Last week, the Federal Trade Commission announcedamendments to the Telemarketing Sales Rule (TSR) relating to the telemarketing of debt relief services, including new restrictions on advance fees charged by debt relief companies.
The Commodity Futures Trading Commission has announced that it will amend its Regulation 190.04(d)(2) regarding the operation of a commodity broker in bankruptcy. Currently, a bankruptcy trustee is prohibited, immediately upon the commencement of the commodity broker’s bankruptcy case, from processing any new trades on behalf of customers of the commodity broker, with limited exceptions.
Bankruptcy headlines in 2007 were awash with tidings of controversial developments in the chapter 11 cases of Northwest Airlines and its affiliates that sent shock waves through the "distressed" investment community. A New York bankruptcy court ruled that an unofficial, or "ad hoc," committee consisting of hedge funds and other distressed investment entities holding Northwest stock and claims was obligated under a formerly obscure provision in the Federal Rules of Bankruptcy Procedure—Rule 2019—to disclose the details of its members' trading positions, including the acquisition prices.
Receiverships are becoming a popular tool for creditors to manage distressed real estate and to realize upon their collateral. Lenders are looking at receiverships as a faster and more efficient and cost effective strategy than forcing a debtor into bankruptcy. They offer the lender flexibility as opposed to well established procedures under bankruptcy. The current economy is also resulting in increased use of receiverships to complete unfinished buildings.
- On August 4, 2010, the US Court of Appeals for the Seventh Circuit affirmed in part and reversed in part a Wisconsin federal district court’s ruling on the Wisconsin bankruptcy court’s disposition of three of Telephone and Data Systems’ (TDS) claims, and the FCC’s objections thereto, filed in Airadigm’s Chapter 11 reorganization plan. The principal assets at issue were a series of C- and F-block spectrum licenses for mobile phone service in certain areas of Wisconsin, Iowa, and Michigan that Airadigm had won at auction in the late 1990s.
IN RE: MEYERS (August 2, 2010)
When a bankruptcy court calculates the "projected disposable income" in a repayment plan proposed by an above-median-income chapter 13 debtor, the court may "account for changes in the debtor's income or expenses that are known or virtually certain at the time of confirmation," the U.S. Supreme Court held in Hamilton v. Lanning on June 7. Writing for the 8-1 majority, Justice Samuel A.
The Bankruptcy Code treats insiders with increased scrutiny, from longer preference periods to rigorous equitable subordination principles, denial of chapter 7 trustee voting rights, disqualification in some cases of votes on a cram-down chapter 11 plan, and restrictions on postpetition key-employee compensation packages. The treatment of claims by insiders for prebankruptcy services is no exception to this general policy: section 502(b)(4) disallows insider claims for services to the extent the claim exceeds the "reasonable value" of such services.
President Barack Obama gave his imprimatur to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 on July 21. Relatively few of the provisions in the new law implicate the Bankruptcy Code. However, among other things, the law does call on the Board of Governors of the Federal Reserve System, in consultation with the Administrative Office of the U.S. Courts (the "Administrative Office"), to conduct two bankruptcy-related studies.
As part of the overhaul of bankruptcy laws in 1978, Congress for the first time included the definition of "claim" as part of the Bankruptcy Code. A few years later, in Avellino & Bienes v. M. Frenville Co. (In re M. Frenville Co.), the Third Circuit became the first court of appeals to examine the scope of this new definition in the context of the automatic stay.