In “The Fed’s Desperate / Get Used To It” the Editorial Staff of Commercial Bankruptcy Alternatives discusses the Federal Reserve’s interest rate and bond-buying policies. Check it out here!

(posted 3 days 20 hours ago)

As a company turns in the widening gyre of financial distress, its directors and officers are often confronted with situations that require them to make difficult decisions. Should things fall apart, those decisions may give rise to claims that directors or officers breached their fiduciary duties to the company. A recent decision by the United States Bankruptcy Court for the District of Delaware serves as a comforting reminder — to directors, officers, and their counsel — that transactions are not judged in hindsight, and the business judgment rule can still offer protection when a business fails despite last-minute efforts.
Ultimate Escapes
Ultimate Escapes was a luxury destination club that provided its members with access to a portfolio of vacation residences and offered related travel services. Following the economic crisis, Ultimate Escapes began to experience financial distress as new membership sales and existing membership upgrades decreased and the value of luxury real estate declined.
Club Holdings Merger

(posted 3 days 20 hours ago)

Beauty treatment chain American Laser Skincare abruptly shut its doors last month. Now, some customers say they’re being asked to pay for treatments they never received, while others who say they paid in advance want their money back.
“How do I get my money back from the package I just bought? Why did you guys let me buy a new package for services you knew you were not going to honor. Filing bankruptcy is unfortunate, but known months, years in advance. You took my money. This is fraud,” wrote one consumer on the shuttered company’s Facebook page.
American Laser’s owner, Philadelphia private equity firm Versa Capital Management, has said it won’t respond to Facebook posts. The firm, which bought the operation from its prior bankruptcy in 2012, said it had already provided “substantial funding to aid the company with its performance.”
Chapter 7 trustee Alfred Giuliano did not respond to requests for information about the state of affairs at American Laser, which said in its bankruptcy petition it owes more than $50 million and expects no return to unsecured creditors. As trustee, Mr. Giuliano is responsible for tracking down money to pay American Laser’s creditors.

WSJ.com: Bankruptcy Beat
(posted 3 days 22 hours ago)

Size-based regulation is designed to curb banks' appetite for growth. This will affect every operational and strategic decision that banks make going forward.

BankThink
(posted 3 days 22 hours ago)

pickpocketThe right of your bank to take your money when you aren’t looking stops at your credit card.
Your bank may be entitled by common law to setoff what it owes you from what you owe it on the garden variety debt.
But the federal Fair Credit Billing Act  forbids a bank who has issued you a credit card from helping itself to your funds at the bank to pay the credit card.
How bank accounts work
When you deposit money at your bank or credit union, the bank doesn’t really tuck your money away in the vault til you need it.
It makes an entry in its books that it owes you the money.
The deposit creates a debt from the bank to you, the depositor.
When debts run both ways
If you borrow money from the bank on a HELOC or personal loan, you now owe the bank a debt.
Common law allows the off set (or setoff) of one debt against the other, when the parties owe each other.
If you don’t make the payment on your debt to the bank, the bank can reduce the debt it owes you by the delinquent payment.
That’s a setoff.

(posted 3 days 23 hours ago)

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The American Bankruptcy Institute‘s Commission to Study the Reform of Chapter 11 issued its report last week, capping more than two years of hearings, meetings, and hard work. Having had the honor of testifying before the Commission on intellectual property and bankruptcy issues at one of its hearings in New York in June 2013, I wanted to take a closer look at its intellectual property recommendations when a licensor or licensee files bankruptcy.
You can download the Commission’s entire report for all the details, but the Commission’s main IP recommendations address five key issues:

(posted 3 days 23 hours ago)

The NYSE has proposed to amend its listing requirements related to a company filing delinquent reports with the SEC. The proposal expands the NYSE’s existing late filer rule to include Form 10-Qs, clarifies how the NYSE will treat companies whose annual or quarterly reports are defective at the time of filing or become defective later, and establishes further procedures for handling these delinquencies.   

(posted 4 days 12 min ago)
The new Apple Watch is pictured during an Apple event at the Flint Center for the Performing Arts in Cupertino, California, in this Sept. 9, 2014 file photo. REUTERS/Stephen Lam/Files (UNITED STATES – Tags: BUSINESS SCIENCE TECHNOLOGY)
Reuters

GT Advanced Technologies Inc . on Monday won bankruptcy court approval of a settlement with Apple Inc. that wards off the threat of litigation over a failed effort to produce large quantities of scratch- and shatter-resistant smartphone screen materials. The Wall Street Journal has the Daily Bankruptcy Review article here.

WSJ.com: Bankruptcy Beat
(posted 4 days 39 min ago)

The latest series of bank settlements over alleged attempts to manipulate the foreign exchange market suggests that lenders need to set about pruning the ranks of problem employees and retraining those who remain.

BankThink
(posted 4 days 42 min ago)

Receiving Wide Coverage ...

British Stress-Testing: One bank, Co-operative Bank, failed the Bank of England's stress test, while Royal Bank of Scotland and Lloyds Banking Group passed...but barely . The tests were "demanding," but the results show British banks are "significantly more resilient" than last year, Bank of England Governor Mark Carney said. RBS and Lloyds' results were made more palatable by the fact that both have already installed programs to boost their capital levels (although...

BankThink
(posted 4 days 1 hour ago)