A seagull flies past the Trump Plaza Hotel and Casino, one of two casinos owned by Trump Entertainment Resorts, in Atlantic City, N.J.

Even as Donald Trump considers buying back two Atlantic City, N.J., casinos that bear his name, the billionaire wants his name removed from the languishing properties as soon as possible—and he doesn’t think bankruptcy laws should get in his way. 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 5 days 14 hours ago)

In a recent decision from the Delaware bankruptcy court, Judge Christopher S. Sontchi joined the debate over the interpretation of section 547(c)(4)(B) of the Bankruptcy Code, which sets forth the new value defense to a preference claim. 
In Miller v. JNJ Logistics LLC (In re Proliance Int’l, Inc.), the question was “whether an (alleged) preferential transfer may be reduced by subsequent new value regardless of whether it was ‘paid’ or ‘unpaid’ prior to the petition date, or whether the defense is only to the extent that the subsequent new value remained ‘unpaid.’”  In a victory for the defendant, Judge Sontchi explicitly held that the defendant was entitled to reduce its preference exposure by both unpaid and paid new value, adopting the “subsequent advance approach” in calculating the new value defense.
Absent defenses, a trustee may avoid any transfer of an interest of the debtor in property (i) to or for the benefit of a creditor, (ii) on account of antecedent debt, (iii) while the debtor was insolvent, (iv) made within 90 days of the filing of the petition (or 1 year in the case of insider transfers), and (v) that left the creditor better off than it would have been in a chapter 7 case if the transfer had not been made.

Absolute Priority
(posted 5 days 14 hours ago)

Receiving Wide Coverage.... Secret Fed Tapes: Here's all you need to pique your interest: It's the "Ray Rice video for the financial sector," according to none other than Michael Lewis, columnist and author of "The Big Short." A former New York Fed bank examiner secretly took a key-chain voice recorder into 47 hours of Fed meetings, recorded what she heard and gave the recordings to a reporter at ProPublica, which later distributed the recordings to NationalÂ...

(posted 5 days 14 hours ago)

pay off old debt
If you’ve got a debt from years ago, don’t make the mistake of prolonging the negative impact is has on your credit history.
Old debts can plague your credit for years, dragging down your score long after the date you went into default.
In fact, according to credit reporting agency Equifax,  a collection account will usually remain on your credit report for seven years from the date the account first became past due.
That means a debt six years past due will stay on your credit report for one more year, at which time it falls off your credit report.
Once a debt falls off your credit report, it will no longer drag down your credit score.
But let’s say you’re impatient and decide to settle a debt that’s five years old. Smart move, right?
Not necessarily.
Credit accounts generally remain on your credit file for up to ten years from the date of last activity on the account. That means the debt will be reported for ten years following the date of payment – so if you pay a debt in full after five years, it will be reported for a total of 15 years (5 years of past due status PLUS 10 years of reporting after payment in full).

(posted 5 days 15 hours ago)

In re Denman, 513 B.R. 720 (Bankr. W.D. Tenn. 2014) – A chapter 13 debtor was a member of a limited liability company. Another member sought relief from the automatic stay in order to exercise a right to acquire the … Continue reading →

(posted 5 days 17 hours ago)

Financial Poise Radio Productions is proud to announce the debut of its first podcast series, Accredited Investor Markets Radio, now available on iTunesStitcher, or on Libsyn.
Entertaining and educational, Accredited Investor Markets Radio is designed for those who save their money, spend wisely and seek to intelligently invest.
Read more here.
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(posted 6 days 38 min ago)

Recreational marijuana is legal in two states—Washington and Colorado—and medical marijuana is legal in another twenty-one states.  Colorado alone has over 500 marijuana dispensaries and that number is on the rise.  However, as the marijuana industry continues to grow, federal law still prohibits the use of marijuana.  So what happens when a marijuana business becomes insolvent? Does it have the right to avail itself of the protections of the Bankruptcy Code?
The United States Bankruptcy Court for the District of Colorado (the “Court”) says no.  In In re Arenas, 2014 Bankr. LEXIS 3642 (Bankr. D. Colo. Aug. 28, 2014), a husband and wife filed for chapter 7 bankruptcy.  The husband engaged in the business of producing and distributing marijuana on the wholesale level in Colorado. The husband carried on his business operations in one unit of a commercial building owned by the debtors.  The debtors also leased another unit in the building to another marijuana dispensary.  The wife was not involved in the business and her income derived solely from disability payments. 

Creditors' Rights
(posted 6 days 5 hours ago)

Judge Drain’s recent decision confirming the Momentive Performance Materials Inc. plan is just the latest in a series of recent cases involving “make whole” premiums. As in several of the recent cases, the lenders lost because the contract did not clearly enough provide for the make whole premium in the event of an acceleration rather than prepayment.
So what is a make whole premium? It is a type of prepayment penalty that is imposed if the loan is paid off early to compensate the lender for the interest that it was not able to earn over the remaining term of the loan. Normally it will be calculated to reflect the difference between the higher rate charged on the early-terminated loan and the lower current market rate since that is the lost expectation interest, or damages, the lender suffers as a result of early repayment. Make whole premiums are important to lenders in times like these when rates are very low and will diminish in importance if and when rates begin to rise.
Many of the recent cases have rejected the premiums by narrowly interpreting the contractual provisions. That has allowed them to avoid the very difficult issue of whether such fees constitute unmatured interest. That classification is important because the Code disallows any claim to the extent that it is for unmatured interest. See 11 U.S.C. § 502(b)(2). The cases that have reached the issue are split – largely on the form vs. substance divide that we often see in the law.

GT Restructuring Review
(posted 6 days 7 hours ago)

Authored by Scott St. Amand of Rogers TowersIn April of 2010, the Office of the Comptroller of the Currency closed First National Bank Myrtle Beach, S.C., a wholly-owned subsidiary of Beach First National Bancshares, a bank holding company, and named the FDIC as its receiver.  As a consequence of the bank’s failure, Bancshares filed for Chapter 7 bankruptcy.  Shortly thereafter, the Trustee filed an adversary proceeding asserting a derivative claim for breach of fiduciary duty and negligence against the officers and directors of the subsidiary bank for injury allegedly caused to the subsidiary bank.
As some readers may know, a bankruptcy Trustee succeeds to all rights of the debtor, including the right to assert any cause of action belonging to the debtor.  Absent statutory modification, this power includes the right to assert the derivative claims of Bancshares (as the subsidiary bank’s sole shareholder) against the directors in their capacity as officers and directors of the subsidiary bank.  However, under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”), the FDIC, when appointed receiver of a bank, succeeds to all rights, titles, powers and privileges of the insured depository institution, and of any stockholder of such institution with respect to such institution and the assets of the institution.

Florida Banking Law Blog
(posted 6 days 8 hours ago)

The London and Frankfurt offices of law firm Bingham McCutchen, as well as a number of partners from the firm’s Hong Kong office, will join Akin Gump in a move that will open Akin Gump’s first office in Germany. The expanded corporate practice in London, Hong Kong and Germany will advise on corporate work including mergers and acquisitions, and the move unites Akin Gump’s U.S. financial restructuring practice with restructuring partners in London. The firm’s financial dispute resolution group will continue representing European and U.S. financial institutions, including hedge funds and investment management groups.

WSJ.com: Bankruptcy Beat
(posted 6 days 9 hours ago)