According to Bloomberg’s U.S. Bankruptcy Tracker, the amount of distressed bonds and loans traded in U.S. markets had the biggest weekly boost of this year, with distressed debt in the telecommunications and oil and gas industries driving the jump. [Bloomberg, Sept. 28, 2021]
The Wall Street Journal discusses a report issued by the Government Accountability Office, the investigative arm of Congress, which recommended that Congress require court oversight of executive retention bonuses paid shortly before a chapter 11 filing. According to the report, in the last fiscal year 42 businesses paid out $165 million in executive retention bonuses before filing for bankruptcy, avoiding scrutiny from bankruptcy judges which they would otherwise have been subject to had they sought such awards post-petition. [WSJ; Sept. 30, 2021]
Forbes reports on a federal district court’s recent decision reversing a New York bankruptcy judge’s ruling that granted cancellation of a Navy veteran’s $221,000 student loan, reasoning that he failed to show why his student loans created an “undue hardship.” While the standards for discharging student loans in bankruptcy have always been strict, the decision is notable given recent political debate and proposed legislation on student loan forgiveness. [Forbes; Sept. 30, 2021]
Reuters reports that the Boy Scouts of America received tentative approval to start soliciting votes from its creditors, including sexual abuse victims, on its proposed reorganization plan. The survivor groups reportedly have conflicting views on the settlement offers proposed by the plan. [Reuters; Sept. 29, 2021]