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The Maturation Of A Market1


Yesterday’s announcement that our portfolio company Coinbase is launching a suite of institutional products for the crypto market made me step back and think about the evolution of their institutional business. Coinbase started out as a place for individuals to buy, sell, and hold Bitcoin. They launched that in 2012. In 2015, Coinbase added the GDAX exchange where institutions, other exchanges, and large traders could trade Bitcoin. By the middle of last year, it became clear that many big institutions were entering the market and needed a lot more. And so Coinbase went back to the drawing board and developed a plan for a comprehensive suite of institutional products. And that is what they announced yesterday: Coinbase Custody Coinbase Markets Coinbase Prime Coinbase Institutional Coverage Group What started out as a simple web and mobile app for buying, selling, and holding Bitcoin has evolved into a full-fledged financial services company, serving both the consumer and institutional market. Say what you will about crypto, it has become an important asset class and the market is maturing before our eyes. I have had the opportunity to watch a bunch of markets go through this cycle over the course of my career and it always gives me chills to watch it happen. https://avc.com/2018/05/the-maturation-of-a-market/

The Maturation Of A Market1


Yesterday’s announcement that our portfolio company Coinbase is launching a suite of institutional products for the crypto market made me step back and think about the evolution of their institutional business. Coinbase started out as a place for individuals to buy, sell, and hold Bitcoin. They launched that in 2012. In 2015, Coinbase added the GDAX exchange where institutions, other exchanges, and large traders could trade Bitcoin. By the middle of last year, it became clear that many big institutions were entering the market and needed a lot more. And so Coinbase went back to the drawing board and developed a plan for a comprehensive suite of institutional products. And that is what they announced yesterday: Coinbase Custody Coinbase Markets Coinbase Prime Coinbase Institutional Coverage Group What started out as a simple web and mobile app for buying, selling, and holding Bitcoin has evolved into a full-fledged financial services company, serving both the consumer and institutional market. Say what you will about crypto, it has become an important asset class and the market is maturing before our eyes. I have had the opportunity to watch a bunch of markets go through this cycle over the course of my career and it always gives me chills to watch it happen. https://avc.com/2018/05/the-maturation-of-a-market/

The Maturation Of A Market1


Yesterday’s announcement that our portfolio company Coinbase is launching a suite of institutional products for the crypto market made me step back and think about the evolution of their institutional business. Coinbase started out as a place for individuals to buy, sell, and hold Bitcoin. They launched that in 2012. In 2015, Coinbase added the GDAX exchange where institutions, other exchanges, and large traders could trade Bitcoin. By the middle of last year, it became clear that many big institutions were entering the market and needed a lot more. And so Coinbase went back to the drawing board and developed a plan for a comprehensive suite of institutional products. And that is what they announced yesterday: Coinbase Custody Coinbase Markets Coinbase Prime Coinbase Institutional Coverage Group What started out as a simple web and mobile app for buying, selling, and holding Bitcoin has evolved into a full-fledged financial services company, serving both the consumer and institutional market. Say what you will about crypto, it has become an important asset class and the market is maturing before our eyes. I have had the opportunity to watch a bunch of markets go through this cycle over the course of my career and it always gives me chills to watch it happen. https://avc.com/2018/05/the-maturation-of-a-market/

Chicago Begins To Rethink How Bankruptcy Lawyers Get Paid


Driven into Debt How Tickets Burden the Poor Twice in the past three years, Kimberly Williams-Hayes has filed for bankruptcy. The first time, she made about $5,400 in total payments toward her debt before her case was dismissed, when she failed to hand over her tax refund. Only a fraction of that amount went toward a car loan, while her thousands of dollars in unpaid tickets and assorted other debts were untouched. One bill got paid in full: the bill from her bankruptcy lawyers. By the time she filed for Chapter 13 bankruptcy again, in September of last year, represented by another firm, her debt had grown. And again, her lawyers added language into her proposed payment plan to ensure they, too, would be paid first. For years, putting the lawyers and their fees ahead of other creditors through so-called “step up” payment plans has been standard practice among bankruptcy firms in the Northern District of Illinois, which includes Chicago. Getting paid early is what motivates some lawyers to take on higher-risk clients who can’t afford to put much money down before filing. But it also means many people who cycle through one bankruptcy after another never make a dent in their debt, as most of their required monthly payments goes toward attorney’s fees. That might be changing. Late last year, a bankruptcy court trustee filed a series of objections over attorney compensation in several cases, arguing that the practice is self-serving and potentially harmful to clients. Three of the 10 active bankruptcy judges on the Northern District bench recently issued opinions critical of the practice, including in Williams-Hayes’ case. Patrick Semrad, pictured here in an ad, is the managing partner of DebtStoppers, which files the most Chapter 13 bankruptcies in the Northern District of Illinois. (Screenshot via DebtStoppers on YouTube) While the judges stopped short of halting the practice, they sanctioned two firms or made them reapply for compensation. The firms, according to court rulings, did not provide sufficient disclosures to clients or failed to submit client agreements spelling out the financial arrangements. “There is simply no way of knowing how many debtors have been harmed by a policy driven by the very counsel that they trusted and relied upon to represent their best interests,” wrote U.S. Bankruptcy Judge LaShonda Hunt in late April. Given the thousands of Chapter 13 bankruptcy cases that end in failure in Chicago each year, the rulings suggest a serious rethinking here about how the structure of lawyer’s fees can affect debtors. They also signal more scrutiny going forward, particularly for the high-volume firms that pump thousands of cases into the court system each year and help make the Northern District the court where more Chapter 13 bankruptcies are filed than anywhere else in the nation. One judge sanctioned the Semrad Law Firm, commonly known as DebtStoppers, knocking down the amount it was allowed to charge in four dozen cases. DebtStoppers, which handled Williams-Hayes’ first Chapter 13 bankruptcy in 2016, files more of these cases than any other firm in the district, according to the most recent data available. More than half end in dismissal, meaning with no debt relief. The next firm Williams-Hayes used, Peter Francis Geraci Law, also saw its fees knocked down or was told to reapply for fees, though in just two cases. The Geraci firm is the district’s second-most frequent filer of Chapter 13 bankruptcies, but it posts a success rate significantly better than DebtStoppers. Going forward, all firms appearing before the three judges who issued rulings will be expected to provide additional disclosures when they seek to prioritize their fees using step up plans. And though those opinions are not binding, many attorneys will likely submit disclosures before the other judges as well to err on the side of caution. Some consumer advocates worry the court rulings could lead to unintended consequences. They say the newly charged environment casts an unfair, negative light on a financial arrangement that helps poor debtors afford bankruptcy, and isn’t controversial in some other courts. In fact, some lawyers say they’ll consider taking fewer cases to avoid added scrutiny, which could lead to reduced access to the bankruptcy system for debtors. Growing Concern What’s happening in Chicago’s bankruptcy courts reflects a growing national discussion about how to improve outcomes, particularly for black debtors who fare far worse than their white counterparts, statistics show. The complex issue has received more attention from judges, attorneys, trustees, creditors and other observers of bankruptcy court since last fall, when ProPublica reported that black debtors, particularly in the South, are lured into “no money down” Chapter 13 bankruptcies that rarely end with debt relief. A similar story is playing out here, but with a twist. ProPublica Illinois reported earlier this year that unpaid tickets from the City of Chicago are sending thousands of mostly black, low-income drivers into bankruptcy. DebtStoppers files the lion’s share of ticket cases. Most end in dismissals. Read More Too Broke for Bankruptcy How Bankruptcy Fails Those Who Need It Most How Chicago Ticket Debt Sends Black Motorists Into Bankruptcy A cash-strapped city employs punitive measures to collect from cash-strapped black residents — and lawyers benefit. Under Chapter 13, debtors must use all of their disposable income every month for up to five years to make payments before having their debts erased. A trustee assigned to the case distributes the money to creditors, giving priority to mortgage and auto lenders before reducing other debt, such as tickets or unpaid credit cards. Attorney’s fees are considered an administrative expense and, like car loans, are near the top of the list for repayment. But there’s debate over whether legal fees can be paid faster through the step up plans used in Chicago. Under these plans, secured creditors— often auto lenders— receive smaller amounts until legal fees are paid. Then, payments to secured creditors get “stepped up,” or get larger, until the bankruptcy plan’s end. Bankruptcy courts around the country deal with attorney’s fees in different ways. Some courts set flat fees, no matter how complicated or lengthy the case. Others allow for payment as cases reach certain milestones “so an attorney still has skin in the game,” said James Haller, a past president of the National Association of Consumer Bankruptcy Attorneys. Flat fees — like the standard $4,000 per case in the Chicago district — help large courts run more efficiently, and can benefit both debtors and attorneys. But there’s no set standard on how quickly the fees can be paid. Some courts stretch the payments over the life of the bankruptcy — meaning lawyers have to wait up to five years to get paid. That can pose a financial challenge, especially for smaller firms. “Many cases will pay very little because you put in a lot of time before a case is filed, work hard to get the case confirmed, and then the client loses their job and is unable to keep paying,” said Haller, who now practices in the Chicago area. “So you’ve spent $2,000 to $3,000 worth of time and you’re not paid for it.” Research by Edward Morrison, an economist and bankruptcy expert at the Columbia Law School in New York, suggests that some lawyers in the Northern District of Illinois lose interest after they get paid. In a 2016 paper he co-authored, Morrison noted a sharp increase in dismissals in the months after legal fees were paid. “Once the attorney is paid,” he said, “it appears there’s a lot less effort to keep the case going.” Failed Cases One reason these rulings have drawn so much attention among bankruptcy attorneys in Chicago is that they involve firms that handle the most bankruptcies. DebtStoppers filed about 36 percent of the more than 19,000 Chapter 13 cases opened here last year, according to a ProPublica Illinois analysis of case data. The firm, known for its catchy jingles in radio and TV ads, has helped popularize the “no money down” model in Chicago and serves mostly debtors from predominantly black neighborhoods, according to court and U.S. Census data analyzed by ProPublica Illinois. Peter Francis Geraci is pictured here in an ad for his firm, the second-most frequent filer of Chapter 13 bankruptcies in the Northern District of Illinois. (Screenshot via Peter Francis Geraci Law on YouTube) But more often than not, these debtors don’t get the relief bankruptcy promises — the discharge of their debt. ProPublica Illinois analyzed outcomes for Chapter 13 cases filed by the firm in 2011 and found that, five years later, only 39 percent ended successfully, with debts discharged. Geraci’s firm, which handled about 17 percent of all Chapter 13 bankruptcies filed here last year, posts a success rate of about 63 percent. Districtwide, about half of all Chapter 13 bankruptcies ended with a discharge of debts. Patrick Semrad, the managing partner of DebtStoppers, did not respond to interview requests but said in an email that input from judges and trustees is essential to protecting the rights of debtors. DebtStoppers, he said, welcomes their review. In earlier interviews, Semrad had challenged the notion that dismissed cases were “failures.” Bankruptcy protection, he said, can give debtors other benefits, even if they are short-lived. While a bankruptcy is pending, for instance, debtors can keep their vehicles, allowing them to get to work and take their children to school without fear of repossession from lenders or seizure from the city over unpaid tickets. But consumer advocates and lawyers from other firms say privately that DebtStoppers takes on too many clients who shouldn’t be in bankruptcy in the first place because they lack the income to keep up with payments. The result, according to these critics, is that when the cases are dismissed, debtors owe even more money and face ruined credit. Many file for bankruptcy yet again, generating more legal fees. It’s unclear if a move toward more disclosure in the payment plans will affect debtors. Marilyn Marshall, the bankruptcy trustee who objected to fees for DebtStoppers and Geraci’s firm, declined to comment. Get Email Updates from ProPublica Illinois Marsha Combs-Skinner, a Chapter 13 trustee in the Central District of Illinois who oversees cases in Urbana and Rock Island, said she doesn’t think more disclosures will make much difference. That’s because so many other factors affect why cases get dismissed, she said. Some cases are doomed from the start, but get filed anyway by desperate debtors. “A lot of them get dismissed because people have bad things happen,” Combs-Skinner added. “People lose their job, get sick, whatever.” Meanwhile, lawyers at the Geraci firm now provide the extra disclosures to clients and submit them to the court when they propose using a step up plan, said the firm’s namesake founder, Peter Francis Geraci. The disclosures are not an obstacle for his lawyers, he said, but he believes his firm’s use of the plans has been cast in an unfair light. Even when cases do get dismissed, debtors aren’t in a dramatically different position than before filing for bankruptcy — unable to make their car payment and hold on to their vehicle, he said. Given the heat his firm and others have taken over the issue, he said he might be less inclined to represent some debtors “if it’s going to be viewed by the court as taking advantage to do a step up plan.” Filed under: Debt

The Battle of New Market


Source: http://themusingsofthebigredcar.com/the-battle-of-new-market/ Big Red Car here on the anniversary of the Battle of New Market on 15 May 1864. It is a touchstone of the Virginia Military Institute whose cadets stormed Yankee artillery batteries with bayonets across a muddy field which came to be known as the Field of Lost Shoes. A vignette from a painting which stands in Jackson Memorial Hall at VMI depicting the successful bayonet charge of the Virginia Military Institute Corps of Cadets on 15 May 1864 in New Market, Virginia whereat they captured Union artillery batteries thereby driving the Union forces from the Shenandoah Valley. The cadets lost 10 KIA and 47 WIA, but drove Yankee general Franz Siegel out of the Valley of Virginia. The Shenandoah Valley was the “breadbasket of the Confederacy” and its loss would have doomed the South. This day is not one to re-fight the Civil War, a truly ill-conceived and absurd way to settle a myriad of disputes, but one to recognize youthful courage. Virginia Military Institute has sent its graduates to fight in every war the US has been involved in since its founding on 11 November 1839. It is a hard place to be educated, but it is a great place to be from. General of the Armies George Catlett Marshall is its most illustrious graduate. It was his genius and preparation which shepherded the creation of a 13MM man military force which took a crucial role in defeating evil in the form of the Germans and the Japanese in World War II. Stonewall Jackson, a professor at VMI before the Civil War, keeping watch over Matthew, Mark, Luke, and John, four cannons which saw action in the Mexican War and the Civil War. In Jackson Arch, which provides the primary access to the VMI barracks, is a saying which is burned into every VMI graduate, “You may be whatever you resolve to be!” A certain VMI cadet on the eve of graduation, headed to Engineer Officer Basic Course, Airborne School, and Ranger School. I am proud to be a VMI graduate. I salute VMI, all of its graduates, and my Brother Rats on this historical day. Rah Virginia Mil! But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Be kind to someone who really needs it today. Honor youthful courage.     Share this:TweetShare on TumblrPrint Related Source: http://themusingsofthebigredcar.com/the-battle-of-new-market/