Cramdown--

Cramdown is not a word that appears anywhere in the Bankruptcy Code. Yet it is a well-known and often employed bankruptcy concept, which means, simply, obtaining confirmation of a Chapter 11 plan of reorganization over the objection of one or more dissenting classes of creditors.Cramdown allows the bankruptcy courts to modify loan terms subject to certain conditions in an attempt to have all parties come out better than they would have without such modifications. The conditions are mainly that the new terms are fair and equitable to all parties involved.

During the financial crisis of 2008, cramdown was used to help troubled mortgage borrowers by allowing the bankruptcy courts to alter mortgage terms, subject to certain conditions, in an attempt to keep borrowers from foreclosure when one or more tranches of the mortgage did not agree to loan modification.

Cramdown is accomplished by convincing the court that a plan is fair and equitable even though one or more creditors have voted against it. For a secured claim, a plan may be found to be fair and equitable if, at a minimum, it provides that the lender will retain its lien and receive deferred cash payments equal to the present value of the collateral securing the loan (i.e., a market rate of interest).

Layoffs mount as crisis drags on--

 

The big job cuts are the evidence that the global financial crisis is unrelenting for any industry battered by heavy losses and weak markets. The 5,300 layoffs by the Swiss bank and a further 1,000 in London by Japan's biggest broker are the latest in the global financial sector .Of these, more than 50,000 were at Citigroup, which has made more write downs than any other bank in the world during the crisis. 

     It really cannot be predicted currently what’s in store for people next. It depends on sentiment, which will in turn drive credit markets, which in turn will weigh on banks or not. From the United States to Asian export giant Japan to European powerhouse Germany, the world's top economies is now in recession as the global crisis deepens. They are not the only ones with Singapore, New Zealand and Hong Kong also joining in. 

     The losses at banks are increasing continuously. Investment banking had a significant pretax loss, reflecting the challenging conditions in the financial markets in the quarter and the costs associated with risk reduction.