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.”

Source 1
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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

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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

To read more click here

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

Chrysler is Trying to Hang On

By: Sara Sindelar

Chrysler filed for bankruptcy back in April and have been dealing with the roller coaster ride of bankruptcy. The company sold all of their assets to the automaker Fiat back in April. Last month, Chrysler documented a net loss of $344 billion. The government, creditors, debtors and Chrysler have been working through this bankruptcy since April with a lot of back and forth and arguing.

This past week there has been a heated debate between sides at the Turnaround Management Associations annual conference. They are trying to conclude if the government’s involvement is too much. They were in court re-debating if selling Chrysler to Fiat was a good idea. For adults in such a professional setting things got very heated in this debate about if or it not the government’s involvement is against the Bankruptcy Code. There seems to be continuous hostility between the sides Thomas Cullen and Thomas Lauria over the issues of this Chrysler bankruptcy.

The bankruptcy details have awhile to fill in and be fixed along with the rest of the auto industry. This economy will continue to cause companies to file bankruptcies and creditors to ask for the money. All we can do it work through them and hope for the best while working through them in the least hostile way.

http://www.nytimes.com/2009/05/01/business/01auto.html

http://blogs.wsj.com/bankruptcy/2009/10/09/sparks-fly-in-chrysler-debate/

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYWWNSAS8yRk

Sparks Fly In Chrysler Debate

POSTED BY: SARA SINDELAR

There wasn’t any chair-throwing, but a debate involving two opposing lawyers in the Chrysler bankruptcy case got pretty heated Thursday.

Arguing over whether the government’s powerful role in the Chrysler bankruptcy proceeding signals the end of a key tenet of the Bankruptcy Code, Jones Day trial lawyer Thomas F. Cullen Jr. and White & Case’s restructuring head Thomas E. Lauria again took up their adversarial roles in a debate that at several points got a bit rowdy and led Cullen to ask: “Are we on Jerry Springer?”

Lauria, you’ll recall, led a group of Chrysler’s lenders who fought the sale of the auto maker to a company controlled by Italy’s Fiat SpA. Lauria, called a “terrorist” by a government lawyer, had argued that the sale was an attempt to avoid playing by the rules of Chapter 11 and wrongly rewarded junior creditors ahead of the senior creditors. The U.S. Bankruptcy Court in Manhattan and the 2nd U.S. Circuit Court of Appeals rejected Lauria’s argument, which was the hot topic that Lauria, Cullen and others revisited Thursday at the Turnaround Management Association’s annual conference in Phoenix.

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Why Americans are Filing for Bankruptcy

By: Lily Mei

Back then, bankruptcy was referred as a shameful and humiliating failure but now more and more Americans file for bankruptcy as second nature to solving their finances.
Many Americans who file for bankruptcy are those who are drowning in medical bills or credit card debt with no realistic hope of ever paying it off. It is a much easier way of deferring your financial responsibilities then dealing it by yourself with collection agency calls, wage garnishment, and threat of lawsuits.
Bankruptcy is also less of a financial, emotional and social strain in many cases. Instead of living in years of hell to pain-staking pay off your debts by saving money and living frugally, by filing for bankruptcy you may be able to actually clear off everything in a few months. In addition, bankruptcy is not look upon badly or disgraceful as it once was in the past. So in the case where you are in a financial crisis to pay off your debts, maybe you should look into filing for bankruptcy to ease the strain.

Sources:
http://mwhodges.home.att.net/nat-debt/debt-nat.htm
http://www.pbs.org/now/politics/bankruptcy.html
http://ezinearticles.com/?10-Reasons-Why-People-File-For-Bankruptcy&id=3022051

Of Layoffs, Bankruptcy and Bonuses

Posted by: Lily Mei

By David Carr

Published: October 4, 2009

Let’s say that a group of corporate executives uses scads of debt to take over a struggling company, sells off some profitable assets, lays off thousands of employees while achieving miserable results. And then, less than a year after saddling the company with $8 billion in debt, they opt for bankruptcy.
You’d expect them to walk the plank, or at the very least, spend a good stretch of time in the naughty corner. But you wouldn’t expect the top 700 managers to collect $66 million in bonuses.
But that’s just what might happen at the Tribune Company. A week ago Friday, lawyers for the company, which publishes The Los Angeles Times, The Chicago Tribune, The Baltimore Sun, and owns other newspapers and television stations, were in Federal Bankruptcy Court in Delaware suggesting that the proposed 2009 bonuses were critical for the health and survival of the company.
Under questioning, Chandler Bigelow III, the chief financial officer, said the bonuses would help “incentivize our key managers to battle all of the intense challenges that unfortunately our local media businesses are facing,” according to The Associated Press.
The unsecured creditors of the Tribune Company filed a letter in support of the incentives, and its senior lenders support the plan as well. But both the company’s union and the trustee appointed to oversee the bankruptcy raised objections, arguing that the bonuses would be the highest ever paid — even as the company has its lowest cash flow in 10 years.


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How to Avoid Bankruptcy

By Nicole Nelson

Since personal bankruptcies are at the highest now since the laws on bankruptcy were changed in 2005, it is crucial that individuals start looking into what would help them avoid actually filing for bankruptcy. If one was leaning toward the idea of bankruptcy, it might be interesting that bankruptcy isn’t always the best option. Bankruptcy isn’t necessarily a “clean slate”. Bankruptcy can sometimes not eliminate a significant amount of debt to offset the bad credit score as well as other consequences it creates. One way to avoid bankruptcy is setting up a strict budget. With this, one can slowly bring down debts little by little. Also, one can try to make money in other ways. One can start working more hours, maybe sell or downsize extra cars/homes, etc. You can also negotiate with your creditors in downsizing your debts to them. You can do this with a debt consolidation program or a debt reduction/settlement program. Also, if you explain to your creditors that you may be facing bankruptcy, they will be more willing to help you with your payments. This is because they would most likely rather get some money that you owe them rather then possibly not getting any money. These are all, maybe not the easiest ways, but ways that one can try to eliminate debts. Debts cannot be relieved overnight, so it is imperative to realize that this must be worked on and it may take some time but in the long run it might be a better choice than filing bankruptcy.

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Firm seeks SEC probe of Hertz over bankruptcy suit

BY: Emily Chasan

NEW YORK, Oct 7 (Reuters) - The financial research firm that Hertz Global Holdings Inc (HTZ.N) sued over a report that said it could go bankrupt is fighting back, and has asked U.S. regulators to investigate Hertz's attempts to involve other companies in its suit.

Audit Integrity, which issued a Sept. 15 report that included Hertz among 20 large companies "most likely to declare bankruptcy" within a year, said it sent a letter on Monday to U.S. Securities and Exchange Commission Chairman Mary Schapiro.

The letter asked the investor protection agency to investigate Hertz's "blatant attempt to induce more than 19 companies to consider legal action against Audit Integrity because of a critical report."

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Posted By: Nicole Nelson

By, Meredith Anderson

With so many people being affected by the harsh economy the amount of Chapter 7 bankruptcy is still on the rise. Chapter 7 is often referred to as a “fresh start.” Essentially after filing for Chapter 7 you are cleared of all your debts.
On October 17, 2005 a new law, Bankruptcy Abuse and Consumer Protection Act also known as BACPA, came into effect that made it harder for people to prove that they are actually in need of being cleared of all their debts. The general idea was to shift the amount of people who filed for Chapter 7 to file to Chapter 13 which is more like Chapter 11. Chapter 13 does not clear you of your debt rather is a repayment plan. The new laws help prove that people are cable of paying portions of their debt back and should not be given a free ride. The new laws also placed requirements on lawyers making it harder and more expensive to hire a lawyer for bankruptcy cases. Some lawyers have even raised their prices by as much as 100%.
The new laws have not seemed to be effective for two main reasons. First there was too much emotion that went into making the law. People don’t generally file for bankruptcy because they are bored rather because they actually have no means to pay off debt. Secondly although the law has changed the economy has as well. People now more than ever are struggling with finical debt.

Sources:

http://money.cnn.com/2005/10/17/pf/debt/bankruptcy_law/index.htm

http://www.nolo.com/legal-encyclopedia/article-30040.html

http://law.suite101.com/article.cfm/filing_chapter_13_bankruptcy

Is CBS really going bankrupt?

Two weeks ago, we noted that CBS had been pinpointed by Audit Integrity as one of 10 big companies at risk of bankruptcy.

This prompted an outraged denial by CBS.

As the banking collapse illustrated, any time a company denies that it's about to go bankrupt, it makes sense to assume that the company is indeed about to go bankrupt--and then analyze the situation for yourself.

We've now done that for CBS. Here's the bottom line:
CBS is not on the verge of bankruptcy. The company is, however, highly leveraged, and its cash flows have been deteriorating rapidly. So if current trends continue, the company will be forced to cut more costs or risk violating debt covenants. If CBS's cash flows keep deteriorating after that, it will very much be on the verge of bankruptcy.

CBS has also blown billions in recent years stupidly buying back its own stock at much higher prices--shareholder value destruction at its finest. So the company's weak financial position is very much of its own making.

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Posted by Kelsey Hoffman

Bank Failures in 2009

Posted By, Meredith Anderson

Three regional banks failed in Michigan, Minnesota and Colorado, raising the national tally. The closures will cost FDIC $293.3 million.

By Hibah Yousuf, CNNMoney.com contributing writer
Last Updated: October 5, 2009: 11:25 AM ET
NEW YORK (CNNMoney.com) -- Three regional banks were closed by regulators on Friday evening, bringing the 2009 tally to 98.
Warren Bank, based in Warren, Mich., Jennings State Bank in Spring Grove, Minn., and Southern Colorado National Bank, Pueblo, Colo., were the latest to go down.
Customers of all three banks are protected, however. The Federal Deposit Insurance Corp., which has insured bank deposits since the Great Depression, currently covers customer accounts up to $250,000.

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Peanut Corporation of America’s and Salmonella

By: Sara Sindelar

Earlier this year there was a recall on peanuts after almost 4,000 people were counted sick and an associated 9 deaths. After Peanut Corp. of America made the recalls they declared bankruptcy. PCA is no longer operating and there continues to be a recall on all their products made in their facilities since January 1, 2007.

PCA had to go back to U.S. Bankruptcy Court to discuss the distribution of money to those who suffered. Yesterday, October 1, 2009 U.S. Bankruptcy Court agreed to have the Peanut Corporation of America issue $12 million to a fund for those who were harmed by salmonella. The claims for their money are due at the end of October. The $12 million will come from Hartford Insurers, PCA’s insurance carrier.

I am surprised that it has been almost a year and these claims are just coming in for compensation for the illnesses these people suffered from peanuts. Though PCA should have to pay for their mistakes they are already in enough trouble with bankruptcy and closer; what is to say they will drop the ball on paying back those harmed.



http://www.newsinferno.com/archives/13198

http://www.cnn.com/2009/HEALTH/10/01/virginia.peanut.fund/

http://www.google.com/hostednews/ap/article/ALeqM5jPLaDKNW3MkO750a8_3Rqb14nexQD9B2IU380

http://www.foodsafetynews.com/2009/09/-for-the-survivors-of/

Consumer Bankruptcy Filings on the Rise

By: Nicole Nelson

In 2005, bankruptcy laws were changed in order to try to alleviate the number of people that were filing for bankruptcy in order to eliminate debts that they owed. During the first nine months of 2009, the number of consumer bankruptcies filed has been the highest it has been since the laws were changed back in 2005. September’s filings alone were 41% higher than they were in September of last year. Although, as mentioned, bankruptcies are the highest they have been in a while, experts believe that the number of filings will continue to rise throughout the end of the year because of the rising unemployment rate and housing debt. The total expected number of bankruptcies in 2009 is 1.4 million. As of the end of September the number of bankruptcies was at 1,046,449. This number is still far away from the record of 2.1 million that happened in 2005. This number was so high because of a rush to file bankruptcies before the laws were changed. Also, although it has been reported that the housing market might be stabilizing and consumer confidence might be recovering, filings rose four percent since August.

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Personal Bankruptcy Filings Soar

By: Sara Murray

Consumer bankruptcies topped one million for the first nine months of this year, the highest point since the system was overhauled in 2005.

The number of personal bankruptcy filings for the nine months rose to 1,046,449 as of Sept. 30, the American Bankruptcy Institute, an organization made up of attorneys, accountants and other bankruptcy professionals, said Friday, using data from the National Bankruptcy Research Center. There were 773,810 personal bankruptcy filings for the same time period in 2008.

September's filings reached 124,790, 41% higher than the same month last year.

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Posted By: Nicole Nelson

Fed Draws Court's Eyes in Lehman Bankruptcy

By JEFFREY MCCRACKEN and MIKE SPECTOR

A court-appointed examiner investigating Lehman Brothers Holdings Inc.'s bankruptcy has been exploring whether the Federal Reserve improperly cut in front of other creditors owed money in the $613 billion bankruptcy case, records show.

Billing records filed with the court show the examiner is investigating an issue that has angered many of Lehman's creditors: how the Federal Reserve and the New York Fed -- which lent Lehman $46 billion in cash and securities before its bankruptcy filing last September -- were paid promptly and in full, while tens of billions of dollars in other debts were left to be sorted out in court. It remains unclear when and how much Lehman creditors will be repaid.

The examiner, Anton Valukas, chairman of law firm Jenner & Block LLP and a former U.S. attorney, said, "I am under a court order not to discuss what we are doing or how we are doing it."

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POSTED BY: SARA SINDELAR

Is Bankruptcy A Good Way Out of Debt?

By, Meredith Anderson

Bankruptcy as always been seen in both a positive and negative way. The word its self might make people scare people. There are two types of common bankruptcy that people file for, Chapter 13 and Chapter 7. Chapter 7 in a sense wipes you clear of your debt and you get what’s known as a “fresh start”. Chapter 13 allows you to set up a five year payment plan. Last Year alone 445,574 cases were filed of Chapter 13. Some people hear bankruptcy and think of it as a relief and a way out rather than a scary thing that will haunt you forever. So the real question is whether or not bankruptcy is the way to go when it come to getting out of debt
The truth is that bankruptcy will give you a sudden relief from your responsibilities, however does follow you for years if not your whole life. Bankruptcy can stay on your credit for up to ten years and will stay on your public record for life. When applying for a job or credit, if asked you must by law state you have filed for bankruptcy. This itself hurts your opportunity to move forward and it becomes harder to take out any loans if you are strapped for money. So when thinking about getting out of debt, bankruptcy might not be the way to go.

Sources:

http://www.daveramsey.com/the_truth_about/bankruptcy_3018.html.cfm
http://money.cnn.com/2005/04/20/pf/bankruptcy_bill/index.htm
http://www.cleardebtsolution.com/Bankruptcy.php