Bank of America Corp., an agent for secured creditors in the Refco bankruptcy, has asked the Bankruptcy Court to establish a committee to rein in Refco's rising costs. Bank of America said the company is spending the equivalent of $150 million a year, based on the approximately $42 million in fees and expenses that Refco incurred between the October 17, 2005 filing date and January 31, 2006.

Bank of America states that Refco cannot sustain these professional costs and has questions about the source of payment for the professional expenses.

Bank of America has said that the budget committee should be made up of unsecured bondholders and secured creditors. According to Bank of America, Judge Robert Drain, the Bankruptcy Court judge, has "expressed a positive view" toward the establishment of a budget committee.

An ABC news article can be viewed here: http://abcnews.go.com/Business/wireStory?id=1893141&business=true

Ray

Judge Barbara Houser of the U.S. Bankruptcy Court for the Northern District of Texas recently entered an order adopting procedures for en banc consideration of such legal issues under BAPCPA.

In her Order, Judge Houser states "The enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA") has effected comprehensive and complex substantive changes in the bankruptcy laws of the United States, which will require the resolution of many legal issues not previously addressed by the bankruptcy judges of the Court (the "Bankruptcy Judges"). The Bankruptcy Judges believe that the bankruptcy bar desires consistency in the resolution of legal issues arising under BAPCPA among the Bankruptcy Judges where possible and appropriate. The Bankruptcy Judges also believe that judicial economy will be served, and the likelihood for uniformity in the resolution of BAPCPA legal issues will be enhanced, by the adoption of procedures for en banc consideration of such legal issues."

Here is a link to the Order:

http://www.txnb.uscourts.gov/orders/2006-03.pdf

Pam

Home Foreclosures rose 38% nationwide during the first quarter of 2006. This is a 72% increase from the first quarter of 2005. "Texas reported the most first-quarter foreclosures of any state, 40,236, and Florida reported the second most with 29,636. California was a close third with 29,537 properties, entering some stage of foreclosure in the first quarter of 2006, but the state's quarterly foreclosure rate of one foreclosure for every 414 households was below the national average.

"With the current market conditions, it's unlikely that foreclosures will return to the historically low levels they were at in recent years when interest rates hit rock bottom and home price appreciation skyrocketed in many areas of the county," says James J. Saccacio, chief executive officer of RealtyTrac.

The full article will be available on the Web for a limited time:

http://www.business-journal.com/HomeForeclosuresQ106.asp

Pam

On Thursday, April 20, 2006, Mike McBride had the opportunity to speak to the Texas Chapter of the Risk Management Association's 53rd Spring Conference on the subject of the bankruptcy amendments. Joining him dias were his friends, Alan Trust and Andrea Roost. Andrea focused her comments on the amendments impact on consumer cases and Michael focused his remarks on their effect on corporate cases. Alan moderated and added his thoughts throughout the talk.

RMA is the formation of a group of Bankers who decided that there had to be a better way to exchange credit information and advance the science of credit risk management. The first meeting took place 92 years ago which resulted in the formation of the Robert Morris Club, now known as the RMA.

In conjunction with their talk, Mike and Andrea prepared papers on their respective subjects. We have both papers available, the Amendements' impact on consumers or the paper regarding the Amendments' impact on corporations. Please let us know and we will send you a copy.

We all know that our papers, especially those send electronically (via attached files) may be mined for information, but as this process becomes more common, litigates in particular and every other lawyer in general, are tying to determine how this impacts their case. The miner can gather information about the authors (who drafted which part) as well and what changes were made by each party (so you were the one who changed the numbers on that deal the attached spreadsheet.

Quote:
The partner at Coxe's firm had sent a brief to a lawyer at another firm who was working on a similar case. Based on the brief, which was sent electronically, the other firm was able to reconstruct every change that had been made to the document, including e-mails between Coxe's partner and his client -- a potential violation of attorney client privilege.

Alarmed by the experience, Coxe urged the board to declare unethical the practice of culling through electronic documents to find hidden data about the history of the document.

Here is a link to the entire article:

http://www.law.com/jsp/ltn/pubArticleLTN.jsp?id=1145538533635

Mike