Pension Bill Moving Slowly in Congress
Nearly everyone—business, labor, Republicans, Democrats—agrees that something must be done to sustain company-based pension plans and make sure that the federal agency insuring them doesn't become a financial basket case. Getting Congress to agree on legislation is another matter, the Associated Press reported Sunday.
The Senate, on the verge of passing a bill several weeks ago, has since stalled, unable to come to terms with several lawmakers, backed by business and labor groups, who oppose requiring companies with poor credit ratings to pay more into their pension funds. The House could take up its version of pension reform in November.
The pension bill has two basic goals. The first is requiring companies with traditional defined-benefit pension plans to meet their funding obligations. The second is ensuring the future solvency of the Pension Benefit Guaranty Corp., the federal agency that insures the benefits of some 44 million people in 31,000 pension plans. The goals can be contradictory if financially shaky companies, forced to pay more into underfunded plans, ultimately do a distress termination. Such a move would shift the benefits burden to the agency, which went from running a surplus in 2001 to piling up liabilities of more than $23 billion in 2004. Read the full analysis.
CUTBACKS, BANKRUPTCY AND GROWING INFLATION SIGNS
Automakers posted huge losses for the last quarter and had little by way of encouragement about their prospects for the future, the New York Times reported Saturday. Sizable layoffs and plant closings are likely early next year, they said, and workers who keep their jobs will have to pay more for their health care. General Motors got the United Automobile Workers union to agree to cuts in health care benefits for more than 750,000 blue-collar workers, retirees and their families. The changes are expected to save about $1 billion a year.
Many big companies said this week that their earnings in the last quarter were better than expected, but many also warned that profits were not likely to grow as fast in the coming months. Inflation, meanwhile, is accelerating, while other economic statistics suggest growth may be slowing. Read the full story.
FDIC STUDY: RECENT CHANGES TO BANKRUPTCY CODE MAY EASE MARKET RISKS
Recent changes to the Bankruptcy Code will make it easier for banks and other financial services providers to manage risk in unsettled financial markets, the Federal Deposit Insurance Corp. said in a staff study released Oct. 11. Click here to read the full text of the study.
BANKRUPTCY LAWYERS PONDER GETTING PAID UNDER NEW LAW
Among the many challenges that BAPCPA presents for lawyers is perhaps the most basic one: how to get paid, the Virginia Lawyers Weekly reported Saturday.
Not only does the law require so much more of lawyers that they will have to raise their fees merely to stay even, attorneys specializing in chapter 13 cases likely will get their fees less quickly than they did previously. Such bankruptcy attorneys as David Cox of Lynchburg, Va., wonder just how elastic the demand for the services of bankruptcy attorneys might be.
“It's going to cost the client more money in terms of what they need to do to get the case filed, and they're going to get less relief,” he predicted. “They may well wonder whether bankruptcy protection is worth it,” he said. Some debtors might choose to go underground and resort to a cash subsistence rather than file bankruptcy, he predicted. Read the full story.
CREDIT COUNSELING DEBATED
Since Oct. 17, more debtors will have to work out repayment plans with creditors. They'll also have to undergo credit counseling before they file for bankruptcy. The counseling is supposed to teach them about the bankruptcy process, alternatives to bankruptcy, how they got themselves into their financial dilemmas and how to ensure that they don't repeat mistakes. There are differences of opinion about how helpful the counseling will be according to an analysis on hispanicbusiness.com.
“The credit-counseling provision is one of the best things about it, because it helps people to get their feet on the ground and to get an understanding of what went wrong and what they can do to adjust for the future," said Steve Bartlett, CEO of the Financial Services Roundtable, which represents financial services companies.
But consumer advocates who opposed toughening the bankruptcy law say that the required counseling doesn't come at the right time. Read the full story.
MORE THAN 400 ALREADY REGISTERED FOR WINTER LEADERSHIP CONFERENCE!
Join ABI for the 17th Annual Winter Leadership Conference, December 1–3, 2005, in beautiful Indian Wells, California at the Hyatt Grand Champions Resort and Spa, one of the Palm Spring 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.
ABIíS SECOND CARIBBEAN INSOLVENCY SYMPOSIUM COMING IN FEBRUARY
Join ABI in Miami for the Second Caribbean Insolvency Symposium, February 9-10, 2006, at the Eden Roc Resort & Spa in Miami.
This year’s program brings together top international speakers to discuss the issues of the moment in international insolvency and restructuring. The Eden Roc, located right in the heart of Miami Beach, provides a memorable venue for the conference.
The program of 7.25 CLE credit hours features a faculty of outstanding scholars, judges and practitioners from across the United States, the Caribbean and South America. Timely topics include:
- CAFTA and New Chapter 15: Forum-shopping in the Caribbean
- Introduction to the New Bankruptcy and Restructuring Law in Brazil
- Small Business and Individual Chapter 11 under BAPCPA
- Tough Ethical Dilemmas after BAPCPA
- Dealing with Disasters: The New Bankruptcy Law after a Natural Disaster
- Views from the Bench
Be among the first to register for this important program in a tropical location.
2005-06 ABI MEMBERSHIP DIRECTORY PRINT EDITION AVAILABLE FOR SALE
The print edition of the 2005-06 ABI Annual Membership Directory is now available. This 21st edition lists more than 11,000 insolvency professionals, more than ever before, and is a symbol of ABI’s sustained membership growth. The Directory is one of the many benefits of ABI membership and is available exclusively to members. An online version of the Directory is available at the ABI World Web site (www.abiworld.org), which is continually updated. All members will receive a complimentary CD-ROM version of the Directory with their November ABI Journal.
The expanded print edition enables you to capitalize on the depth and diversity of our membership. In addition to indexing each member by geographic area, ABI committee, profession and practice area, there are references to firm size and certification to assist you in identifying colleagues for referrals. Included is a “Multiple Members by Firm” section, which permits you to easily locate all members from a particular law, accounting or turnaround firm. Members are also listed under other locations where they have offices, thus enhancing your ability to easily find bankruptcy professionals nationwide. Also included are e-mail addresses and firm Web site listings. The Endowment section includes guidelines for consideration of Endowment Fund grant proposals. The $55 cost of the printed version includes shipping and handling. Visit the ABI bookstore to order.
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.
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