It's been a slow month in the Fifth Circuit, my home Circuit with just two bankruptcy-related opinions. This month's cases involve a non-filing spouse who lost her homestead interest and a bank which provided "reasonably equivalent" value but not enough to constitute a complete defense to a fraudulent transfer claim.
Homestead Exemption; Takings Claim by Non-Filing Spouse
The Supreme Court doesn't take many cases on bankruptcy issues. It has only ruled on attorney's fees in bankruptcy once since the Code was adopted and that ruling was on the narrow issue of whether a chapter 7 debtor's attorney could recover fees from the estate. As a result, it was big news when the Court granted cert in No. 14-103, Baker Botts, LLP v.
Jeffrey Lacker, President of the Richmond Federal Reserve Bank, made the case for why large financial institutions should subject to bankruptcy as the ABI Luncheon Keynote Speaker. He started his address with the question "Why is a central banker interested in bankruptcy?" His answer was that during the financial crisis of 2007-2008, the government played a role by distorting incentives of market players with multiple discretionary interventions which destabilized expectations.
I spent the morning listening to presentations on very disparate topics: hedge funds, examining an expert witness and the balance between secured creditors and unsecured creditors. I was not able to capture the full extent of the discussions and in some cases my descriptions below may be a bit cryptic. My intent is not to provide a transcript, but rather to provide a flavoring of issues being discussed at NCBJ.
William A. Strauss, an economist with the Chicago Fed, delivered the keynote address for the Commercial Law League of America's luncheon Thursday. His overall forecast was for slow but steady growth, declining unemployment and low interest rates as the country digs its way out of the Great Recession. In other words, he predicted a good climate for reorganizing debtors.
NCBJ is in Chicago this year. The weather is pleasantly cool compared to the continuing Austin heat and the first day of CLE had some interesting programs. Here is a wrap of Day 1, which included Chapter 9, reorganization for closely held companies, e-discovery, an economist from the Chicago Fed, claims trading and treatment of "interests" in section 363 sales. I will divide the day between separate posts on the educational seminars and the economist's prognostications.
Today I had the opportunity to debate venue reform at the National Conference of Bankruptcy Judges in Chicago. We had two excellent teams of debaters. Arguing for the pro-reform position were Prof. Samir Parikh, retired Bankruptcy Judge Leif Clark and myself. The pro-status quo team consisted of Prof. Douglas Baird, retired Bankruptcy Judge Arthur Gonzalez and Dennis DeFranceschi of Richards, Layton & Finger, P.A. Jamie Sprayregen of Kirkland & Ellis moderated the debate. We had a good, vigorous debate.
