Tag Archives: bankruptcy

Kochs and Other Madoff Investors Are Winners in Fight Over Profits Held Abroad

The company led by the American billionaire Koch brothers, along with dozens of banks and fund managers, kept billions of dollars in profit fromBernard L. Madoff’s Ponzi scheme in accounts offshore. As it turns out, that was a good decision.

Koch Industries and others who invested in the Madoff fund from offshore accounts won a key ruling in federal bankruptcy court on Monday, when the judge said certain funds held abroad — estimated at about $2 billion — could not be made available to victims of the Madoff scheme.

The ruling highlights the tug-of-war that has been raging between those who lost money when the scheme fell apart eight years ago and those who walked away before the fraud came to light, having recouped their original investments and then some.

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NOVASTAR FINANCIAL FILES FOR BANKRUPTCY

Novation Companies, formerly known as NovaStar Financial, a company that made over $11 billion in mortgage loans that failed at very high rates during the housing crisis, filed for bankruptcy court protection in Baltimore on July 20, 2016.

NovaStar was a major participant in mortgage-backed securities.…[Read More]

Wells Fargo, U.S. Trustee Program Reach Mortgage Settlement

Aug. 26 — The U.S. Trustee Program announced Aug. 25 that it has reached an agreement with Wells Fargo Bank, N.A. requiring the bank to pay close to $3.5 million in remediation on account of 8,000 homeowners in Chapter 13 bankruptcy.

Wells Fargo and the USTP filed an amendment to a prior settlement entered in a Maryland Chapter 13 bankruptcy case on Nov. 19, 2015 (In re Green, Bankr. D. Md., No. 11-33377-TJC, 8/25/16 ), according to a press release sent to Bloomberg BNA.

The amendment is the result of an independent reviewer’s oversight of Wells Fargo practices with regard to filing and serving payment change notices in active Chapter 13 cases, and increase payments to be made by the bank by approximately $3.5 million. Wells Fargo previously agreed to pay about $81.6 million in remediation for “its repeated failure to provide homeowners with payment change notices (PCNs) as required under federal bankruptcy law,” the USTP, a branch of the U.S. Department of Justice, told Bloomberg BNA in an Aug. 25 e-mail.

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CFPB publishes 900-page final rule on mortgage servicing

NAFCU pushes back against new rule’s “unintended consequences”

The Consumer Financial Protection Bureau finalized new regulations Thursday that it says will ensure homeowners and struggling borrowers are treated fairly by mortgage servicers.

The final mortgage servicing rule will require servicers to provide certain borrowers with foreclosure protections more than once over the life of the loan, clarifies borrower protections when the servicing of a loan is transferred and provides loan information to borrowers in bankruptcy.

“The Consumer Bureau is committed to ensuring that homeowners and struggling borrowers are treated fairly by mortgage servicers and that no one is wrongly foreclosed upon,” said CFPB Director Richard Cordray.

“These updates to the rule will give greater protections to mortgage borrowers, particularly surviving family members and other successors in interest, who often are especially vulnerable,” Cordray said.

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Researcher: Fed Could Have Saved Lehman Brothers From Bankruptcy

On a side note: Lehman Brothers was turned down by then NY Fed President Tim Geithner to be a bank holding institution yet Morgan Stanley and Goldman Sachs were not turned down. If Lehman was not turned down, like Morgan Stanley and Goldman Sachs, Lehman would have received a bailout…

The collapse of Lehman Brothers in a record-setting bankruptcy could have been avoided, but the political will was lacking at the Federal Reserve to rescue the troubled investment bank, according to newly published research.

“Fed officials have not been transparent about the Lehman crisis. Their explanations for their actions rest on flawed economic and legal reasoning and dubious factual claims,” says Laurence M. Ball, chairman of the economics department at Johns Hopkins University and author of the report.

Lehman’s $639 billion bankruptcy filing occurred as a bubble in the U.S. housing market contracted from a 2006 peak. The U.S. economy fell into the deepest recession since the Great Depression in the months after the bankruptcy as unemployment jumped to a 30-year high of 10 percent.

Ball’s research concludes that the Fed did have the legal authority to bail out Lehman, whose collateral was deeply impaired. But Lehman’s crisis occurred amid a backlash against government bailouts of Bear Stearns, Fannie Mae, Freddie Mac and AIG.

Read more: Researcher: Fed Could Have Saved Lehman Brothers From Bankruptcy

Former Subprime Lender NovaStar Files for Bankruptcy

Bizjournals:

The subprime lending roots of Kansas City-based Novation Cos. Inc. (OTC: NOVC) finally have caught up to the company, playing a role in its recent decision to file for Chapter 11 bankruptcy protection.

Novation is the successor company to NovaStar Financial Inc., a major subprime lender during the housing bubble that at one time originated more than $11 billion in mortgage loans a year.

Ambac Financial : Corzine, others settle with MF Global trustee over collapse

Jon Corzine has reached a settlement with the trustee for the former New Jersey governor’s collapsed brokerage MF Global Holdings Ltd, as part of a series of accords expected to provide about $132 million to creditors, according to court papers.

The trustee, Nader Tavakoli, on Wednesday night asked a U.S. bankruptcy judge to approve payments being made on behalf of Corzine and several other defendants, including MF Global’s former Chief Operating Officer Bradley Abelow and former Chief Financial Officer Henri Steenkamp.

Insurers will make payments on behalf of the defendants, who did not admit wrongdoing, the court papers show.

The accord does not resolve the U.S. Commodity Futures Trading Commission’s civil lawsuit against Corzine and Edith O’Brien, a former MF Global assistant treasurer, but provides a reserve to help fund their defenses.

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