News

TBA to Introduce Legal Document Generation

The TBA will soon launch a new subscription-based product for Tennessee lawyers — automated legal forms. The initiative will use HotDocs, a custom documentation generator that creates form templates and speeds up the preparation process based on client and case data. In order to provide this valuable resource to our members, we hope to obtain your comments and ideas on forms you deem beneficial for replication. With across-the-board participation, we can comprise a substantive, comprehensive database where subscribers will have access to forms submitted by all TBA sections. Please send suggestions and comments to TBA Membership Director Mindy Fulks.

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TBA Legislative Agenda – Service of Process

Sen. John Stevens, R-Huntingdon, and Rep. Johnny Garrett, R-Goodlettsville, introduced a bill yesterday, drafted by the TBA’s Creditors Practice Section, and supported by the TBA. SB 456/HB 393 allows for process to be valid if a private process server does not include a mailing or physical address on the service return. The TBA Governmental Affairs team will work with legislators to pass this bill and have it signed into law by Gov. Bill Lee.
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Southeastern States Continue to Lead in Bankruptcy Filings

Data compiled for the American Bankruptcy Institute shows that Alabama, Tennessee and Georgia again led the nation in the per capita rate of bankruptcy filings for last year, the Times Free Press Reports. While bankruptcy filings decreased nationwide, the city of Chattanooga saw an increase for the second consecutive year, specifically a 1.8 percent increase with 6,011 total cases filed. One Chattanooga bankruptcy attorney attributes the increase to wages not increasing enough to keep up with the rising cost of living. The article notes that 59 percent of the filings in Tennessee were Chapter 13 petitions. Despite average job growth in Tennessee over the past year, the state’s bankruptcy filings were twice the nation’s per capita rate. 

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Meditation Apps Help Incorporate Mindfulness Each Day

Consider a meditation app for your phone to help incorporate mindfulness into your day. The accessibility and variety of meditation apps can make them beneficial and easy to try. Some, such as Mindbody, Stop, Breathe & Think, 10% Happier, Breethe, Omvana, Insight Timer, Sattva Meditations & Mantras, and Smiling Mind (which can be tailored to different age groups) are free. Others, such as Calm, Headspace, and the Mindfulness App, have free trials and can be upgraded to a paid subscription. Comparisons of various apps are available on www.healthline.com or www.bestproducts.com.
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Creditors File Motion Challenging Lampert’s Bid for Sears

Attorneys representing Sears’ unsecured creditors filed a motion last week challenging Sears Holdings chairman Eddie Lampert’s $5.2 billion bid to buy the company, USA Today reports. The creditors’ committee claims to have uncovered facts that demonstrate misconduct committed by Lampert and his hedge fund, ESL Investments, which contributed to the retailer’s downfall. The bid needs final approval from a bankruptcy judge at a hearing currently slated for Feb. 1. Sears maintains that the sale will prevent liquidation and preserve 45,000 jobs; however, the creditors allege that the deal is part of a pattern that enriches Lampert by acquiring the company at a discounted rate. The court filing claims Lampert engaged in two controversial and complex financial transactions in which he acted as both lender and borrower. One of those deals occurred in 2015; 235 of the most valuable Sears store properties were transferred to the real estate investment trust Seritage Growth Properties, where Lampert is the biggest shareholder and chairman. According to a public filing, in 2017, Sears paid Seritage $109 million in rent, $43 million in expenses and $35 million in lease termination fees. The creditors would like to recover the value of the properties transferred to Seritage. ESL stated that all business transactions involving Sears were done in good faith and on fair terms with the approval of the Sears Board of Directors.

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Will AI Technology be the Next Disrupter in the Legal World?

There is a growing prevalence of AI (artificial intelligence) technology being utilized in the legal sector, Crain’s Cleveland Business reports. Some fear that this technology will replace attorneys with computers. However, the Cleveland office of Baker Hostetler experienced an increase in lawyers a couple of years following the partnership of its bankruptcy practice and IBM’s ROSS intelligence. This technology was able to divert mundane and tedious tasks from the attorneys, such as legal research and case law analysis. Baker’s bankruptcy practice is using the AI technology to track case law and make predictions on the outcome of current cases. While Baker is open to partnering with various legal tech companies, the American Bar Association’s 2018 legal tech survey only found that 10 percent of attorneys polled utilized AI technology in some way. In addition to firms incorporating new technology, Cleveland-based law school Case Western University is also exploring ways to slowly incorporate programming, AI and blockchain technology into its curriculum in order to stay ahead of the disruptive curve.

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PG&E Plans to File Bankruptcy Amid Mounting Liability Costs

Pacific Gas and Electric Corp. announced last week plans to file for Chapter 11 bankruptcy protection as the company faces liability claims in excess of $30 billion as a result of the deadly California fires, the Los Angeles Times reports. Although the company has stated that it does not believe the filing would affect the 16 million customers served, California Gov. Gavin Newsom has formed a task force to evaluate steps the state can take to help Californians amid the potential bankruptcy. Customers experienced added costs with the company’s previous bankruptcy filing in 2001. The article notes that Senate Bill 901 which took effect Jan. 1 allows the California Public Utilities Commission to oversee future fire-related bond issues by the utilities. Depending on how the bankruptcy plays out, an intervention may be necessary in order to prioritize the claims of the fire victims since they would likely be classified as unsecured creditors.  

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Sears Closures Add Millions of Square Feet to Commercial Real Estate Market

Beleaguered retail behemoth Sears is considering liquidation, which would add an estimated millions more square feet of unused commercial space nationwide, Forbes reports. Since it announced bankruptcy last October, Sears has either closed or plans to close 260 of its 700 retail locations. In 2015, Sears Chairman and former CEO Eddie Lampert created the real estate investment trust Seritage Growth Properties, seeking to capitalize on the real estate value of Sears’ holdings; however, there is no indication if this was done in light of bankruptcy considerations. 

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A Review of 2018's Notable Business Bankruptcies

Several large retail businesses declared bankruptcy in 2018. This NBC News article reviews some of the highly publicized cases, including Toys R Us, Sears, Mattress Firm, Nine West and more.  A retail analyst also provides a grim outlook for retailers struggling with debt in 2019.

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Blog Reviews Most Important Legal Tech Developments in 2018

LawSitesBlog.com has published a roundup of the 20 most important legal tech developments in the past year, eschewing the traditional Top 10 list due to the overwhelming number of significant changes. Included on the list were analytics becoming an essential part of the legal practice, investments in legal tech topping $1 billion, the end of Avvo and the new American Bar Association rule emphasizing the duty of lawyers to be up-to-date on legal technology.
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Regular Memphis Pro Bono Clinic Has Served 12K Since Inception

Since its beginnings over a decade ago, a Memphis-area pro bono legal clinic has gone on to serve roughly 12,000 individuals in need, The Daily Memphian reports. The Saturday Legal Clinic, sponsored by Memphis Area Legal Services (MALS) and the Memphis Bar Association, has been held at the Benjamin L. Hooks Library once a month since November 2006. Firms and associations work to promote the event to ensure that 30 to 40 attorneys attend each month.
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Venezuela Sued Over Unpaid Bonds

Florida-based firm Casa Express Corp. filed suit in New York federal court yesterday against Venezuela for unpaid debt, Reuters reports. The firm via a trust of the same name represents bondholders who are demanding payment on over $34 million of unpaid principal and interest. This may be the first legal action taken by creditors since the nation defaulted on its debt. The article notes that "the government of President Nicolas Maduro stopped making payments on nearly all bonds issued by Venezuela and state oil company PDVSA this year and has accumulated some $8 billion in pending interest and principal." Last month, a group of creditors demanded payment on a $1.5 billion defaulted bond, but no claims have been taken to court. 

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Court Solicits Comments on Rule Change for Professional Privilege Tax Payments

The Tennessee Supreme Court is soliciting comments on a proposed rule change that would make delinquent professional privilege tax fees payable via an online portal and remove the requirement of a Privilege Tax Delinquency Notice to be sent via mail, requiring only an email notice. The deadline for submitting written comments is Feb. 4. Written comments may be emailed to appellatecourtclerk@tncourts.gov or mailed to James M. Hivner, Clerk, Re: Tenn. Sup. Ct. R. 9, section 26 Tennessee Appellate Courts, 100 Supreme Court Building, 401 7th Avenue North, Nashville, Tennessee 37219-1407.
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Creditors Demand Payment on Defaulted Venezuelan Bond

A group of five investment funds have filed an acceleration request after Venezuela failed to pay the principal and about $140 million in outstanding interest on a bond, Reuters reports. No claim has been filed in New York courts, but an acceleration request was submitted to both the fiscal agent of the bond, Bank of New York Mellon, and the law firm representing Venezuela.  The article notes that “the government and state-owned companies owe nearly $8 billion in unpaid interest and principal following this year’s default on bonds amid a hyperinflationary collapse of the country’s once-wealthy sociality economy.” Over 1 million Venezuelans are expected to have left the country by the end of the year to escape the economic peril.

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Missed the Creditors Practice Forum? Never Fear ... Online Videos are Here!

If you missed the section’s annual forum back in September, check out the online videos that are now available to purchase on the TBA website: 

The CLE deadline is quickly approaching, and TBA’s vast catalog of online videos provide the much-needed flexibility to work around a busy schedule. 

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Join Us Today: LAW TECH

Today's the day! Discover the newest technology for your law practice and law office at this year's Law Tech Blast at the Tennessee Bar Center in Nashville!

The flexible open house format allows you to create your own schedule. You can attend CLE sessions, enter to win prizes, network with attendees, visit with sponsors and interact with speakers. Take as many or as few CLE hours as you need. Only those seeking to be awarded CLE Credit will be charged. The registration desk will be open all day, so you can come and go for the hours you need when it is convenient for you. Attendees can earn up to 6.5 hours of Dual CLE credit.

CLE TOPICS:
  • GDPR, Cloud and Technological Competency
  • The Bill and Phil Tech Show 2019: BEAT THE CLOCK
  • Best Practices: Information Security for Firms
  • Judicial Panel: Technology in the Courtroom
  • Know When to Hold 'Em
  • Digital Evidence – A Technical Life Raft for the Legal Mind
  • Make it Rain: Ethics Guidelines and Practice Essentials

ATTEND TO WIN: Attendees will have a chance to win prizes, including an iPad Pro. The tech prize drawing will be held at the 10:30 a.m. break. Must be present to win.

TAKE A LYFT: TBA has partnered with Lyft to offer attendees a discounted ride.

  • New to Lyft?: Get $5 off 2 rides at http://lyft.com/i/lawtech5 or download the app and enter code LAWTECH5
  • Already Have Lyft?: Save 10% off 2 rides to or from Law Tech Blast with code LAWTECH

THANK YOU TO OUR SPONSORS & EXHIBITORS:


 

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Give the Gift of TBA Membership

Give yourself (or a friend) the gift that keeps giving — one-year of unlimited access to professional development opportunities and a number of programs and services designed to help you become a better practitioner. Founded in 1881, the Tennessee Bar Association is dedicated to enhancing fellowship among members of the state's legal community. Oh, and did we mention some of the benefits? Earn three pre-paid credits to use on any live or online course featured in the 12-days of CLE. Join now!

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Bankrupt Crypto Mining Firm Giga Watt Owes Millions to Creditors

Chapter 11 bankruptcy court documents filed last week by U.S.-based bitcoin mining firm Giga Watt revealed millions are still owed to creditors, CoinDesk reports. Nearly $7 million is owed to its biggest 20 unsecured creditors, including a utility provider and an electricity provider. The court documents also revealed that Giga Watt’s assets are estimated at less than $50,000 while the estimated liabilities are somewhere between $10­ and $50 million. Minutes from a special meeting of the firm’s shareholders indicate the belief that the creditors and corporation would best be served by reorganization under Chapter 11.

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Bloomberg: Puerto Rico Set to Reduce Development Bank’s Debt

Puerto Rico is set to make its first debt exchange since collapsing into bankruptcy in 2017, Bloomberg reports. Government Development Bank will exchange its bonds for $2.6 billion of new securities and around $4 billion of the bank’s debt will be restructured under the transaction. The article notes that Puerto Rico will likely have to make several exchanges in order to reduce the $74 billion of debt sold by various arms of the island. The government-sponsored bank, which also served as the island’s fiscal adviser, extended loans meant to deal with operating deficits experienced by the commonwealth and its agencies. The economy continued to shrink, and these loans contributed to its over-borrowing. Although the exchange is aimed at resolving the island’s debt crisis, the bond document notes the risks and uncertainty associated with the restructuring.

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Sears Secures Additional Bankruptcy Financing

Sears secured a $350 million bankruptcy financing deal with Cyrus Capital Partners LP, Reuters reports. The U.S. Bankruptcy Court for the Southern District of New York approved the deal on Tuesday. This will allow the retailer to continue operating during the crucial holiday time while the company continues to reorganize. Sears has secured a total of $650 million in financing since filing for bankruptcy protection in October.  

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Board of Law Examiners Holds Deans' Summit in Nashville

Law school deans from across the state recently gathered in Nashville for the Tennessee Board of Law Examiners’ 2018 Deans’ Summit. The summit, which included deans from most of Tennessee's law schools, featured presentations and discussions on a range of topics, from law student wellness, to innovations at Tennessee law schools, to the state’s recent adoption of the Uniform Bar Exam. Other parts of the program took the form of an open discussion between members of the board and the deans. 
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December CLE in 6 Cities

TBA offers CLE in six locations during December. See offerings in Chattanooga, Knoxville, Memphis, Nashville, Johnson City and Jackson. Find last-minute by the hour through Dec. 31 or take any of the TBA's online CLE packages.
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Creditors Practice Middle Tennessee Delegate on Short List for Davidson Co. Chancellor

The Trial Court Vacancy Commission will consider six applicants for a seat on the 20th Judicial District Chancery Court serving Davidson County. There is an impending vacancy on the court due to the Hon. Claudia C. Bonnyman's plan to retire effective Jan. 1. Applicants for the position include the newest member of the TBA Creditors Practice Executive Council, David Michael Anthony. As part of its meeting, the commission will hold a public hearing on Dec. 4 at 9 a.m. in the Cordell Hull Building's Senate Hearing Room 2. The commission is expected to vote immediately following the interviews and forward three names to Gov. Bill Haslam for his consideration.

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Reserve Your Spot Today

Want to know more?  Find additional details and registration information here!

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Severance Fund Created for Former Toys R Us Workers

The private equity firms KKR and Bain Capital, which owned Toys R Us before the company declared bankruptcy, have each pledged $10 million to establish the TRU Financial Assistance Fund, CNBC reports. The firms said the fund is being established to try to provide some financial relief for former employees. The article notes that this is an unusual move by the firms since this is not a requirement under bankruptcy law. Former employees must meet certain requirements in order to be eligible for payments, including being employed by Toys R Us for at least a year, having an annual income between $5,000 and $110,000 and meeting the termination and employment guidelines in the Toys R Us plan. Interested parties will be able to comment on the terms and conditions of the plan during a two-week period. Following the evaluation of comments, the final terms and conditions will be outlined. The claims process is expected to begin on Dec. 15 with the goal of completing payments by April 30, 2019.

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