, they usually stop the calls altogether. Whew.

(posted 1 day 15 hours ago)

As I’ve mentioned before, Kentucky law is quirky in many respects.  Unlike most states, Kentucky’s fraudulent transfer statute is essentially bespoke, adopting neither the Uniform Fraudulent Transfer Act or the Uniform Fraudulent Conveyance Act.  Kentucky’s Constitution requires that lawyers swear an oath that they’ve never participated in (or seconded) a duel.  Kentucky’s Constitution also adopts wholesale the common law in effect in Virginia on the day that Kentucky became a state.  While interesting, these are not likely to cause most commercial lawyers any alarm.

The Kentucky statute that ought to cause alarm, and which has created abundant litigation in Kentucky for regional or national creditors, is Kentucky’s statute regarding the enforceability of guaranty agreements.  To be valid, guaranty agreements in Kentucky must comport with KRS 371.065, which provides:

Creditors' Sidebar
(posted 1 day 15 hours ago)

International treaties take years to complete as it is, so imagine the complexities at play in a hypothetical international insolvency treaty.
But at least people are starting to talk about it.
On Friday, at the International Global Restructuring Organization’s annual conference in Modena, Italy, Chief New York Bankruptcy Judge Cecelia Morris will speak about the bankruptcy of the city of Detroit, insolvency risk in Puerto Rico and the ongoing problems in Argentina. Judge Morris told Bankruptcy Beat that while formal international insolvency agreements related to sovereign states may be a few years off, getting the restructuring experts in the same room as the financial players is a huge part of moving closer.
“Financial people want to know that they’re protected,” Judge Morris said.
The U.S. is of course a long way ahead of many countries in terms of corporate restructuring, and even has Chapter 15 of the Bankruptcy Code in place for foreign companies with U.S. interests. Educating people in other countries on working with a group of creditors, especially when politics are involved, can be difficult.

WSJ.com: Bankruptcy Beat
(posted 1 day 15 hours ago)