Bankruptcy Blogs

SEC’s Proposed Conflicts of Interest Rule May Impede Hedging

04/14/23

Critics are warning that the SEC’s recently proposed rule (the “Proposed Rule”) prohibiting conflicts of interest in asset-backed securities (ABS) transactions may impede the ability of financial institutions, broker-dealers and others to enter into interest rate hedges and other risk-mitigating transactions.

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LTL 2.0: The Largest Fraudulent Transfer in History

04/11/23

Today was the first day hearing for LTL 2.0.

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LTL, Part Deux (now with even more fraudulent transfers!)

04/05/23

This post is a joint post by Hon. Judith K. Fitzgerald (ret.)[*] and Adam Levitin

Here we go again. Precisely one hour and thirty-nine minutes after the dismissal of the bankruptcy filing of LTL, Johnson & Johnson’s artificially created talc-liability subsidiary, the company was right back at it again with the filing of a new chapter 11 case in New Jersey, again assigned to Judge Kaplan.

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CFPB Details "Abusive" in Policy Statement and Speech

04/03/23

In a few hours, I'll have the pleasure of hosting CFPB Director Rohit Chopra for a virtual talk at UCI Law (today at 12pm PDT, 3pm PDT). You can still join us by registering for the Zoom link here.

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Inflation Adjustment on income–But not on Expenses

04/02/23

Bankruptcy income eligibility got easier April 1, 2023 Income eligibility to file Chapter 7 bankruptcy in Virginia got easier April 1, 2023.  The median income–that’s the cutoff for automatic eligibility based on income–shot up six to ten thousand dollars. The median income for a family of four increased from $124,304 to $134,252.  For a family […]

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It's Not Just an SVB Problem: the Systemic Nature of the Bank Regulation Failure

03/27/23

A mid-sized regional bank specializing in lending to tech start-ups, crypto companies, or law firms hardly seems of systemic importance, even if its failure would have caused disruption in some industries regionally and might have triggered a cascade of corporate bankruptcies because of large uninsured deposit balances. That sort of collateral damage from a bank failure is unfortunate and painful for those involved, but that's the nature of market discipline.

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FDIC's Poor Track Record in Holdco Bankruptcies

03/25/23

Last week I did a post about how the FDIC as receiver for Silicon Valley Bank probably doesn't have a claim against SVB Financial Group, the holdco of the bank. I got some pushback on that (including from a former student!), but I'm sticking to my guns here. It's a result that seems wrong and surprising, but if you look at the three most recent big bank holdco bankruptcies (this takes some digging in old bankruptcy court dockets), the FDIC has ended up with little or no claim.

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SVB Financial Group's Manhattan Venue

03/23/23

As I have previously blogged, SVB Financial Group seems to be trying to do venue by declaration. Consider the grounds for venue under 28 USC 1408 and how they apply to SVBFG:  

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The Death of Dodd-Frank: Banking Law's Dobbs Moment

03/23/23

Last year, I savored a bit of schadenfreude watching my con law scholar colleagues despair about their field after cases like Dobbs v. Women's Health Organization or West Virginia v. EPA. Con law scholars see themselves as the royalty of the legal academy, far above those folks who do blue collar law like bankruptcy and commercial law or grubby stuff like banking and money.

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SDNY: EFTA Applies to Crypto

03/22/23

I'm teaching cryptocurrency today in my Payment Systems class, and I'd been puzzling about why no one has applied the Electronic Fund Transfers Act and Reg E thereunder to crypto: after all, if you have a crypto account with an exchange, it would seem to be an "account" at a "financial institution" that is primarily for personal, family, or household purposes and is used for electronic transfe

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