Financial Institutions

I've held my tongue for a while on the proposed class settlement in the multidistrict credit card interchange fee litigation (MDL 1720).  I'm weighing in on it now.  I've written up an analysis of the proposed settlement.  It's available here.

The English High Court just ruled in Assenagon Asset Management S.A. v. Irish Bank Resolution Corporation Limited (formerly Anglo Irish Bank) that a popular technique used to pressure bondholders to participate in a debt restructuring, as deployed by Anglo Irish in late 2010, violated English law and the terms of the Trust Deed.

If I rob a federally insured bank and make off with $20,000, I'm facing years of federal prison time. If I defraud federal insurance programs, be they FHA or Medicaid, I'm also facing years of prison. If I engage in insider trading, I could also be looking at prison time (although that's pretty rare).

For the past couple of years, I've been thinking that cramdown is dead as a policy solution. But I was thinking about cramdown as requiring legislation. It doesn't. We could start doing it tomorrow. Under current bankruptcy law, a Chapter 13 plan may be confirmed only if secured creditors receive their collateral, receive the value of their collateral, or consent to the plan.