BCLP Global Restructuring & Insolvency Developments

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U.S. Trustee Fees – one spreadsheet to rule them all…

Editor’s Note – This is a great and useful post.  Most importantly, these formulae work perfectly – your editor actually tried them out in his own spreadsheet.  For your next Debtor case, use this for your budgeting and there should be no surprises for US Trustee fees.  And if you have any trouble with this, call Jacob directly – he is a data-driven lawyer and also very interested in lending a hand to fellow restructuring professionals.

Recently I had to project quarterly U.S. Trustee fees in several jointly administered chapter 11 bankruptcy cases under the U.S. Trustee’s current fee guidelines (posted to effectuate 28 U.S.C. § 1930(a)(6)).  Fees are calculated based on each debtor’s “disbursements” in a given quarter.[1]  The calculation of multiple U.S. Trustee fees for multiple debtors can be challenging, particularly since the U.S. Trustee fees are calculated based on eight different brackets. 

SCOTUS Protects Lawyers Pursuing Non-Judicial Foreclosure As Not the Actions of a “Debt Collector” under the FDCPA

Editor’s Note:  BCLP’s consumer financial services team is a group of specialized lawyers from around the U.S., adept in state court rumbles, courthouse steps foreclosures, and bankruptcy court interludes.  They are also deep thinkers in consumer law, and were waiting for this ruling today.  If you have a portfolio of consumer loans and want some efficient, value-maximizing handling, give us a call.  Here’s the take from Zina Gabsi, from our Miami CFS practice.  

 

Earlier today, the U.S. Supreme Court issued its long-awaited opinion on whether law firms pursing non-judicial foreclosures are “debt collectors” as defined by the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §1692 et seq.[1]  In its Obdusky ruling, The Court held that a business engaged in no more than a non-judicial foreclosure is not a debt collector under the FDCPA. (Business lawyers around the US breathed a collective sigh of relief.) 

A step forward – the FirstEnergy Solutions court comes to the commonsense conclusion that steel forges aren’t “forward contract merchants.”

Thomas Paine would be proud of this Court’s commonsense approach to the Bankruptcy Code

 

In the In re FirstEnergy Solutions Corporation bankruptcy cases,[1] the court recently issued an opinion narrowing the number of situations in which a fixed-price supply agreement (used to hedge against rising input costs and constituting a “forward contract” in bankruptcy parlance) will be treated as an exception to the general rules governing “executory contracts”[2] in chapter 11 bankruptcy cases.

The “automatic stay” under section 362 of the Bankruptcy Code usually prevents a contract counterparty from terminating an executory contract without first getting court approval (i.e., relief from the automatic stay); this is true even if the contract provides it may be terminated upon the filing of

How to Lose a Receiver in One Appeal

February 6, 2019

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How to Lose a Receiver in One Appeal

February 6, 2019

Authored by: Keith Aurzada

The appointment of a receivership is an incredibly useful tool for lawyers. Since it is such a useful tool and due to a recent ruling in Texas, we thought now was as good as any to brush up on our familiarity with receiverships.  (And by the way, check out a prior post by my colleague Brad Purcell on “Fourteen Ways to Appoint a Receiver in the Lone Star State.”)  Although this post focuses on Texas law, the statutes governing most states and federal receiverships have similar requirements.

The general receivership statute in Texas allows for the appointment of a receiver under a number of conditions including[1] an action by a creditor to subject any property or fund to his claim if the creditor has a probable interest in or right to the property or fund and the property is in danger of

In a Case of First Impression, the Ninth Circuit Begins to Unravel the Mystery of When a Claim to Enforce a Rescission Request under TILA May be Time-Barred

Editor’s Note:  Our good colleagues at BankBCLP are always at the forefront of matters of concern to the banking and financial services community; this blog post first appeared on BankBCLP.  Consumer financial services remains a morass of challenging rulings and regulations.  Jim Goldberg from BCLP’s San Francisco office provides some guidance on a recent TILA decision on the right of rescission.

An action by a Washington state borrower to enforce a request for rescission of a loan under the Truth in Lending Act (TILA) is analogous to an action to enforce a contract and must be brought within the Washington state statute of limitations for such a contract claim, given that TILA itself does not provide a limitations period.  Hoang v. Bank of America, N.A., 2018 WL 6367268 (9th Cir. December 6, 2018).

To effect rescission of a loan under TILA,

Distressed Step-In as a Remedy for UK Lenders

This article first appeared in Corporate Rescue & Insolvency, December 2018.

Key points

  • Step-in is a versatile tool which gives a lender the right, in certain circumstances, to step-in to a contract between a borrower and its contractual counterparty, and to perform the borrower’s part of the bargain to keep the contract alive.
  • It can have much less impact on the actual project or development than the commencement of formal insolvency proceedings, thereby minimising loss.
  • Step-in won’t be right for all situations (or for all lenders) and, where there is distress, additional risk factors need to be brought in to a consideration of the lender’s options.

Introduction

Step-in is a self-help remedy. It is a creature of contract and, in a finance structure, gives lenders the right, in certain circumstances, to step-in to a contract between a borrower and its contractual counterparty, and perform the borrower’s part of

The Stalking Horse Bid Protections: The Auction Credit Conundrum, and How to Avoid It

The Scenario

You’re an investor kicking the tires on a company in bankruptcy. If you agree to be the “stalking horse” bidder, you’ll expend significant time and money vetting the opportunity (including attorneys’ fees, quality of earnings analysis, valuation and appraisal work, and site visits), only to possibly end up in a bidding war with others wanting a free ride on your due diligence.

To lure you in, the debtor offers you $250,000 in “Bid Protections” (total breakup fee and expense reimbursement) if you don’t win at auction. Not only that, you’ll get a credit toward your cash bid at the auction in the amount of the Bid Protections.  This makes sense, you think, because the economic value of a competing bid is deflated by the $250,000 in Bid Protections that must be paid to you if the competitor is ultimately successful.  So to compare the economic value of

SDNY Joins the Rush Party, Rules for Trustee in Another Child Tuition Clawback Case

We at the BCLP Global Insolvency and Restructuring Developments (the GRID) continue to watch and cover the growing jurisprudence of trustees seeking to recover pre-petition tuition payments made by a debtor parent to support his or her child’s college education.  Our prior posts can be found here and here.  And in February, the Emory Bankruptcy Developments Journal’s annual symposium will have a panel on this topic (contact me or Lynne, below, in a couple months and we will send you our materials).  Well, the party (or hangover??) continues.

Earlier today, Judge Glenn ruled that a debtor parent does not receive reasonably equivalent value, under either the Bankruptcy Code’s fraudulent transfer provisions or New York’s Debtor and Creditor Law, by paying for a adult child’s college tuition.  The opinion is In re Sterman, and if you have not followed this fascinating effort to transfer

Update – Our New and Improved Set of Opening Questions and Document Questions for Your Deposition

 

Way back in 2015, we published our first edition of the most comprehensive set of opening questions for your next deposition, including follow up matters, common procedural mistakes in depositions, and the 41 questions to ask about any pertinent document.  The response was positive, which we appreciate!  In light of other depositions of ours over the past three years, and changing practices among business people (including the pervasive use of texts for everything), and more recently, the use of text-and-email-destroying-applications, we gave this list an upgrade, and decided it to publish it again for your use.

We hope you find this useful, time saving, and helpful in getting to the truth of things in your next deposition – it is located here in MS Word so you can drop it into your next deposition script in as much detail as you want.

Check back again in a few weeks –

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