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Vol 12, Num 3 l August 2015

Secured Credit - an ABI Newsletter

► In This Issue:

Recharacterizing Debt as Equity and Equitable Subordination: Some Disagreement


Donald L. Swanson
Koley Jessen P.C., L.L.O.
Omaha, Neb.

In In re Alternate Fuels Inc., the Tenth Circuit Court of Appeals describes and applies standards for (1) recharacterizing debt claims as camouflaged equity and (2) equitably subordinating debt claims. In doing so, the court confirmed two things:

  1. Describing the legal standards is relatively easy: In Alternate Fuels, seven judges (one bankruptcy, three BAP and three circuit) all describe the same legal standards; but
  2. Applying the standards in Alternate Fuels is not so easy: Five judges (one bankruptcy, three BAP, and one circuit dissent) all recharacterize debt as equity and equitably subordinate the debt, while the circuit’s two-judge majority reviews the same record, applies the same law, disagrees, and reverses on all counts.
» Read More

Recording Available: ABI Hosts In-house Bankruptcy Judges Roundtable

ABI recently hosted a Bankruptcy Judges Roundtable at their headquarters in Alexandria, Va to discuss the Commission's recommendations on resolving court splits. This program featured some of the most experienced and thoughtful judges on the bench today, assessed the Commission recommendations, and identified some that might be effected soon. Speakers on the program included Bankruptcy Judges Dennis R. Dow (D. Mo.), Bruce A. Harwood (D. N.H.), Barbara J. Houser (N.D. Texas) and Eugene R. Wedoff (N.D. Ill.). Members were able to attend this event in-person, or by watching a live stream. A reception was held after the roundtable to allow members to chat and mingle with a variety of judges from across the country.

ABI's Commission to Study the Reform of Chapter 11 identified more than 30 splits in case law on important issues. Such a split of authority results in delay, increased litigation costs and above all, uncertainty -- imposing a kind of "ambiguity tax" on the system, as one witness put it in testimony before the Commission. The recommendations contained in the Commission's final report, in many cases, can be implemented by judicial opinion at the bankruptcy court or court of appeals level, without need for action by Congress.

This roundtable was recorded and available for purchase and CLE at our CLE Center. Download your copy now!

NEWSnazzy New Website Available for the 27th Annual Winter Leadership Conference

ABI has launched a new website and registration page for this year’s Winter Leadership Conference! Join us Dec. 3-5, 2015, at the historic Arizona Biltmore in downtown Phoenix for CLE, networking and breath-taking views. Offering up to 12/14 hours of CLE/CPE credit and 2.75/3 hours of ethics, there are a variety of sessions with topnotch speakers for consumer and business practitioners, as well as financial advisors.

Included in this year's schedule is the Secured Credit and International committees' joint session titled "Collateral Protection and Competing Priorities: Secured Credit in the International Arena." Scheduled for Saturday, from 9:30 - 10:45 am, speakers for this session include Rebecca A. Roof (AlixPartners LLP; New York), Frederic Sosnick (Shearman & Sterling LLP; New York), E. Patrick Shea (Gowlings; Toronto) and Prof. Jay L. Westbrook (University of Texas School of Law; Austin).

Highlights from the conference include:
  • Optional events, including a golf tournament, kayaking, tennis, horseback riding and much more
  • Great Debates on chapter 11 plans, whether a bankruptcy judge can disband a creditors’ committee and must a creditor file a proof of claim
  • BAPCPA Consumer Issues: 10-Year Anniversary Special
  • Nine joint committee sessions, provided by ABI’s 18 committees
  • A live Bloomberg “Eye on Bankruptcy” luncheon presentation
  • A special Casino Night!
  • A judges’ roundtable on hot-button issues

Early-bird registration ends Oct. 2, so be sure to register to take advantage of the savings

23rd Annual Southwest Bankruptcy Conference


20th Annual Views from the Bench 10/09/15

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