Illinois Supreme Court Rules Chicago Pension Scheme Unconstitutional

The Illinois Supreme Court has struck down as unconstitutional Chicago Mayor Rahm Emanuel's attempt to bail out the city's severely underfunded pension systems for its workers and laborers, according to Chicago.CBSLocal.com. The state's highest court upheld a ruling by a Cook County judge, as five of the seven justices concurred in the ruling. (Justices Anne Burke and Charles Freeman recused themselves from considering the case.) In 2014, the Illinois General Assembly passed legislation requiring city workers and laborers to pay increased pension contributions, and lowering the annual cost-of-living increases for retirees. In exchange, the city agreed to increase its annual contributions to the pension funds. Most of the city's unions agreed to the changes, but some did not, and opponents sued the city, arguing that the changes violated a clause of the Illinois Constitution that states that public employee pension benefits "shall not be diminished or impaired." The city argued that the changes did not violate the Illinois Constitution because the law would require significant increases in the city's contribution to the pension funds to avoid bankruptcy, which it expects would happen within 15 years without the changes. The Illinois Supreme Court rejected that argument: "These modifications to pension benefits unquestionably diminish the value of retirement annuities the [workers] were promised...Although we recognize that fiscal soundness is important, the General Assembly may not utilize an unconstitutional method to achieve that end."

Can a financially distressed government unit restructure its pension obligations over retiree objections? Prof. Amy Monahan of the University of Minnesota Law School joins ABI Resident Scholar Melissa Jacoby to explore this difficult topic on an ABI Podcast.

The impact of public pension debt on the economy will be the focus of a special "Eye on Bankruptcy" panel before a live audience on April 16 at ABI's Annual Spring Meeting in Washington, D.C. Register today as rates go up tomorrow!

Report: Oil Patch Bankruptcies Hit $17.4 Billion

Nine North American oil and gas producers have filed for chapter 11 so far this year with approximately $17.39 billion in cumulative secured and unsecured debt, according to Haynes and Boone LLP's Oil Patch Bankruptcy Monitor. These nine oil patch bankruptcies now mean that a total of 51 North American oil and gas producers have filed for bankruptcy since the beginning of 2015 (total includes chapter 7, chapter 11, chapter 15 and Canadian cases). Swift Energy Co. and Magnum Hunter Resources Corp. are the largest companies to have filed for bankruptcy since November. These companies collapsed owing a total of $1.2 billion and $1.1 billion in both unsecured and secured debt, respectively.

Has the final shoe dropped for the E&P industry? A session at ABI's 34th Annual Spring Meeting features experts discussing energy industry distress. Register by Friday before rates go up!

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Pre-order your copy of ABI's When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition.

Revised Dollar Amounts in Bankruptcy Forms Effective April 1

Automatic adjustments will be made on April 1 to dollar amounts stated in official bankruptcy forms 106C, 107, 122A-2, 122C-2, 201, 207, 410, Director's Forms 2000 and 2830, and certain instructions. The adjustments will apply to cases filed on or after April 1, 2016. For more information, please click here.

Watch Rochelle and Resident Scholar Jacoby Analyze the Oral Argument in Puerto Rico v. Franklin California Tax-Free Trust

Watch as ABI Editor at Large Bill Rochelle and ABI Resident Scholar Prof. Melissa Jacoby discuss issues that arose in Tuesday's Supreme Court oral argument that took place in Puerto Rico v. Franklin California Tax-Free Trust. Click here to watch the discussion.

Businesses Win Lawsuit Curbs with New Rules

Companies notched a quiet win in December when the federal courts adopted rules intended to curb the scope of pretrial evidence requests, a change that could tip the scales in their decades-long battle against consumer lawsuits, the Wall Street Journal reported yesterday. The rules, heralded by Chief Justice John Roberts in his year-end annual report, congratulated judicial policymakers for taking "a major stride toward a better federal court system." Chief Justice Roberts said the 2015 changes to the Federal Rules of Civil Procedure were a watershed toward tackling "the most serious impediments to just, speedy and efficient resolution of civil disputes." Behind the changes affecting all types of federal litigation was a concerted push by corporate lawyers, long engaged in a multifront battle against plaintiffs' lawyers and class-action lawsuits. The most significant amendments modify the early phase of litigation when parties exchange documents and other evidence related to their dispute in the discovery process. The previous rules said discovery requests must be "relevant"; the new language adds that they must be "proportional to the needs of the case" as well.

CFPB Tells Banks How to Combat Elder Financial Abuse

The Consumer Financial Protection Bureau (CFPB) issued a report and advisory yesterday calling on banks and credit unions to do their part to prevent, recognize, report and respond to elder financial abuse, Forbes.com reported yesterday. Many large financial institutions have special dedicated teams to combat elder fraud already, and smaller ones have creative approaches like a fraud-busters program that recognizes tellers who catch theives, but the approaches really run the gamut in terms of how robust they are, says Naomi Karp, senior policy analyst with CFPB's Office for Older Americans. The recommendations are specific and actionable, but they aren't binding regulations, said CFPB director Richard Cordray, announcing the advisory and urging financial institutions to adopt the recommendations as best practices.

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Upcoming Webinars Provide Update on New Bankruptcy Forms and the Importance of Pre-Bankruptcy Planning

Join us for two FREE and compelling abiLIVE webinars that both feature optional CLE!

- Enjoy a follow-up webinar on March 29 to our popular program from last year looking at the new bankruptcy forms (enacted on Dec. 1). Covered in this new program will be forms B 410 (proof of claim) and B 410 - A (supplement for a secured claim). Hear experts discuss the pros and cons of both new forms; attendees will have time to ask questions and provide feedback. Register here.

- When it comes to pre-bankruptcy planning, what is on your "checklist?" ABI's Business Reorganization Committee will be hosting a free abiLIVE Webinar on April 4 to help you identify potential pitfalls and privacy issues, and gain a few tips on best practices. Register here.