Banking Law Prof Blog

Will the Bailouts Cost Less Than We Thought?

A recent Treasury Report concludes that the final loss figure for the $370 Billion it has lent to failing companies could be only $42 Billion (compared with Treasury's summer estimate of $341 Billion in potential losses from TARP.  The summer estimate was based on projected need for financial bailout assistance that did not materialize. 

Bailout loans to banks are expected to earn money for Treasury -- only a "slight profit," but not bad!  However, there could be an additional $100 Billion in losses yet to come from future troubled bank loans and assistance to homeowners and small businesses.

Link to story:  http://www.nytimes.com/2009/12/07/business/07tarp.html?_r=1

(ag) Dec. 7, 2009, in Economy

Teaching Corporate Finance in the Country of Georgia

I am teaching a three-week course in Corporate Finance at International Black Sea University in Tblisi, Georgia.  It's a great experience, but I have had a few technical difficulties. I'll continue to try to post from here.  I will be back in the U.S. on Dec. 24.

Bankruptcy and Free Speech for Attorneys

Does the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 contain an unconstitutional provision that would prohibit an attorney from telling a client that he or she can legally incur additional debt (for example to pay for emergency medical care OR to refinance a mortgage at a lower interest rate OR to purchase a car needed for work) when the client is contemplating bankruptcy? 

The provision in question is designed to prohibit bankruptcy lawyers from counseling clients to defraud creditors by advising clients to take on additional debt immediately prior to filing bankruptcy.  But the language may be overbroad, infringing on free speech rights of the attorney and inhibiting lawful and candid advice.  The Eighth Circuit Court of Appeals held the provision violates Consitutional free speech rights under the First Amendment. 

The U.S. Supreme Court heard oral arguments this week in Milavetz v. U.S.

Link to U.S. Supreme Court case summary:  http://www.supremecourtus.gov/qp/08-01119qp.pdf

LInk to Washington Post article:  http://www.washingtonpost.com/wp-dyn/content/article/2009/12/01/AR2009120103948.html?wpisrc=newsletter&wpisrc=newsletter&wpisrc=newsletter

(ag) December 2, 2009, in Banking, Consumer Protection, Supreme Court