Delphi's bankruptcy a issue with retirees pensions

Written by Michael Rivezzo

Retirees from Delphi testified in front of a Senate committee this week about abrupt cuts that were made to their pensions following Delphi filing for Chapter 11 bankruptcy in October 2005. Majority of the 20,000 retirees from Delphi stand to lose 30 to 70 percent of their pension. Senators were outraged because GM retirees managed to work out agreements to retain 100% of their pensions during GM's government-led bankruptcy; and GM is the parent company of Delphi.

"It's a wonderful thing that we live in a country where we can petition our government for redress of grievances" said Bruce Gump, a engineer who worked with Delphi for 33 years. The reduction in pensions will most likely put many workers just below federal poverty levels. Gump is pleading with the committee to show fair treatment to all auto workers, with obvious preferential treatment shown to GM workers.

They plan on meeting with the House of Representatives committee in the next few weeks. Hopefully, this situation can be resolved with retirees having a better idea of what they expect to receive in the future.

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Bereaved mother fights for changed bankruptcy laws

BY LARRY MARGASAK

Posted by Michael Rivezzo

A Rhode Island woman urged senators Tuesday to ease bankruptcy rules for people devastated by medical debt, as she described the pain of losing a child and going broke from his health care bills.

The experience of Kerry Burns, of Coventry, R.I., raised a crucial question of bankruptcy law: should people going broke due to high medical bills get a break over those bankrupted by divorce or high credit card bills?

Sen. Sheldon Whitehouse, D-R.I., chaired the Senate Judiciary subcommittee hearing on his bill to create an exception for people whose medical bills are their main cause of financial distress.

Sen. Jeff Sessions, R-Ala., disagreed with a major provision of the bill: Elimination of an income-related test for medical debtors only. The test currently is required to determine if someone is qualified for a Chapter 7 bankruptcy, which allows the debtor to get a fresh start by wiping out all debts.

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Debt Settlement Company Forced to Pay for Defrauding NYS Customers

Posted By: Lisa Matthys

Written By: David Mittleman

During a time when most people are desperate to pay off those high-interest rate credit card balances, it can be tempting to call up a debt settlement company. They often promise a quick fix: by paying them a fee, they agree to negotiate much lower settlement amounts with your creditors. Indeed, for many people debt settlement seems like the answer to fix all of their financial woes and a way to avoid bankruptcy. However, a recent lawsuit against a debt settlement company in New York state might make you think twice before “signing on the dotted line”, so to speak.

In a ruling on Thursday, the Arizona-based Nationwide Asset Services was ordered to pay $200,000 for defrauding 1,981 customers in New York State. Furthermore, the company was also barred from conducting further business in New York, unless they provide a $500,000 performance bond to protect their customers.

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Replacing Bankruptcy Not Best for "Too-Big-To-Fail" Banks

Posted By: Lisa Matthys

Written By: Stephen Labaton

WASHINGTON — Congress and the Obama administration are about to take up one of the most fundamental issues stemming from the near collapse of the financial system last year — how to deal with institutions that are so big that the government has no choice but to rescue them when they get in trouble.

A senior administration official said on Sunday that after extensive consultations with Treasury Department officials, Representative Barney Frank, the chairman of the House Financial Services Committee, would introduce legislation as early as this week. The measure would make it easier for the government to seize control of troubled financial institutions, throw out management, wipe out the shareholders and change the terms of existing loans held by the institution.

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Personal Bankruptcy Filings Soar

Written By: Lisa Matthys

Consumer bankruptcies exceeded one million for the first nine months of this year for an all time high since the system was overhauled in 2005. Using data from the National Bankruptcy Research Center, the American Bankruptcy Institute determined that as of Sept 30. personal bankruptcies totaled 1,046,449, whereas in 2008 there were 773,810 within the same time period. September's filings increased 41% from last year.

The 2005 reform was intended to make it more difficult for Americans to simply relieve their debts by filing for bankruptcy. Many attribute bankruptcies to health care and job loss. Some believe personal bankruptcies are caused by over-consumption in which households underestimate their personal disposable income and end up spending more than what they budget for. The new law imposed by Congress forces more people to file under Chapter 13, in which consumers are put on a repayment plan of up to five years. Any debts not addressed by the repayment plan do not have to be paid. Still, even with the new law, about 71% of consumers who filed for bankruptcy within the first nine months of this year filed for Chapter 7. With a tough economy, the American Bankruptcy Institute expects that personal bankruptcies will exceed 1.4 million by the end of the year.

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Commercial Real Estate Industry are Seeing Bankruptcy as the Only Option

By Rico Setyo

The commercial real estate industry has already been forecasted to collapse. The Federal Deposit Insurance Corporation closed Corus Bank which can be seen as the beginning of “the next shock to the banking system” which would be commercial real estate. The lack of new debt will hurt many people especially inside the industry. There are three signs to look for to see how badly and when will the collapse of the industry happen: Special Servicers, Big Projects, and Regional Banks.

Capmark Financial Group is one of the largest commercial real estate lenders and they have recently filed for bankruptcy protection due to bad debts. The company has been looking at Chapter 11 Bankruptcy since September and they have finally filed. Chapter 11 bankruptcy is the restructuring of the organization and the debt it owes. Mohsin Meghji, the company's chief restructuring officer said that "the Chapter 11 process will give Capmark the opportunity to restructure our balance sheet while continuing to focus on maximizing value for our principal stakeholders".

Many other players in the commercial real estate industry were forced to make the same the decision as Capmark. The mall giant company, General Growth Properties and hotel chain, Extended Stay Inc. filed for bankruptcy in the past year, and even more commercial real estate ventures could fail because of the inability to refinance debts and reduced customer traffic as consumers continue to pull back.

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Annie Leibovitz is heading towards bankruptcy.

By Johanna Neuman
Posted By Rico K Setyo

The photo was released by the White House today, the official portrait of the current occupants of 1600 Pennsylvania Ave. -- President Obama, 8-year-old Sasha, First Lady Michelle Obama and 11-year-old Malia. The photo was taken Sept. 1, and the subjects were all smiles.

The back story is anything but. Leibovitz is best known for her celebrity photos -- like the famous one she did of John Lennon and Yoko Ono the day the former Beatle was gunned down, or the one she did of a pregnant Demi Moore, posing nude.

But lately the photographer to the stars has been embroiled in a financial mess that could lead to bankruptcy and the loss of her photographic catalog. As Gawker.com put it, the Obama photo was taken one week before Leibovitz's deadline to repay a $24-million loan to "high-end artsharks Art Capital Group."

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Bankruptcy Options - 7, 11, and 13

By Joseph Devine
Posted By Rico K Setyo

Bankruptcy: the word alone may send chills up your spine. But so should the words "debt", "foreclosure", and "repossession". While bankruptcy may seem undesirable, intimidating, or downright embarrassing, in some instances bankruptcy can be a useful tool and may save you from a life mired in debt. Bankruptcy under chapters 7, 11, and 13 are available to both individuals and businesses, each with its own advantages and disadvantages.

Chapter 7

Chapter 7 is a liquidation bankruptcy. This means that, as an individual or business, when you file for Chapter 7 you agree to have some of your property liquidated to pay off your debts. Businesses that file for Chapter 7 will be dissolved and the assets liquidated to creditors. For individuals, some assets may be exempt, such as your home, tools of your trade, and retirement accounts.

The laws for exempt assets vary from state to state. All nonexempt items, however, are at risk of being liquidated under Chapter 7. While you may lose a significant amount of property, your debts will be immediately resolved and you can quickly begin to restructure your finances without the burden of debt.

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Perkins Twp. woman fights unethical debt collection

Posted by Stefanie Marty

By MELISSA TOPEY | Wednesday, October 21, 2009 1:00 AM EDT

PERKINS TWP.

A local woman who dared to question has given a black eye to one of the nation's largest debt collection agencies.

Andrea Schwarzentraub, 32, was distraught when she opened up a certified letter to find she was being sued by Midland Funding and Midland Credit Management for an alleged credit card debt of $4,516 from 2000.

Not recognizing any of the people she supposedly owed, she questioned the lawsuit. She attempted to get answers from the collection agency with the help of Sandusky law firm Murray & Murray.

"Most people wouldn't have questioned it," Schwarzentraub said.

U.S. District Court Judge David Katz ruled that Midland Funding used an illegal affidavit to sue Schwarzentraub and others when the company attempted to collect debts. The affidavit, signed by a Midland employee, stated the employee had personal knowledge of the debt.

A year and a half later, the debt still hasn't been proven. Katz did not rule on whether the debt belongs to Schwarzentraub, a matter that could go to trial.

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Debt Collection

Posted By Adam Lindheim
By Arthur Epstein

During these gloomy times for the U.S. economy, many businesses are suffering. But some are uniquely positioned to do well when times are tough for most others, namely debt collection agencies and related companies.

The U.S. now has more than 6,000 debt collection companies, according to Kaulkin Ginsberg, a Maryland-based market research firm. Most of them are small, privately held entities. However a few debt collection agencies are publicly traded, including Portfolio Recovery Associates (PRAA) and IDT (IDT).

Although the debt collection business may get a bad rap when depicted in the movies or on television shows, it is actually a heavily regulated industry. While debt collectors may be tempted to use any tactics that will pry owed money from debtors' hands, they must comply with the federal Fair Debt Collection Practices Act, which prohibits deceptive, unfair, and abusive practices by third-party collectors; requires debtors to be treated fairly; and forbids certain methods of debt collection, including threats, abusive language, or harassment, such as repeatedly calling.

According to the Federal Reserve, the consumer credit industry increased from $133.7 billion of consumer debt obligations in 1970 to $2.5 trillion of consumer debt obligations in November, 2007, a compound annual growth rate of 8.2%. The Kaulkin Ginsberg report states the amount of outstanding revolving and non-revolving consumer credit increased at a compound annual growth rate of 6.4% from $1.3 trillion in June, 1997, to $2.5 trillion in June, 2007.

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Bankruptcies: The Next Wave

Posted by Adam Lindhem
By Ben Steverman

Recent earnings reports show companies are slashing costs, paying off debt, and stockpiling cash. Meanwhile, economists see signs the economy is slowly improving.

Unfortunately, none of that could prevent a wave of bankruptcies by firms walloped by the recession and credit crisis.

That's the prediction of experts on bankruptcy, who say too many firms are loaded up with too much debt to survive the next year without defaulting on their debt obligations and filing for bankruptcy protection.

Standard & Poor's, for example, predicts the default rate for speculative-grade (i.e., junk-rated) companies to hit an all-time high of 14.3%—but not until the first quarter of 2010. The default rate was 9.25% last month, and just 0.79% back in November 2007. (S&P, like BusinessWeek, is a unit of The McGraw-Hill Companies (MHP).)

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Corporate Bankruptcy

By Adam Lindheim

With the crashing of the American economy more and more corporate companies are filing for bankruptcy. In the first 5 months of this year 100 public companies filed for bankruptcy, the highest number since 2002. A company or individual files for bankruptcy when they pay their bills to their creditors in a timely fashion. Their debts outweigh their assets, and in these cases they turn to bankruptcy courts for protection. The courts will either liquidate their company or reorganize their business.

Bankruptcy is a legal procedure that is used by the U.S. bankruptcy code when a debtor is not able to make payments to its creditors. Bankruptcy is used as a safety net as it gives companies protection from their creditors which can no longer demand to be paid once bankruptcy is declared. The majority of corporate bankruptcies filed are either under chapter or chapter 11 of the bankruptcy code.

A chapter 7 filing typically leads to a liquidation of its business. This implies that the company has no intention of continuing to operate and is planning to sell off all of its assets. Proceeds from the sale are distributed to creditors in the order of their priority. A chapter 11 filing usually involves company reorganizing its business through the bankruptcy process with the hope that it will survive. When a company files chapter 11 it shields them from a creditors demands for payments and from lawsuits while it restructures it finances. Contract terms between the debtor and creditor can also be rewritten under the bankruptcy codes, something that is not as easily done without a bankruptcy filing. During a chapter 11 proceedings, the debtors reorganization plan must be accepted by a majority of its creditors.

General Motors the nations largest automaker had 172.81 million dollars in debt and 82.29 billion dollars in assets, according to their recent bankruptcy filling. They are currently trying to restructure their company so they can eventually prosper once again. They hired the consulting firm AP Services LLC who charged GM 23 million dollars for 90 days of consulting work. Bankruptcy laws have allowed GM to protect itself from its creditors and try to bring back their company.

As the number of corporate companies in the U.S. that are filing for bankruptcy continues to rise and reach record numbers, investors need to be aware of where and how they invest their money. Companies need to be more ethical with their operations, and conscious of how their operations are going in order to avoid bankruptcy.

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After Lehman Bankruptcy

Written by Minjune Kim

Simmons & Simmons has advised hedge fund RAB Market Cycles Fund on the latest dispute in the Lehman Brothers bankruptcy saga. Simmons acted for RAB in relation to the status of post-administration cash derived from securities received by the failed bank after it went into administration. As a result of the ruling handed down on 21st October. City hedge funds could now see the money returned to the beneficiaries rather than falling into the general estate. RAB successfully argued that the post-administration cash held by Lehman as custodian was held on trust, and therefore under Financial Services Authority regulations should not fall into Lehman's general estate. The ruling will be seen as important by so-called prime brokerage clients, which currently have cash worth $3.3bn (£2bn) tied up in the administration.

Hundreds of hedge funds that were customers of Lehman Brothers and had their assets frozen when the bank collapsed can keep the cash generated by their portfolios in the 13 months since the investment bank was declared bankrupt. A High Court judge said yesterday that about $3.3 billion (£2 billion) in dividend, interest and other payments accrued since Lehmans entered bankruptcy on September 15 last year should go directly to the funds, rather than into a general pot for all Lehmans creditors. The decision is a setback for Lehmans’ non-hedge fund creditors, which had hoped to benefit from the constantly expanding pot of cash generated by frozen hedge fund holdings. PricewaterhouseCoopers (PwC), the bank’s European administrator, had kept confidential the names of and amounts owed to Lehmans’ European creditors, for fear that financial institutions could suffer if it became known that they had large Lehmans-related losses.

ehman Brothers Holdings Inc, the bankrupt investment bank, paid its lawyers and financial advisers $402.9m between September 2008, when it failed, and now, according to a filing with the US Securities and Exchange Commission.In total, 23 law firms, financial advisers, investment banks and consulting firms were paid in fees and expense reimbursements over the last 12 months. Restructuring firm Alvarez & Marsal LLC, which provided Lehman with its current chief executive officer, Bryan Marsal, was paid $169.2m in fees. The firm said it had about 175 full-time employees working on the bankruptcy.Weil Gotshal & Manges LLP of New York, the investment bank’s lead bankruptcy-law firm, was paid $98.5m, Lehman said in the filing.

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Auctions, bankruptcy sales scheduled

Written by Ed Waters Jr.

Posted by Minjune Kim

Two trustees sales and a bankruptcy sale are scheduled within the next several weeks.
A parcel at Hamilton and Pennsylvania avenues will be auctioned at 10 a.m. Wednesday at the Frederick County Courthouse, 100 W. Patrick St.
The land had been owned by the city, according to Harry T. deMoll, a substitute trustee, but was sold to Richard Romsberg. The land had been used at one time to park trucks and other equipment for the city's Public Works Department.
The Musket Ridge Golf Course on Brethren Church Road, Myersville , will be auctioned off at 11 a.m. Nov. 17 at the courthouse in Frederick .
The golf course includes a main clubhouse, banquet facility, maintenance building, driving range and putting green. The course was constructed in 2001.
A bankruptcy sale will be held at 9 a.m. Nov. 16 for Hubert R. Brown Construction Inc. on site at 11214 Angleberger Road, Thurmont .
The auction includes heavy construction equipment and trucks, shop equipment, tools, office furniture and other equipment.

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Bankruptcy court allows Erickson Retirement Communities to pay staff

Written by Julekha Dash

Posted by Minjune Kim

A U.S. bankruptcy court in Texas has allowed Erickson Retirement Communities LLC to continue paying its employees and offer them health benefits as it works though a reorganization plan.
One of the nation’s largest builders of senior housing, Erickson filed for Chapter 11 bankruptcy protection Oct. 19. The Catonsville firm also said it will sell the company to Redwood Capital Investments LLC, controlled by Baltimore businessman Jim Davis, who is chairman of Hanover-based staffing agency Allegis Group Inc.
The court’s Oct. 20 ruling affects 794 employees who work for Erickson’s corporate division. Of those, 723 are full-time salaried employees, 65 get paid hourly and six are temporary workers. Though Erickson employs 12,000 throughout the country, but the remaining workers get paid by their individual properties and are not impacted by the ruling. Erickson oversees 19 housing campuses in 10 states.
In court documents, Erickson said it owes approximately $2.3 million in unpaid salary and other compensation to its employees on its next pay date. It also owes $6,000 in reimbursable expenses related to business travel, mileage and parking. The company pays $772,00 per moth, on average, on medical and vision insurance and another $167,000 a month on dental insurance.
After a company files for bankruptcy, all spending needs to be approved by the court.
Erickson filed bankruptcy after unsuccessfully trying to restructure its debt with its lenders. The company had been facing mounting financial pressures that forced it to stop work on all of its new developments. The stoppage affected seven developments in Kansas, Texas, Michigan, Illinois and Massachusetts.
Chairman John Erickson told his 23,000 residents across 10 states in a letter earlier this month that the company has to separate its real estate business from its property management business so its residents are protected from its financial troubles. Part of the bankruptcy process will include breaking off these two divisions.

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The good and bad of chapter 13 bankruptcy

by Michael Rivezzo


Filing Chapter 13 bankruptcy can actually be beneficial to you if you have failed redundantly to pay off debt . Chapter 13 can help people that still make a income and who want to avoid a foreclosure, while still being able to pay off some of their debts. This is why Chapter 13 is also called the reorganization bankruptcy.

Some of the positives of Chapter 13: you can still be able to keep real estate and some personal property. You can pay back some or all of your debt with a payment plan. This usually take 3-5 years to completely pay back the creditor. Creditors also stop calling and any legal action brought against you is nullified.

There are still some bad parts of Chapter 13. Your credit score will drop 200-250 points. The bankruptcy will stay on your report for 7 years. There is also fees that need to be paid regularly.Most people will not even qualify for Chapter 13 because there strict criteria for eligibility. You must have a regular source of income, while your gross income should be greater then the State median for your family size.



http://www.brainerddispatch.com/stories/101709/new_20091017032.shtml

http://blogs.wsj.com/economics/2009/10/23/qa-what-the-middle-class-recession-means-for-bankruptcies/

http://toledoblade.com/apps/pbcs.dll/article?AID=/20091002/BUSINESS07/910020354/-1/BUSINESS05

Identity Theft on the Rise

By Lorilyn Prestidge

Posted By Michael Rivezzo


Identity theft is the fastest growing crime in America.

And in light of increasing numbers, this week has been named, "National Protect Your Identity Week" by the National Foundation for Credit Counseling.It's a crime with more than ten million victims, including Catherine Estergren, who had checks stolen out of her mailbox."The bank called me after I didn't have any money in my account and I was way overdrawn," said Victim of Identity theft Catherine Estergren.

The thieves used Estergren's checks in five states and withdrew more than seven thousand dollars."I got all kinds of collection letters from all over these states," said Estergren.Estergren's story is a classic case of identity theft."It takes years and again tens of thousand of dollars to correct what has happened in maybe just a week or two or a month," said Austin Police Department Lt. John Mueller.


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States institute new rules that limit debt collectors

by Emery P. Dalesio

Posted By Michael Rivezzo


With many Americans in dire financial straits, states are cracking down to make sure aggressive debt collectors target only people who legitimately owe them money.

National consumer credit laws already prohibit collection agencies from harassing, deceptive or unfair practices like telling neighbors or family about what is owed, or calling before 8 a.m. or late at night. Since the recession started, at least a half-dozen states have adopted additional limits, like imposing statutes of limitation on collections and adding opportunities to punish abusive practices in court. Other states may follow suit.

Lawmakers are increasingly focusing on outfits that buy bad debt from credit card companies and other lenders for pennies on the dollar and profit when they collect more than they paidDebtors – some agree they owe money, others say they’ve already paid or are disputing their bills – have reported being bombarded with calls and subjected to foul language and threats of arrest or deportation.

A North Carolina law that took effect this month requires debt buyers filing collection lawsuits to produce documents proving they’re the ones owed the money. Trying to collect on a debt that a company should reasonably know is invalid could lead to lawsuits and civil penalties of up to $4,000 per violation.

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Personal Bankruptcies

Written by Jane Birnbaum
Posted by Stefanie Marty

Bankruptcy is a procedure allowing debtors, both households and businesses, to eliminate some bills and repay others over time.

While bankruptcy is generally seen today as a protective measure for debtors, its ancient roots are punitive, a remedy on behalf of creditors. Early United States bankruptcy laws did not provide for a discharge of debts by debtors, only a liquidation of their assets. The roots of modern American bankruptcy are found in Congress’ Bankruptcy Act of 1898.

The Department of Justice’s United States Trustee Program oversees administration of bankruptcy law. There are five chapters of United States bankruptcy law, which apply to different situations:

Chapter 7: Used by consumers and businesses, it eliminates many debts such as credit card and medical bills not secured by collateral, in exchange for the liquidation of assets not protected by federal or state exemption laws.

Chapter 13: A debt reorganization plan chiefly used by individuals who want to keep possession of assets such as homes and cars by becoming current on delinquent loans and repaying unsecured debts according to their means.

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Personal Bankruptcy on its highest Level since 2005

Written by Stefanie Marty

In the first nine months of this year 1,046,449 individuals filed for personal bankruptcy. This represents a 35% increase from the previous year, when 773,810 filed for personal bankruptcy during the same time period. At the same time consumer bankruptcy is on its highest point since 2005 when the system was overhauled. In 2005 and before the implementation of the new system the amount of personal bankruptcies in the first nine months of the year was 1.35 millions.

The new implemented law makes it harder and more expensive to file bankruptcy. Academics and lawyers believe that by the new law many borrowers have the wrong impression that they could no longer file. This unavailability of bankruptcy makes the current economic crisis even worse.

Typical reasons for bankruptcy are job loss, medical bills, and divorce. During the tough economic crisis there are more factors present that make the number of bankruptcy filings go up. Some of them are the rising unemployment, lower payments, fewer people with health insurance, and the mortgage and foreclosure crisis, but the most important one is probably the credit tightening. Due to the fewer lending by banks, it has gotten though and in some cases even impossible for consumers to get credits.

Robert M. Lawless, a professor at the University of Illinois College of Law, said: “With the consumer credit tightening and the economy in a nosedive, this pop could just be the beginning of a long-term rise in the bankruptcy filing rate to levels that are even higher than we had before the 2005 bankruptcy law.”

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Bounce back fast after bankruptcy

Posted by Lily Mei

By Liz Pulliam Weston
Almost anyone can get credit soon after a bankruptcy. It's just a matter of knowing how.

It's true that bankruptcy deals a devastating blow to your credit and your credit score, the three-digit number lenders use to gauge your creditworthiness. But the effects don't have to be lasting.

Long before the bankruptcy drops off your credit report, you could be qualifying for loans with good rates and terms.

Nothing is forever
Ken from Chicago filed Chapter 7 liquidation after unemployment and overspending caused him to rack up more than $20,000 in credit card and other unsecured debt. Four years later, his credit scores ranged from 655 to 719, decent numbers that are just below the cutoff to get most lenders' very best rates.

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Your Credit Report After Bankruptcy

By: Lily Mei

Bankruptcy is generally considered as a last resort for managing your debt because the credit results are long-lasting and hard to repair. A bankruptcy stays on your credit report for 10 years, making it extremely difficult to get credit, buy a home, get life insurance, and sometimes even get a job. However, under the federal law, it is a required legal procedure for people who want to get a fresh start from their debts.
It is a long-standing battle once you file for bankruptcy because even you file a bankruptcy and voluntarily dismiss it before the discharge, the credit reporting agency must report the dismissal as well as the bankruptcy filing. Therefore, your credit is still affected by the dismissal. That doesn’t mean you won’t receive new credit after bankruptcy, credit is still available but it may be more expensive than before with lower available limits. Rebuilding credit worthiness after bankruptcy is difficult and takes time. It is a matter of using the credit cautiously and paying it on time to slowly improve your credit score.

Sources:
http://www.creditreporting.com/bankruptcy-credit-report.html
http://www.doney.net/faq_credit.htm
http://www.cardratings.com/bankruptcyconsumercreditrights.html

At Ethics Debate, Goldman Exec Defends Bonuses

Posted by: Lily Mei

One Goldman Sachs executive thinks the bank’s rich bonuses are a good thing, and he’s not afraid to say it.

Bumper payouts to bankers should be seen as part of a longer-term investment in London’s economy, the vice chairman of Goldman Sachs International, Brian Griffiths, told a debate on ethics at St. Paul’s Cathedral in London on Tuesday.
Defending lavish bonuses expected at the U.S. investment bank, Mr. Griffiths said he was not “ashamed” of his bank’s compensation package, which has inflamed the bonuses debate, Reuters reported.

The British public should “tolerate the inequality as a way to achieve greater prosperity for all” Mr. Griffiths, a former adviser to Margaret Thatcher when in power, said at the public meeting examining what role morality should play in the marketplace.

Goldman last week reignited the fight over excessive compensation after setting aside $5.4 billion for pay in the third quarter alone. It is on course to pay out $20 billion this year, infuriating critics in part because it comes so soon after repaying $10 billion in taxpayer bailout funds.

Mr. Griffiths said that if bonuses were capped the industry’s highest fliers would leave London’s financial services sector for other countries.

“I believe that we should be thinking about the medium term common good, not the short term common good… we should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people,” he said.

He also said Goldman rewarded only those who showed a commitment to company values and not simply to whoever brings in the most profit.

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Hate it when free credit reports aren't free? Tell the feds

By Diane C. Lade
Sun Sentinel (MCT)

FORT LAUDERDALE, Fla. - Federal trade regulators are changing the rules regarding how "free credit reports" are marketed, as required under the Credit CARD Act of 2009. And they want to hear from you.

The Federal Trade Commission is collecting comments on their proposed changes through Nov. 30. To submit electronically, go to http://public.commentworks.com/ftc/FreeCreditReportNPRM/. Or write: FTC, Office of Secretary, Room H-135 (Annex T), 600 Pennsylvania Avenue NW, Washington, D.C. 20580.

Among the agency's suggestions: Private companies that use "free credit report" in their name would be required to first send customers to a page explaining they are not AnnualCreditReport.com, the federally mandated centralized source.

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Posted By: Amy Nightingale

Underlining 'Free' in 'Free Credit Report'

By Michelle Singletary

Sunday, October 11, 2009

I've been meaning to pull my credit reports for some time.

I, like so many others, am concerned about identity theft or uncorrected errors in my credit files that might ding my credit scores.

When I finally got around to it, I knew to go to AnnualCreditReport.com or call 877-322-8228. I haven't been fooled by those ubiquitous commercials for FreeCreditReport.com with the goofy guy playing a guitar and complaining about how his life is messed up because he didn't check his credit report.

But the Federal Trade Commission has received many complaints from consumers who were misdirected from the official centralized site. Every person is entitled to a free credit report every 12 months from each of the three nationwide consumer reporting agencies -- Equifax, Experian and TransUnion.

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Posted By: Sara Sindelar

It is great that the government is working on regulating which credit reports are the real thing without hidden fees. Credit reports are necessary to have and should be looked at once a year in order to see where you stand. It is hard with all the false advertising that is out there like freecreditreport.com that really in the fine print it not free. The FTC is allowing for the general public to way in on their view of false marketing and credit report regulations. We should take advantage of this opportunity.

Tips detail safeguards to combat ID theft

By Steve Wartenberg
THE COLUMBUS DISPATCH

More than 8,000 Ohioans last year became the victims of identity theft, a crime that's still sweeping the nation.

"It's the fastest-growing crime in the United States, and
10 million people in the United States were affected last year," said Ohio Attorney General Richard Cordray.

To mark National Protect Your Identity Week, which runs through Friday, he and other experts held a news conference to warn Ohioans of the dangers of identity theft and offer tips on how to avoid it and what to do if it happens.

State residents filed 8,237 identity-theft complaints with the Federal Trade Commission in 2008, up from 7,178 in 2007 and 6,878 in 2006.
"It's on the rise," said Cpl. Zach Scott of the Franklin County sheriff's office. "And when they get someone's (credit-card) information, what they do is start hitting them as fast as possible."

Click here to read more.

I think that identity theft from credit reports is one of the most important things we talked about today in class. It is so easy for someone to steal a wallet and use someone elses credit card without them knowing that people really need to take the time to look at their credit reports. Many college students in particular don't take the time to follow their finances correctly and these are the people who are going to be hit the hardest.

Posted by: Kelsey Hoffman

Money is one of the top reasons couples get divorced. It creates problems between people. When a company files for bankruptcy, there is a lot of stress put on employees and owners alike. These situations can have drastic effects on a family’s dynamics.

For example, Denny Hecker was an owner of 26 auto dealerships, the Advantage Rent-A-Car chain and other businesses was put in a tough financial situation earlier in October. Recently he had to declare bankruptcy for these businesses which put stress on his family also. A short time after he filed bankruptcy, his wife filed for a divorce. Financially Hecker was disappointing his family and they could not deal with it any longer.

There are people in this world who think that filing for bankruptcy during a divorce is a way to reorganize themselves for the future. Bankruptcy filings have increased steadily from 1988 to 2005 from about 500,000 to 1,700,000. The amount of women versus men who file has also changed.

Filing for bankruptcy during a divorce, and going through a divorce because of bankruptcy are both very real things that happen now a day. We have to remember that families are important to everyone but also that money will always be an issue.

By: Kelsey Hoffman

References:

http://www.divorceinfo.com/bkrcybankruptcy.htm

http://blogs.wsj.com/bankruptcy/2009/10/13/bankruptcy-plus-divorce-equals-major-drama/

http://straighttalking.typepad.com/straight_talking_on_the_l/2009/02/bankruptcy-and-divorce.html

Report finds new wrinkle in U.S. bankruptcies

By James B. Kelleher

CHICAGO (Reuters) - Recent bankruptcy filings by small U.S. businesses show a trend that could complicate lenders' efforts to identify at-risk borrowers, a new study reveals.

PayNet Inc, which provides analytic tools to the commercial credit industry, looked at 750 small business bankruptcy filers and found 50 percent were current with one or more of their lenders when they threw in the towel and sought protection from their creditors.

"Approximately half the lenders never saw it coming," PayNet President Bill Phelan said. "They were blindsided."

PayNet will officially release the study on Monday at the annual convention of the Equipment Leasing and Finance Association in San Diego.

The 750 companies PayNet studied collectively owed $58 million in loans, leases and lines of credit -- a tiny fraction of the 100,000 small businesses that PayNet said have filed for bankruptcy over the past year with an estimated $10 billion in obligations outstanding.

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Posted by: Amy Nightingale

TOKYO — Yohji Yamamoto, the Japanese designer whose ascetic look defied the overexuberance of the 1980s, fell prey to the global economic crisis on Friday when the company bearing his name filed for bankruptcy protection.

Yohji Yamamoto follows a string of fashion houses into insolvency amid a slump in luxury sales worldwide. The Italian luxury company Gianfranco Ferré filed for bankruptcy in February, while Christian Lacroix, the French couturier, sought bankruptcy protection in May.

The outlook for the fashion industry is especially bleak in Japan. Women here, once the world’s most avid luxury shoppers, are turning to cheaper, more casual fashion in the middle of a prolonged downturn.

Low-cost brands like Uniqlo and the Swedish casual fashion retailer Hennes & Mauritz have become the labels of choice for many Japanese.

Just this week, Gianni Versace, the Italian fashion brand, announced it would close its Japanese stores as demand for luxury goods continued to decline. Versace Japan had sales of 1.6 billion yen in 2008 (about $18 million at today’s exchange rates) compared with 4.1 billion yen four years ago.

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Posted by: Kelsey Hoffman

Is CIT Next in the Line of Bankruptcy?

By: Sara Sindelar

CIT Group, Inc. is “a large American commercial and consumer finance company included in the Fortune 500 and the S&P 500 index. CIT's Commercial Finance business offers secured lending, leasing and factoring products.”

CIT is on the brink of declaring bankruptcy if they do not get bondholders approval for the $29 Billion debt exchange/swap. This is a swap of “unsecured obligations for new secured debt and preferred shares”, in effort to avoid bankruptcy.

There is a prepackage Bankrupt plan where bondholders will “receive 70 cents on the dollar in form of new 7% notes and 83.4 % of equity in reorganization” of the company. CIT has $75 million in assets which contributes to many small and medium sized businesses. CIT is a critical part of the supply chain of the retail industry and will have harsh affects on it if it declares bankruptcy. “A Collapse would ripple the ‘small and medium sized business who rely on the finance company to operate,” speaker from CIT.

It is stated that if CIT goes bankrupt it could be the 5th largest bankruptcy to date. Though, if bondholders approve the swap their $29 million debt could be reduced by 30%. The now CEO, Jeffrey Peek, has declared he will resign at the end of the year and there is a board in place to find his replacement. This bankruptcy could cause a major stir up in the economy and it is up to the bondholders to make the choice of the swap.


http://www.bloomberg.com/apps/news?pid=20601103&sid=adkNpcgSTTeo

http://www.boston.com/business/articles/2009/10/14/chief_of_troubled_cit_plans_to_resign/

http://www.bloomberg.com/apps/news?pid=20601103&sid=agRAQzb5M3cg

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/30/AR2009093004993.html

DSB Bank Must Find Buyer or Face Bankruptcy

By BART KOSTER

AMSTERDAM -- Time is running out for troubled Dutch lender DSB Bank NV, after an Amsterdam court ordered it to find a buyer by Friday or face being declared bankrupt. But the bank's owner said he remains confident of keeping the operation alive.

The court told unlisted DSB Bank, which was placed into administration Monday by the Dutch Central bank after a run on deposits, that it has until 11 a.m. local time to talk with "major banks" to find a buyer.

If no "realistic chance" for a takeover of the privately owned Dutch savings and mortgage bank can be worked out, DSB will be declared bankrupt, the court said. If a takeover can be worked out, the case will be discussed in a closed court session later Friday, it added.

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Posted By: Sara Sindelar

Largest Bankruptcies

By: Nicole Nelson

Corporate and Personal bankruptcies have been on the rise during the past few years during the recession that has occurred. Out of the top 10 biggest bankruptcies of all time, fifty percent of these have occurred during the past two years.

Lehman Brothers tops this list with assets totaling 691 billion dollars. Lehman Brothers was once a very highly regarded investment firm on Wall Street. The filled for bankruptcy protection on Sept. 15th of last year.

Number two on this list is Washington Mutual, a once very powerful and large savings and loan bank. “WaMu” filed for bankruptcy after customers withdrew deposits totaling 16 billion dollars in only ten days. Washington Mutual’s assets totaled 327.9 billion dollars.

WorldCom, which is at number three in the top ten bankruptcies, is the only bankruptcy in the top four that has not occurred in the past two years. This bankruptcy occurred in July of 2002. WorldCom was at one point, the second largest telecom company. WorldCom was forced to file bankruptcy after being caught up in a 11 billion dollar accounting scandal. At the time of the bankruptcy filing, WorldCom’s assets totaled 103.9 billion dollars.

Although inflation does account for why older bankruptcies have been “out done” by other companies on this list, the recession itself did not help the bankruptcy situation.

source one

source two

source three

Big Companies Face Big Problems

By, Meredith Anderson

As our economy seems to still be hurting from the current recession, we are seeing now that it’s not only the smaller companies that are getting hit hard. Big names which we have learned to become loyal customers to over decades are now taking a turn for the worse.

The following ten companies were perceived to be at a very high risk of going bankrupt. The ranking was done by the markets perceived bankruptcy risk- Market Cap (MC) divided by the Enterprise Value (EV). In order from the most risky to least is at number one Hertz, Textron, Sprint Nextel, Macy’s, Mylan, Goodyear, CBS, Advanced Micro Devices, Las Vegas Stand, and at tenth Interpublic Group.

The nations ‘Big Three’ automakers, Chrysler, Ford, and GM face enormous discussion when it comes to bankruptcy as well. Congress asked the three companies to provide a $25 million dollar bailout plan saying that the worse is still yet to come. People are unable to pay for the cars they have bought and as more and more people turn to Chapter 13 these companies face the tough challenge of staying afloat. GM informed 1100 dealerships they would be cut in 2010. It’s a terrible cycle for everyone, with these cuts thousands of families will lose incomes and then who can really buy a car, none less feed their children?

Sources:

http://finance.yahoo.com/tech-ticker/article/336235/Ten-Big-Companies-That-Are-Veering-Toward-Bankruptcy?tickers=AMD,LVS,S,M,GT,MYL,HTZ

http://news.siuc.edu/news/November08/112108par8155.html

http://blogs.findlaw.com/free_enterprise/2009/05/gm-bankruptcy-coming-dealerships-could-face-expedited-closure.html

Hospital Bankruptcy

In this type of economy we know businesses are going to start filing for bankruptcy. But one of the saddest things I see is the fact that hospitals are getting hit very badly financially. These are the places that take care of us when we’re sick and dying. These are the types of places that really need to be held together.

At the start to the downturn of this economy, South Beach hospital in Florida filed for Chapter 11 bankruptcy protection after listing debts totaling more than $5.3 million. They hospital had to discharge its patients and dismiss all employees except for a small clean-up crew.

Just today, Michael Reese Hospital in Chicago, Illinois filed for Chapter 11 bankruptcy as it has racked up between $50 million and $100 million dollars in debt. They also owe $19.4 million to their unsecured creditors and a substantial amount to Medicine Industries Inc. who owns the property and leases the hospital to Michael Reese.

There should be some dedication and responsibility to maintaining these hospitals. For example, another hospital in Chicago, Mercy Hospital, almost filed for bankruptcy four years ago. Thankful for them though they had gained good recognition and support from their community. The mayor was born at Mercy Hospital and couldn’t let it go so he and the Mercy staff made some very strategic decisions in order to refinance the hospital.

Posted by: Kelsey Hoffman

References:

http://www.chicagobusiness.com/cgi-bin/news.pl?id=31200&seenIt=1

http://southflorida.bizjournals.com/southflorida/stories/2006/02/27/daily38.html

http://www.suntimes.com/news/watchdogs/1821278,CST-NWS-watchdogs13.article

Chicago Sun-Times Faced with Bankruptcy

Posted By, Meredith Anderson

By DON BABWIN (AP) – 4 days ago
CHICAGO — The way The Rev. Issac Whittmon sees it, a vital piece of his city was saved Thursday when a bankruptcy judge approved the sale of the Chicago Sun-Times, a newspaper he's been reading since he was a child.
"If we lost Wrigley Field, that's the way I would feel if we'd lost the Sun-Times," the 67-year-old minister said, after hearing on the radio that the newspaper's parent company can be sold to Chicago businessman Jim Tyree.
Without a deal, the Sun-Times, whose roots date to 1844, could have faced a shutdown, following a path already taken by other No. 2 publications in two-newspaper towns such as Seattle and Denver.

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Crystler Bankruptcy

Posted by: Kelsey Hoffman

Bankruptcy court OKs Six Flags settlement deal

Associated Press

By ALAN SAYRE , 10.08.09, 04:41 PM EDT 

NEW ORLEANS -- A settlement over Six Flags Inc.'s lease with New Orleans for the site of the defunct Six Flags New Orleans theme park was approved Thursday by a federal bankruptcy judge in Delaware.

Approval comes amid plans for a startup company, Southern Star Amusements of Baton Rouge, to take over the site and develop a Nickelodeon-themed park.

Under the agreement, Six Flags (SIX - news - people ), which is in bankruptcy reorganization, will pay the city $3 million and 25 percent of any insurance proceeds Six Flags recovers from Hurricane Katrina damage above $65 million.

Under Southern Star Amusement's plan, the new development would cost $165 million to $170 million. Nickelodeon, a unit of Viacom Inc.( VIA - news - people ), will get a licensing fee and the city will retain a leasing arrangement with Southern Star. There will be no local public funding used to construct the park.

Posted By: Amy Nightingale

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Chicago Cubs file for bankruptcy as part of sale

By Tom Hals

WILMINGTON, Delaware (Reuters) - The Chicago Cubs baseball team filed for bankruptcy on Monday as part of the team's planned sale to the Ricketts family by the Tribune Co, according to court documents.

The Cubs bankruptcy is aimed at shedding any claims on the team related to the bankruptcy of Tribune Co, a media conglomerate.

As part of the agreement that received the approval of a bankruptcy court last month, Tribune will contribute the Cubs, Wrigley Field and its stake in a sports television network to a new company.

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Posted by: Nicole Nelson