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What Distressed Asset Investors Can Glean from Low Interest Rates, Rising Asset Prices and Insolvency on the Horizon DailyDAC readers know that we try to confine ourselves to publishing “evergreen” thought leadership—general education for business owners and investors about business bankruptcy, its alternatives, and related subjects. There isn’t a stark line between the news of the day about the Markets and the Economy, on the one hand, and the world that is our stock and trade. We have, in the past few weeks, had a number of conversations with some […]

What is the Consolidated Appropriations Act? Congress passed the Consolidated Appropriations Act, 2021 on December 21, 2020, and President Trump signed the massive act into law six days later, when it became effective. The act includes several changes to title 11 of the United States Code, which is usually called the “Bankruptcy Code,” and most changes sunset on either the first or second anniversary of the effective date of the act. Here are the changes you need to know, in the order they are presented in the act. Property That […]

[Editor’s Note: This article was originally published on LinkedIn on September 20, 2020.] There has been a significant uptick in the number of articles appearing in mainstream media (e.g. newspapers) about the wave of bankruptcies that has already started to appear. One article (linked here), authored by Matt Egan for CNN Business and published about a week ago, caught my particular attention. It is well-written but there were a few things about it that were wrong or, at least, not entirely right. And, so here I am with my thoughts… In […]

The Complexity of Student Loan Debt in Bankruptcy… Demystified Student loan debt has hit a record $1.6 trillion. This number is staggering on its own, but as millions of Americans lose their jobs and source of income during the COVID-19 pandemic, student loan borrowers have to look at their options for repayment.  The U.S. government is allowing borrowers to suspend all federal loan principal and interest payments until September 30, 2020, but this still leaves many private loan borrowers at the hands of their lenders. For those experiencing extreme financial […]

Gerchen Keller purchases a portion of the interest in proceeds of $213 million fraudulent conveyance judgment in innovative public sale. An interesting transaction took place on September 8, 2016. The chapter 7 bankruptcy trustee for Magnesium Corporation of America (“MagCorp”) sold a $50 million share of a $213 million judgment it has against fraudulent conveyance transferee, Renco Group Inc. and former MagCorp owner, Ira Rennert. The buyer, Gerchen Keller Capital LLC paid $26.2 million transaction for the interest. Those close to the deal report that this may be the first […]

If you have not done so already, you’ll want to read Part 1 and Part 2 of this series first, before delving into this final Part 3. So, now that we know that this “shale revolution” has at least been a short-term game changer, it’s time to get into some more specifics of how unconventional oil sources should impact our long-term perspective. On that point, let’s first turn to Mathilde Mathieu, Oliver Sartor, and Thomas Spencer, research analysts at the think tank Vox CEPR’s Policy Portal, whose recent article “Economic analysis of the US unconventional oil […]

If you have not yet read Part 1 of this series, you’ll want to go back and do so before tackling this Part 2. And if you’ve read Part 1, you’ll recall that we took an in-depth look at why conventional oil production follows a bell curve (known as “Hubbert’s Curve”), and where on that curve we find ourselves today—which happens to be, either at or very near the peak. Continuing with our A. Whitney Brown-style “The Big Picture” approach, we need to now talk about unconventional oil sources, which […]

Back in the mid-to-late ‘80s, when Dennis Miller had a massive mullet (and his stand-up performances were much more likely to be attended by you and your friends than your distant aunt and uncle who worked on the ’72 Nixon campaign), his “Weekend Update” features on Saturday Night Live were often enriched by little segments featuring writer and comedian A. Whitney Brown, who, with just the right amounts of sarcasm, compassion, wit, and insight, would give us “The Big Picture.” In these editorials, Brown shared his perceptions about the topics of […]

The bankruptcy case of the Spokane Country Club (“SCC” the “Club” or the “Debtor”) is a very interesting study of how the bankruptcy process has not only been used to disrupt the collection efforts of plaintiff creditors who have already been awarded a judgment, but also to essentially negate significant policy changes for a club that had been stipulated to in a state court proceeding. The Club was founded in Spokane, Washington in 1898. Spokane is located on the far eastern side of Washington State, closer to Missoula, MT than to Seattle. The city […]

In part one of our series on recharacterization, we discussed the elements of judicial recharacterization of loans as equity interests.[i]  In part two of the series, we considered how debtors can “claw back” putative “loans” that they may have repaid years earlier because the “loans” were in fact equity investments and their repayment was invalid.[ii]  In this finale of the series, we contrast recharacterization with equitable subordination, which is another means by which some creditors can seek to push ahead of others. Equitable subordination resembles recharacterization in that it permits […]