Mark Donnell at MGLaw says predictions of a 2012 rise in business bankruptcy filings aren't yet coming true. That, he writes, may counterintuitively suggest the economy isn't healing as well as we'd like it to.
This may appear to be a good sign for business, but could actually be a bad sign for the economy, as struggling companies continue to search for a light at the end of the tunnel.
Workout specialist Bob Mendes at MGLaw has a follow-up on our piece from last week on the state of local banks. Noting that the banks posting better numbers are also the ones he and his fellow attorneys are generally having an easier time dealing with, Mendes writes that predictability, realism and financial health are aligning more and more.
On the flip side, lenders who are still catching up to the lower values of borrowers' collateral are acting a little more erratically and — still — looking to kick the can down the road. But that “live to fight another day” strategy relies on a lot of macroeconomic hope and not much more.
Not that anyone has asked me, but a word of advice to the less-healthy banks…like any distressed business, when you find yourself invoking the “live to fight another day” strategy, you should be thinking really hard about your exit strategy.
SEE ALSO: Profits falling, banks confront a leaner future from Sunday's New York Times
MGLaw attorney Griffin Dunham says legislation to tighten bankruptcy filing venue rules — Memphis Congressman Steve Cohen is co-sponsoring the bill — should be well received. The proposal will require companies to file where they are based or do most of their business.
The bill is aimed at preventing debtors from using a friendly forum where they have no real presence to make creditors’ lives more difficult. This makes sense - the most affected districts should hear the case. This also seems fair to creditors because presumably it would cut down on the significant transaction costs that would be incurred to fight in $600/hour legal markets like Delaware and New York.
POSTDATA: WARRANTY DEEDS