Bankruptcy

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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Increased Bankruptcy Fees Affecting Companies

Some companies operating under Chapter 11 protection are struggling to deal with the quarterly trustee fee increases that came into effect at the start of the year, The Wall Street Journal reports. Previously capped at $30,000, the rule change now caps the fees at $250,000. Last October, Congress passed these increases as part of a disaster-relief spending bill. The change only applies to companies with quarterly operating costs over $1 million. Grocery stores, car and boat dealerships, agricultural businesses and any company that has high costs and modest profits are particularly affected. This new fee system is set to end in 2022, but will be reviewed annually.

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Volunteers Needed for TBA’s Mentoring Program

The TBA’s Mentoring Program is seeking volunteers willing to mentor newly-licensed attorneys who are interested in the bankruptcy practice area. There is a current need for mentors in Cleveland and Nashville, but volunteers from across the state are welcome to sign up. This is a flexible program designed by the mentor and mentee based on their schedules and availabilities. To become a mentor, fill out this application or contact Kate Prince, 615-277-3202. 

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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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National Conference of Bankruptcy Judges 2018: All of the Usuals and Plenty of Surprises

The 92nd National Conference of Bankruptcy Judges (NCBJ) program will be Oct. 28-31 at the Marriott Rivercenter and Henry B. Gonzalez Convention Center in San Antonio, Texas. With more than 1,500 insolvency professionals and judges expected to attend, the NCBJ is one of the largest nationwide gatherings for insolvency professionals. This is your opportunity to interact with some of the most involved professionals in the industry. In addition to the top insolvency professionals and judges, the conference also attracts a number of affiliate organizations, including AIRA, ACB, IWIRC, ABI, CLLA, FBA, NACBA and ABA. For more information on these timely and engaging CLE programs and to register, please visit the conference website.
 
When: Oct. 28–31
Where: Marriott Rivercenter, 101 Bowie St, San Antonio, TX 78205
 
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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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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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Meet Your 2018–19 Bankruptcy Law Section Chair

Laura Ketcham is a Member in Miller & Martin PLLC’s Chattanooga office, where she focuses on bankruptcy and creditors' rights, commercial finance and providing general business counsel. Ketcham has represented parties in a variety of finance transactions, loan workouts, foreclosures, receiverships, lien priority disputes, judgment enforcement actions, lawsuits asserting the breach of loan documents, distressed asset sales and preferential transfer cases. Laura serves on the Board of Directors for Chattanooga Friends, CHI Memorial Foundation and the Board of Trustees for St. Peter’s Episcopal School. Ketcham holds degrees from Vanderbilt University and Vanderbilt University Law School. Please join us in welcoming your 2018–19 Tennessee Bar Association Bankruptcy Law Section Chair.

 

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