News

Schedule Time to Read Email

A tip from the TBA Attorney Well-Being Committee

Rather than checking on every e-mail as it arrives, schedule time in your calendar for reading and managing e-mail (and leave e-mail notifications silent during the other times of the day). This will enable you to have focused time for given tasks without constant interruption and distraction.
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Troubles Plague Auto Masters Bankruptcy

With charges of fraud and armed guards trying to take possession of a building, the Auto Masters bankruptcy has been anything but normal. The Nashville Post takes a closer look at all the intrigue here

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Gibson Owes Bankruptcy Law Firm

The American Lawyer takes a look at the creditors that Gibson Brands owes in bankruptcy suit. One of the most notable creditors on the list is the law firm of White & Case - the firm is owed $139,144 for some restructuring work for the Nashville-based company.

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Brentwood Based Healthcare Company to Assume Control of Bankrupt Hospital Group

Brentwood-based RCCH Healthcare Partners could take control of recently bankrupt Trios Health facilities in less than a month, reports the Tri-City Herald. The transfer is part of a bankruptcy plan that earmarks $3.95 million for unsecured creditors, with RCCH contributing most of the money. RCCH pledged to employ all Trios employees, saving an estimated 1,000 jobs. You can view the order here.

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Foreign Subsidiaries Could Defraud Creditors

The New Jersey Law Journal takes a look at a recent Third Circuit ruling on the Delaware Uniform Transfer Act. The ruling held that the transfer of assets by a foreign subsidiary of a debtor was not a fraudulent transfer.

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A Wellness Tip from the Attorney Well-Being Committee

Consider waking 10 minutes earlier so you can incorporate a brief mindfulness meditation into your preparations for the day. Set a timer for 3-10 minutes (depending on how much time you feel you want to use). Begin by sitting in a relaxed and comfortable but dignified and upright position, with your spine and head aligned. Place both feet on the ground, with legs uncrossed, and rest your hands gently on your lap. Gently close your eyes and allow yourself to notice the sensation of sitting in the chair, of your feet on the ground, of your hands resting in your lap.

Gently bring your attention to your breath, slowly taking a deep breath in, pausing briefly, then slowly exhaling. Now repeat this twice and as you do so, observe your breath as it goes in your nostrils and as it exits your nostrils. Sense the flow of air as it moves in and out, and the space between breaths. You may notice the air feels cool as you inhale, but warmer as you exhale.

Return to your normal breathing. Don’t try to change your breath, just continue to observe it, with a sense of curiosity. Allow yourself to feel your body relax and yield to gravity as you sit quietly in your chair, focusing on your breath. Notice any tense areas in your body and with your next breath, imagine it as a cool breeze touching those areas holding tension and as you exhale, release the tension along with the breath. Continue observing your breath.

When thoughts or concerns arise – as they inevitably will – simply acknowledge their presence, without judgment or opinion, and let them pass by while you gently bring your attention back to your breath. There is no need to grab hold of any thought right now -- just allow your breath to guide you back to the present moment.

Our minds will wander, as intrusive thoughts are constantly vying for our attention. When you realize this has happened, simply observe without judgment and gently guide your attention back to your breath. You might find it helpful to label the thought – “worry” “laundry” “clients” – then let it go and return to your breath. Although thoughts and feelings will come and go in the background, you can prevent them from highjacking your attention by simply acknowledging them without judgment, then gently returning to the breath and this present moment.

Julie Sandine is a graduate of Wake Forest School of Law. She serves as the Chair of the TBA Attorney Well-Being Committee.

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Stormy Daniels' Attorney Tested Legal Boundaries in Bankruptcy

Michael Avenatti was caught in a downward spiral of financial trouble last year when Jerry Tobin, a private detective sometimes used by his law firm, filed a court petition to force the firm into bankruptcy, the Los Angeles Times reports. The bankruptcy triggered the end to an arbitration between the firm Eagen Avenatti and a lawyer who used to work there who claims to be owed more than $14 million.
 
U.S. Bankruptcy Judge Karen Jennemann immediately questioned whether Eagan Avenatti was colluding with Tobin in order to stall the arbitration — or “just got plain lucky.” The judge dismissed Tobin as a “screwy small creditor” who couldn’t, on his own, figure out how to initiate the rarely used involuntary bankruptcy process. “We have an involuntary case that has a stench of impropriety,” said Jennemann.
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Volunteer Opportunity For Law Camp at Lipscomb University

Each summer, the TBA Public Education Committee works closely with David Lipscomb University to host a week-long law camp for high school students, exposing them to various aspects of the legal profession. This year’s camp is expected to have 30 students from across the state in attendance, where they will learn to participate in our democratic society by engaging in educational sessions led by knowledgeable, civically active adults — including lawyers, judges, teachers, youth workers and other leaders. The American Bar Association has developed lessons on many different topics that can be adapted to fit the needs of many different audiences and programs.

This year’s theme is ‘Power and Empowerment in Your Community.’ The camp will examine federalism and shared powers, separation of powers, ideals and realities of political power and checks and balances, offering relatable examples through our current political climate and social change movements. Our hopes are to encourage conversations amongst lawyers and students that relate to their demographic and Tennessee’s constitution. Learn more about the Lipscomb Law Camp, or contact Young Lawyers Division and Public Education Coordinator Stephanie Vonnahme with questions or to volunteer.

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Investment Trust to Buy HCR ManorCare Real Estate

Welltower Inc, a real estate investment trust, is purchasing the real estate of recently bankrupt nursing home giant HCR ManorCare for $2.7 billion, Reuters reports. Welltower will team up with non-profit hospital operator, ProMedica, which purchased ManorCare’s operations for $1.3 billion, to create a 30-state health care system. The partnership plans to capitalize on the trend of more health care taking place outside of hospitals.

If the U.S. Bankruptcy Court approves the deal, the merger stands to boost the group into the 25 largest U.S. health systems by revenue alongside names like Mayo Clinic, Geisinger and Johns Hopkins. ManorCare, which was the second-largest U.S. nursing home operator, filed for Chapter 11 protection in March, with $7.1 billion of debt, as part of a prearranged deal to transfer ownership to its landlord Quality Care Properties Inc.

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Share Your Thoughts on Proposed Amendments to Tennessee Supreme Court Rule 6

The Supreme Court recently requested comment on proposed amendments to TSC Rule 6 that would require new attorneys to complete a Tennessee Law Course within one year of admission to the Tennessee bar. The Tennessee Bar Association has a working group on this issue and will be drafting comments in response to the court's Order for Comment. To ensure this comment best reflects members’ views and positions, the groups is looking for your feedback. Share your thoughts about the proposed amendments through this form by June 8.
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    Federal Court Favors Lender in FDCPA Case

    A recent decision by the Sixth Circuit Court of Appeals in Cincinnati will be a comfort to lenders in regards to the Fair Debt Collection Practices Act, Grant Stephenson of Porter Wright says. In a recent blog post for the Banking and Finance Law Report, Stephenson looks at how Hagy v. Demers & Adams, in which the court decided in favor of the purported debt collector, imposes new judicial limitations on Congress when it creates federal statutory causes of action.

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    Wells Fargo Missteps Lead to More Consumer Abuses

    Jace Ferraez with Bondnbotes.com writes about new penalties charges for Wells Fargo. Fines target Wells Fargo who faces new penalties for auto insurance and mortgage lending client abuses. Fines stem from in consumers wrongly charged with insurance they did not need and changes to borrower’s accounts on mortgage loans. Mike Mulvaney, head of the Consumer Financial Protection Bureau, leads the investigation.

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    FirstEnergy Strikes Creditor Deal in Subsidiary Bankruptcies

    FirstEnergy Corp. has reached a settlement with creditors of its bankrupt power-generation businesses that would simplify its restructuring while extricating the parent company from the chapter 11 case, The Wall Street Journal reports. If approved, the agreement covers potential claims surrounding FirstEnergy’s obligations toward money-losing coal and nuclear power plants in Ohio and Pennsylvania. FirstEnergy said it would try to bring the court-appointed committee of unsecured creditors on board with the settlement terms.
     
    The company filed for Chapter 11 recently, asking the United States Department of Energy for a bailout to keep dozens of coal and nuclear power plants in the large PJM Interconnection LLC (PJM) grid region operational, arguing the closure of these plants constitutes a national grid emergency. PJM coordinates the movement of wholesale electricity in Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.
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    U.S. Says Bankrupt Tennessee Nursing Home Chain Must Transfer Liability

    The U.S. government has objected to a plan by Orianna Health Systems nursing home chain to protect companies that would acquire facilities through its restructuring from successor liability, Reuters reports. Filed on April 9, the motion contends that the ultimate control over the legal issues surrounding the transfer of Medicare provider agreements, not a bankruptcy court — and that Orianna cannot expect a new operator to assume control over the properties without also dealing with its existing liabilities. The Nashville based company, which operates skilled nursing facilities in seven states, with around 4,500 beds and 5,000 employees, initially revealed its bankruptcy plan last month after falling behind on rent payments to landlord Omega Healthcare Investors. 
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    Tomorrow: Topgolf CLE – Estate Planning Tee-Off

    Register now for the second annual TBA Estate Planning & Probate Section Topgolf: Estate Planning Tee-Off tomorrow, June 19. The program will feature 3 hours of CLE programming, focused on information relevant to new attorneys interested in Estate Planning and lawyers who desire to add this area to their practice.
     
    The CLE package includes breakfast, lunch, plus two hours of Topgolf after the presentations. Don’t miss this unique opportunity to build your practice knowledge and fine-tune your drive game, all in one day! 
     
    When: Wednesday, June 19, 9 a.m., CDT
    Where: Topgolf Nashville, 500 Cowan Street, Nashville, TN, 37207
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    Online CLE Credit Available

    Did you miss the Creditors Practice Forum this year? Do you need some online CLE hours? Want to learn about the Telephone Consumer Protection Act and creditors practice in estate claims? If so, then click here to access all of the TBA's online resources.

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    Toys 'R' Us Founder Dies as Company is Set to Begin Liquidation

    In an unlikely sequence of events, the founder of Toys 'R’ Us has passed away just as the beleaguered retailer was set to begin its liquidation, The New York Times reports. Charles Lazarus opened the first Toys R’ Us in 1957 and led the company for several prosperous decades prior to stepping down as chief executive officer in 1994.

    Lazarus’s death comes one week after Toys 'R' Us announced that it would start liquidating its stores in the United States. The company filed for bankruptcy last September and announced last Thursday that the company planned to close or sell all of its stores in the United States. That could result in more than 30,000 employees losing their jobs.

    “There have been many sad moments for Toys 'R' Us in recent weeks, and none more heartbreaking than today’s news about the passing of our beloved founder, Charles Lazarus,” Toys “R’ Us said in its statement on Thursday afternoon. “We will forever be grateful for his positive energy, passion for the customer and love for children everywhere.” Lazarus was 94.

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    Remington Declines to Say if Bankruptcy Will Put Existing Settlement at Risk

    Remington, America's oldest gun manufacturer, filed Chapter 11 bankruptcy on Monday, sparking questions on how this will affect an agreement to repair millions of allegedly defective guns that resulted in a lawsuit. The suit began in 2010 when CNBC investigated allegations that for decades Remington covered up a deadly design defect that allows the guns to fire without the trigger being pulled. To this day, Remington denies the allegations and maintains the guns are safe.
     
    The company said it was settling the case to avoid protracted litigation. An attorney for Remington refused to say whether the plan by America's oldest gun manufacturer to file for Chapter 11 bankruptcy protection will affect an agreement to repair millions of allegedly defective guns. "It is the company's position not to comment," said John Sherk, attorney for Remington.
     
    An attorney representing plaintiffs in the case, J. Robert Ates, says the bankruptcy filing should be of no moment in terms of the class action case, particularly because the suit also named as a defendant E.I. du Pont de Nemours and Company, which owned Remington when the original trigger mechanism was developed. The company, which merged with Dow Chemical last year to form DowDuPont, recorded $24 billion in revenues 2016.
     
    Under the proposed settlement - which Remington and plaintiffs have claimed could be worth upwards of $500 million - DuPont would fund only a tiny amount, covering product vouchers being offered to owners of some of the oldest Remington models. DuPont has also continuously maintained that the guns are safe.
     
    Neither Remington nor its attorneys have indicated whether the company intends to abide by the agreement considering the bankruptcy filing. While the settlement includes a guarantee that the company will meet its financial obligations under the agreement, it does not address the possibility of a bankruptcy. The settlement is currently under appeal in the Eighth U.S. Circuit Court of Appeals.
     
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    TBA Gears Up for 2018 Mock Trial Tournament

    The Tennessee Bar Association will host the upcoming Tennessee High School Mock Trial Tournament on March 23 and 24 in Nashville. The Mock Trial is a two-day, single-elimination bracket-style competition where 16 high schools face-off against each other in the Davidson County Courthouse. Each team is scored on their trial preparation and skills. 

    We need TBA volunteers to help be bailiffs and jurors (scorers) for the event. After signing up, we will send you a Volunteer Memo with all the information you need for competition including; parking, hotel, downtown map, courthouse rules, and reimbursement information. Come be a part of the Young Lawyers Divisions’ March Madness! Feel free to contact YLD Director Stephanie Vonnahme with any questions.

    To volunteer for this event, click here.

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    15th Annual Bankruptcy Forum in Gatlinburg

    The 15th Annual Tennessee Bar Association Bankruptcy Forum will take place April 27-29, 2018, at the Hilton Garden Inn in scenic Gatlinburg. This event offers 10 hours of CLE credit including 3 hours of ethics.
     
    This high-quality program will begin on Friday with presentations on recent bankruptcy case developments in the Sixth Circuit and around the country. A faculty of prominent bankruptcy judges will be present, encouraging participants to analyze, discuss, and argue different approaches to relevant case studies.
     
    Make plans to join us in this wonderful and relaxing setting for unique and informative presentations, while networking with attorneys of an associated practice. 
     
    Speakers and producers include:
    • Joel Giddens, Wilson & Assoc PLLC, Memphis 
    • Lawrence Ahern III, Brown & Ahern, Nashville 
    • Paul Bonapfel, United States Bankruptcy Court - North District of GA, Atlanta 
    • James Croom, United States Bankruptcy Court for the Western District of Tennessee, Jackson
    • Laura Ketcham, Miller Martin PLLC, Chattanooga
    • Randal Mashburn, U.S. Bankruptcy Court, Middle District of Tennessee, Nashville
    • Michael McCormick, McCalla Raymer Leibert Pierce, LLC, Roswell
    • Shelley Rucker, U.S. Bankruptcy Courts for the Eastern District of TN, Chattanooga
    • Kara West, Chapter 13 Trustee, Chattanooga

    For more information and to register for this event, click here.

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    Memphis Landlord Trying to Save Shuttering Toys 'R' Us Location

    A Memphis Toys R Us is among as many as 182 stores likely to close as part of its bankruptcy reorganization plan, but a local shopping center owner will try negotiating to keep it open. The beleaguered company announced its filing of Chapter 11 bankruptcy filing last September, acknowledging that it needed to revamp its long-term debt totaling more than $5 billion.
     
    "I was a little surprised,'' Michael Lightman said of learning that the Toys R Us made the closure list. "I thought that store was doing just fine. I'm still trying to reach the right people at Toys R Us to find out more detail,'' he said.
     
    The company noted that some closings may be avoided if it is able to negotiate more favorable lease terms. But most of the stores listed in the documents are expected to close as Toys R Us tries to reinvent itself as a leaner, smarter retailer. "The reinvention of our brands requires that we make tough decisions about our priorities and focus," Toys R Us chief executive Dave Brandon said in a letter posted on the company's website.
     
    Toys R Us will shrink its store fleet by about 20 percent if all planned 182 stores are closed. Lightman's location is among two planned Tennessee closures for the company. Babies R Us on Nolensville Road in Nashville is also planned for closure. A complete list of closing stores can be found here.
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    Director of Consumer Financial Protection Bureau Comes Under Fire After Closing Payday Lending Investigations

    Mick Mulvany, director of the Consumer Financial Protection Bureau, has recently closed investigations of payday lending companies in Kansas and South Carolina, causing concerns that the Trump administration is taking a lax approach to regulations on this polemic industry.
     
    The CFPB, formed in 2011 amidst the aftermath of the Great Recession, is tasked with making sure banks, lenders, and other financial companies treat citizens fairly. In a memo released by Mulvany, he announced a new direction for the bureau stating "We don't just work for the government, we work for the people. And that means everyone: those who use credit cards, and those who provide those cards; those who take loans, and those who make them; those who buy cars, and those who sell them. All of those people are part of what makes this country great. And all of them deserve to be treated fairly by their government. There is a reason that Lady Justice wears a blindfold and carries a balance, along with her sword."
     
    The move has been met with consternation from critics who believe Mulvaney may have a conflict of interest due to receiving campaign contributions from a number of payday loan companies. Payday lenders gave $31,700 in 2015-16 federal campaign cycle contributions to Mulvaney, ranking him ninth among all congressional recipients from the sector, according to data analyzed by the Center for Responsive Politics. When asked whether the contributions influenced his position on the rule and could pose a conflict of interest, Mulvaney said, "I don't think so, because I am not in elected office anymore."
     
    Tennessee, who is among 25 states the US have already passed serious legislation to regulate the functioning of payday loans, has most predatory lenders in the U.S. according to a recent report. The same report found people without 4-year college degrees, home renters, African-Americans, and those earning less than $40,000 a year are most likely to use a payday loan.
     
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    Don't Forget: Winter CLE Blast Tomorrow!

    Need CLE hours fast? We can help! The annual Winter CLE Blast is less than a day away. With this program, you can complete up to 11 hours of Dual CLE credit on your own time. Our registration desk will be open from 7 a.m. to 6:45 p.m. on Feb. 21, providing you the flexibility to create your own schedule and take as many or as few hours as you need. Payment will be determined at checkout depending on the number of hours you attend. 

    Highlights

    • Flexible to your schedule
    • Up to 11 Hours of CLE
    • Ethics Credits
    • Compliance CLE
    • Live Credit Hours

    When: Feb. 21, registration begins at 7 a.m., CST

    Where: Tennessee Bar Center, 221 4th Ave N., Nashville, TN 37219

     

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    Court Clarifies Law When Bank Sells Loan Collateral Without Proper Notice

    The Tennessee Supreme Court today issued guidance on the steps courts should follow when a creditor sells collateral used to obtain a loan, but does not provide the required notice of the sale. The case involved a bank loan that was used to purchase an airplane, with the plane itself and additional guarantors securing the transaction. When the debtor failed to maintain insurance, the bank, Regions Bank, placed the loan in default, and the resulting accelerated payments were not made. The bank filed suit against the guarantors. While that action was pending, Regions also repossessed the plane and spent money to make it flightworthy and marketable. Regions then ultimately sold the plane at a private sale for less than the amount owed to Regions. The Court concluded that resolution of this issue was a fact question for the trier of fact, in this case the trial court, to decide. The court expressly rejected the Court of Appeals’ evidentiary requirement regarding proof negating a debtor’s or guarantor’s ability or motivation to redeem or purchase the collateral. The court then spelled out the proper procedures for a trial court to utilize to resolve this issue.

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