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Bankruptcy

Credit Slips

A discussion on credit and bankruptcy.
By Bob Lawless, Adam Levitin, Angie Littwin, Katie Porter, John Pottow, Debb Thorne, Elizabeth Warren

Post Frequency: 12.8/day

Last Entry: April 01, 2011 at 09:01:41

Credit Card Defaults--Piggybacked Underwriting

Posted on June 04, 2009
If you want to get a window on why credit card defaults are soaring, look at credit card underwriting. There is virtually no income verification in the card industry--all loans are stated income loans (a/k/a liar loans), and we know...

Let the Canadians Run It

Posted on June 03, 2009
The Financial Times mentions that Senator Alexander has proposed distributing the U.S. Treasury's stake in reorganized GM to taxpayers. After we all receive our 0.0000003% stake in GM (talk about separation of ownership and control), the Canadians and the UAW...

Chrysler Appeal

Posted on June 03, 2009
The 2d Circuit is holding a hearing on Friday. No word in the article on whether they'll stay the closing, which can happen any time after noon on Friday. Unfortunately the Circuit's PACER page is not as useful as the...

May Bankruptcy Filings Climb to Over 6,000 Per Day

Posted on June 03, 2009
According to data from Automated Access to Court Electronic Records ("AACER"), there were over 120,000 U.S. bankruptcy filings in May 2009 or 6,020 for each of the 20 business days in May. That is the first time daily bankruptcy filings...

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GM & Opel

Posted on June 03, 2009
On the day GM filed, the Times ran a story noting that GM's European division ? Opel/Vauxhall ? had been ?spared? going into bankruptcy by the deal with Magna and some Russian investors. Are we so certain they were spared?...

GM & Our Socialist Angst

Posted on June 02, 2009
Much hand-wringing has occurred over the government's large equity stake in GM (or, New GM) announced as part of its mostly prepackaged plan of reorganization, with of course "Government Motors" appearing on newscast graphics. Leaving aside the socialists in our...

What's Up With This?

Posted on June 02, 2009
A financially savvy Credit Slips correspondent--but aren't they all?--wrote with the following story: "Just received a robo-call telling me that my credit card interest rates were going up, and I should press '6' for more, live information to do something...

GM & Investor Rights

Posted on June 02, 2009
David Brooks has a generally smart column in today's Times about GM, in which he notes that the chapter 11 case can only resolve GM's operational and financial problems, it can't change GM's management. And as I've noted before, there...

Chrysler Sale Order Appeal

Posted on June 02, 2009
The bankruptcy court has certified both of the sale-related orders for immediate appeal to the 2d Circuit. Under 28 U.S.C. �158(d)(2), it will be up to that court to decide whether to accept the appeal.

Chrysler Sale Order Appeals -- growing by the minute

Posted on June 02, 2009
The notices of appeal are coming fast and furious now. But some of the appeals are filed by parties of dubious standing. Are the Center for Auto Safety or Public Citizen (founded by noted bankruptcy commentator Ralph Nader) really "persons...

GM Has Filed

Posted on June 01, 2009
Case was assigned to Judge Gerber, case no 09-50026. UPDATE: Download GM Petition

Movin' Right Along

Posted on June 01, 2009
The bankruptcy court has scheduled a first day hearing in GM for 4pm today. GM won't have any trouble meeting its first "Case Milestone;" it has already filed its sale motion. Unfortunately, the requested bidding procedures include the requirement that...

A Forum Shopping Update

Posted on June 01, 2009
As Bankruptcy Judge Steven Rhodes of Detroit commented in Time magazine, "There is no district in this country that has a greater stake in the outcome of a General Motors case than the Eastern District of Michigan." Exactly. And that...

The End of an Aphorism

Posted on June 01, 2009
The United States will own 60% of the reorganized General Motors, meaning that what is good for General Motors is good for the United States, literally. Can you still use an aphorism that has lost its punch? Is this any...

What?

Posted on June 01, 2009
Or as my daughter used to say when she was learning to speak "what say? From the aforementioned DIP motion: Any delay will result in significant irretrievable revenue perishability to the detriment of all interests and will exacerbate consumer resistance...

The GM Fast Track

Posted on June 01, 2009
I've been reading over GM's DIP Financing motion, and came across the following: The "Case Milestones" include: June 3, 2009: deadline to file motion to approve 363 Transaction (as defined below); June 5, 2009: deadline for commencing hearing on motion...

GM's Plan: The Basic Outline

Posted on June 01, 2009
The basic outline of GM's plan to reorganize (as opposed to a plan of reorganization) as it's seeping out is pretty neat. GM wants to separate its productive assets from its liabilities. The basic way to do this is to...

Beating around the bush

Posted on June 01, 2009
It is amusing -- in a dark sort of way -- that the GM Q&A for investors never mentions that the shareholders are expected to get no recovery under the proposed reorganization structure. The repeated intonation of phrases to the...

The Minnow & the Whale

Posted on June 01, 2009
GM filed in the Southern District of New York as a related case to Chevrolet-Saturn of Harlem, Inc., a company-owned dealership located on 2nd Avenue in New York.

Chrysler Appeals

Posted on June 01, 2009
As I noted earlier, the Indian Pension Funds have filed two appeals. The debtors have now asked the bankruptcy court for permission to go directly to the 2d Circuit Court of Appeals -- bypassing the Southern District of New York....

And in other news

Posted on June 01, 2009
The Indiana Pension Funds have appealed from Judge Gonzalez's opinions approving Chrysler's sale motion and ruling that the pension funds don't have standing to challenge the Treasury's actions under the TARP program. I suspect they may have jumped the gun...

Chrysler Sale Order

Posted on June 01, 2009
The court has entered a final order approving the sale. The court also granted a partial waiver of FRBP 6004(h), so that the debtors can close any time after noon on Friday (absent a stay by an appellate court). The...

GM First Day Hearing

Posted on June 01, 2009
The hearing is coming to a close -- looks like GM will not only get its typical first day motions approved, but also its sale procedures. Sale hearing is set to commence on June 30. At this pace they are...

Let's Try This Again

Posted on June 01, 2009
Despite my best efforts (see here, here, here, here, you get the idea), we have yet another story today about how the Chrysler sale is a "rub rosa" plan that violates the absolute priority rule. It is not -- and...

Chrysler & GM

Posted on May 29, 2009
Word is that the Chrysler ruling won't come until Monday -- when everyone expects GM to file. A busy day at the Alexander Hamilton Custom House. Update: here's the story.

Chrysler & Credit Bidding, Again

Posted on May 29, 2009
At the hearing tonight, the government has asserted that they told the representative of JP Morgan Chase, the lead bank among the senior lenders, that if they did not like the proffered deal, the senior lenders could credit bid. If...

Nader on Chapter 11

Posted on May 29, 2009
Ralph Nader, the consumer activist and (perhaps) decider of presidential elections, is out today with an editorial in the WSJ that argues for more Congressional involvement in the automotive bankruptcy cases. Think about that for a moment. More people involved...

Speeding up the process

Posted on May 28, 2009
GM now has a committee of 20% of its bondholders supporting a plan to give the bondholders 25% of reorganized GM. The unanswered question is what the marginal difference in value is between 10% (previously offered) and 25%. From GM's...

The Inefficient Capital Markets Hypothesis

Posted on May 28, 2009
The Efficient Capital Markets Hypothesis (sometimes just called the Efficient Markets Hypothesis) states that liquid markets quickly absorb information, so that it is essentially impossible for an average investor to make excess profits trading on public information...

A couple of quick Chrysler points

Posted on May 27, 2009
On the eve of the big sale here, there have be a few new developments. First, the district court denied the Indiana pension funds' motion to withdraw the reference. I suspect the pension funds are working on those "stay pending...

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