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Forex Probe Update: U.S. prosecutors have stepped up their probe into Barclays' alleged foreign exchange manipulation, the Wall Street Journal, New York Times and Financial Times all report. The London bank said the U.S. extended a pact known as a "nonprosecution agreement" in the investigation. The new pact gives the Justice Department more time to decide if Barclays breached the 2012 nonprosecution agreement it had previously signed not to commit crimes in...

(posted 2 days 5 min ago)

A group Argentina banks are working on a last-minute plan to help the country avoid default, The Wall Street Journal reports.
As Love Culture Inc. prepares for a Wednesday bankruptcy auction, the clothing retailer is asking a judge to rule that its e-commerce business be included in the assets for sale, as the company challenges an unapproved insider sale of the business that allegedly took place three months ago. Read the Daily Bankruptcy Review story.
(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.”)
As Argentina hurtles toward a second default in 13 years, an 83-year-old U.S. judge is in the spotlight, WSJ reports.
Faced with the possible extinction of the material that made Hollywood famous, WSJ says a coalition of studios is close to a deal to keep Eastman Kodak Co. in the business of producing movie film. Bankruptcy Beat
(posted 2 days 42 min ago)

Never let it be said that the wheels of international justice spin quickly, but, with the pace of a Siberian jail sentence, the Permanent Court of Arbitration finally handed down its merits award in the Yukos litigation.  (For those of you not in the know, Yukos was dismantled by the Russian government, nominally as seizure for back taxes -- some levied ex post -- purportedly as an attempt to stymie the political aspirations of its principal, Mikhail Khodorkovsky.)  The decision is a doozy: a unanimous and stinging denunciation of the Russian government in this series of transactions, with such zingers as "calculated expropriation" and accusations that the governmental scheme was "devious."  The award of a cool $50 billion was far less than the plaintiffs wanted but was a record-setter for the Court.
Russia, of course, is vowing "appeal" (not quite sure to where -- strongly worded letter?), but this really means the fight now enters the collection phase.  Maybe Russia has some frigates to grab?
Here's a link to the ruling.

Credit Slips
(posted 2 days 9 hours ago)

When will your company’s Section 503(b)(9) claim be paid?  Under normal circumstances, Section 503(b)(9) claims are paid when the debtor makes a final distribution to creditors.  However, a Section 503(b)(9) creditor can file a motion to demand immediate payment of its claim.  This article will address the standard employed by the Bankruptcy Court in determining whether to grant immediate payment of a Section 503(b)(9) claim.
Bankruptcy Courts have considered the issue of whether a Section 503(b)(9) claim can be paid immediately, before the distribution to other similarly-situated creditors.  In the case of In re Global Home Prods., LLC, 2006 WL 3791955 (Bankr. D. Del. Dec. 21, 2006), the Court considered  the following three factors in deciding whether to make payment immediately to the creditor:

  1. prejudice to the debtor;
  2. hardship to the claimant; and
  3. potential detriment to other creditors.

The Court in Global Home denied the claimant’s request for immediate payment of the Section 503(b)(9) claim because the creditor could not demonstrate that it would suffer prejudice or hardship if payment is deferred until after confirmation of the plan, while the debtor would suffer substantial hardship.

(posted 2 days 11 hours ago)

Sir Richard Branson comments on laws of the United Arab Emirates and their effect on business.  This is from back in February.


 Wednesday, 12 February 2014 9:06 AM Serial entrepreneur and billionaire Sir Richard Branson has told Arabian Business he was “flabbergasted” that the UAE did not have a bankruptcy law.
Branson, who has founded dozens of businesses under the Virgin brand, said providing bankruptcy protection was a priority for a region where millions of new jobs desperately need to be created.
“I’m flabbergasted to hear there’s no bankruptcy law [in the UAE],” Branson said, speaking exclusively to Arabian Business on the sidelines of the Government Summit in Dubai.
“What transformed Great Britain was, in about 1850 the bankruptcy law was brought in and people didn’t have to go to the watch house [jail] if they went bankrupt and they had a chance to start again.
“I would say that that would be one of the first things [Gulf governments] should do if they want to encourage entrepreneurship, because who’s going to take a risk if there’s no protection?”

(posted 2 days 11 hours ago)

An interesting post from the Bankruptcy Blog about a recent ruling by Judge Rakoff concerning the interplay of section 502(d) of the Bankruptcy Code and provisions of the Securities Investor Protection Act (SIPA).



Canons of statutory construction are used frequently to resolve ambiguities in the Bankruptcy Code. In a recent decision arising out of the Madoff liquidation, Judge Rakoff of the Southern District of New York had to implement more than a few to creatively resolve a potential conflict between the Bankruptcy Code and the Securities Investor Protection Act (SIPA). He also had to take a practical, yet expansive, view of what the word “prompt” can mean when managing the untangling of one of the largest financial frauds in American history.

The Facts

(posted 2 days 13 hours ago)


Tue., July 29, 2014  Portugal's central bank said late on Monday that if Banco Espirito Santo posts a loss larger than its existing capital cushion of 2.1 billion euros ($2.8 billion), a capital increase will be used to guarantee adequate solvency levels, Reuters reported. Earlier, Expresso newspaper's online edition said BES was likely to report a loss of around 3 billion euros on Wednesday after having to assume additional debt liabilities linked to the troubled Espirito Santo group of its founding family. BES officials were not immediately available to comment. Three of the Espirito Santo family holding companies, including ESFG, which holds a 20 percent stake in BES, have requested creditor protection this month.

(posted 2 days 13 hours ago)

Unless the plaintiffs request a stay (and quick!), this will probably be the last request for Judge Griesa to stay the injunction before Argentina defaults officially fails to put money into the bank accounts of exchange bondholders. It is an emergency motion to stay filed by Knighthead Capital Management and other holders of euro-denominated bonds. They want the judge to stay the injunction for at least 90 days, so that they can try to round up votes to waive the RUFO clause, or through the end of the year, when the RUFO clause expires. They add that "a stay would not affect the plaintiffs at all, since they have not been paid since 2001..."

Credit Slips
(posted 2 days 16 hours ago)

When you’re flat broke and thinking about bankruptcy, cheaper sure looks better.
If a lawyer will do your Chapter 7 for $600, what’s the point of paying $1000? Or even $2000?
Like answers to many legal questions, it depends.
Bankruptcy relief depends on your facts
Whether to file bankruptcy, or whether to file now, rather than later, depends on how the facts of your financial situation interact with bankruptcy law.
Your bankruptcy lawyer is charged with gathering those facts and analyzing them so that you get the most debt relief the system can offer.
If your bankruptcy lawyer doesn’t dig deep enough, or think broadly enough, you may hit avoidable snags in your case.
With the caveat that there is no direct and sure-fire connection between cost and quality, let’s talk about what it costs to escape from broke.
How to figure what you should pay
The cheapest guy in town isn’t for you.  Chances are, he’s new to the field.  He’s dabbling.  He’s hoping to sell you something else along with a bankruptcy, or he’s outsourced the real work to someone with less training than he has.

(posted 2 days 17 hours ago)

Ordinarily, when a Judge tells a lawyer that he needs to be somewhere, the lawyer recognizes the need to be there. Here’s a case where the lawyer will learn that lesson the hard way. You can find the Order here.
JR-order resetting COP
It is the rare lawyer who dictates to the federal court, or any state court, when he is willing to participate in a scheduled hearing. It is an even rarer occasion that a lawyer having received an order from the federal court setting a hearing, files a pleading which says “[d]ue to scheduling conflicts and lack of time to make arrangements both counsel and [the client] are unable to appear at the Change of Plea Hearing currently set for July 29, 2014, at 9:45 am.” Perhaps such hubris would be understandable if some critical event prompted the injudicious pleading. But, reasoning that “[d]ue to a vacation, medical issues, a root canal and hundreds of emails–counsel inadvertently missed the email setting the Change of Plea Hearing in this case[,]” does not meet any standard except that of
extraordinary hubris, a standard not usually recognized in judicial proceedings. In the event that the Court’s concern is not evident, such behavior by a lawyer is unacceptable, unprofessional, and unfortunate.

(posted 2 days 17 hours ago)