Columbus Blue Jackets defenseman Jack Johnson has filed for bankruptcy, according to the Columbus Dispatch.
Johnson, 27, is in his ninth NHL season. He is slated to earn $5 million this season. However, due to his parents' mismanagement, he won’t see a dime.
After splitting from his agent Pat Brisson in 2008, Johnson gave power of attorney to his parents. With his fortune in their control, his parents took out a series of high interest loans in his name after Johnson signed a seven-year $35 million contract with the Los Angeles Kings in 2011.
The first loan Johnson’s parents took out was for $1.56 million, used to purchase a home in Manhattan Beach, California. The loan included a 12 percent interest rate and a down payment of $1 million.
Just one day after signing the home loan, the Johnsons took out a $2 million personal loan from U.S. Congressman Rodney L. Blum, also with a 12 percent interest rate.
Hardly one month later, the Johnson took out a $3 million personal loan—this one at 24 percent interest. The loan was funded by Pro Player Funding.
Not even a month later, Johnson was sued by both Pro Player Funding and Congressman Blum; he reached a settlement with both parties that included garnishing his wages.

Total Bankruptcy
(posted 2 days 6 hours ago)

By Glenn Blain

ALBANY - New York's highest court handed a victory to tenants in rent stabilized apartments Thursday when it ruled their leases could not be seized as assets in bankruptcy proceedings.

The Court of Appeals, in a 5-2, decision sided with a 79-year-old Manhattan widow's argument that her rent-stabilized lease was a public assistance benefit and not an asset that could be liquidated as part of her bankruptcy case.

"When the rent-stabilization regulatory scheme is considered against the backdrop of the crucial role that it plays in the lives of New York residents, and the purpose and effect of the program, it is evident that a tenant's rights under a rent-stabilized lease are a local public assistance benefit," Judge Sheila Abdus-Salaam wrote in the majority decision.

The decision stems from the bankruptcy case of Mary Veronica Santiago-Monteverde, who has lived in her 7th St. apartment for more than 40 years and was forced to file for bankruptcy after the death of her husband in 2011.

During the bankruptcy proceedings, Santiago-Monteverde’s landlord offered to purchase her interest in the lease and the bankruptcy trustee accepted the deal.

Shenwick & Associates
(posted 2 days 8 hours ago)

November 24, 2014

help signThe Consumer Financial Protection Bureau “CFPB” is proposing additional measures to ensure that homeowners are treated fairly by mortgage servicers. These rules provide important protections for consumers with mortgages, including:

(posted 2 days 8 hours ago)

In “RECOMMENDED READING: in Which Lender Tells Tax Man, ‘Let Me Tell You How It Will Be’”, the Editorial Staff of Commercial Bankruptcy Litigation presents a very fine article by Michael L. Cook about tax liens in general, and about an interesting lien fight between later filed and unrecorded Lender against earlier filed but unrecorded IRS.
Read the full article here.

(posted 2 days 9 hours ago)

This article has been contributed to the blog by Patrick Riesterer and Waleed Malik. Patrick Riesterer is an associate in the Insolvency and Restructuring group of Osler, Hoskin & Harcourt LLP and Waleed Malik is an articling student at Osler.

(posted 2 days 9 hours ago)

The SCOTUS has recently decided to hear an appeal to consider whether junior mortgage liens, which are out of the money, on chapter 7 debtor’s homes may be voided simply because there is no equity in the home to attach to the junior lien at the time of the bankruptcy filing.  The effect of a win by the debtor would be to permit bankrupt individuals to wipe out junior mortgages in chapter 7 when the senior lender’s lien debt is greater than the value of the home.
home underwater
In bankruptcy, a secured creditor’s claim is considered to be bifurcated for the purposes treatment under a plan (see chapter 11 or 13 usually).  More simply, when the secured claim exceeds the value of the collateral, the secured claim equals the collateral value and the portion of the debt above the collateral value is considered to be unsecured.
In a chapter 13 bankruptcy case (an individual’s version of chapter 11), some secured claims may be stripped downie, the secured portion is reduced to the collateral value.  Similarly, in chapter 13, junior lien holders who’s debt is behind a senior lien debt which is greater than the collateral value may be stripped off (rendered unsecured entirely).

Tough Times for Lenders
(posted 2 days 11 hours ago)

Before the CFPB imposes new rules on overdraft fees, it should consider whether restricting consumer access to this feature could drive people to more expensive alternatives like payday loans.

(posted 2 days 12 hours ago)
The Revel Casino Hotel in Atlantic City, N.J.
Mel Evans/Associated Press

Lawyers representing Atlantic City, N.J.’s Revel Casino Hotel will meet with a handful of its creditors on Monday to try to salvage a deal to sell the shuttered boardwalk resort to a Canadian private-equity firm. 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.”) Bankruptcy Beat
(posted 2 days 13 hours ago)

Banks and regulators aren't the best judges of what constitutes a clear and transparent disclosure form. The CFPB could fix the problem by holding a contest that asks professional designers to create models that convey important information in a way that consumers can understand.

(posted 2 days 14 hours ago)

Jay D. Hanson, a board member of the PCAOB, recently spoke about the PCAOB's efforts to address issues raised by audit committees.  

(posted 2 days 14 hours ago)