A government tool for unloading failed bank assets and minimizing FDIC losses may be used as a vehicle to publicly subsidize private gains in the proposed merger between CIT Group and OneWest Bank.

(posted 2 days 15 hours ago)

Receiving Wide Coverage ... Revolving Door?: More evidence has emerged of conflicts of interest involving the New York Fed and Goldman Sachs. This time it's an indication of a revolving door between the two institutions, in which an employee leaves one and quickly joins the other, bringing sensitive market information along for the ride. Goldman fired two workers after the bank learned that one had shared confidential information with his colleagues about the New York Fed'sÂ...

(posted 2 days 17 hours ago)

In a prior post, we discussed the commencement of approximately 72 preference actions filed in the Quantum Foods bankruptcy proceeding by the Creditors Committee.  In the preference actions at issue, the Creditors Committee seeks to avoid and recover purported preferential transfers under Sections 547 and 550 of the Bankruptcy Code, and purported fraudulent transfers under Section 548 of the Bankruptcy Code.
Since the filing of these adversary actions, the Court has scheduled a pretrial conference for December 9, 2014 at 2:00 p.m.  The purpose of a pretrial conference, among other things, is to enter a scheduling order to govern relevant timelines of the litigation.  It is therefore important for any preference defendant to fully review any proposed scheduling order in advance with counsel to determine whether such deadlines and provisions are consistent with scheduling orders commonly entered by the Delaware Bankruptcy Court.

(posted 3 days 5 hours ago)

American Bankruptcy Institute “ABI” Resident Scholar Prof. Lois Lupica interviews Jake Halpern, author of the hot new book Bad Paper: Chasing Debt from Wall Street to the Underworld.   It is a riveting tale of the seamy world of debt collecting and the shady characters at the center of the multi-billion dollar business.
Skull& Crossbones - goldThis book is based on the real underworld of the debt collection schemes and artifices.  According to the interviewer 77 million people in the US have at least one debt in collections.  The average debt is $5,500.  Typically, after a debt is more than 180 days delinquent the original creditor will sell it for “pennies on the dollar”.  The debt buyer rarely receives any back paperwork  such a a copy of the original contract accounting.  Instead, the debt is listed on a spreadsheet along with thousands of other debts.   The original creditor specifically disavows any responsibility for the accuracy of the debt.

(posted 3 days 8 hours ago)
Cars drive by the Chicago Theatre April 3, 2011 in Chicago.
Associated Press

A Chicago sign maker that’s done work for the Windy City’s theaters and stadiums, including the famed Chicago Theatre marquee, has filed for bankruptcy.
White Way Sign & Maintenance Co. aims to restructure and emerge from Chapter 11 protection, its bankruptcy attorney recently told the Chicago Tribune.
White Way, which has remained in the same family since its 1916 founding, has had a hand in everything from helping with the most recent version of the historic Chicago Theatre sign to making and installing the Chicago White Sox’s current video scoreboard at U.S. Cellular Field. It has also lit up Michigan Avenue for holiday shoppers.

WSJ.com: Bankruptcy Beat
(posted 3 days 11 hours ago)

You might recognize the last name “Underhill” from the 1980’s movie, Fletch. In the movie, the main character, Irwin “Fletch” Fletcher overhears snobby country club member Mr. Underhill speaking rudely to a waiter. To get revenge, Fletch famously tells the waiter he’s “with the Underhills” and proceeds to charge a Bloody Mary, a steak sandwich and…a steak sandwich to the Underhills’ tab. In the recent case of In re Underhill (no relation to the Fletch Underhills, in case you were wondering), the United States Court of Appeals for the Sixth Circuit decided that it, too, was “with the Underhills” when it reversed two lower court rulings and found (in the Underhills’ favor) that debtors’ tortious interference claim was not properly includable in the debtors’ pre-bankruptcy estate.

(posted 3 days 12 hours ago)

For years, it has been the rule in the Ninth Circuit that a chapter 11 plan cannot discharge or otherwise affect the obligation of a non-debtor owed to a third party. This view interprets section 524(e) of the Bankruptcy Code, which provides that “the discharge of a debt of the debtor does not affect the liability of any other third entity on, or the property of any other entity for such debt,” to specifically prohibit the permanent release, discharge, or injunction of non-debtors. See In re Lowenschuss, 67 F.3d 1394, 1401 (9th Cir. 1995); In re Western Real Estate Fund, Inc., 922 F.2d 592, 600 (10th Cir. 1990).  In Fireman’s Fund Insurance Company v. Plant Insulation Co. (In re Plant Insulation Co.), 734 F.3d 900 (9th Cir. 2013), the Ninth Circuit seems to dilute that principle as it applies to mass tort claims.

Absolute Priority
(posted 3 days 13 hours ago)

Banks need risk managers with a "show me the money" mindset Â-- that is, people who know how to use income statements and balance sheets to sniff out risky business activities.

(posted 3 days 13 hours ago)

The D.C. Circuit Court of Appeals has granted the petitions for panel rehearing by the SEC and Amnesty International on the conflict minerals case, and have ordered the parties to file supplemental briefs to address the following specific questions:
What effect, if any, does this court's ruling in the American Meat Institute case have on the First Amendment issue in this case regarding the conflict minerals disclosure requirement;
What is the meaning of “purely factual and uncontroversial information” as used in the Zauderer case and American Meat Institute case; and
Is the determination of what is “uncontroversial information” a question of fact?

(posted 3 days 15 hours ago)

You probably do not even bother answering the phone because you know it is a creditor calling.  It would be nice to have some peace, right?

Creditors will stop calling you immediately after you hire a law firm to file your bankruptcy case. This is even before your bankruptcy case is filed with the bankruptcy court!  You tell your creditors that you hired a lawyer and that all contact must go to that attorney.  They have to follow your instructions.  Under the Fair Debt Collection Practices Act, once a creditor is made aware that you are filing for bankruptcy or that you have representation to file bankruptcy, they are prohibited from contacting you and they must go through your attorney.

Most bankruptcy attorneys can be retained for a small down payment toward your bankruptcy fee. Many debtors take several months of saving money to afford a lawyer to file their bankruptcy case. Those months of saving are done without the hassle of creditors calling all the time.

Photo credit: Atilla KeFeli at Flickr

Fresno Bankruptcy Law Blog
(posted 3 days 15 hours ago)