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Bankruptcy

Texas Lawyer Blog

Bankruptcy law: adversary proceedings, fraudulent transfers, preferences, creditor representation.
By J. Michael McBride

Post Frequency: 6.9/day

Last Entry: March 29, 2011 at 11:47:27

Harvard Economist Pushes Bankruptcy not Bailout

Posted on September 30, 2008
“The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company. Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines)...

Another Opinion on the Bailout? the Austrian School, not Marxism, is the Answer

Posted on September 30, 2008
Quote: At first glance, anyone who understands economics can see that there is something wrong with this [bailout] picture. The taxes that will need to be levied to finance this package may keep some firms alive, but they will siphon off capital, kill jobs and make businesses less productive elsewhere...

25 Billion For US AutoMakers, Even Foreign Ones

Posted on September 29, 2008
Amid all of the other news of the day, the bailout that did not pass, at least today, and the markets that were expecting passage of the bill which fell sharply (DJIA falls by 777 points), there is also news of a loan guarantee package for US automakers...

More on Citi Deal for Wachovia

Posted on September 29, 2008
“The FDIC in a press release stressed that Wachovia did not fail. Citi will take the hit for up to $42 billion of losses on a $312 billion pool of Wachovia loans, while the FDIC will take responsibilities for additional losses. It granted the FDIC $12 billion in preferred stock and warrants for assuming the risk...

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Fed Continues to respond to Crisis?by Making More Money Available

Posted on September 29, 2008
The Federal Reserve has announced that it will again make more and more money available for “cash starved banks” both here and abroad (?!). This continues and expands again the same policy that the Fed has been pursuing for months. One could gather that so far this policy has not worked as it seems necessary to keep pumping more money toward financial institutions, even though they continue to fail...

Citi Buys Wachovia

Posted on September 29, 2008
In yet another weekend deal, it has been announced that Citigroup is buying the banking part of Wachovia, in exchange for taking a percentage of its bad loans, with the FDIC covering its other losses. “Citigroup also will issue $12 billion in preferred stock and warrants to the FDIC...

Another Opinion on the Crisis

Posted on September 26, 2008
It is hard to get much of an overview on a crisis while it is happening. That is why I read and link here to multiple articles with differing view points. Here is another opinion from E. J. Dionne, Jr.. “The simple truth is that Washington is petrified about this crisis and will pass something...

How Well the FDIC Works Re: Failed Banks

Posted on September 26, 2008
“It is a tale of two systems. One system, the one used to process failed and faltering banks, works really well. It's been in place and evolving for 75 years, since the Federal Deposit Insurance Corp. was founded (over the opposition of bankers, it must be added)...

WaMu NoMo

Posted on September 26, 2008
This is the largest bank failure thus far. “The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion. Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country's history...

Warren Buffett Warned of Time Bomb?

Posted on September 25, 2008
And now the derivative time bomb is going off. Quote: “When historians write about the current crisis, much of the blame will go to the slump in the housing and mortgage markets, which triggered the losses, layoffs and liquidations sweeping the financial industry...

If you are car shopping?

Posted on September 25, 2008
This is a list of the top 10 cash rebates on current new cars. I am making no recommendations at this stage as I suspect that if you have cash, you will be able to get bigger bargains on land, houses and cars and everything else in 12 months from now...

Auto Group with 13 ?Stores? Closes

Posted on September 24, 2008
Although it is difficult to ascertain exactly what caused this prompt action, it appears that the lack of floorplanning loans caused this mega dealer group to shut its doors. “High fuel prices, cancelled floorplanning from GMAC Financial Services, a reliance on trucks and SUVs, a soft national economy and struggles in local markets had troubled the company, which on Sept...

Not Only Does the Bill Cost 700 Billion to 1 Trillion Dollars?it Gives Unreviewable Power to the Executive Branch

Posted on September 24, 2008
Buried in at least one of the proposed legislation to fix our economy is a provision which states that all acts by the Treasury Secretary are somehow not reviewable by any Court of law. This is troubling as it sounds like the passage of some other recent bills which had to be done ASAP in a time when people were full of fear and there allegedly was not time to actually read the provisions of the bill—which not shockingly gave extensive additional powers to the federal government...

Relevant Quote From Robert Prechter

Posted on September 23, 2008
This quote is from an article Robert Prechter wrote on Sept. 19: The overall process of credit manipulation has robbed bears of their rightful income for nine years. The latest announcement was timed perfectly to bail out investment banks and brokers who bet on the upside or against the downside in derivatives...

Social Mood, Movies and Politics

Posted on September 23, 2008
As has been previously stated, much of what I read (e.g., Elliot Wave Theory) holds that social mood drives the financial markets and also, perhaps less directly, large governmental actions, like wars. War fever, for example, tends to rise when markets bottom, so that is something to watch for (fervent nationalism in combination with a testosterone fueled feeling of “we need to kick some …” in order to make ourselves feel better)...

No One is Talking About how to Pay for These Bailouts!

Posted on September 23, 2008
“Even though the government has now formally agreed to guarantee the debt of Fannie and Freddie, the White House says it doesn't see the necessity—shock me!—to include the cost of doing so in the budget.… Consider the spree of actions that have the potential—directly and indirectly—to cost taxpayers money: the government accepting $30 billion of Bear Stearns' drecky collateral for a $29 billion loan to JPMorgan, giving investment banks access to the discount window, assuming responsibility for Fannie Mae and Freddie Mac, guaranteeing money market funds (up to $50 billion), making a big loan to AIG (up to $85 billion), and now proposing the mother of all bailouts—up to $700 billion...

Kids and Cellphones ? and Cancer

Posted on September 23, 2008
“Children and teenagers are five times more likely to get brain cancer if they use mobile phones, startling new research indicates. The study, experts say, raises fears that today's young people may suffer an "epidemic" of the disease in later life...

Why Should we be Shocked?

Posted on September 22, 2008
Given the exit money paid to the executives who ran Fannie Mae and Freddie Mac into the ground, literally threatening the US economy to the extent that the federal government “had” to buy these private companies, this story should come as no surprise...

Biggest Bail Out Ever, So Far?

Posted on September 19, 2008
In order to avoid what has been said to be a “complete meltdown” of our financial system, the federal government has announced its largest new financial program ever whereby it will “take bad mortgages off the books” of large banks...

Phil Gramm?s Fingerprints

Posted on September 18, 2008
“McCain's former economic adviser is ex-Texas Sen. Phil Gramm. On Dec. 15, 2000, hours before Congress was to leave for Christmas recess, Gramm had a 262-page amendment slipped into the appropriations bill. It forbade federal agencies to regulate the financial derivatives that greased the skids for passing along risky mortgage-backed securities to investors...

Fed Announces 180 Billion More Cash

Posted on September 18, 2008
“The US Federal Reserve announced a 180-billion-dollar cash line to fight the racing fires of global financial crisis Thursday, as leading central banks said they would join in. The Federal Reserve said it was expanding its temporary arrangements for banks to obtain dollars by 180 billion ‘to provide dollar funding for both term and overnight liquidity operations by other central banks...

Got Migraines?

Posted on September 18, 2008
Here is a book written by a famous MD which gives a step by step method of getting rid of headaches. It is a great book and offers relief for most headache sufferers, in my opinion. Here is a link to the book on Amazon: http://www.amazon.com/Heal-Your-Headache-Program-Taking/dp/0761125663/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1220993314&sr=1-1 ...

Credit card delinquency rate, debt levels up

Posted on September 18, 2008
The TransUnion Trend Data for the 2008 second quarter shows the credit card delinquency rates and average debt per borrower are up from this time last year. The figures are compiled from 27 million consumer reports sampled each month. Here is how the numbers break-down: Average credit card delinquency: This is defined as the percentage of people at least 90 days delinquent on credit card payments...

Russian Markets Re-Open; Panic Ensues; Then Close

Posted on September 17, 2008
In a repeat of yesterday’s events, the Russian stock market re-opened only to close thereafter. ":Russian markets stopped trading for a second day after emergency funding measures by the government failed to halt the biggest stock rout since the country's debt default and currency devaluation a decade ago...

Crisis Spreads; Russian Market Falls, then Closes

Posted on September 17, 2008
“Russian shares suffered their steepest one-day fall in more than a decade on Tuesday, losing up to 20 per cent, as a sharp slide in oil prices and difficult money market conditions triggered a rush to sell. The heads of the Russian central bank, the finance ministry and the financial market regulator met on Tuesday night for an emergency discussion on ways to halt the crisis...

Another Day, Another Private Corporation Taken Over by the US Government

Posted on September 17, 2008
Again as with Fannie Mae and Freddie Mac, today’s takeover of a private corporation by the federal government (with your tax dollars) is not being challenged or even seen as out of the ordinary. Has there ever been more intervention in private corporate affairs by the US government in the history of this country? Amazingly, there are no outrage from those who espouse the “free market” as the answer to all ills...

Overnight Interest Rates Double as Banks Hoard Cash

Posted on September 16, 2008
Why would banks hoard cash? One can speculate as to their reasons, but the fact is that this is exactly what is happening. One result of that action is that overnight interest rates doubled and now stand at their highest point since 9-11. (Another is the Federal reserve having to pump more and more and more money into the system as was noted in yesterday’s article on “priming the pump...

Fed Continues to Prime the Pump at a Furious rate

Posted on September 15, 2008
Not surprisingly, given its past actions and the strength of the recent reversals in the market, but the Federal Reserve has added another 70 billion in reserves to the banking industry. Banks appear to be hoarding cash while demand increases. “The Federal Reserve added $70 billion in reserves to the banking system, the most since the September 2001 terrorist attacks, to reverse a surge in borrowing costs sparked by the collapse of Lehman Brothers Holdings Inc...

Something You May Not Have Known About Guantanamo

Posted on September 12, 2008
I know this is a bit off the subject of bankruptcy, but very intersting and informative. At the Inns of Court meeting this week, the guest speaker, a bankruptcy lawyer, spoke about his representation of several detainees at Guantanamo Bay. This clip is pretty much the same subject matter and tone as his speech...

Speech by Fannie Mae?s President

Posted on September 11, 2008
Way back in February, Daniel Mudd spoke to the Homebuilders Association and assured them that his company was doing all it could to weather the storm, including cutting the corporate dividend (and it also quit paying his $100,000 annual tab for his country club)...

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