Senate Confirms Donald to Sixth Circuit Court of Appeals

On September 6, the U.S. Senate confirmed Judge Bernice Bouie Donald, U.S. District Court for the Western District of Tennessee, to the Sixth Circuit Court of Appeals. The vote was 96-2; Senators David Vitter and Jim DeMint voted against the nomination. Here are some quick facts relating to the newest member of the Sixth Circuit:

• Age 59.

• Continuously served as a judge in Tennessee since 1982.

• Attended law school at the University of Memphis Cecil C. Humphreys School of Law (1975-1979).

• Attended Memphis State University (1969-1974).

• First African-American woman to be elected as a judge in Tennessee (1982-1988), serve as a bankruptcy court judge (Western District of Tennessee, 1988-1995), and sit as a U.S. district judge in her state.

Once Judge Donald is sworn in sometime during the next four to six weeks, the Sixth Circuit will be up to its capacity of 16 judges, comprised of nine nominated by Republican presidents and seven nominated by Democrat presidents.

Read the full post    By Griffin Dunham    Tags legislation    Comments 0

Nashville Post’s 2Q 2010 Bank Performance Summary

The Post came out with its quarterly summary of local bank performance today. http://bit.ly/p6iT21 (subscription required) The central premise of the piece is that “a closer look at the numbers and their trends show that clear camps are emerging.” The camps are “banks that have seemingly digested the worst of the downturn” and “institutions that are nowhere near over their indigestion.” This meshes pretty well with what we are seeing.

Read the full post    By Bob Mendes    Tags commercial loans, finance    Comments 0

Round-Up: Insolvency in the News

Here are bankruptcy stories from around the web making headlines on 8.26.11:

The Nashville Business Journal provides a sobering update of the Tennessee housing market.

Reuters reports that Lehman Bros. executives have agreed to settle shareholder investment suits for $90 million.

WSJ Bankruptcy Beat: Oregon Newspaper files Chapter 11, but not without a fight; paper goes down swinging against its largest creditor.

Too big to fail? Denmark enacts plan to protect banks from bankruptcy.

And on a historical note, the State of Indiana apparently went bankrupt in 1839.  Unless you’re from Indiana, in which case the situation is considered a mere brief unpleasantness.

Read the full post    By Dan Lins    Tags insolvency    Comments 0

Discharging Student Loan Debt — Applicable Only to Government Loans?

I had lunch a few days ago with a fellow lawyer and he had some questions about discharging student loan debt in bankruptcy. He heard that only loans through government-sponsored programs were nondischargeable because free market private originators didn’t need protection — after all, they made the business decision to set an interest rate and agree to terms they found acceptable.

He had part of it right. Section 523(a)(8) of the Bankruptcy Code does, indeed, deem that student loans funded in whole or part by the government are excepted from discharge absent an “undue hardship.” But, if you keep reading in this section, it also excepts loans from nonprofit institutions and “any other educational loan that is a qualified educational loan, as defined in section 221(d)(1) of the Internal Revenue Code.” Unfortunately for individual debtors, section 221(d)(1) of the IRC is drafted to include any loans, to include private loans, that pay for tuition, fees, books, and other “costs of attendance.” Through section 523 of the Bankruptcy Code and section 221 of the IRC, Congress has determined that private loans are afforded the same basic exception to discharge as federally backed loans.

As mentioned above, student loans are excepted from discharge absent an undue hardship. This is really tough for a debtor to satisfy, but I thought it’d be worth providing the three-part test (known as the “Brunner Test”) used to determine if undue hardship has been proven:

1. that the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for [herself] and [her] dependents if forced to repay the loans;

2. that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and

3. that the debtor has made good faith efforts to repay the loans.

See Brunner v. New York State Higher Educ. Serv. Corp., 831 F.2d 395 (2d Cir. 1987).

Read the full post    By Griffin Dunham    Tags insolvency    Comments 0