Despite recent improvements in India’s economic stability, the hangover from India’s credit fueled boom isn’t over yet. Estimates of the percentage of bank loans that are “impaired” — where repayment of the loan is classified as doubtful — run as high as 9%. Following the global financial crisis in 2008 and 2009, India joined countries around the world in rapidly pumping money into the financial system to prevent a prolonged global recession. The strategy of cheaper and more available money, much of it flowing through India’s banks, succeeded and resulted in the country’s growth. However, overreliance on interest-rate sensitive bank loans, slowing global GDP growth rates, and uncertain domestic economic policies exposed the vulnerabilities of India’s banks. Bad debts and missed loan repayments started to pile up quickly. The consequences of shortcomings in the insolvency process are … [Read more...] about Revamping India’s Bankruptcy Laws: A Way Out of India’s Bad Debt Problem
Doubtful debts to bad debts
Thousands of car dealerships across the country have closed their doors in the past year as the recession deepens and the very survival of the nation’s automobile industry is in doubt. General Motor’s high-profile bankruptcy will result in the eventual closing of 2,300 dealerships. Chrysler, too, will close nearly 800 dealerships in the wake of its bankruptcy. According to The Wall Street Journal, as of July 1st, 2,483,627 cars had been sold in the United States so far this year, a 35.4 percent decrease from last year at this time. Additionally, sales of lightduty trucks and SUVs have decreased 34.8 percent and 45 percent respectively. While this economic crisis constitutes an enormous challenge for all participants in the automobile industry, from the steel companies that provide the raw material to the dealerships that sell the finished products, this crises also raises a myriad of challenges for the banks and other financial institutions that finance individual … [Read more...] about Gone In 60 Seconds – When Dealerships Go Bad, What’s Their Lender To Do?
At its core, each business’s goal is usually the same – generating profits. This is true whether a business manufactures auto parts, provides medical services, or stages a traveling circus. Accordingly, a primary objective of each business is the collection of money owed; any business that fails to prioritize realization of its accounts receivable soon will find that it is no longer in business. Thus, it can be instructive to review one company’s errors and its failed attempts to collect a debt. While the company undoubtedly learned from its mistakes, other businesses would be wise to review its situation and learn those same lessons without experiencing the corresponding loss. Howell Contractors (“Howell”), a Kentucky contracting company, entered into a contract in 2005 with Westview, an LLC organized under Ohio law, to provide services in the building of a residential subdivision in southern Ohio. Several years and one housing collapse later, Howell … [Read more...] about Doing Business with Corporate Entities: Lessons to Learn From a Deal Gone Bad
Adam Krohn sues debt collectors for unfair practices, but he found himself in a role reversal last year when calling a fellow California lawyer who owed him money on a judgment.“He told me, ‘Come get it. I want you to know what it’s like to try to collect a debt,’ ” recalls Krohn. So he had a writ of execution served on Scott Carruthers, who Krohn says picked up another $90 in costs for the pleasure of teasing his adversary before paying up on a consumer’s Fair Debt Collection Practices Act claim.Carruthers did not respond to interview requests.Their tangle, ongoing with new cases in which Krohn says Carruthers is avoiding service altogether, offers a humorous glimpse into a decidedly unfunny area of the law: debt collection.With the nation so awash in debt—the Federal Reserve pegs “consumer credit outstanding” at more than $2.4 trillion—getting payment from those who owe money has become a huge business. And a big mess, with … [Read more...] about Payback: Lawyers on Both Sides of Collection are Feeling Debt’s Sting
K&L Gates chairman Peter Kalis is responding to negative press coverage about lawyer departures in the Chicago office with a firm-wide memo touting the firm’s financial stability and its refusal to engage in a “Deweyesque charade.”Above the Law obtained a copy of the memo, and the blog is impressed. Its story describes the memo as a “tour de force” and admires Kalis’ use of “punchy, short sentences,” his “delicious turn of phrase” and his data-driven defense.K&L Gates spokesperson Michael Rick confirmed that Kalis wrote the memo and sent a copy to the ABA Journal.Kalis contrasts K&L Gates’ good financial outlook with the findings of a law firm survey by Wells Fargo, and concludes that his firm is outperforming the market.Wells Fargo believes profits will be down in 2012, Kalis says, but K&L Gates is expecting an increase in revenues and profits per equity partner. Wells Fargo says bank lines of credit … [Read more...] about No ‘Deweyesque Charade’ at K&L Gates: Chairman Fights Bad Press in Impressive Memo