In re Melillo, 385 B.R. 476, 481-82 (Bankr. D. Mass. 2008) (Hillman) (Failure to object to balloon payment of arrearages is not consent to treatment that is inconsistent with § 1325(a)(5)(B)(iii)(l). “I cannot infer a secured creditor’s consent to treatment which is expressly prohibited by the Bankruptcy Code from a lack of an objection because ‘it has a reasonable expectation that I will not approve treatment which violates the Bankruptcy Code.’ Here, graduated payments and backloaded balloon payments in plans are exactly the proposed treatment Congress sought to prohibit.”).

In re Bethoney, 384 B.R. 24, 34 (Bankr. D. Mass. 2008) (Hillman) (Failure to object to plan that bifurcates a 910-day PMSI car claim is not inferred acceptance of plan; court denies confirmation notwithstanding adequate notice and lack of objection from lienholder. Citing In re Montoya, 341 B.R. 41 (Bankr. D. Utah 2006), “I cannot infer Capital One’s consent to this treatment from the lack of objection because it has a reasonable expectation that I will not approve treatment which violates the Bankruptcy Code.”).
See Also:  Bankruptcy Lawyers Boston

FirstFed Financial Corp. filed for chapter 11 protection less than a month after its banking unit was shut down by federal regulators, Reuters reported yesterday. The company listed assets of $4.8 million and liabilities of $159.7 million in court papers filed on Wednesday. OneWest Bank, formerly failed mortgage lender IndyMac, bought 39 branches of FirstFed’s bank in December. In addition to assuming $4.5 billion in total deposits, OneWest, of Pasadena, Calif., agreed to buy essentially all of First Federal’s assets of $6.1 billion. The case is In re FirstFed Financial Corp., U.S. Bankruptcy Court, Central District Of California, No 10-10150.

See Also:  Bankruptcy Lawyers Boston

House Financial Services Committee Chairman Barney Frank (D-Mass.) said that he plans to propose legislation today that could force bond-rating companies to take a more positive stance toward state and municipal bonds, the Wall Street Journal reported today. The $2.5 trillion municipal-bond market is currently rated on a risk scale that is generally tougher than the one used for corporate bonds or national-government debt. Moody’s has found that investment-grade corporate bonds between 1970 and 2000 had a 10-year default rate of about 2.3 percent, far higher than the 0.03 percent default rate of investment-grade munis. Muni-bond issuers and politicians across the country have argued that the tougher ratings treatment is basically a hidden tax on cities, states and the public. Bond-rating firms, however, may argue that the bill comes too close to legislating their methodologies, something that Congress has been reluctant to do in the past.

Continental Airlines said yesterday that it had abandoned merger talks with United Airlines and was planning to remain an independent carrier, a blow to lengthy efforts by United to find a merger partner, the New York Times reported today. Continental’s move was a stunning development for United’s parent, UAL, which had been negotiating in expectation of reaching a deal by late this week. Continental decided to drop the discussions after UAL announced worse-than-expected earnings, which sent shares falling last week. On Tuesday, United said it lost $537 million during the first quarter, on sharply higher costs for jet fuel. The airline, which spent more than three years under bankruptcy protection earlier this decade, said it would cut flights and eliminate a further 1,000 jobs. Directors at Continental, who met Sunday afternoon, feared that a merger with United could put their company in peril.

Last year’s landmark labor deals and the weak dollar are breathing new life into U.S. auto plants, leading Detroit’s auto makers to plan sizable exports of U.S.-made vehicles to markets around the world, the Wall Street Journal reported today. General Motors Corp. is looking to export U.S.-made vehicles to Europe as well as to China and Latin American markets such as Brazil. Chrysler LLC, primarily spurred by exchange rates, has already started shifting production from Europe to the United States to take advantage of lower costs and available plant capacity. Ford Motor Co. said it is considering ramping up exports if it can bring labor costs down.

The Enron Creditors Recovery Corp. said yesterday that it had distributed $1.03 billion to holders of general unsecured claims and allowed guaranty claims, Bankruptcy Law360 reported yesterday. The distribution included $980,600,000 in cash; $37. 4 million in Portland General Electric Company common stock and $9 million in interest, dividends and gains from the sale of the PGE stock. The distribution brings the total cash handed out to about $14.6 billion. Future distributions will be bolstered by the funds collected in the recently settled MegaClaims litigation, which will include a $1.66 billion settlement from Citigroup Inc., the last remaining defendant in the massive suit.

U.S. investment bank Lehman Brothers said that it had filed a lawsuit today to reclaim $352 million from Japanese trading house Marubeni Corp in the wake of a finance scam, Reuters reported. The loans in question were made last year to finance a revamp of hospitals and lease medical equipment via Asclepius, a now-bankrupt unit of drug firm LTT Bio-Pharma Co., and arranged through Marubeni staff. When repayment fell due on Feb. 29, the U.S. investment bank was told by Marubeni that its contract was void because it had been signed with a forged seal. Seals are used for business and legal transactions in Japan. Lehman Brothers also believed that one of the people it had discussed the loans with had been an imposter.

See Also:  Chapter 7 Bankruptcy

Southern Building Products Inc., Florida’s largest maker of roof and floor trusses, has filed for chapter 11, the latest victim of a slowdown in the U.S. housing market, the Associated Press reported yesterday. The company said that its sales revenue fell from a high of $33 million in 2005 to $11.6 million in 2007. When lender Bank Atlantic froze its line of credit, Southern Building said that a chapter 11 reorganization became its “only alternative to maximize return to all creditors.” Bank Atlantic is owed more than $5.8 million, according to court papers.

U.S. District Judge Lawrence McKenna denied a second plea by Deloitte & Touche LLP to be dropped as a co-defendant from the multidistrict securities litigation against Adelphia Communications Corp., leaving hedge funds’ fraud claims as actionable against the firm over its auditing of the collapsed cable company’s financial reports, Bankruptcy Law360 reported yesterday. The funds, among them Appaloosa Investment Ltd Partnership, claim that they bought debt securities issued by Adelphia at inflated prices, relying on materially false announcements and regulatory filings prepared by Deloitte. Judge McKenna agreed in September to dismiss some of the plaintiffs’ claims on the grounds that they had been “reckless” in their decision to buy shares in the company and could not justifiably claim to have relied on Adelphia’s alleged fraudulent statements about its financial health when investing their money. However, the judge declined to toss other securities claims that required only that the plaintiffs were unaware of the alleged falsity of the statements.

HSH Nordbank AG said that Swiss bank UBS AG sold it $500 million in securities tied to U.S. subprime mortgages that have since soured, in the latest case of a midtier German lender to be singed by the slump in the U.S. mortgage market, the Wall Street Journal reported today. HSH, which specializes in shipping finance, joins a growing number of investors around the world, including municipalities in the United States and Australia, that fault the banks that packaged and sold the investments. HSH said yesterday that UBS had sold it investments tied to debt pools known as collateralized debt obligations and that those investments had incurred significant losses. HSH, based in Hamburg and Kiel, that it was considering legal action.