American Bankruptcy Institute Update

September 1, 2005

In This Issue


Hurricane Katrina Affects Bankruptcies in Southeast U.S.

Bankruptcy: Another Hurdle for Victims

Hurricane Katrina is expected to cause a spurt of bankruptcy filings by storm victims—and sweeping changes in U.S. bankruptcy laws may leave them even more financially troubled than they otherwise might be.

The new law, which takes effect Oct. 17, includes new rules and regulations intended to curb abuse. These are expected to make it more difficult for individuals to file for bankruptcy protection, and more difficult for businesses to reorganize.

But some lenders are taking steps to help hurricane victims. Such banks as Wachovia Corp. are relaxing some fees and providing loan assistance. Ford Motor Co.’s finance arm is letting customers defer two loan payments, while General Motors Corp.’s finance arm is working with customers case by case.

In related news, Reps. John Conyers Jr. (D–Mich.), Mel Watt (D–N.C.), Jerrold Nadler (D–N.Y.) and Sheila Jackson Lee (D–Texas) announced today that when Congress returns on Tuesday, they will introduce legislation to protect the thousands of families and small businesses financially devastated by Hurricane Katrina from being penalized by what the sponsors call anti-debtor provisions contained in the new law, scheduled to take effect on October 17, 2005.

The Senate and House will convene in special sessions this evening at 10 p.m. and tomorrow afternoon to approve emergency funding to Gulf Coast states that have been ravaged by Hurricane Katrina.

You can vote on this issue – Take the ABI Online Poll.

Katrina Shutters 5th Circuit Courthouse

As Hurricane Katrina and growing floodwaters have turned the New Orleans business district into a legal ghost town, officials at the 5th U.S. Circuit Court of Appeals are making plans to relocate the court, Texas Lawyer reported today. Several breaks in the levees that surround the city have caused water to rise around the marble walls of the John Minor Wisdom Courthouse, which houses the 5th Circuit. The city’s electricity is expected to be out for a month or more. “We can’t return to the building anytime soon,” says Carolyn Dineen King, chief judge of the 5th Circuit. “So we have to have an alternative site. The question is, where?”

While Houston, where King’s chambers are based, may be a logical choice, it still will be a difficult decision. King believes the temporary location of the court will be selected by Friday. King says she is not sure when the court will resume its regular operations. But in the meantime, filing deadlines have been extended. And lawyers have been instructed not to send any filings to the New Orleans courthouse. Further instructions about where to direct emergency matters can be found on the Fifth Circuit’s web site.

Suit Alleges Credit Cards Colluded

A lawsuit filed in New York federal court alleges eight leading credit card companies violated U.S. antitrust laws by colluding to promote arbitration of customer disputes, the Wall Street Journal reported. The complaint alleges that Bank of America Corp.; Capital One Financial Corp.; J.P. Morgan Chase & Co; Morgan Stanley’s Discover unit, Citigroup Inc.; MBNA Corp.; Providian Financial Corp. and Britain’s HSBC Holdings “combined, conspired and agreed to implement and/or maintain mandatory arbitration.” Some of the banks named allegedly convened a group in 1999 called the “Arbitration Coalition” or “Arbitration Group,” the complaint says, according to the Journal. The suit was filed on behalf of seven plaintiffs who live in California, Pennsylvania, New York, Illinois and New Jersey.

Many of the largest U.S. credit-card companies require customers to sign away their ability to take disputes to court and instead settle disagreements in arbitration, the newspaper said. Now that practice itself is under attack in court.

The suit, which was filed last month and is seeking class-action status, claims that bank representatives spoke or met at least 20 times from 1999 to 2003 to share experiences from arbitration as well as advise on how to set up arbitration agreements with consumers that would withstand challenges in court. Read the full story.

ABI’s Revamped Online Consumer Education Center Prepares Public for New Bankruptcy Law

ABI’s new and improved Consumer Education Center is up and running.

The user-friendly Consumer Education Center Web site contains information critical to the decision-making process for consumers considering bankruptcy, including:

  • “Should I File for Bankruptcy?”—complete with the “Consumer Bankruptcy Checklist” of important considerations,
  • Comprehensive bankruptcy FAQs that take the consumer from the decision-making process all the way through exiting bankruptcy,
  • Links to pertinent resources, including major credit counseling organizations and a host of “financial literacy” sources,
  • A directory of certified bankruptcy attorneys and
  • An ABI-produced video program, “Taking Charge of your Finances,” on the basics of household budgeting and bankruptcy options.

Check it out today!

ABI’s New Investment Banking Program Is Next Week!

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, to be held in Las Vegas at the Four Seasons Hotel, September 8–9, 2005.

Register today!

“Best of Central States Bankruptcy Workshop” Registration Now Open

The “Best of ABI” Webinar, “Preclusion Issues: Been There, Done That,” will be held on September 21, 2005, at 2:00 p.m. EDT.

Among the featured presenters will be:

  • Hon. Susan Pierson Sonderby, U.S. Bankruptcy Court, Northern District of Illinois, Chicago
  • Timothy F. Nixon, Godfrey & Kahn SC, Green Bay, Wis.
  • Robert B. Millner, Sonnenschein Nath & Rosenthal LLP, Chicago
  • Robert D. Gordon, Clark Hill PLC, Detroit

Register today!

The “Best of ABI” series brings the highest-rated sessions from each ABI conference right to your office. We provide a special web interface for this program, allowing participants to interact online with presenters through Q&As, file-sharing and dynamic polling. ABI offers the latest distance learning technology in order to provide you with this innovative learning experience. CLE/CPE credit will be available in certain states.

The “Best of ABI” archive includes past programs that you can register for and access 24/7/365.

Detroit Bankruptcy Conference Provides Intensive New-Law Education

ABI’s Detroit Bankruptcy Conference, “Practice Under the New Bankruptcy Law” brings together the area’s top insolvency professionals for one day of intense learning. The event will be held on November 11, 2005, at the Novi Sheraton. Topics will include:

  • U.S. Trustee Implementation: Entering, Getting Through and Exiting the Process
  • The Means Test: An In-depth Analysis
  • Chapter 13 Changes
  • What Debtors Get to Keep (and Not): Homestead Exemption; Household Goods; Privacy Issues
  • The New Super-Creditor: Domestic Support Changes
  • The New World of Chapter 11: Small Business Rules, Strategies in Real Estate Cases, Lease Rules, Preference and Reclamation Issues and Ethics
  • Tax Changes

Register today and earn up to 7 hours of CLE credit.

Register for ABI’s Winter Leadership Conference Now and Save $50!

Join ABI for the 17th Annual Winter Leadership Conference in beautiful Indian Wells, Calif. at the Hyatt Grand Champions Resort and Spa, one of the Palm Springs area’s most luxurious hotels.

The program of 14 CLE credit hours (including 3 hours of ethics) features a faculty of renowned scholars, judges and practitioners from across the United States. A wide variety of committee educational sessions will be offered. Timely topics—all updated with the latest legislative revisions—include:

  • The Year in Review (other than legislation) and Emerging Issues for 2006
  • Solemn Promise or Past Sin? Implications of Pension Terminations
  • Pre-petition Sanctions, Contempt (Civil/Criminal), Penalties and Punitive Damages: Allowability and Enforceability
  • Ten Hints to Surviving the New Consumer Bankruptcy Law
  • A Gift by Any Other Name: Absolute Priority Rule after Armstrong World
  • New Realities for Financial Advisors under the New Law and Other Emerging Problems
  • Right Without a Remedy?: Individual and Small Business Chapter 11 under the New Code
  • Breakfast Educational Program: New Law in Practice
  • Ethics: Swearing Contest—Certifications of Information and Other Ethical Quandaries of the New Law
  • Ethics: Special Conflicts Counsel: Best Practice or Big Case Aberration

This year’s meeting will feature stand-up comedian Steve Bridges (a.k.a. “Mr. President”) and the all-ABI member rock-and-roll band, the Indubitable Equivalents. Optional events will include golf, tennis, The Living Desert, hot air ballooning, a Joshua Tree Jeep Eco-tour, off-road quad tours and a cooking class.

Register by September 16 and save $50 on registration!

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.

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!

ABI World Tutorial Highlights Daily News and Bankruptcy Court Updates

A new online tutorial shows you how to find daily news stories, information and bankruptcy opinions on ABI’s comprehensive Web site. The tutorial features a visual demonstration of how to locate these documents quickly and easily, and guides you through the navigation process. This is the fourth 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: