Everyone gathered last week at the meeting convened by Detroit Emergency Manager Kevyn Orr knew that the news would be dire. Nonetheless, Orr’s report on Detroit’s financial condition and his proposal for the treatment of the city’s creditors – an offer of approximately ten cents on the dollar for the city’s unsecured bonds - still managed to drop jaws. Therein lies

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The chapter 11 case of mortgage lender and servicer Residential Capital, LLC (“ResCap”) is fascinating on a number of levels. Its parent company, Ally Financial, Inc.

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The judicial power of the United States is vested in courts created under Article III of the Constitution. However, Congress created the current bankruptcy court system over 40 years ago pursuant to Article I of the Constitution rather than under Article III.

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The Supreme Court’s decision last term in Baker Botts v. Asarco, in which the Court ruled that professionals that are paid from a debtor’s bankruptcy estate cannot be compensated for time spent defending their fee applications, continues to rankle bankruptcy practitioners.  Moreover, a recent decision in a Delaware bankruptcy case shows that the impact of Asarco will not be easily circumvented.

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