The card industry is at it again, devising new tricks and traps to disguise the cost of its products and avoid price competition. Unfortunately, this was exactly what I predicted in the wake of the Credit CARD Act. I was a vocal supporter of the Credit CARD Act, but I [...]
Many have speculated, in both the comments to my post yesterday and on other blogs, about the editorial significance of the Supreme Court's vacatur of the 2d Circuit's Chrysler opinion -- the most common reading being that the Court intended [...]
Rather than risk a Dubai World chapter 11 case, Dubai is apparently doing a quickie revamp of its bankruptcy code. Of course, the code itself is only half, or less, of the issue -- you also need the structures to properly implement the code (see China, People's [...]
How many U.S. bankruptcy filings will there be in 2010? A "projection" would imply all sorts of careful analysis with regressions and charts. I don't have that, but I do have a guesstimate based on the trends we have seen recently. Last year, I made a guesstimate of a [...]
And it never really began -- the Supreme Court has denied the Indiana Pension Funds' appeal as moot in Chrysler.
UPDATE: A few further thoughts on this: First, because the Supreme Court has vacated the 2d Circuit opinion, the bankruptcy community has lost an appellate precedent on §363 [...]
Over the past year there have many, many articles about the perils of our nation's debt load, and I've been largely context to see these dispatched by that other New Jersey professor.
But now the WSJ has entered my territory, arguing in a recent personal finance column that [...]
According to data from Automated Access to Court Electronic Records ("AACER"), there were about 115,500 total bankruptcy filings in November 2009. This is a drop from October but, contrary to a few reports, not a big drop in [...]
We get all kinds of visitors, from top experts in the field to neophytes looking for information, but I thought there was something for everyone on two recommended reading lists from Underbelly. I don't think I'm blowing his cover to note that Underbelly is written by Jack Ayer, a [...]
Apparently I've been challenged to a duel wager. I say apparently, because this challenge was never delivered to me. Instead, it was posted to a website almost a month ago, which is a little odd for a serious bet.
So what is this about? Slips readers will be familiar with [...]
Over the long holiday weekend, we have been treated to a series of increasingly breathless stories about Dubai World's decision to seek a six-month moratorium on some $60 to 80 billion of debt. How Dubai World, a corporation owed by the government of Dubai, will resolve its debt [...]
Some of the news reports on the White House dinner crashers (Tariq and Michaela Salahi) have noted that they own a winery that filed for Chapter 11 (reorganization) bankruptcy and then converted to Chapter 7 (liquidation) bankruptcy. My prurient interest was engaged, so I tracked down the petitions and [...]
FDIC-sponsored haircuts have become a hot item in the blogosphere. My wife used to work for the FDIC, and I smile every time I hear the term as I think about the building on F Street with a big barber pole in front of it. Here, the term is not [...]
The New York Times ran a story on the impact of interchange regulation in Australia. Calling it interchange regulation is somewhat of a misnomer. The Reserve Bank of Australia in fact acted to bust up anticompetitive private regulation of interchange. Payments are an area with intense regulation, but that [...]
More fun with the Code, or "Bankruptcy Nerdcore," {my attempt at nerdy humor -- "nerdcord" -- apparently lost on one and all} as one recent commentator has described it.
It is the reality of current academia that we don't do much in the way of "close readings" of the Bankruptcy [...]
As Credit Slips readers may know, a group of key Philadelphia newspapers are currently in chapter 11. The debtor that owns the papers owes its secured lenders north of $290 million. It wants to sell itself under a plan to a group of buyers that include some insiders. The deal [...]
Lehman has sued Barclays over the incredibly rushed sale of Lehman's key brokerage assets to Barclays a year ago. No doubt the financial industry crowd will use this to further promote their argument that chapter 11 does not work for large financial firms, thus supporting the need to [...]
Today I'm speaking (along with my co-blogger, Adam) at the ABI's conference on chapter 11 reform at Georgetown. I'll be making the case for the repeal of the derivative safe harbors in the Code -- my paper can be found here. I should point out that I suggest [...]
While the loan origination fraud is largely shut down, the foreclosure crisis has spawned a whole new consumer fraud in the form of foreclosure rescue and loan modification scams. These companies offer to help consumers get a loan modification or to fend off a foreclosure in return for high, upfront [...]
Yes, I went back to D.C. for more congressional bankruptcy brouhaha, this on the rising incidence of medical bankruptcies. C-SPAN decided to broadcast the proceedings in all their glory. Sen. Franken (D-MN) was armed with statistics on Swiss medical bankruptcies -- very well prepared, I must say. Here's the [...]
Former Credit Slips guestblogger Max Gardner is always trying to understand the real mechanics and economics of mortgage servicing. At one of his infamous bootcamps, he had an employee at a now-deceased mortgage servicer share an insider’s perspective on default mortgage servicing. The employee used some terms of art [...]
A couple of weeks ago I wrote a short critique of one piece of a long study written by David Evans and Joshua Wright about the Consumer Financial Protection Agency and funded by the American Bankers Association. The related blog post is here. Evans and Wright [...]
The daily bankruptcy filing rate in October hit 6,200, setting a new record since the 2005 changes to the U.S. bankruptcy law. There were about 130,200 total filings spread over the 21 business days in October. The October filing rate [...]
This just in from our Washington, DC, bureau: the Supreme Court has granted certiorari in Hamilton v. Lanning, No. 08-3009 (10th Cir. Nov. 13, 2008), where the Tenth Circuit adopted the "forward-looking test" for how much a chapter 13 debtor has to pay creditors. The alternative is the "mechanical [...]
By way of Underbelly comes this story from the Seattle Times chronicling the many failures at the now defunct WaMu. Among the stories was that a WaMu banker gave O.J. Simpson a second mortgage on his Florida home despite the existence of a huge judgment lien against Simpson [...]
It's Halloween, and time for nominations for the Spookiest Bankruptcy Opinion of the Year. Comments are open. Name the opinion that gives you goosebumps, and explain why others should be scared . . . very, very scared.
My own nomination is Sternberg v. Johnston, ___F. 3d. ___, 2009 WL 3381162 (9th [...]
Word on the street is that Capmark liquidated its derivative portfolio pre-bankruptcy to avoid having to deal with the safe harbors in the Bankruptcy Code. Cash is still subject to the automatic stay, unlike derivative contracts.
Imagine, for a moment, if they sold their portfolio "too cheap," in a [...]
Controversy abounds these days about whether government programs should adjust downward to reflect cost-of-living and income declines. I’d like to stir up a little controversy here at Credit Slips about Bob Lawless’ recent post that said the drop in median state income will "make it harder to file bankruptcy." [...]
The debate over what to do about too-big-to-fail is heating up (see here (FRB) and here (BoE) and here (Simon Johnson for a summation and commentary). A lot of the moves in the debate are well-rehearsed: the moral hazard issues involved with too-big-to-fail have been amply noted elsewhere, and the problems with [...]
Long time readers of Credit Slips may have noticed that my blogging has flagged the past few months. That is because my colleagues, Jennifer Robbennolt and Tom Ulen, and I have been working on a text entitled Empirical Methods in Law. It is intended to be a user-friendly guide to [...]
Fake statistics have been a central feature of the banking industry's lobbying strategy on every major consumer credit issue since the 2005 bankruptcy amendments.
In 2005, there was the phantom $400 bankruptcy tax used to push through the BAPCPA. Then there was the Mortgage Bankers Association's 200 basis point interest [...]
The FT has a front page story today about the total fees incurred by the debtor's professionals in the London part of the Lehman case. So far the accountants (who play the lead role in the UK) and the attorneys are due about $363 million. This got me [...]
Not really, of course. But Felix Salmon does have an important new post about how, in the sovereign debt context, Congress is honestly considering preventing purchasers of distressed sovereign debt from collecting the full face amount of the debt. It is aimed at the "vulture funds" who buy distressed [...]
Beginning on November 1, some people might suddenly find they are now ineligible for chapter 7 bankruptcy. Making it harder to file bankruptcy in the middle of our financial crisis may not be the best policy idea to come down the pike, but it is exactly what Congress set in [...]
This just in from our Tampa bureau: a debt collector threatens a debtor and his family, including the lovely threat "I'm going to f*** you up" if you don't pay. Abusive debt collection practices seem to be pretty widespread but are rarely the subject of much enforcement or litigation. This [...]
The Cubs filed for Chapter 11. Yes, I recognize that this has nothing whatsoever to do with the quality of their play, which has itself frequently been bankrupt. But the Southsider in me is enjoying a moment of Schadenfreude despite the Sox's subpar year. Maybe the Cub's plan will [...]
Corrine Ball has a post today offering her insights on the automotive cases, which she was involved in as lead counsel for Chrysler. Not surprisingly, she and I share similar views about the cases and the arguments that have been made against them. In short, the critics often [...]
You might think that we all caught the lesson that lying is wrong somewhere between Sunday School and warnings that Santa only brings presents to good boys and girls. But an Ohio federal court recently caught a debt buyer making a a load of lies--under oath, no less. The opinion in Midland Funding [...]
In a post yesterday, I used bankruptcy filing figures from Automated Access to Court Electronic Records (AACER) that showed just over 125,500 total filings in the month of September. A large number of news stories reported there were 124,790 consumer filings in September (e.g., here, here, and [...]
In a world of news stories about crippled credit markets, at least one group of Americans still faces the problem of aggressive loan marketing. Senior citizens are on pace to set a new record in 2009 for reverse mortgages, complicated financial products that enables seniors to extract equity in their homes. [...]
The good folks at Automated Access to Court Electronic Records (AACER) report there were over 125,500 total bankruptcy filings in September. The daily bankruptcy filing rate was 5,980 for an increase from August of only 0.5%.
Recent media reports and blog posts like to comment on how monthly bankruptcy filings [...]
Somehow you always knew these two would get together. AIG and Lehman are in a dispute about credit default swaps. A whole bunch of credit default swaps to be precise.
It seems AIG and Lehman sold 125 CDS contracts to each other under a single master agreement, with Lehman as [...]
Yes, self-serving, but What Is To Be Done?
A few years ago, my Michigan Law colleague Jim White (J.J. White to some) -- who has guest blogged for Credit Slips -- and I picked up a BAPCPA case trickling though the Ninth Circuit. (OK, I started it and then [...]
Last week, I agreed to join an amicus brief in the pending U.S. Supreme Court case of Schwab v. Reilly. This case will not receive a lot of medial attention, but it could have a big practical effect on the approximately 1.5 million bankruptcy cases that it looks like [...]
This semester, I have been teaching secured credit from Lynn LoPucki and Elizabeth Warren's wonderful textbook. One of the problems from the book was, I believe, inspired by my former colleague at UNLV and current bankruptcy judge, Bruce Markell, who requires his students to draft a security agreement taking [...]
Credit Slips would like to thank Professor Stephanie Ben-Ishai of the Osgoode Hall Law School at York University for joining us last week. Professor Ben-Ishai gave us a fairly comprehensive overview of the changes to the Canadian bankruptcy law that took effect in September (and earlier this year). [...]
Yesterday’s post on means-measuring versus means-testing offered a positive perspective on the Canadian bankruptcy reforms. The focus was on debtors who are currently able to access the bankruptcy system and how this will change with the enactment of the reforms. Unlike the American system, the Canadian surplus payment requirements do [...]
Adam Levitin, Bob Lawless, Stephen Lubben, John Pottow, Katie Porter
