News

Sears Files for Bankruptcy

Sears Holdings has filed for Chapter 11 bankruptcy following its inability to make a $134 million debt payment, which was due Monday, CNN Business reports. The company’s chairman and largest shareholder, Eddie Lampert, gave up the title of CEO. Last month, Lampert proposed restructuring Sears’ finances in order to avoid filing for bankruptcy; however, the creditors instead decided to head to bankruptcy court. With the advent of online shopping and big box stores, Sears has been struggling for several years. The last profitable year for the 132-year-old company was 2010. In addition to the 46 store closings planned for next month, the company will also close 142 stores near the end of the year.

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U.S. Bankruptcy Judge Rules in Favor of Toys 'R' Us

U.S. Bankruptcy Judge Keith L. Phillips ordered Fung Retailing Ltd., a joint venture partner of Toys “R” Us Inc., to drop a court action against the retailer yesterday in Richmond, Virginia, Bloomberg reports. This decision negates a Hong Kong court order to suspend the auction of Toys’ Asia operation, of which Fung owns 15 percent stake. Fung claims it will be harmed by the way Toys is pursuing a sale, while Toys claims Fung is attempting to scare off opposing bidders in order to buy out Toys’ stake at a discount.   

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CEO of Sears Proposes Rescue Plan to Avoid Bankruptcy

Upcoming debt payments and a limited cash flow loom over Sears Holdings Corp. CEO Edward Lampert tells the Wall Street Journal. In order to avoid a bankruptcy filing, Lampert, who is also Sears’s chairman, controlling shareholder and biggest creditor, is encouraging creditors to restructure over $1 billion of debt coming due in the next two years. He also proposes that the Sears board sell an additional $1.5 billion of real-estate and divest $1.75 billion of assets, which would include Sears Home Services and the Kenmore appliance brand.  In August, Lampert made an offer to buy the brand for $400 million in cash, but the board has yet to approve it. His proposal requires approval from multiple stakeholders, including Sears’s independent board committee and bondholders.

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TBA YLD Seeking Volunteers for Nashville Expungement Clinic

The TBA Young Lawyers Division is seeking volunteers for an expungement clinic on Oct. 27 at Nashville's Cathedral of Praise, 4300 Clarksville Highway. The event will be hosted by the National Prison Summit. Registration for pre-registered participants will take place from 8 - 9 a.m. and the clinic will start at 9:30 a.m. All volunteer attorneys are asked to arrive at 9 a.m. for orientation and the run of the day. The Criminal Court Clerk’s office will have computers and the ability to process the expungement paperwork right on the spot. The clinic is expected to end around noon. Those who wish to volunteer should contact Amber Floyd.
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Avvo to Improve Lawyer-Rating Transparency, Pay $50K in Agreement with NY AG

Online legal marketplace Avvo has reached an agreement with the New York Attorney General’s Office to increase the transparency of the online legal directory’s lawyer-rating system, The ABA Journal reports. The changes include consumer disclosures about how lawyers are rated and how legal forms are posted to the website. The company will also pay a $50,000 fine to cover the cost of the AG’s investigation.
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The Final Frontier: Ethics and the Malpractice Risks of Protecting Electronic Information – Knoxville, Nashville, Memphis

Just in time for the end-of-the-year CLE rush, the TBA has a variety of ethics CLE options across the state. As quickly as client information and case management technology evolves, so too does the legal profession’s duty to safeguard it. Join us in Knoxville, Nashville and Memphis on Oct. 23, 24, and 25 for this annual event, with three hours of dual CLE, guiding attendees through malpractice risks and how to prevent them from happening in the ever-changing electronic age.

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3 Dual Hours in Memphis, Nashville and Knoxville

The TBA is offering a three-hour CLE focused on ethics and malpractice risks in protecting electronic information in Middle, East and West Tennessee. The CLEs will start in Knoxville on Oct. 23. Topics include: case management technology, professional duty, financial exposure and risk management. See all locations and dates here.
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Mt. Gox Opens Online Claim Filing for Corporate Creditors

Corporate creditors are now able to enter claims for refunds of crypto assets held by the now-defunct Tokyo based Bitcoin (BTC) exchange, Mt. Gox, CoinDesk reports. In early 2014, Mt. Gox was hacked and nearly 750,000 BTC was stolen, valued around $473 million at the time. The theft quickly led to the exchange’s bankruptcy. Mt. Gox creditors have been working for years to retrieve their funds. Last year, creditors filed a petition to move Mt. Gox out of the bankruptcy case and into civil rehabilitation; it was approved this June. Former corporate users have until Oct. 22 to file proof backing up their refund claims.

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Sovereign Bilateral Creditor Collaboration Encouraged by IMF

Low-income countries that have built up high levels of debt from non-traditional sources are a growing cause of concern, according to the managing director of the International Monetary Fund, Christine Lagarde, Reuters reports. At a sovereign debt restructuring conference, Lagarde warns that debt restructuring cases with non-traditional lenders are going to require better collaboration. Non-Paris Club providers of credit, like China, often do not have developed guidelines on how to restructure debts. She advised borrowers and their new creditors to be more transparent about their liabilities to prevent debt from spiraling into massive government obligations.

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Former Toys ‘R’ Us Employees Seek Severance From Lenders

Two worker advocacy groups are seeking additional severance funds from lenders that financed this year’s bankruptcy and liquidation of the toy store chain Toys “R” Us, Bloomberg reports. The lending companies, Angelo Gordon & Co. LP and Solus Alternative Asset Management, have responded with no intention of providing additional funds after already ensuring employees received full payment for the 60-day period following a WARN notice pursuant to the Worker Adjustment and Retraining Notification Act. Two of the three firms that purchased the company a decade ago in a leveraged buyout have agreed to contribute to help meet the $75 million needed to pay for 33,000 employee severances.  

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Annual Bankruptcy Forum Survey

The TBA Bankruptcy Executive Council welcomes opinions about the Annual Bankruptcy Forum. Completing this brief web form will assist in ensuring the forum remains timely and relevant. We welcome feedback regarding subject matter, length, location, etc. Please respond to this survey by Nov. 14. Please also mark your calendars to join us on April 5-7, 2019.  Your help and participation are greatly appreciated!
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Bankruptcy Filer Takes Student Loan Servicer to Court

A student who took out federal student loans to cover the cost of her bachelor's and master's degrees is taking the student loan provider to court, CBS Denver reports. Paige McDaniel said that she began receiving direct mail from her loan provider Sallie Mae offering additional loans to pay for different expenses. McDaniel maintains that she took advantage of the loan offers not realizing that they were different and signed up for about $120,000 of private student loans in addition to her existing federal loans. McDaniel eventually filed Chapter 13 bankruptcy, paying through the proceedings, but still came out underwater. The issuer of the private student loans — Navient Solutions — is facing lawsuits about its lending practices in Illinois, Washington, Pennsylvania and California. 

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Section Seeks Your Opinions on Upcoming Law Office Technology Forum

To help build programming for its upcoming Law Tech Forum, the TBA Law Office Technology and Management Executive Council is asking your opinions. Completing this brief web form will assist in ensuring the forum remains timely, relevant and on the cutting edge. Comments can be related to subject matter, length and location of the event. Please respond by Sept. 7. 

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Put TBA UPS to Work

Have you enrolled in TBA’s UPS account for members? Visit UPS's TBA page and save up to 45% on UPS’s broad portfolio. Shipping services include next day air, international, ground and express.

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Creditors Practice Annual Forum 2018

The annual Creditors Practice Forum will be held at the Tennessee Bar Center on Sept. 26. This year's program will provide new information on stay violations, charging orders and theories of successor liability. Other topics include a discussion of bankruptcy focusing on preference issues and dischargeability as well as an ethics session.  

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Law Office Management Tips on Shipping

If your law office uses shipping services, your TBA membership team can help you compare those costs to TBA’s UPS member benefit. Your firm office manager can work directly with TBA staff and UPS services to enroll or transfer shipping accounts. Members can save up to 45% on UPS’s broad portfolio of shipping services, including next day air, international, ground and express.

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Toys ‘R’ Us Settlement Approved by Court

Toys “R” Us Inc. has come to a compromise with lenders and creditors it’s bankruptcy filing. Marketwatch reports that the settlement will pay 22 cents on the dollar to creditors. It will also shield lenders from future litigation. In March the retail chain abandon its plan to survive bankruptcy after lower than expected holiday sales.

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Destination CLE Survey

Let's take a trip! The TBA CLE Committee would like your feedback on destination CLE events. Taking a moment to complete this brief survey will greatly assist us in developing the best CLE experience for you. Please complete this survey by Aug. 10. We greatly appreciate your help with this endeavor.
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Tax Law Forum 2018

The annual Tax Law Forum will be held at the Tennessee Bar Center in Nashville on Sept. 17. Sessions will focus on the new Tax Cuts and Jobs Act. Topics include the new pass-through entity tax law, an overview of the changes to international tax law, corporate and other business tax changes as well as non-profit law changes.

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ABA Files Amicus Brief Regarding Profits of Dissolved Law Firm

The American Bar Association last Thursday filed an amicus brief in the District of Columbia Court of Appeals asking the court to reject a bankruptcy trustee’s rule to capture profits earned by new law firms from clients previously served by the dissolved firm Howrey LLP, according to a press release on its website. The issue is whether D.C. law gives a dissolved firm a property interest in “substantively new representations undertaken by third-party firms.” The bankruptcy trustee contends it does and wants to impose on former Howrey partners and the partners’ new firms a duty to pay to the dissolved firm all profits earned by them on the hourly rate matters of former clients. The ABA is asking the court to reject the trustee’s rule and affirm that the profits in question are not the property of the dissolved firm and not subject to claims by creditors. You can view the brief here.

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Tennessee Number Two in National Bankruptcy Filings

Despite a nationwide drop in bankruptcy filings, Tennessee ranks number two on a list of bankruptcy filings this year, with the number of persons and businesses filings nearly double the national per capita rate, the Chattanooga Times Free Press reports. The data was compiled by Epiq Systems for the AmericanBankruptcy Institute. The majority of those who seek bankruptcy in Tennessee opt for financial restructuring under Chapter 13, rather than a liquidation under Chapter 7.

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Tennessee Can't Revoke Driver's Licenses for Unpaid Court Costs

U.S. District Judge Aleta Trauger recently ruled that Tennessee cannot revoke driver's licenses for unpaid court costs. The ruling means more than 100,000 people in Tennessee can start the process of regaining their driver's license. For full coverage of this ruling head over to the Tennessean.

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Education Department Takes Steps to Protect Student Loan Debt Collectors

According to NPR the U.S. Department of Education is taking steps to protect student loan debt collectors. Recently, the Education Department announced it would also stop collaborating with the Consumer Financial Protection Bureau (CFPB) in its oversight of loan servicers. The move comes after the CFPB sued the nation's largest servicer, Navient. 

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Tennessee Tenth In Fraud Complaints

The Chattanooga Times Free Press reports that according to the Federal Trade Commission, Tennessee ranks tenth in per-capita consumer complaints about fraud and other issues. The FTC's report was compiled from complaints made to the FTC's call center or online as well as complaints filed with federal, state and local law enforcement agencies and other organizations.

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U.S. Supreme Court Rules for Amex in Antitrust Case

The U.S. Supreme Court ruled yesterday that American Express can continue contractually forbidding merchants from encouraging customers to use other credit cards with lower fees, CBS News reports. The case dates to 2010 when the Obama administration and more than a dozen states sued American Express, Visa and MasterCard for anti-steering rules. Visa and MasterCard have since changed their practices. “In this case, we must decide whether Amex’s antisteering provisions violate federal antitrust law. We conclude they do not,” Justice Clarence Thomas wrote in the 5-4 majority opinion. 
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