Yves Smith has had some great coverage of the AIG bailout trail over on Naked Capitalism.  While the litigation, as Yves has characterized it, is a bit like a brawl between the ugly stepsisters, it's telling us all kinds of stuff we didn't know (or at least couldn't document) about the 2008-09 bailouts.   
Today's coverage is a must-read piece by Matt Stoller about the civil service regulatory capture at the Fed, as personified by its general counsel.  The AIG trial has highlighted some of the worldview problems at the Fed. It has also included some jaw-dropping exchanges like the following:
Q: Would you agree as a general proposition that the market generally considers investment-grade debt securities safer than non-investment-grade debt securities?
A: I don’t know.
You can't make this stuff up.  I'll let readers draw their own conclusions. 

Credit Slips
(posted 3 days 9 hours ago)

Pursuant to a mandate in the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), every four years beginning in 2014, the U.S. Securities and Exchange Commission (SEC) is to review the definition of accredited investor to determine whether it should be “adjusted or modified for the protection of investors, in the public interest, and in light of the economy.” That review is underway. As it proceeds, the SEC Investor Advisory Committee, itself a creation of the Dodd-Frank Act, undertook an assessment of the current definition of accredited investor to determine whether basing it entirely on financial thresholds best determines an individual’s ability to bear and understand the risks of investing in private placements, and whether criteria other than the existing purely quantitative income and net worth criteria are meaningful proxies for investor sophistication.
Accredited Investor Markets is pleased to have an in depth, plain English summary of the October 2014 SEC meeting centered around potential changes to the “accredited investor” definition from guest author Robert N. Rapp, (B.A., J.D., Case Western Reserve University; M.B.A., Cleveland State University and a partner in Calfee, Halter & Griswold LLP).

(posted 3 days 10 hours ago)

In the well-known children’s story book written by P.D. Eastman and edited by beloved Dr. Seuss, a baby bird embarks on a quest to find his mother, asking a hen, a dog, and a kitten, among others, the famous question, “Are you my mother?”   If Dr. Seuss had penned the recently-decided case of Thielman v. MF Global Holdings, Ltd. (In re MF Global Holdings Ltd.), he might have called it, “Are You My Employer?” and its plot would have centered around the WARN Act plaintiffs’ efforts to convince the court that the MF Global enterprise, collectively, was the plaintiffs’ mother ahem employer. Just as the baby bird in Are You My Mother was faced with a journey before he could meet his mother, so too did the plaintiffs in MF Global Holdings embark on a journey of sorts—meeting the bankruptcy court and then the Southern District of New York along the way —before finding out that maybe in, some instances, it’s not necessary to know exactly who your mother, ahem employer, is. 

(posted 3 days 11 hours ago)

A federal district court in New Mexico has issued a decision finding that the U.S.  Department of the Interior’s regulations permitting the Secretary of the Interior to adopt Class III gaming procedures for a tribe lacking a Tribal-State Compact are invalid and violate the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 et. seq. (“IGRA”).  If upheld, the decision in New Mexico v. Dept. of Interior could be expected to shift the balance of power to the states in the negotiation of new compacts and renewed compacts.  The decision also may result in pressure on the Department of the Interior to exercise its role as trustee for tribes and sue states that fail to negotiate compacts in good faith.

(posted 3 days 12 hours ago)

Apple Pay is a watershed moment that will do more to stimulate mobile commerce than the sum of all previous efforts. But it also has an impact on branding that should make it part of a broader mobile menu for banks and retailers.

(posted 3 days 12 hours ago)

U.S. v. State Street Bank and Trust Co., as Trustee
for Junior Subordinated Secured PIK Notes, et al. (In re Scott Cable Communications,
Adv. Proc. No. 01-4605 (KJC), 2014 WL 5298031 (Bankr. D. Del. Oct. 15, 2014).

Delaware Bankruptcy Insider
(posted 3 days 13 hours ago)

Some banks try to justify tight underwriting standards by arguing that borrowers with lower credit scores and those who can only afford lower down payments are more likely to default. But the research supporting this argument is based on outdated analysis of high-cost, risky loans.

(posted 3 days 14 hours ago)

I have found this to be true over and over again.  Maybe it’s just my line of work.
Grump Cat
Part of my regular practice is being called in by the transactional lawyers (paper pushers) as they paper up a new loan or re-fi.  My job in those situations is to give my thoughts on what will happen should the worst occur (eg, default, receivership, bankruptcy, lawsuit, etc.) and how to minimize the risks to the lender.
Often times, identifying potential fraudulent transfer exposure on the front end is of concern when the lender creates some type of relationship with a non-borrower affiliate or insider of the borrower. The usual situation is a guarantor, but other situations exist such as payment from a non-borrower affiliate.  A recent 5th Circuit case discusses such a situation.
The Background – Skip this if you are Familiar with Fraudulent Transfers
There are a few types of “fraudulent transfers” under both federal and state law.  Generally speaking, however, a fraudulent transfer occurs in two ways:

Tough Times for Lenders
(posted 3 days 15 hours ago)
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, 2014.
Stephen Lam

GT Advanced Technologies has signed a pact with Apple Inc. for an “amicable parting of the ways,” Luc Despins, attorney for the bankrupt supplier to the technology giant, said Tuesday in the U.S. Bankruptcy Court in New Hampshire. 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 3 days 15 hours ago)

Receiving Wide Coverage ...

New QRM Rule Assessed: The reviews are coming in on the final QRM rule and reaction is mixed. The American Bankers Association indicated it could live with the new rule, which doesn't require a down payment in its criteria for being exempted from risk retention, saying it "might have been more restrictive." Former FDIC Chairman Sheila Bair, however, described the final version of the risk retention rule as "unfortunate" because "if the...

(posted 3 days 15 hours ago)