The U.S. Marshal Service has informed the bankruptcy court that temporary staffing vacancies preclude adequate security for the Bakersfield Bankruptcy Court, and the situation is likely to persist for several months. Accordingly, the court is closed, all Bakersfield bankruptcy matters will be heard in the Bakersfield Federal Courthouse at 510 19th Street in Bakersfield, California or in the Fresno U.S. Bankruptcy Court.
Judge Lee’s current Bakersfield Calendars are here: October 2 and October 3.
Judge Clement’s current Bakersfield Calendar is here: September 26.
Detroit Retirees and Unions Say Municipal Bankruptcy Unconstitutional
A line in the Michigan state constitution provides that public worker pensions cannot be undone. Detroit unions have joined a committee of retirees seeking to end Detroit's bankruptcy case on these and other grounds. They intend to depose Michigan's governor Rick Snyder as to his role in authorizing the bankruptcy. It will be interesting to see how tensions between federal preemption and state sovereignty are resolved in the context of a Chapter 9 bankruptcy.
Martindale-Hubbell Rates Iain A. Macdonald AV Preeminent
We are proud to announce that Iain A. Macdonald has earned Martindale-Hubbell's highest rating: AV Preeminent. Congratulations!
Senator Requests Probe of U.S. Trustee Attorney's Fees Initiative
Senator Chuck Grassley (R-Iowa) has requested a probe of the U.S. Trustee's initiative to overhaul how counsel is compensated in large chapter 11 cases. On November 1, 2013, new rules for attorney pay in large chapter 11 cases go into effect. The U.S. Trustee hopes the guidelines will dispel the perception that lawyers take advantage of large corporate bankruptcy cases to charge expensive fees of $1,000 per hour or more. In a letter yesterday, Senator Grassley asked the U.S. Government Accountability Office to review whether the new fee guidelines will “prevent excessive fees in the future and, if not, whether legislation is needed to address this problem.”
The new guidelines will be discussed in a Bar Association of San Francisco program set for today. Click here to register.
Diocese of Stockton Considers Bankruptcy
Quick Update: The Diocese of Stockton, California, of the Catholic Church, is considering filing for bankruptcy protection amid costly settlements with sex-abuse victims. It would become the tenth Diocese in the U.S. to do so. Bishop Stephen Blaire announced that “options other than filing for bankruptcy protection have not emerged.”
Morgan Lewis to Pay $1.15 Million to Howrey Bankruptcy Estate
Morgan, Lewis & Bockius has agreed to pay $1.15 million to the bankruptcy estate of Howrey LLP to settle $12 million in potential claims for unfinished business under Jewel v. Boxer. The agreement is awaiting approval by the bankruptcy court.
AnchorBank's Holding Company Tries New Bankruptcy Strategy
A bank holding company typically files bankruptcy after the FDIC takes over its bank subsidiary, when the only task left is to marshal assets and liquidate. Anchor BanCorp, holder of AnchorBank, is trying something new.
Specifically, Anchor BanCorp filed a chapter 11 bankruptcy petition on August 12, 2013, before a takeover of AnchorBank, which may be avoided in light of the bankruptcy. Anchor BanCorp proposes a genuine restructuring in which it would pay off more than $180 million in debt owed to other banks for just $49 million; it could convert the U.S. Treasury’s preferred stock into an equity stake worth about $6 million (the bank received $100 million in TARP funds); and it would recapitalize by canceling its existing shares and sell the remaining new equity to investors. The bankruptcy court approved the plan last week, but regulators still need to sign off.
If successful, Anchor BanCorp could provide a model for other struggling regional banks to get ahead of the FDIC and take control of their own restructuring.
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