Monday, December 5, 2011
Two more bankruptcy preparers facing possible criminal contempt charges
"Cases against two additional bankruptcy petition preparers are being sent to the U.S. Attorneys Office, bringing to four the number of criminal contempt cases against preparers under review by federal prosecutors.
Cases against Jennifer Valente Abbott, a disbarred attorney, and Gaynor Morrison, who had prepared bankruptcy petitions for the now defunct Credit University, were sent to the prosecutors last week by U.S. District Court Judge J.P. Stadtmueller. Each were cited for contempt by bankruptcy court judges who, in accordance with judicial protocal, sent the case up to district court for possible criminal action."
AMR Record $4.1 Billion Bankruptcy Cash Mutes Takeover Risk
"AMR Corp.'s $4.1 billion in cash, the most ever for a U.S. carrier entering bankruptcy, may help the parent of American Airlines preserve its independence.
Filing for Chapter 11 with that much in cash and short-term investments strengthened the third-largest U.S. airline company's control over its fate, unlike peers that restructured in the last decade, said James M. Higgins, an analyst at New York-based Ticonderoga Securities LLC."
Tuesday, November 29, 2011
Misconceptions About Lehman Brothers’ Bankruptcy and the Role Derivatives Played
by Kimberly Summe
Lecturer in Law, Stanford Law School
General Counsel, Partner Fund Management, L.P.
Former Managing Director, Lehman Brothers
"On November 4, 2011, Lehman Brothers’ creditors voted on Lehman Brothers’ liquidation plan, with approval from the bankruptcy court to follow on December 6, 2011. In the three years since the bankruptcy of Lehman Brothers, which was the largest bankruptcy filing in U.S. history, Congress enacted the Dodd-Frank Act to prevent the failure of another systemically important financial institution. Lehman Brothers’ bankruptcy offered a unique opportunity to understand the linkages among financial institutions and the broader economy, but few policymakers delved into the actual causes of the bank’s collapse. Most instead pointed to derivatives as the cause. This Article offers a brief overview of some of the most persistent misconceptions regarding Lehman Brothers’ bankruptcy and the role that derivatives played in it."
Monday, November 28, 2011
UPDATE -- Stern v. Marshall Amicus Briefs
Thank you to the Hon. Scott Clarkson for forwarding us the Order re extension of time to file Stern v. Marshall amicus briefs:
"T-Boz ain't too proud to beg -- just like TLC sang back in the 90s -- because she's filed for bankruptcy.
According to docs filed last month in U.S. Bankruptcy Court, T-Boz (real name Tionne Watkins) found herself owing creditors $768,642.99 -- mostly from mortgages on her $1.2 million house.
The docs don't paint a picture of exorbitant spending -- she takes in $11,700/month in income, with monthly expenses totaling $8,821."
Louis Freeh, Former FBI Director, Appointed Trustee In MF Global Bankruptcy Case
"Former FBI director Louis Freeh was appointed trustee in the MF Global (MFGLQ.PK) bankruptcy case on Friday, days after he was hired to lead an independent probe into a sex abuse scandal at Penn State University.
Freeh, also a former judge, was appointed by the United States trustee for the region, according to a court document. The move is subject to court approval.
MF Global filed for bankruptcy protection on October 31, after $6.3 billion in risky bets on European sovereign debt spooked investors and an attempt to sell the firm failed."
Tobey Maguire, others settle over poker winnings
"Tobey Maguire has decided to fold 'em and settle a lawsuit over his winnings from a convicted con man during high-stakes Hollywood poker games.
The 'Spider-Man' star agreed to pay $80,000 to settle the lawsuit filed over more than $311,000 he was paid by a convicted Ponzi scheme operator in Texas Hold 'Em matches that included celebrities, businessmen and others, court documents state.
If approved by a judge next month, Maguire will pay the money to a bankruptcy trustee who is trying to recoup money that former hedge fund operator Bradley Ruderman bilked from investors to finance his lavish lifestyle."
Tuesday, November 22, 2011
FINANCIAL LAWYERS CONFERENCE
FINANCIAL LAWYERS CONFERENCE -- Thursday, December 8, 2011
214 Main Street, #336, El Segundo, CA 90245
(310) 322-1350 · Fax (310) 615-4581
WEB SITE: www.financiallawyers.org
Constructive Trust And Other Non-Bankruptcy Law Rights And Remedies: Do You Have More Than A General Unsecured Claim?
Reflecting the fundamental bankruptcy principle providing for equality of treatment of creditors, the definition of ‘claim’ under section 101(5) of the Bankruptcy Code is extremely broad. At the same time, there is a fundamental bankruptcy principle that a debtor’s rights and interests in property are defined by non-bankruptcy law. Sometimes these principles are in conflict. The program will discuss some of these conflicts, including:
* Constructive and resulting trusts
* Escrows and express trusts
* Specific performance, reformation, and rescission
* Environmental liabilities
David Shemano, Peitzman, Weg & Kempinsky LLP
Mark Shinderman, Milbank, Tweed, Hadley & McCloy LLP
Beverly Hilton Hotel
9876 Wilshire Boulevard
Beverly Hills, California
6:00 pm - 7:00 pm - Registration and Cocktail
Reception with Appetizers & Buffet
7:00 pm - 8:00 pm - Program
$70.00 FLC Member
$40.00 Lawyers in Gov’t Svc.
For information on FLC’s events and membership, go to
Monday, November 21, 2011
Judge rejects Las Vegas Monorail budget plan
"A federal judge has rejected the Las Vegas Monorail's plan for financial solvency.
The Las Vegas Review-Journal reports that U.S. Bankruptcy Court Judge Bruce Markell rejected Friday the monorail's plan to exit Chapter 11 bankruptcy because the terms 'doom it to failure.' "
Jefferson County bankruptcy: Sewer receiver John Young's role to be focus of hearing today
"The pivotal arguments on court-appointed receiver John S. Young's future are set for today in Jefferson County's bankruptcy case, arguments some legal experts say are eventually destined for the U.S. Supreme Court."
Saturday, November 19, 2011
Dallas Stars win OK for bankruptcy plan, team sale
"The Dallas Stars hockey team won court approval of its bankruptcy reorganization, clearing the way for the team to be sold for $265 million to Vancouver businessman Tom Gaglardi.
U.S. Bankruptcy Judge Peter Walsh approved the plan at a hearing on Friday, court records show."
Fox seeks immediate dismissal of Dodgers from bankruptcy
"Fox Sports on Friday asked that the Dodgers be discharged from bankruptcy immediately, saying that owner Frank McCourt need not pursue a plan to market the team's television rights because he can repay his creditors in full now by selling the team.
In a filing in U.S. Bankruptcy Court, Fox said McCourt would be able to sell the Dodgers 'for a handsome price,' either with the current television contract intact or with a new owner negotiating a new television deal.
'Neither option requires these bankruptcy cases to continue,' the filing read."
Bankrupt flywheel maker Beacon to sell plant to pay back DOE
"Beacon Power, the flywheel maker that filed for bankruptcy last month after winning a $43 million loan guarantee from the Department of Energy, announced on Saturday that it plans to sell its 20 MW flywheel plant in Stephentown, New York, to pay back the DOE loan. Beacon Power has been in negotiations with the DOE about how to pay back the loan and also continue operations, and Beacon says the DOE loan office’s 'highest priority was to recover as much of the $39.1 million loan balance as soon as possible' which led to the decision to sell the plant by January 30, 2012."
Thursday, November 17, 2011
Procedures for Judge Bason (Los Angeles)
United States Bankruptcy Court - Central District of California
Edward R. Roybal Federal Building and Courthouse
California Supreme Court's Decision re Standing in Prop. 8 Case
General Maritime Files Bankruptcy With $1.4 Billion in Debt
"General Maritime Corp., the second- largest U.S. owner of oil tankers, filed for bankruptcy protection from creditors after falling oil demand and a surplus of ships led to two years of losses.
The New York-based company listed assets of $1.71 billion and debt of $1.41 billion today in a Chapter 11 petition in U.S. Bankruptcy Court in Manhattan. Lender Oaktree Capital Management LP agreed to make a $175 million equity investment and a group led by Nordea Bank Finland Plc will provide as much as $100 million in financing to help the company through reorganization, General Maritime said."
Wednesday, November 16, 2011
Insolvency Law Committee eBulletin
November 16, 2011
Dear Insolvency Law Committee Constituency List members:
The purpose of this eBulletin is to provide analysis concerning substantial amendments to the Federal Rules of Bankruptcy Procedure (“FRBP”). In February 2010, the Insolvency Law Committee (“ILC”) submitted comments to the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States regarding proposed revisions to the FRBP. Based on comments by the ILC and others, further revisions were made and proposed rules were submitted to the U.S. Supreme Court. In April 2011, the Supreme Court approved the following revisions to the FRBP which, absent Congressional action to the contrary, will go into effect on December 1, 2011:
FRBP 1004.2 will require an entity filing a Chapter 15 petition for recognition of a foreign proceeding to state the country where the debtor has its center of main interests, and list each country where a foreign proceeding by, regarding, or against the debtor is pending. The new rule also establishes a deadline for the filing of a motion challenging the debtor’s statement regarding its center of main interests, and identifies the entities upon which such a motion must be served.
Section 1322(b)(5) of the Code provides that a Chapter 13 debtor may, under a plan, cure a default and maintain payments of a home mortgage over the course of the plan. To provide the debtor information necessary to determine the exact amount needed to do so, new FRBP 3002.1 requires the creditor to give notice of changes in the amount of the debtor’s payments, with such notice to be given at least 21 days before the new payment amount is due. The rule also requires the creditor to give an itemized notice of fees, expenses or charges incurred by the debtor postpetition, with such notice to be given within 180 days after incurrence of such fees, expenses or charges. The notices must conform to a new official form and be filed as a supplement to the creditor’s proof of claim. A procedure is established pursuant to which, among other things, the debtor or Chapter 13 trustee may challenge the alleged fees, expenses and charges.
Tuesday, November 15, 2011
Jefferson County Judge Known for ‘Rule-From-the-Bench' Style
"Thomas B. Bennett, the Birmingham, Alabama-based judge overseeing the biggest U.S. municipal bankruptcy, comes to court ready to rule, said attorneys who have appeared before him in his 16 years on the federal bench.
Bennett, chief bankruptcy judge for the Northern District of Alabama, was selected last week to manage the case of Jefferson County, whose seat is Birmingham, the state's biggest city. He asserted his style the first day the county and its major creditors appeared in court on Nov. 10."
Monday, November 14, 2011
Request for Amicus Briefs in 9th Circuit re Stern v Marshall
From: Bankruptcy law discussion list [mailto:BANKR-L@LISTSERV.ILLINOIS.EDU] On Behalf Of Alan Wenokur
Sent: Thursday, November 10, 2011 5:04 PM
Subject: request for amicus briefs in 9th circuit re Stern v Marshall
The 9th Circuit has asked for amicus briefs on whether Stern v Marshall prohibits a bankruptcy court from issuing a final binding judgment on an action to avoid a fraudulent conveyance and, if so, whether the bankruptcy court may hear the case and then submit a report and recommendation to a federal district court in lieu of entering a final judgment. I’m not involved in this case. As I understand it, the Chapter 7 trustee prevailed in overturning a fraud transfer under both state law and section 548, and the Stern issue was raised in appellant’s motion after briefs were submitted to the Ninth.
Any party or entity may file briefs. The request for briefs was issued on November 4, with a deadline of 30 days. Ninth Circuit case number is 11-35162, if you are interested.
Alan J. Wenokur
Attorney at Law
600 Stewart St., Suite 1300
Seattle, WA 98101
Fax (206) 624-2631
California Bankruptcies Show Jefferson County Cost of Failures
"John Moorlach, who became treasurer of Orange County, California, after it filed the biggest municipal bankruptcy in U.S. history in 1994, has some advice for the new record-holder, Jefferson County, Alabama.
'What they might be able to learn from us is: Who can you sue for bringing you to this crazy place?' said Moorlach, who got $800 million in settlements from Merrill Lynch & Co., Standard & Poor's, broker-dealers and bond counsel after the county's investment pool lost $1.7 billion when bets on interest rates soured."