Bankruptcy Archives - Alexson Law

Husky Int’l Electronics v. Ritz

Harriet B. Alexson, ESQ — Wed, 24 Aug 2016 01:49:42 +0000

Husky Int’l Electronics v. Ritz (US Supreme Court 2016). This case is about Bankruptcy Code 11 U.S.C. 523 which defines which debts are non-dischargeable in bankruptcy. Most common examples are a debt incurred by way of fraud or false representation, fraud in a fiduciary capacity, domestic support obligations or willful or malicious injury. The opinion focused on actual fraud under 523 (a) (2) (A). The court held that actual fraud does not require a false representation but can include fraudulent conveyance schemes. The case was remanded back to the bankruptcy court to determine the facts. Some commentators have suggested that this holding will encourage more filings by creditors as it is an “easier” standard than that proposed in the dissent which would require that the debt result from the fraud at the inception of the transaction.

The post Husky Int’l Electronics v. Ritz appeared first on Alexson Law.

The Credit Risk Retention Rule

Harriet B. Alexson, ESQ — Wed, 24 Aug 2016 01:48:44 +0000

The Credit Risk Retention Rule (see OCC Bulletin 2015-8) (the “Rule”) imposes these requirements on firms, that package financial securities, into asset-backed securities by organizing a securitization transaction. The final rule defines qualified residential mortgages (“QRM”) to include all loans that meet the qualified mortgage definition defined in Section 129c of the Truth and Lending Act (15 USC 1639 c) and issued by the Consumer Financial Protection Bureau (“CFPB”). Securitization of QRM’s are exempt from risk retention. The final rule requires the sponsors to retain 5% of the credit risk. The final rule includes a reduced risk retention requirement for asset-backed securities collateralized by commercial loans, commercial real estate loans or auto loans that meet certain underwriting standards.

The post The Credit Risk Retention Rule appeared first on Alexson Law.