American Bankruptcy Institute Update

August 18, 2005

In This Issue

Highlights

Seeing Red: Americans Driven into Debt by Medical Bills

New analysis of the 2003 Commonwealth Fund Biennial Health Insurance Survey reveals that an estimated 77 million Americans age 19 and older—nearly two of five (37 percent) adults—have difficulty paying medical bills, have accrued medical debt or both. Working-age adults incur significantly higher rates of medical bill and debt problems than do adults 65 and older, with rates highest among the uninsured. Even working-age adults who are continually insured have problems paying their medical bills and have medical debt. Unpaid medical bills and medical debt can limit access to health care: two-thirds of people with a medical bill or debt problem went without needed care because of cost—nearly three times the rate of those without these financial problems. Read the full report.

Pension Risk Overstated, Says Study

The pension crisis is not as dire as many observers fear, a new analysis by Watson Wyatt has found, CFO.com reported today. The consultancy found that pension plan liabilities at about half of the Fortune 1000 companies with defined benefit plans pose little risk to the financial stability of the company’s core business; about 30 percent face a moderate amount of risk. Only the remaining 20 percent or so face what Watson Wyatt deems to be relatively high risk levels.

Watson Wyatt also asserted, however, that the companies that carry the majority of the total value of pension risk tend to be financially healthy and thus likely able to weather a financial crisis. The consultancy noted that 84 percent of the aggregate pension risk currently in the system belongs to investment-grade companies, while just 16 percent belongs to companies with a junk-bond rating.

“Despite pockets of trouble in the pension system, employers for the most part face only a small or moderate amount of risk,” said senior research analyst Julia Coronado in a Watson Wyatt press release. Coronado added that since relatively few companies have high pension risk, the broader risk to the U.S. economy seems to be minimal.

Read the full story.

Regulators Delay Action on Insurance Receivership Model Law amid Industry Concerns

State regulators had planned by year’s end to adopt a new model law for insurers in receivership, but a new round of industry comments and concerns may stall progress, BestWire Services reported yesterday. After a special meeting held in Chicago the week of Aug. 1, the National Association of Insurance Commissioners’ (NAIC) Financial Condition Committee voted to continue discussing concerns that insurers and others have raised since a working group and a task force of the committee both approved amendments to the Insurer Receivership Model Act earlier this year.

Originally, the measure was planned for a vote by the NAIC’s Executive Committee at its June national meeting in Boston. The model has been billed by the industry as among the most important model act projects the NAIC ever has undertaken. Read the full story.

Register Now for ABI’s New Investment Banking Program

An “all-star” cast of industry leaders will play the roles of the major constituents as they work through a case study in this day-long program. In the new format and location, the 2005 ABI Investment Banking Program will offer a unique approach to understanding the role of investment bankers in insolvency and restructuring contexts. See how creditor and debtor dynamics affect a case as the players seek the highest value for an insolvent company. Join us for this year’s program, set to be held in Las Vegas at the Four Seasons Hotel, September 8–9, 2005.

Moderators and Program Co-chairs:

  • James D. Decker, Houlihan Lokey Howard & Zukin
  • Peter S. Kaufman, Gordian Group LLC

“Representing” Parties-in-Interest:

  • Board of Directors: Laura Davis Jones, Pachulski, Stang et. al
  • Debtor/Management: William K. Snyder, Corporate Revitalization Partners LLC
  • Trade Creditors: Peter M. Gilhuly, Latham & Watkins
  • Senior Lender: Mitchell E. Drucker, CIT Group Inc.
  • Private Equity Investor: Joel B. Piassick, Harbert Management
  • Bondholders: Jeffrey S. Sabin, Schulte Roth & Zabel LLP
  • CRO: Rebecca A. Roof, AlixPartners LLC
  • U.S. Trustee: Ilene J. Lashinsky, Region 14, Arizona
  • Judge: Hon. Wesley W. Steen, S.D. Texas

Register today!.

Join Your Peers at ABI’s International Insolvency Symposium

ABI’s first program in Europe, to be held September 23, 2005, in London, at the renowned Savoy Hotel, will bring together top international speakers to discuss the issues of the moment in international insolvency and restructuring. The event has attracted significant support from the industry’s top professional firms in the United States and Europe.

Sir Gavin Lightman, Chancery Division High Court of Justice, London, will present the keynote address: Views from the Bench. Other symposium sessions will include International Forum Shopping, Hands Across the Pond: Identifying Best Practices, Restructuring Trends in Europe, and Managing an International Reorganisation.

Register today for this exciting international program.

Mark Your Calendar to Participate in the New Bankruptcy Law Series’ Final Webinar!

The Judges’ Perspective—September 22, 2 p.m. EDT

This Webinar will be a special roundtable featuring a panel of leading bankruptcy judges:

  • Second Circuit: Hon. Elizabeth Stong, Eastern District of New York
  • Fourth Circuit: Hon. Douglas Tice, Eastern District of Virginia
  • Fifth Circuit: Hon. Barbara Houser, Northern District of Texas
  • Sixth Circuit: Hon. Steven Rhodes, Eastern District of Michigan
  • Ninth Circuit: Hon. Samuel Bufford, Central District of California
  • Tenth Circuit: Hon. James Starzynski, District of New Mexico
  • Eleventh Circuit: Hon. Mary Grace Diehl, Northern District of Georgia

Register today.

Technology & Telecommunications Cases Committee E-Newsletter Now Available Online

Should liquidating IT/technology companies choose auction or asset recovery? Will VOIP providers be the next technology segment to fail? Read about these and other technology issues in the August issue of the Technology & Telecommunications Cases Committee e-newsletter.

Prepare for the Certification Exam

The new bankruptcy law provides that courts will take into account board certification when awarding attorney fees under §330. The American Board of Certification is offering its exams several times this fall (covering current law). You can prepare for the exams with a handy and affordable CD-ROM prepared by board-certified ABI members. The CD includes materials on consumer bankruptcy, business bankruptcy, ethics and creditors’ rights. Sample exam questions and answers are also included. Member price is $195. Buy the CD-ROM in ABI’s online store!

“Best of Annual Spring Meeting” Archived Program Now Available Online

The “Best of ABI” series brings the highest-rated sessions from each ABI conference right to your office. The “Judges’ Roundtable: The New Bankruptcy Law ” archived program is now available online at ABI World.

CLE/CPE credit will be available in certain states. The program features Judges Joan Feeney, David Houston, Linda Riegle and Mary Walrath analyzing the new law.

ABI World Tutorial Highlights Search Engine

A new online tutorial focuses on the capability of ABI’s search engine. The tutorial features a visual demonstration of how to use the online search engine and locate documents quickly and easily on a particular bankruptcy topic within the thousands of articles, reports, publications, court documents and many other sources available at the ABI World web site. This is the third in a series of tutorials that will highlight the many resources and services available at ABI World.

Latest Job Postings at ABI Career Center

Check out the ABI Career Center. The Center is a one-stop site for job seekers and employers in the insolvency community. Career Center resources are available free to both employers and job seekers. New positions are featured daily. The latest listings include: