Wall Street Journal

Banks and other financial-services companies will increase spending on cybersecurity by $2 billion over the next two years, according to a PricewaterhouseCoopers study. Citigroup, for example, now spends about $300 million yearly on cybersecurity, an anonymous source told the Journal. Wells Fargo spends about $250 million per year. JPMorgan Chase now spends about $250 million, but that could double over the next years, CEO Jamie Dimon has said. JPMorgan has about 1,000 workers...

(posted 1 week 3 min ago)

The 8th Circuit Bankruptcy Appellate Panel denied Kathryn Nielen's application to discharge her student loans, and the result, although discouraging in many respects, is not all that surprising. (Nielsen vs. ACS Inc, No. 13-6034, 8th BAP 2014)  The debtor graduated high school in 1995 and went on to obtain an Associates of Science degree in biology and then a Bachelor's of Science in Health Services Administration followed by a Masters of Business Administration degree in 2001.  At the time she filed bankruptcy she was 36 years old and married with 4 children.  The debtor claimed medical problems due to allergies and mold exposure, but the court did not believe these conditions prevented the debtor from working.
 Several factors were decisive in turning down the application to discharge her student loans:

(posted 1 week 2 hours ago)

In a 27 page opinion released October 23, 2014 in the Conex Holdings case (Bank. D. Del. 11-10501), Judge Sontchi of the Delaware Bankruptcy Court provided his analysis of the ability of a debtor to recover the value of NOLs used by its parent within consolidated tax returns.  This ruling has implications for any debtor whose parent company uses its NOLs in a consolidated filing.  Judge Sontchi’s opinion is available here (the “Opinion”).
CopperCom (the “Defendant”) included the Debtor’s tax returns in its consolidated tax returns.  As the Debtor had a net loss, the Defendant included $7.79 million of net operating losses (or NOLs) in its tax return.  This created a net benefit to the Defendant of $2.64 million.  Conex Holdings’ chapter 7 trustee (the “Trustee” or “Plaintiff”) sued CopperCom to recover what he claimed was a preferential transfer of the net tax benefit.  The Defendant eventually filed a motion to dismiss.  In deciding the motion to dismiss, Judge Sontchi issued this Opinion.

(posted 1 week 9 hours ago)

The New York Times ran an article Debts Cancelled by Bankruptcy Still Mar Consumer Credit Scores.   These so called “zombie debts” are debts that cannot be killed even by declaring personal bankruptcy.  United States Trustee Program, an arm of the Justice Department, are investigating JPMorgan Chase, Bank of America, Citigroup and Synchrony Financial, formerly known as GE Capital Retail Finance.
To explain: the discharge of debt in bankruptcy does not erase the debt.  The debt is still owed, but the discharge is a federal injunction which prohibits the creditor forcing the borrower to pay the debt.  Once a borrower receives a discharge the creditors are required to update credit reports to reflect that the debt is no longer owed, removing any notation of “past due” or “charged off.”  But, the New York Time’s reporter finds that banks routinely fail to do that.  Creditors argue that there is nothing inaccurate David and Goliath drawingabout reporting the debt to a credit reporting agency as still owing, provided that the debt is also reported as discharged in bankruptcy.

(posted 1 week 16 hours ago)

Yesterday the New York Times ran a storyabout a meeting Janet Yellen, Stanley Fischer and some other  Fed colleagues took the day before with about 30 people who aren't making as much money as they would like.  The meeting was organized by an advocacy group based in Brooklyn and the reporter chose to focus on one attendee, a photographer resident in Queens, who cannot get steady work and finds that, when he does work, he now makes only $250-300 per day instead of $400 that he used to make.  Neither number was verified and the man's statements are the only quantitative data in the story (although the story says the attendees wore T-shirts with charts on the back).  I suppose if you think of the Times as a local paper it made sense to focus on that person, but $250-300 per day would not seem like a struggling income level in many other regions of the country outside of New York City. 

Necessary and Proper
(posted 1 week 1 day ago)

“New Jersey champagne” might sound like a sarcastic joke, but it’s really a thing, and the winery that invented it filed for Chapter 11 Thursday.
Renault Winery Inc. became so prominent among New Jerseyans for its champagne and other wines, in fact, that it earned Egg Harbor City, N.J. the unlikely nickname of “Wine City,” despite a very un-Napa like location 20 miles from Atlantic City.
By filing bankruptcy, Renault—which also runs a 50-room resort, two restaurants and a 7,200-yard golf course—narrowly escaped a scheduled sheriff’s sale Thursday brought on by a foreclosure by lender Ocean First Bank.
In Chapter 11, Renault plans to keep operating, and LivingSocial Inc. even emailed customers a discounted offer for a one- or two-night stay at Renault on Friday afternoon, with a “limited time extra discount” for those who clicked immediately.
Renault operating chief Dennis Del Vecchio in court papers blamed the bankruptcy on bad investment advice from a prior manager, who allegedly urged the company not to pay its mortgage or taxes while it sought a sale of the company. That sale falling through, and Hurricane Sandy ravaging the Jersey Shore and temporarily closing Renault, put the company on a path that eventually led to Chapter 11, Mr. Del Vecchio said.
Renault, the oldest winery in New Jersey, has had to reinvent its business before.

WSJ.com: Bankruptcy Beat
(posted 1 week 2 days ago)

Scooter after auto accidentOn November 13, 2104, two people in Pinellas County  died after the scooters they were riding were involved in separate auto accidents. The Pinellas County Sheriff’s Office investigated one auto accident in north Pinellas County when a woman on a scooter collided with an SUV. The young woman died at the scene after a Jeep Cherokee struck her while trying to make a turn in front of her.
A man in St. Petersburg also died after an auto accident that same night. A few hours earlier a 38-year-old man lost his life when he was hit by a Volkswagen. The man was transported to Bayfront Health Center where he was pronounced dead according to St. Petersburg police. You can read the full article from Bay News Nine here.

(posted 1 week 2 days ago)

In Episode 10 of Accredited Investor Markets Radio, host Chris Cahill speaks with Charles Smith, founder and managing partner of Pegasus Intellectual Capital Solutions, a boutique investment bank, about the great growth and diversity of investment opportunities in agriculture and aquaculture. Their discussion will also include an exploration of investment opportunities driven by astounding technological advances in robotic tillage and in farming seafood.
Learn more about alternative investments here.

Find out more about Charles and Pegasus ICS here.
Or you can find him here:
LinkedIn: Charles Smith

(posted 1 week 2 days ago)
In this Nov. 8, 2012, photo, singer Ginuwine performs onstage at the Soul Train Awards at Planet Hollywood Resort and Casino in Las Vegas.
Jeff Bottari/Invision/Associated Press

This week on The Broke and the Beautiful, Ginuwine dismisses bankruptcy rumors, and Sister2Sister magazine had a short stay in Chapter 11.

WSJ.com: Bankruptcy Beat
(posted 1 week 2 days ago)

On 23 October 2014, the Bank of England published its strategy for resolving failing financial institutions in an orderly manner. The Bank of England’s new publication outlines the three stages of resolution – stabilisation, restructuring and exit from resolution – and sets out exactly how the Bank would use its “toolkit” of resolution measures in practice.
Andrew Wilkinson, Alex Wood and Kate Stephenson discuss the Bank of England’s approach in an interview with LexisNexis, which outlines the main issues raised in the “approach document”, future developments and important considerations for clients.
Please click here for the interview: “Three-step strategy for resolution of failed institutions”.
To read our other posting go to Weil’s European Restructuring Watch.

(posted 1 week 2 days ago)