News

50 Years of Travel, Plus Columns on Wills, Banking, Uber

To celebrate the Journal’s 50th birthday, travel back through some of the exotic trips the TBA has taken over the years -- Rome, Mexico, the Caribbean and more. This month, columnist Eddy Smith asks (and answers) the question, "Strictly Speaking, When Is a Will Not a Will?" and in her column, Kathryn Reed Edge gives an overview of interest rates. Humor columnist Bill Haltom suggests a slight career concept change … to Uber Attorney. See the entire August Journal here.

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Bank On It: Interest Rates 101

Ask any commercial lawyer or banker about interest rates, and you are likely to get a mixture of inappropriate language, confusion and resignation. Interest rates are complicated. How they are figured sometimes belies all reason, and why you can’t find the various rates all in one place in the Tennessee Code is a mystery.

“Interest rate” is defined as the annualized cost of credit or debt capital computed as the percentage ratio of interest to the principal.

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Bankruptcy Judge Applicants Sought in Nashville

The Sixth Circuit Judicial Council is soliciting applications for the U.S. Bankruptcy Court in the Middle District of Tennessee at Nashville. The position will become vacant with the retirement of Judge Keith Lundin on June 16, 2016. The term of office is 14 years. The council will recommend at least three nominees to the Sixth Circuit Court of Appeals, which will make the final selection. Apply by Aug. 25 for consideration.

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Bankruptcy Chief Judge Lundin to Retire

Keith Lundin, chief judge of Middle Tennessee’s bankruptcy court plans to retire next summer, the Tennessean reports. Lundin said he plans to step down June 16, 2016, after serving on the federal bench for 34 years. He previously served as a Chapter 13 trustee. Lundin said his post-retirement plans include writing on bankruptcy and teaching in law schools across the country.

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AG Announces $136M Chase Bank Settlement

Tennessee Attorney General Herbert Slatery, along with 46 other states and the Consumer Financial Protection Bureau, announced a $136 million settlement with Chase Bank USA N.A. and Chase Bankcard Services Inc. The deal settles claims that Chase subjected consumers to inaccurate credit reporting, unlawful judgments, inaccuracies in debt collection suits, re-sale of uncollectable debts, use of false and deceptive affidavits and robo-signing. As part of the deal, Chase will spend $50 million to make restitution to consumers and will be barred from reselling consumer debts to other purchasers.

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Whittenburg Reflects on 1st Week as Bankruptcy Judge

Judge Nicholas Whittenburg just completed his first week as the newest bankruptcy judge for the Eastern District of Tennessee and tells the Hamilton County Herald that the responsibilities have been overwhelming. “My predecessor, Judge [John C.] Cook, was on the bench for 28 years,” Whittenburg says. “I’m learning how inefficient I am compared to him. It took me a week to do what he could accomplish in a matter of hours.” Whittenburg also says he did not appreciate the sheer number and variety of matters that come before the federal bankruptcy court, but is ready for the challenge.

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Court Rules Against Law Firm in Bankruptcy Fee Fight

The Supreme Court ruled today that one of the nation's biggest law firms is not entitled to recover $5.2 million in legal fees it incurred in the course of a bankruptcy proceeding. The 6-3 ruling said the firm Baker Botts could not collect additional fees it billed during a side dispute over whether the firm should be paid $117 million in fees earned representing Tucson-based copper-mining giant Asarco in the underlying bankruptcy. The court found that federal law does not allow a bankruptcy court to award attorney fees solely for the extra work performed to justify fees in the underlying case. The Daily Times has more from the Associated Press.

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Chattanooga Lawyer Sworn in as Bankruptcy Judge

Nicholas Whittenburg was sworn in Friday as federal bankruptcy judge for the Eastern District of Tennessee during a private ceremony in Chattanooga. He fills the seat vacated by Judge John C. Cook, who retired in March after 28 years on the bench. Whittenburg is from Crossville and has practiced law in Tennessee and Georgia for 25 years. He has been with Miller & Martin since 2004, the Times Free Press reports.

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First Tennessee to Pay Government $212.5 Million

First Tennessee Bank has agreed to pay $212.5 million after admitting to making bad mortgage loans. According to the U.S. Justice Department, the bank kept approving Federal Housing Administration loans for ineligible borrowers through its subsidiary, First Horizon Home Loans Corporation, between January 2006 and October 2008. When many of those loans later defaulted, the banks holding the loans were able to submit insurance claims to the U.S. Department of Housing and Urban Development for their losses. News Channel 9 has the story.

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Court Rules on Head Scarf, Internet Threats

The U.S. Supreme Court today issued orders from its May 28 conference and four decisions in argued cases. In Mellouli v. Lynch, the court ruled that a lawful permanent resident may not be deported after a misdemeanor state drug paraphernalia conviction. In Bank of America v. Caulkett, the court found that when a mortgage lien is worth more than the market value of the property, courts may not reduce the lien’s value to the property’s market value. In EEOC v. Abercrombie & Fitch Stores, the court found for a job applicant whose faith dictates a personal practice that contradicts the company’s workplace rules, even though the rules are entirely neutral about religion. And in Elonis v. United States, the court overturned a Pennsylvania man’s conviction for making threats over the Internet. SCOTUSblog has more on each of the decisions.

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Report: Foreclosure Rates Trending Down

Foreclosure rates continue to drop across the country, according to the Memphis Business Journal. A recent report by CoreLogic shows the foreclosure rate for the country dropped from 1.86 percent in March 2014 to 1.39 percent this year. In Tennessee, the rate went from 0.75 percent to 0.67 percent. The report also found that the percent of loans more than 90 days delinquent also improved nationwide and in Tennessee.

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Court Clarifies Power of Bankruptcy Judges

The U.S. Supreme Court ruled 6-3 on Tuesday that bankruptcy courts have authority to rule on disputes that fall outside the bankruptcy proceedings if the parties to the case consent. The question of the judges’ authority had been an issue since 2011 when the court limited their authority to decide non-bankruptcy issues. The Daily News has more from the Associated Press.

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Holmes Named New Federal Magistrate

The U.S. District Court for the Middle District of Tennessee has announced that Barbara D. Holmes has been selected to replace Magistrate Judge Juliet Griffin, who will be retiring July 31. Holmes is currently head of h3gm’s Commercial Bankruptcy and Reorganization Practice Group. She has more than 25 years of experience with restructuring and insolvency matters and commercial litigation in state and federal courts.

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Rejected Bankruptcy Plan Cannot be Appealed

A unanimous Supreme Court today ruled that debtors in bankruptcy may not immediately appeal the rejection of a repayment plan, but must wait until a plan is confirmed before appealing to a higher court. Writing for the court, Chief Justice John Roberts agreed that only an order confirming a payment plan is immediately appealable, the Associated Press reports. An appeals court had found similarly, that a rejected order was not final because the debtor could still propose another plan. The Memphis Daily News has the story.

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Steen: Bridge the Generation Gap With Clear Communication

In his Tennessee Bar Journal column about how different generations communicate, TBA President Jonathan Steen points out how important good communication skills are -- and why sending a text late at night to a senior partner may not be the best way to make contact. In the April issue's other columns, Eddy Smith covers IRA beneficiaries and creditor protection; Katy Edge explains how banking works for legal marijuana sales; and Bill Haltom comments on Justice Ginsburg’s recent nap before the president’s speech.

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Tennessee Has Highest Bankruptcy Filing Rate

Data from February shows that bankruptcy filings decreased 13 percent nationwide from last year, down to 65,000 from 72,000. But Tennessee is making news for the opposite reason, the Memphis Business Journal reports. With 5.17 bankruptcy filings per 1,000 people, the state rate is more than double the national rate and puts Tennessee above all other states.

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Reminder: Investiture Ceremony Friday for Judge Bauknight

The investiture ceremony for U.S. Bankruptcy Judge Suzanne H. Bauknight will take place Friday at 2 p.m. at the Howard H. Baker Jr. U.S. Courthouse in Knoxville. The event will take place in Courtroom 4 with a reception following on the fourth floor. For security purposes, plan to arrive early and have photo identification. Bauknight was sworn in this past fall after being picked by the 6th Circuit Court of Appeals to succeed Richard Stair Jr. as bankruptcy judge for the Eastern District of Tennessee.

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ABA House Acts on Range of Issues

The ABA House of Delegates met Monday in Houston, adopting a number of resolutions, including: (1) calling for counsel to be appointed to unaccompanied minor immigrants and special training be provided to courts that hear their cases, (2) opposing stand-your-ground laws, (3) condemning foreclosure rescue fraud, (4) urging states to grant protective orders even though a victim and perpetrator have no established domestic relationship, (5) requiring a unanimous jury verdict before imposing the death penalty, (6) calling for open and transparent disclosure of execution protocols, (7) urging governments to adopt a presumption against the shackling of juveniles in court, and (8) urging law schools and bar associations to counsel young attorneys on student loan debt. The body considered but sponsors ultimately withdrew resolutions calling for federal regulation of paid tax preparers and stronger laws to protect the privacy of consumer data.

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Circuits Split on Definition of ‘Applicant’

In her Journal column this month, Kathryn Reed Edge makes a prediction: "As the financial crisis wanes and fewer banks are plagued by their borrowers’ credit problems, we in the business are seeing the federal banking agencies gear up for an energetic assault on consumer compliance violations." And adding to the confusion that many bank compliance officers have in interpreting the Equal Credit Opportunity Act, she writes that two judicial circuits, the 6th and the 8th, "have split on a seemingly simple issue of the definition of 'applicant' under the ECOA." She explains the important differences and advises readers of her column "Bank On It" to watch the U.S. Supreme Court for an answer.

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Tennesseans to Receive $2.6M in Foreclosure Settlement

More than 2,000 Tennessee residents who lost their homes to foreclosure with Ocwen Loan Servicing will receive a total of $2.6 million in a settlement announced today by the Tennessee Attorney General’s office. Each homeowner should receive a check for approximately $1,100. The agreement settles state and national findings that Ocwen engaged in servicing abuses that resulted in unnecessary and illegal foreclosures from Jan. 1, 2009, to Dec. 31, 2012. It also covers two loan servicers recently acquired by Ocwen: Litton Loan Servicing LP and Homeward Residential Holdings LLC (previously known as American Home Mortgage Servicing Inc. or AHMSI). Those with questions should call (866) 783-5382.

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Bauknight Takes Bankruptcy Seat

Suzanne H. Bauknight, former chief of the civil division of the U.S. Attorney’s Office for the Eastern District of Tennessee, is now officially the new U.S. Bankruptcy Court judge seated in Knoxville, Knoxnews reports. Bauknight was sworn in Nov. 10 by U.S. District Chief Judge Thomas Varlan. A formal ceremony is scheduled for March 13. She was scheduled to hear her first case today with a major docket day set for Dec. 3. Bauknight was picked by the 6th Circuit Court of Appeals several months ago. She succeeds Richard Stair Jr., who retired Sept. 30.

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Court to Consider When 2nd Mortgage Can Be Void

The U.S. Supreme Court said Monday it will decide whether homeowners who declare bankruptcy can void a second mortgage if the home’s market value has dropped below the amount they owe on the first mortgage, the Memphis Daily News reports. The case involves Florida homeowners who were allowed to nullify second loans held by Bank of America. The Atlanta-based 11th U.S. Circuit Court of Appeals affirmed both cases, but Bank of America says the rulings conflict with Supreme Court precedent and the rulings of other appellate courts that have considered the issue.

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Council Recommends 4 for Chattanooga Bankruptcy Judge

A merit selection panel of the Sixth Circuit Judicial Council has recommended four applicants to fill a bankruptcy judgeship in the Eastern District of Tennessee being vacated by John C. Cook. The four are: Judith Elkin, New York City; James D. Lane II, Tullahoma; Kimberly C. Swafford, Chattanooga; and Nicholas W. Whittenburg, Chattanooga. The council must now narrow the list to three recommended candidates. The final selection will be made by the U.S. Court of Appeals for the Sixth Circuit. Written comments regarding the nominees will be accepted through Nov. 17. Learn more in this announcement from the court.

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Stair Praised at Retirement Ceremony

Dignitaries, friends and family on Friday packed a send-off ceremony for retiring U.S. Bankruptcy Judge Richard Stair Jr., Knoxnews reports. “But Stair seemed nonplussed by the bigwigs who turned out and, bucking tradition at such fetes, did not regale the crowd with highlights of his tenure,” according to the paper. Instead, he praised his mentors, law clerks, assistants, court staff and family. Others who spoke said Stair, who is leaving the bench after a 28-year-career, treated all who came before him with dignity and respect and was known for his wisdom, wit, insight and selflessness.

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6th Circuit Picks Bauknight as Next Bankruptcy Judge

Suzanne H. Bauknight, chief of the civil division of the U.S. Attorney’s Office for the Eastern District of Tennessee, is slated to be the next bankruptcy judge in the state, pending clearance by the FBI, Knoxnews reports. Bauknight was picked by the Sixth Circuit U.S. Court of Appeals in Cincinnati to succeed Richard Stair, who retires at the end of the month after 28 years.

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