Bankruptcy Blogs

Are Cries to Break Up Big Banks About Reform ... Or Revenge?

03/19/13

Breaking up big banks as way to score our pound of flesh post-financial crisis could result in increased unemployment, higher credit costs for all and a transfer of risk from banks to lightly regulated shadow financial institutions.

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Banks, Governments and Cyprus

03/19/13

A key point is at risk of getting buried in all the din surrounding Cyprus's deposit levy (apparently poised for parliamentary defeat). To me it comes through most clearly in the latest from the tornado-chasing (or front-running?) duo, Lee Buchheit and Mitu Gulati.

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Emergency Bankruptcies in Northern Virginia

03/19/13

Here’s an email I got on Friday, March 15 2013.

I started the bankruptcy process with your office in 03/2012 and stopped the process. That was a wrong decision!!! My house is scheduled for foreclosure on Monday 03/18/13 and I have tried working with Wells Fargo to postpone the sale. NACA and Senator Mark Warner’s office also joined me to work with Wells Fargo but they are slow to give me a decision. Can you help me stop the foreclosure?

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Fifth Circuit Issues Two Decisions Easing Path for Chapter 11 Debtors

03/19/13

Within the span of a few days, Judge Patrick Higginbotham of the Fifth Circuit released two decisions which will ease the way for chapter 11 debtors to confirm their plans. In the first decision, the Court definitively put a stake through the heart of the artificial impairment doctrine, while in the second, the Court held that the Till prime + formula, while not mandatory, was becoming the "default" rule for calculating interest in chapter 11 plans. The cases are Matter of Village at Camp Bowie I, LP, No.

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Federal Regulators Must Tread Softly on Executive Pay

03/19/13

Rewriting the longstanding structures of corporate law and the roles and responsibilities of bank boards could create chaos in the global corporate and financial structures.

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The Daily Docket: Judge Says Creditors Can Vote on Rival Plans for Ahern

03/19/13

A bankruptcy judge cleared Ahern Rentals Inc.’s creditors to vote on its restructuring plan as well as a rival plan from its bondholders, paving the way for a showdown over the construction equipment company’s fate.Read the Daily Bankruptcy Review article here.

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Citi Settles with Investors (Again); Cyprus Update; Levin Explains 'Whale' Hearing

03/19/13

Receiving Wide Coverage ...

Citi Settles: In a story that will sound familiar, Citigroup has agreed to pay $730 million to settle claims that it misled its bond and preferred stock investors about possible exposure to losses on securities backed by subprime mortgages. The settlement is now the second-largest class action settlement related to the financial crisis. Bank of America's $2.4 billion payout to shareholders over the health of Merrill Lynch still takes the top spot....

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Congress, Not FHFA, Should Be Reforming the GSEs

03/19/13

There's an emerging bipartisan consensus on the way forward for the secondary mortgage market. But as Congress has punted, the FHFA is taking significant steps without hearings or public discussion.

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Cyprus: Is the Precedent Worth $7.25B?

03/18/13

Stepping back from the Cyprus bail-in, I'm wondering if it is penny-wise, pound-foolish. The depositor tax is only supposed to raise about $7.25 billion (5.8 billion Euros). Given the risks created by a bailout being rejected and the risk of runs created in other countries, does it really make sense to demand the depositor tax? $7.25 billion seems like a really cheap price for avoiding the problems that the Cyprus depositor tax is making. Indeed, in the big picture, the whole Cyprus bailout package is only around $23 billion.

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