The Supreme Court vacated and remanded Tuesday an appeals court decision that found under federal common law, a tax refund due from a joint tax return generally belongs to the company responsible for the losses that form the basis of the refund, rejecting a nearly half-century-old precedent.

In Rodriguez v. Federal Deposit Insurance Corporation, the case involved the issue of whether a parent corporation or its subsidiary owns a tax refund during bankruptcy proceedings.

Justice Neil Gorsuch (pictured with President Trump), in his opinion, explained the facts of the case: The trouble here started when the United Western Bank hit hard times, entered receivership, and the Federal Deposit Insurance Corporation took the reins. Not long after that, the banks parent, United Western Bancorp, Inc., faced its own problems and was forced into bankruptcy, led now by a trustee, Simon Rodriguez. When the Internal Revenue Service issued a $4 million tax refund, each of these newly assigned caretakers understandably sought to claim the money. Unable to resolve their differences, they took the matter to court.The bankruptcy court agreed with Rodriguez, the FDIC appealed the ruling, and the district court reversed. The Tenth Circuit Court of Appeals affirmed the district court, ruling for the FDIC as receiver for the subsidiary bank rather than for Rodriguez as trustee for the corporate parent.

In reaching its decision, the Tenth Circuit applied federal common law under the Bob Richards rule, which provided that, in the absence of an agreement, a refund belongs to the group member responsible for the losses that led to it. In this case, there was an allocation agreement, but the Tenth Circuit applied a more expansive version of the rule, applying it even to situations where there is an agreement unless the agreement unambiguously specifies a different result. The Supreme Court held that the Bob Richards rule is not a legitimate exercise of federal common lawmaking, and vacated and remanded the decision. Whether this case might yield the same or a different result without Bob Richards is a matter the court of appeals may consider on remand, Gorsuch stated.

Some tax experts see the case as a significant reversal from previous rulings. I was surprised that the Supreme Court has thrown out the Bob Richards doctrine, since it has been used by most courts as a factor in cases over the last 47 years, said Lee Zimet, senior director with Alvarez & Marsal Taxand LLC. Only the courts in the Sixth Circuit have refused to apply federal common law. The elimination of the use of federal common law in deciding ownership of tax refund cases will make the case decisions less predictable. Without the application of Bob Richards, the cases will be decided solely based upon the nuances of state corporate law and the specific language of a tax sharing agreement.

In the Rodriguez case, the Supreme Court reaffirmed the application of state law to determine property rights in a bankruptcy case, even when the property in question is a federal tax refund, according to Annette Jarvis, a partner in the international law firm Dorsey & Whitney.

The Supreme Court overturned federal court-created federal common law that had existed in many Circuits for over 45 years and, in so doing, severely limited the ability of federal courts to create federal common law, she said. Restricting federal court common lawmaking to that which is necessary to protect uniquely federal interests, the Supreme Court found this narrow ability to create common law not to apply to the allocation of federal tax refunds even when the parent and subsidiary companies were both in federally created insolvency proceedings. In addition to setting an important precedent for the limited ability of federal courts to establish federal common law, the impact of this decision is to allow corporate affiliates to freely decide, in a tax allocation agreement, the beneficiary of a tax refund among a corporate group filing a consolidated tax return, even if the allocation does not align with the company which created the tax losses and even when one or more of the corporate affiliates is in a bankruptcy case or an FDIC receivership. When companies face insolvency, this contractual allocation can be critical to the return available to a particular affiliated companys creditors, and, in some cases, to lenders who may have taken an assignment of tax refunds."

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Supreme Court vacates tax refund awarded to bank in bankruptcy case - Accounting Today

By Phil Lawler (bio - articles - email) | Feb 28, 2020

This weeks news was dominated by reports about the coronavirus. Even in Rome, when Pope Francis curtailed his schedule for a few days because of a slight indisposition, some overeager reporters questioned whether it was possible the Pontiff had somehow contracted the feared virus. Yes, its possible. But not at all probable. There was no report of an outbreak in Rome, and statements from Vatican officialswho were obviously being terse, to discourage speculationsuggested that in the Popes case the culprit was an ordinary winter flu.

By the way, questions about the Popes health will probably remain unanswered next week. After his scheduled public audience on Sunday, he is due to go into seclusion for a week, with the leaders of the Roman Curia, for the annual Lenten Retreat.

Otherwise it was a quiet week. But I was taken aback, I admit, by Archbishop Bernard Hebdas directive that priests and deacons in his St. Paul archdiocese should not vote in Minnesotas presidential primary. Why would a prelate discourage clerics from exercising their civic rightsand, some would say, their duties? Archbishop Hebda explained that voting could be seen as partisan political activity under new Minnesota rules for the primary, and canon law bars clerics from involvement in partisan causes.

The new rules in Minnesota are neither unusual nor extreme. They require primary voters to select the ballot of a particular political party; this is, after all, a primary, to determine the parties candidates. And records are kept of which voters chose which ballots. Pulling a ballot for one party does not necessarily mean that the voter endorses that partys platform or favors that partys candidate. The voter could, if he wished, write in a Republican candidates name on a Democratic party ballot, or vice versa. There is no public record of how the voter marked the ballotonly of which ballot he chose. So a clerics activity inside the voting booth would still be secret, and unlikely to embroil the Church in political disputes. But when a voter chooses not to vote in the primary, he forfeits any opportunity to influence the partysany partyschoices. So the archbishop is asking clerics not to make their voices heard in the political process. Again I wonder: why?

Maybe Im too cynical, but I wonder whether Archbishop Hebda knows that a solid majority of his priests would choose to vote in the Democratic primary. If so, its theoretically possible that some energetic researcher could search the voter rolls and determine which percentage of the local clergy chose to participate in the primary of a party whose leadership is firmly committed to legal abortion on demand, same-sex marriage, and gender ideology. We still wouldnt know how those priests voted. But the data would be interesting, wouldnt they?

This week also brought the news that the Diocese of Buffalo has filed for bankruptcy protection, the 22nd American diocese to take that step. (The neighboring Diocese of Ogdensburg will likely join the list soon.) I can still remember the time in 2002 when the finance council of the Boston archdiocese approved a move toward bankruptcy. At the time the decision was shocking. No American diocese had ever previously contemplated such a radical step, and as things happened the Boston archdiocese never took it. But now there are 22 on the list (23 if you include the Archdiocese of Agana in Guam, a US territory), and the list is sure to grow longer. Signs of unhappy times.

Before I sign off for the week, let me call attention to two noteworthy articles on other sites:

Phil Lawler has been a Catholic journalist for more than 30 years. He has edited several Catholic magazines and written eight books. Founder of Catholic World News, he is the news director and lead analyst at CatholicCulture.org. See full bio.

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This week: Should clerics vote? Is bankruptcy a disgrace? And more. - Catholic Culture

Forever 21 has been bought out of bankruptcy in a deal worth over $81 million and its new owners plan to keep the brand alive.

Authentic Brands Group, Simon Property Group and Brookfield Property Partners are jointly acquiring the retailer, which filed for bankruptcy protection in September, according to NPR. Authentic Brands owns retail brands including Aeropostale and Nine West while Simon and Brookfield are both real estate firms whose holdings include numerous malls, outlet centers and other retail properties.

Forever 21 currently has 593 stores worldwide. It has a major presence in many U.S. malls, including Destiny USA in Syracuse and other properties owned by Syracuse-based Pyramid Management Group.

The sale to the new owners closed Wednesday.

When Forever 21 first filed for bankruptcy, it said it would close up to 178 U.S. stores along with stores in Asia and Europe. The new owners now want to grow in Europe, Asia, the Middle East, South America and elsewhere, NPR said.

Destiny USAs Forever 21 and several others stores in New York appeared on a list of possible closures the chain released in the fall after filing for bankruptcy. The company didnt necessarily expect to close all the stores on that list and was trying to negotiate new leases and rents.

But the list did represent the chain's least profitable locations.

The Destiny location remains open. It previously underwent a major renovation that dropped its footprint from two levels in the mall to one.

Most remaining U.S. Forever 21 stores will stay open under the new ownership, according to the BBC. The chain is now seeking a new CEO and plans to launch new lines of jewelry, footwear and handbags.

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New lease on life for Forever 21 with acquisition out of bankruptcy - syracuse.com

MARIETTA Although the national organization of the Boy Scouts of America filed for Chapter 11 bankruptcy last week, it shouldnt affect the operations of the local council.

We are locally controlled and operated, and unrelated financially to the Boy Scouts of America, said Ed Mulholland, executive director of the Muskingum Valley Council of the BSA. It really should not have any impact on our local programs.

Mulholland said the BSA filing for bankruptcy allows it to compensate victims of sexual abuse equally.

There are a lot since theyve lifted the statute of limitations, he explained. Some 90 percent of cases are from 30 years or before.

Thousands of Scouts have come forward alleging sexual abuse by their Scout leaders. According to the U.S. News and World Report, nearly 8,000 leaders in Boy Scouts had been accused of sexually abusing children dating back decades. Victims have come forward accusing hundreds more in the last year.

Mulholland said that in the 1980s, the organization started learning the Scouts were being abused, so it developed a two deep leadership in which a leader could not be alone with a Scout.

It protected the leader and the Scout, he said. There had to be more than one leader if they were alone with a Scout.

He said there were leaders who were kicked out of the organization over the years because children might not be safe around them. If there were serious allegations, the leader was reported to the police or children services.

We kept a list of them so if they wanted to join somewhere else, the other council will know they couldnt be in a leadership position, Mulholland added.

Bob Sheridan, River Trails District commissioner, which covers Washington County, excluding Belpre, said there have been casual discussions about the bankruptcy, but no real concerns have been raised locally. He said he doesnt see an immediate impact on local packs and troops.

They are the national council and they do a lot in program content. We have four national camps that we send a lot of boys to during the year, Sheridan said. They fall under national jurisdiction, so thats a concern. We hear a lot of the Boy Scout assets are landreal estate. If we dont have those camps, you really hurt scouting.

He said the local camps such as Camp Kootaga in Wirt County and the Muskingum Valley Scout Reservation near Coshocton are locally owned.

The local district hasnt heard a big outcry about the BSA declaring bankruptcy, he said.

When you get down to the troop and pack levels, they dont realize national exists, Sheridan said. They are focused on their packs and kids. The general conclusion isare we doing the right things for the kids. Thats where we try to keep our focus.

Mulholland explained that the local council applies to the national organization to be the ones who implement the scouting program in this area, much like a franchise.

We apply to do that each year. We collect a membership fee and that goes right through our hands to the national trust, Mulholland said. But everything we do locally, we raise our own funds.

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Boy Scouts of America bankruptcy expected to have little local impact - Parkersburg News

Screenshot of the Pier 1 Imports location in Newport News. (WYDaily/ Courtesy of Google Maps)

Pier 1 Imports, the home decor and furniture chain, is filing for bankruptcy, the company announced Monday.

The business plans to close up to 450 stores, including all of its stores in Canada.

The Peninsula has three store locations in Williamsburg, Hampton and Newport News.

Todays actions are intended to provide Pier 1 with additional time and financial flexibility as we now work to unlock additional value for our stakeholders through a sale of the Company,said Robert Riesbeck, chief executive officer and chief financial officer for the company in a Feb. 17 news release about the Chapter 11 bankruptcy. We are moving ahead in this process with the support of our lenders and are pleased with the initial interest as we engage in discussions with potential buyers.

WYDaily called all three stores on the Peninsula to see which locations were closing and when.

The Pier 1 location in Newport News, 12551 Jefferson Ave., is closing, according to an employee.

The Newport News location no longer shows up on the retail chains website store locator, according to Pier 1 Imports website.

The stores Williamsburg, 4625 Casey Blvd. Ste. 110, and Hampton, 1045 West Mercury Blvd., will remain open, according to the assistant store manager in Williamsburg and a store employee in Hampton.

WYDaily reached out to Jennifer Engstrand Reeder, spokeswoman for Pier 1 Imports as well as Leigh Parrish and Andrea Rose fromJoele Frank Wilkinson Brimmer Katcher, a public relations firm based in New York City.

Reeder, Parrish and Rose were not immediately available for comment.

We will continue to serve our customers regardless of how and where they shop with the style, value and selection of merchandise they want as we move through this process, and we are committed to working seamlessly with our vendors and partners, Riesbeck noted in the news release. We appreciate the ongoing dedication of our associates, whose efforts in providing our loyal customers with the experience they expect from our brand are critical to our success and the future of Pier 1.

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Pier 1 files for bankruptcy; hundreds of stores to close, 1 on the Peninsula - Williamsburg Yorktown Daily

When filing for Chapter 11 bankruptcy protection in September, Forever 21 had stated that it planned to reorganize the business and would likely close up to 178 U.S. stores. Kiichiro Sato/AP hide caption

When filing for Chapter 11 bankruptcy protection in September, Forever 21 had stated that it planned to reorganize the business and would likely close up to 178 U.S. stores.

Forever 21, the fast-fashion mall standby that filed for bankruptcy last year, will live on. Three companies announced Wednesday that they are jointly acquiring the retailer aimed at young shoppers and that they plan to continue to operate its U.S. and international stores.

The buyers are Authentic Brands Group, which owns major brands such as Barneys New York, Aeropostale and Nine West; and real estate companies Simon Property Group and Brookfield Property Partners.

"Forever 21 is a powerful retail brand with incredible consumer reach and a wealth of untapped potential," Jamie Salter, CEO of ABG, said in a statement. Forever 21 currently has 593 stores globally.

The deal is valued at $81.1 million, according to court records, and officially closed on Wednesday. When the company filed for Chapter 11 bankruptcy protection in September, Forever 21 had stated that it planned to reorganize the business and would likely close up to 178 U.S. stores.

But while the company said at the time that it planned to shut down stores in Asia and Europe, the new owners say they hope to expand in "South America, Western and Eastern Europe, China, Southeast Asia, Middle East, and India."

Forever 21 was founded by Korean immigrants in Los Angeles more than 30 years ago and, until now, has described itself as a "family-owned business." It enjoyed rapid expansion in the 2000s but has struggled as mall customers have dwindled. Other companies that were common sights in malls during the 1990s and 2000s such as Wet Seal and American Apparel have faced similar struggles.

"Consumers are not spending like they used to, and that has made things more competitive," NPR's Planet Money recently reported. "And in this more competitive environment, Forever 21 has been losing ground to the new crop of online retailers companies like boohoo, ASOS, Revolve and Lulus."

ABG and Simon will each own 37.5% of the company's intellectual property and operating businesses, while Brookfield will own 25%. The new owners plan to keep the company's headquarters in LA.

ABG says it plans to seek out young customers "by introducing refreshed creative, targeted digital campaigns, and influential collaborations."

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Despite Bankruptcy, Forever 21 Will Live On After New Owners Step In - NPR

A customer enters a Pizza Hut restaurant in Princeton, Illinois.

Daniel Acker | Bloomberg | Getty Images

Pizza Hut's largest U.S. franchisee is weighing restructuring options, including bankrutpcy, Bloomberg reported Wednesday.

NPC International, which has about $1 billion in debt, operates nearly 400 Wendy's restaurants and more than 1,200 Pizza Huts.

People familiar with the matter told Bloomberg that the franchisee has begun negotiating with its lenders. The company is trying to keep the restructuring out of court but is considering the possibility of filing for bankruptcy with a pre-negotiated plan in place, according to the outlet.

In 2019, the franchisee saw its debt slide further and further into junk territory after credit downgrades from S&P Global Ratings and Moody's. Both ratings agencies downgraded NPC's debt this week after it did not make interest payments due to lenders on Jan. 31.

Yum Brands' Pizza Hut, historically known as a dine-in restaurant, has struggled because more consumers want their food delivered. High food and labor costs have eaten into profits. Same-store sales at U.S. restaurants fell 2% during the pizza chain's fourth quarter.

"There is potential for choppiness in near-term results of Pizza Hut U.S., primarily related to our largest franchisee," Yum CFO Chris Turner told analysts earlier in February.

Shares of Yum, which has a market value of $31.3 billion, were trading down 1% on Thursday morning. The stock of rival Domino's Pizza, which has a market value of $15.1 billion, surged 24% after its fourth-quarter earnings topped estimates.

Read more about NPC International's options here.

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Pizza Hut's largest US franchisee is reportedly weighing options, including bankruptcy - CNBC

Wednesday, February 19, 2020

If a creditor wants to continue a lawsuit against a debtor outside of bankruptcy, repossess collateral, terminate a lease, set off debts, or pursue other collection efforts, it first must obtain stay relief from the bankruptcy court. The "automatic stay" is a command to halt action, and creditors violate it at their own peril.

But what about inaction? If a creditor began collection activity before the bankruptcy, must it unwind its actions when notified of the filing? Can a creditor violate the automatic stay by doing nothing? A recent decision by a bankruptcy court in Virginia says "yes," but other courts have said "no." The United States Supreme Court is likely to resolve the uncertainty this summer. Meanwhile, creditors may want to err on the side of caution.

Attorney Griffin represented Randi Nimitz in her divorce before she filed for bankruptcy. Griffin did not pay all her legal fees, and Griffin obtained a judgment against her for $10,000. Virginia allows wage garnishment, so Griffin obtained a garnishment order against Nimitz. The state court was holding $1,000 in wage deductions, and a hearing on turning over the funds to Griffin was scheduled when Nimitz filed Chapter 7. Her bankruptcy petition listed Griffin's judgment as debt and claimed an exemption in the $1,000. Nimitz's counsel notified Griffin and demanded he terminates the garnishment. Griffin refused. He claimed that he could do nothing because he had no legal obligation to take affirmative action to terminate the garnishment.

Nimitz moved for Griffin to be held in contempt for a willful violation of the automatic stay. The bankruptcy court agreed. To prove a stay violation, a party must establish that (1) a violation occurred, the violation was committed willfully, and (3) the violation caused actual damages. The automatic stay prohibits any act to obtain possession of property of the estate or to exercise control over estate property. The bankruptcy court reasoned that property seized pre-petition, but not yet liquidated, remains property of the bankruptcy estate. The debtor's bankruptcy estate includes a possessory interest in property not held at the time of filing.

The bankruptcy court concluded that Griffin's refusal to terminate the garnishment amounted to the improper exercise of control over the debtor's property. Griffin did not assert an ownership interest or lien in the garnished funds, which did not help his argument. The bankruptcy court awarded Nimitz attorneys' fees of $2,400 to prosecute the contempt motion.

The United States Supreme Court should rule definitively on this issue sometime this summer. It is possible they will rule that mere inaction does not violate the automatic stay. But unless that happens, creditors who fail to unwind collection efforts when demanded to do so by a debtor in bankruptcy risk being held in contempt and liable for damages.

2020 Ward and Smith, P.A.. All Rights Reserved.

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Is a Bankruptcy Stay Violated by Creditor Doing Nothing? - The National Law Review

Days after the Irving-based Boy Scouts of America announced its Chapter 11 bankruptcy filing, children with the organization set up their tents at Camp Wisdom, one of Texas oldest campsites, for a weekend-long camporee.

On the second day of the camporee at Camp Wisdom, scouts yelled as they yanked and pulled on either end of a rope in a match of tug-of-war. David Shuford, Crosstimbers District chairman, stood on the sidelines. Shuford has been involved in scouting off and on his whole life.

Anybody that comes forward with any concern that their scout, or they as a scout, was abused in scouting, we want to take care of that, Shuford said.

The bankruptcy follows a slew of sexual abuse lawsuits and allegations that have trailed behind one of the largest youth organizations in the country for decades, creating a financial force to be reckoned with for the BSA.

According to the BSA, the bankruptcy process is being used to create a compensation fund for victims of the alleged abuses.

We filed for Chapter 11 bankruptcy to ensure that victims of past abuse in Scouting are equitably compensated, the organization said in a statement on its website.

I am outraged that individuals took advantage of our programs to commit these heinous acts. I am also outraged that there were times when volunteers and employees ignored our procedures or forgave transgressions that are unforgivable, Jim Turley, BSA national chairman, said in an online statement. In some cases, this led to tragic acts of abuse. While those instances were limited, they mean we didnt do enough to protect the children in our careto protect you.

In the statement, the BSA said local councils, such as the Longhorn Council, which organized the camporee at Wisdom, are not included in the bankruptcy. According to the statement, these councils are legally separate, distinct and financially independent from the national organization.

When Shuford was a youth in the scouts, he, too, camped out at Camp Wisdom. He remembers hiking across what would turn into Interstate 20, which cut through the now-90-year-old site. Shuford left the scouts in 1971. A job and the birth of his three daughters took him away from BSA for a while until he had a grandson who wanted to get involved.

When the grandson decided he wanted to be a Cub Scout, I said, Well, Im joining with you, Shuford recalled.

After so much time with the organization, Shuford said he was disappointed when the allegations of child abuse began to come out.

I guess disappointment is one of the words you can use, he said. I know that scouting is such a great organization. Its the greatest youth organization in the country.

During the years Shuford was away from the Boy Scouts, the organization created its Youth Protection program to combat the issue of sexual abuse. He says the program has made the BSA one of the safest youth organizations in the world.

The child abuse thing, it hit the Catholic church not too long ago. Now its the Boy Scouts, he said. Were not making light of that at all. The Boy Scouts certainly arent. Theyre openly saying, Look, if you were abused by a scout leader, we want to know about that. We want to take care of you. We want to provide whatever help you need. They want to get all these cases out in the open and make the rest of the world know that scouting is one of the safest youth organizations in the entire world because of our Youth Protection program, which has been in place since the 1980s.

Shuford says the organization had been in talks about the bankruptcy for about a year before it was finally announced. He says the filing is not only a way to compensate the victims of the alleged abuse. It is also a legal maneuver to help protect BSAs national assets, which amount to some $1 billion, according to The New York Times.

The bankruptcy is making sure that the people that feel like they were affected by some kind of mistreatment, in some cases decades ago, are taken care of, while the assets of the Boy Scouts program are taken care of so that we can continue, he said.

Fallen leaves crunched underneath the scouts feet as they ran around Wisdom, gathering materials to help ignite that evening's campfire. Theyd sit around the fire that night and be awarded for their accomplishments during the camporee.

Scoutings been going on for 110 years this month, Shuford says. Theres been a lot of talk about [if] scouting still has value. It does. It teaches kids a lot of life skills that they might not learn otherwise.

Scouting will live on, Shuford says. The bankruptcy is just a way to help ensure that it does live on.

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After Bankruptcy, Will Boy Scouts of America Live On? - Dallas Observer

24 February 2020

Ward and Smith, P.A.

To print this article, all you need is to be registered or login on Mondaq.com.

If a creditor wants to continue a lawsuit against a debtoroutside of bankruptcy, repossess collateral, terminate a lease, setoff debts, or pursue other collection efforts, it first must obtainstay relief from the bankruptcy court. The "automaticstay" is a command to halt action, and creditors violate it attheir own peril.

But what about inaction? If a creditor began collectionactivity before the bankruptcy, must it unwind its actions whennotified of the filing? Can a creditor violate the automaticstay by doing nothing? A recent decision by a bankruptcycourt in Virginia says "yes," but other courts have said"no." The United States Supreme Court is likely toresolve the uncertainty this summer. Meanwhile, creditors maywant to err on the side of caution.

Attorney Griffin represented Randi Nimitz in her divorce beforeshe filed for bankruptcy. Griffin did not pay all her legalfees, and Griffin obtained a judgment against her for$10,000. Virginia allows wage garnishment, so Griffinobtained a garnishment order against Nimitz. The statecourt was holding $1,000 in wage deductions, and a hearing onturning over the funds to Griffin was scheduled when Nimitz filedChapter 7. Her bankruptcy petition listed Griffin'sjudgment as debt and claimed an exemption in the $1,000.Nimitz's counsel notified Griffin and demanded he terminatesthe garnishment. Griffin refused. He claimed that hecould do nothing because he had no legal obligation to takeaffirmative action to terminate the garnishment.

Nimitz moved for Griffin to be held in contempt for a willfulviolation of the automatic stay. The bankruptcy courtagreed. To prove a stay violation, a party must establishthat (1) a violation occurred, the violation was committedwillfully, and (3) the violation caused actual damages. Theautomatic stay prohibits any act to obtain possession of propertyof the estate or to exercise control over estate property.The bankruptcy court reasoned that property seized pre-petition,but not yet liquidated, remains property of the bankruptcyestate. The debtor's bankruptcy estate includes apossessory interest in property not held at the time of filing.

The bankruptcy court concluded that Griffin's refusal toterminate the garnishment amounted to the improper exercise ofcontrol over the debtor's property. Griffin did notassert an ownership interest or lien in the garnished funds, whichdid not help his argument. The bankruptcy court awardedNimitz attorneys' fees of $2,400 to prosecute the contemptmotion.

The United States Supreme Court should rule definitively on thisissue sometime this summer. It is possible they will rulethat mere inaction does not violate the automatic stay. Butunless that happens, creditors who fail to unwind collectionefforts when demanded to do so by a debtor in bankruptcy risk beingheld in contempt and liable for damages.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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Can A Creditor Violate The Automatic Stay In Bankruptcy By Doing Nothing? - Mondaq News Alerts

Last week, the Boy Scouts of America filed for bankruptcy. This was not unexpected. Speculation about bankruptcy had been running rampant for over a year now.

It was done in direct response to New Yorks Child Victims Act and similar laws in other states which allow for a temporary lookback for victims of abuse whose claims previously would have been denied by the statute of limitations. Thousands of lawsuits have been filed against churches, schools, clubs and the BSA for transgressions alleged to have been done by leaders and mentors decades ago.

The CVA and its companions are good, as they allow anyone who was abused as a youth in any organization or by any individual to find closure or, in legalese, be made whole after surviving evil and holding dark secrets that are nearly impossible to overcome and/or share as a youth and an adult. Most times, it takes decades to open up about it and these lookbacks recognize that.

The path of bankruptcy isnt the BSA abandoning its responsibility to anyone who was hurt. Instead, it allows the BSA to reach settlements with these parties in an equitable fashion, otherwise potentially large awards in the first rounds of lawsuits would have decimated BSA finances and prevented monetary awards for those who brought lawsuits later in the cycle. The management of finances and settlements ensures that all who deserve something get something and the BSA can continue its mission.

Since early 2019 and especially now following the actual filing, Ive been asked about what bankruptcy and financial reorganization of the BSA means for Scouting; after all, I have long been a champion of Scouting in this column and in the community, having been a scout for eight years and a volunteer in the organization for the past 26.

First and foremost, take comfort in knowing local Scouting is financially sound and protected.

The Iroquois Trail Council (which serves eastern Niagara and the GLOW counties) is, like all councils, a corporation separate from the BSA and it maintains its own 501(c)3 status. Business decisions made on bankruptcy by the BSA will not impact the assets of the Iroquois Trail Council including our camps and donations made to local programs by families, donors and community partners like the United Way. The Council is not on the hook for assisting with the BSAs reorganization.

It is important to note that the Iroquois Trail Council is governed by local volunteers who provide strong oversight on budget development, fundraising, spending and investment. During the past decade, the council has routinely balanced its budget, been creative with its staffing model, made substantial capital improvements to Camp Dittmer and Camp Sam Wood, acquired a new centrally-located headquarters in Oakfield and ensured the future of local scouting through growth in its endowment fund. The Council is also debt-free and has no pending litigation.

Secondly, know that scouting is safe.

At first glance, driven by headlines on smartphones and hot takes on social media, some would wonder why theyd ever want to put their children in scouting for fear that they might be abused, thinking that the spate of lawsuits are recent in nature. They arent; 90% of those filed against the BSA date back 30 years plus. We cant let a few bad apples spoil the barrel, nor can we believe that protections arent afforded. A system is in place to keep out troubled souls and identify and eliminate adults and youths who may put others at risk. As long as Ive been in scouting, there has been detailed and effective youth protection training for all participants, double supervisory control and background checks.

Lastly, know that scouting is just as meaningful now as it was when the BSA was founded 110 years ago.

My Eagle Scout certificate is beside me in my office every day, a reminder of who I am and who I will be because of scouting. The organization and its principled lessons and experiences gave me a deeper understanding of service, leadership, teamwork and humanity and it has helped me greatly at home, work, and in the community. I and my fellow volunteers want to make sure more boys and girls are given such positive experiences in their lives in hopes of making them the very best citizens, spouses and parents they can be. God knows we need that in todays world.

Please know that all of us in scouting cannot and will not let financial restructuring by the national organization distract us from our goals. Scouting will continue to be a guiding light for many children for many decades more even amidst the occasional storm that might shake its very foundation.

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. Email him at bobconfer@juno.com.

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BOB CONFER: The Boy Scouts will survive bankruptcy - Lockport Union-Sun & Journal

The Associated Press

INDIANAPOLIS Home goods retailer Pier 1 Imports Inc. has filed for bankruptcy protection.

The Fort Worth, Texas-based company has been struggling with increased competition from budget-friendly online retailers such as Wayfair.

The retailer has two stores in Indianapolis (6810 S. Emerson Ave. and 2902 W. 86th St.) and three in the suburbs (Plainfield, Carmel and Noblesville).

The Indianapolis stores are not among the locations expected to close, but bankruptcy papers indicate seven stores will be eliminated in Indiana: in Bloomington, Kokomo, Fort Wayne, Merrillville, Valparaiso, Goshen and Warsaw.

Pier 1 said it will pursue a sale, with a March 23 deadline to submit bids. The case is being heard in the U.S. Bankruptcy Court for the Eastern District of Virginia.

In the meantime, Pier 1 said lenders have committed approximately $256 million in debtor-in-possession financing so it can continue its operations during the Chapter 11 proceedings.

The bankruptcy filing is intended to provide Pier 1 with additional time and financial flexibility as we now work to unlock additional value for our stakeholders through a sale of the company, Pier 1 CEO and Chief Financial Officer Robert Riesbeck said in a statement.

Riesbeck, who was CEO of former Indianapolis-based appliances HHGregg when it filed for Chapter 11 bankruptcy in 2017, took over the top spot at Pier 1 after joining the company as chief financial officer in July.

Pier 1s sales fell 13%, to $358 million, in its most recent quarter, which ended Nov. 30. It reported a net loss of $59 million for the quarter as it struggled to draw customers to its stores. Pier 1 has been trying to declutter its stores, improve online sales and draw in younger customers.

Last month, Pier 1 announced it would close 450 stores, including all of its stores in Canada. The company is also closing two distribution centers.

Pier 1s shares have fallen 45% since the start of the year. They closed at $3.58 per share on Friday.

After leading HHGregg through bankruptcy, Riesbeck joined FullBeauty Brands as CFO in 2018 and helped guide the company through what The Wall Street Journal reported was the fastest Chapter 11 case ever. It filed for bankruptcy on Feb. 3 and emerged on Feb. 7.

Riesbeck previously spent eight years as an executive with private equity firm Sun Capital Partners Inc., including four years as CFO at defunct Indianapolis-based grocery chain Marsh Supermarkets after Sun acquired Marsh in 2006.

Ted Gavin, a retail bankruptcy expert and managing partner of the consulting firm Gavin/Solmonese, said he hasnt shopped at Pier 1 in more than a decade.

People have been talking about Pier 1 heading for bankruptcy for a few years now. Theyve closed stores, theyve struggled to find a steady customer base, theyve struggled with falling sales, Gavin said.

Pier 1 was founded in 1962 in California, where it made its name selling incense, beanbag chairs and love beads. The company moved to Texas in 1966 and went public in 1970.

But in recent years, it struggled to draw customers to its often cramped and cluttered stores. The company has been trying to streamline its merchandise, improve online sales and draw in younger customers, but it was an uphill climb. For example, a recent check of online offerings showed Pier 1 was selling a tufted velvet armchair for a sale price of $399 on its web site. Target was offering a similar one for $214.

In its most recent fiscal year, which ended in February 2019, Pier 1 reported sales of $1.55 billion. That was down 18% from 2015. Pier 1s sales tumbled 13% to $358 million in its most recent quarter, which ended Nov. 30.

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Pier 1 files for bankruptcy protection, to close 7 Indiana stores - The Republic

Whatever the reason for these false intuitions, subsequent research has revealed that gamblers fallacy can have serious consequences far beyond the casino. The bias appears to be present in stock market trading, for instance. Many short-term changes in stock price are essentially random fluctuations, and Matthias Pelster at Paderborn University in Germany has shown that investors will base their decisions on the belief that the prices will soon even out. So, like Italys lottery players, they trade against a streak. Investors should, on average, trade equally in line with the streak and against it, he says. Yet that is not what we can see in the data.

The gamblers fallacy is a particular problem in the very professions that specifically require an even, unbiased judgement.

One team of researchers recently analysed US judges decisions on whether or not to grant asylum to refugees. Logically speaking, the ordering of the cases should not matter. But in line with the gamblers fallacy, the team found that the judges were up to 5.5% less likely to grant a case if they had granted the two previous cases a serious decline from the average acceptance rate of 29%. Consciously or not, they seemed to think that the chances of having the same judgement three times in a row was just too small, and so they were more inclined to break the streak.

The researchers next analysed bank staff considering loan applications. Once again, the order of the applications made a difference: the loan officers were up to 8% more likely to reject an application after they had already accepted two or more in a row and vice versa.

As a final test, the team analysed umpires decisions in Major League Baseball games. In this case, the umpires were about 1.5% less likely to call a pitch a strike if the previous pitch was also called a strike a small but significant bias that could make all the difference in a game. Kelly Shue, one the co-authors of the study, says that she was initially surprised at the results. Because these are professionals and they're making decisions as part of their primary occupation, she says. But they were still vulnerable to the bias.

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The simple maths error that can lead to bankruptcy - BBC News

When you're drowning in debt with no end in sight, you may start wondering if you should file for bankruptcy. There are both benefits and drawbacks to taking this drastic step, so it's important to know what you're signing up for. Here, we'll discuss how bankruptcies work and help you decide if it's the right route for you to take.

Bankruptcy is a legal process that lets people or entities who can't pay their debts obtain some type of relief by having those debts either reorganized or eliminated. You can file for bankruptcy as an individual, a corporation, or a municipality.

When you file for bankruptcy, your debts are either reorganized so they're easier to pay off, or wiped out so you don't need to pay some or all of them. The exact process depends on the chapter of bankruptcy you file for.

You might consider filing for bankruptcy when your debts are such that you see no reasonable way to keep up with your payments. The purpose of bankruptcy is to give people (or companies or municipalities) a chance either to wipe out some of their financial obligations and start over with a clean slate, or to repay those obligations in a more affordable fashion.

However, to be clear, bankruptcy is not an option to consider if your debt is fairly new, or if you're going through a temporary financial crisis that's likely to improve (such as being out of a job). There are consequences associated with filing for bankruptcy, and it's most certainly not a "get out of jail free" card. So you should really consider bankruptcy only as a last resort if you've tried paying off your debts but keep digging yourself deeper into a hole.

Bankruptcy isn't a one-size-fits-all solution. There are different chapters of bankruptcy that apply in different circumstances. If you're filing for a personal bankruptcy, your choices are Chapter 7 and Chapter 13.

Chapter 7 is a personal liquidation bankruptcy. Your non-exempt assets are sold off by a court-appointed trustee to pay your debts to the greatest extent possible, and from there, your remaining unsecured debts are eliminated. (The amount of assets you can exempt varies from state to state.) Unsecured debts are those without collateral behind them -- debts like credit card balances and medical bills.

Qualifying for Chapter 7 is harder than qualifying for Chapter 13 because you'll be subject to what's known as the means test. If your income is lower than the median income in your state for a household your size (meaning, based on the number of dependents you have), you'll pass the means test and be eligible for Chapter 7. If you don't pass the means test based on income alone, you can deduct certain expenses, such as taxes, mortgage payments, and child care, from your income to see if it comes in under the necessary threshold.

If you don't pass the means test, you can either try again in six months and see if you qualify for Chapter 7, or otherwise pursue a Chapter 13 bankruptcy.

Chapter 13 is a personal reorganization of debt. If your earnings are too high to qualify for Chapter 7, you can file for Chapter 13. From there, your debts will be reorganized and possibly negotiated downward so that you're able to pay them off in a time frame of three to five years. You'll also be assigned a trustee to oversee that process.

One benefit of filing for Chapter 13 instead of Chapter 7 is that you'll get to retain your assets throughout the bankruptcy filing. Say you have electronic equipment or artwork you want to keep. Under Chapter 7, a trustee may be eligible to sell those items to repay your creditors, but under Chapter 13, you get to keep them.

Chapter 13 is also a good option if you own a home and want to keep it. You'll be given an opportunity under Chapter 13 to catch up on any mortgage payments you may have missed to stay in your home. Keep in mind that it's possible to keep your home under Chapter 7, too, but only if you manage to get current on your mortgage payments. Chapter 7 filings don't include provisions to help you catch up on missed payments, and if you have enough equity in your property, your trustee might choose to have it sold to pay off your creditors.

Another thing: Often, Chapter 13 filers have enough income to keep up with their mortgages, whereas Chapter 7 filers don't, which is also why you shouldn't lose your home under Chapter 13.

Chapter 7 and Chapter 13 are your two choices when filing for personal bankruptcy. But there are a few other types of bankruptcy you might hear about in passing as you explore your options.

Chapter 9 applies to municipalities -- cities, states, and other public entities like school districts are eligible for it when they can no longer keep up with their financial obligations. Chapter 9 debtors reorganize their debts in an attempt to pay creditors to the greatest extent possible, and the extent to which creditors are made whole depends on the level of assets and revenue the filer in question has.

Chapter 11 is a corporate bankruptcy that allows companies to reorganize their debts, similar to a Chapter 13. Under Chapter 11, a company puts together a plan of reorganization that dictates how its existing debts will be paid. The purpose of Chapter 11 is to allow the company in question to keep operating. By contrast, Chapter 7 liquidations are available to corporations, too, only in that case, the filing company doesn't attempt to stay in operation, but rather, winds down its business and pays creditors off to the greatest extent possible.

Chapter 12 is an option specifically for farmers and fishermen to reorganize their debts. It works much like a Chapter 13 bankruptcy, only to be eligible, you must be engaged in a commercial farming or fishing operation.

Chapter 15 is a relatively new chapter of the U.S. Bankruptcy Code. Its purpose is to promote cooperation between U.S. courts and outside courts when a foreign entity files for bankruptcy.

Your first step in filing for bankruptcy should be to consult with an attorney who can advise you on whether that's the right choice, and also, to let you know which chapter of bankruptcy is most suitable for you. From there, you'll need to gather certain documentation to help your attorney make that determination, such as:

Before you're even allowed to file for bankruptcy, you'll be required to take a credit counseling course. Part of the purpose of that course is to help you determine whether bankruptcy is your best course of action.

Once you've completed that course, you'll need to file the bankruptcy forms associated with the chapter you're pursuing with your local court. An attorney can help you complete this step of the process. From there, a bankruptcy trustee will be assigned to oversee your case to perform the required tasks such as selling off your assets under Chapter 7, or ensuring that you're sticking to your personal plan of debt reorganization under Chapter 13.

The costs of filing for bankruptcy can be great. How much youll pay a bankruptcy attorney depends on where you live, the chapter you're filing, and how complex your case is. You can expect to pay between $1,000 and $1,500 for a Chapter 7, and between $2,500 and $3,500 for a Chapter 13, but these are just ballpark estimates.

You'll also need to cover the court fees associated with filing for bankruptcy, which are $335 for Chapter 7 and $310 for Chapter 13. You'll also pay a modest fee of $20 to $50 for your credit counseling course, but if your income is low enough, you may be eligible to have that fee waived.

Filing for bankruptcy might seem like a great solution to your debt-related woes. But there are repercussions you'll need to be aware of. For one thing, under Chapter 7, there's a good chance you'll lose your home, if you own one. You'll also risk losing other valuable assets, such as family heirlooms, jewelry, and other items worth money.

Additionally, bankruptcy proceedings are a matter of public record, which means the people you know could, in theory, find out detailed information about what your assets look like and how much money you owe. In other words, say goodbye to your privacy.

Filing for bankruptcy is a sign that you're unable to manage your bills and debts responsibly. Therefore, your credit score will go down to reflect that. Oddly enough, the higher your credit score prior to filing for bankruptcy, the more of a hit it will take. By contrast, you'll feel less of an impact if your credit score isn't great to begin with. If your credit score is 700 or above, it could drop by a good 200 points with a bankruptcy filing. But if your score is lower, it might drop less than 150 points.

A Chapter 13 bankruptcy filing will stay on your credit record for seven years. On the other hand, a Chapter 7 filing will stay there for 10 years. During that time, you may have difficulty borrowing money, or borrowing affordably. You may also have difficulty getting approved to rent a home.

Although bankruptcy is a good way to deal with unsecured debts, there are certain debts it won't wipe out. These include:

Also, filing for bankruptcy won't prevent you from losing your home if you're unable to get current on your mortgage payments and keep up with your future payments.

Clearly, there are some pretty extreme consequences you'll face when you file for bankruptcy, so it could pay to explore alternate options that make your debt more manageable. Here are a couple to consider.

Debt consolidation is the process of rolling multiple debts into a single loan. Doing so serves a couple of purposes. First, if your new loan comes with a lower interest rate than what's currently attached to your debt, you'll have an easier time paying it off, and it will cost you less money to do so. Secondly, having a single loan to keep up with means not having to risk missing different payments, or not having to keep track of multiple debt payment due dates.

You can consolidate your debt via:

You'll need good credit to qualify for a balance transfer or personal loan. With a home equity loan, the requirement of having good credit isn't as stringent because your home is used as collateral for that loan. But if you fail to keep up with your payments, you risk losing your home.

Debt settlement is the process of negotiating with your various lenders and creditors to reduce your existing debt to a smaller amount. Why would your creditors do that? It's simple -- they want to be paid, and if negotiating means they get something rather than nothing, it's a step they may be willing to take. For example, a creditor of yours might agree to accept 50% of your outstanding debt, knowing full well that if you were to go through the bankruptcy process, it could end up with a mere 10% of what it's owed.

You can attempt to settle your debt yourself, use a debt settlement company, or hire a debt settlement attorney. If you have a lot of debt to negotiate, the latter two options are worth pursuing.

While debt settlement can be a good solution for dealing with large sums of debt, one thing you should know is that your credit score will drop if you go that route, and any debts charged off by lenders could stay on your credit report for seven years, similar to a Chapter 13 bankruptcy. You'll also pay fees to settle your debts, which could eat into your savings. And forgiven debt is generally considered taxable, so you could get hit with an IRS bill if you go through with a settlement.

The U.S. Bankruptcy Code exists for a reason -- to protect individuals (and other filers) who get in over their heads on the debt front and need relief. Filing for bankruptcy could be the best solution for dealing with your outstanding debt, or it could end up being a mistake you regret. If youre even considering filing for bankruptcy, consulting with a bankruptcy attorney is a good idea because a lawyer can walk you through your options and help you weigh the pros and cons involved.

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How Bankruptcies Work | The Ascent - Motley Fool

2019 saw a number of high-profile airline bankruptcies. While Jet Airways was the biggest in terms of fleet size, Thomas Cook was the biggest in terms of immediate impact after collapse. In fact, 600,000 people were stranded abroad as a result. But how did this well-established brand reach the point of failure?

The Thomas Cook Group traced its roots all the way back to 1841, when the company was founded by its namesake, as Thomas Cook & Son. The company went through many changes throughout the years, and only entered the airline industry in 2001. Despite not being that old, Thomas Cooks Airline division operated 34 aircraft in total, with a further 71 aircraft being operated by its various subsidiaries.

Thomas Cooks demise may have come as a surprise to many, but the company had been on the decline for a while. Since Thomas Cooks collapse, many analysts and individuals familiar with the company have described its business practices as old-fashioned. Discussing Thomas Cooks downfall with the BBC, ex-Monarch managing director, Tim Jeans said that Thomas Cook had an analogue business model in a digital world.

This old school way of thinking was a major negative for Thomas Cook when it came to reacting to the moves of rival airlines. The rise of highly competitive low-cost airlines across Europe was a big thorn in the side of Thomas Cook, which it never managed to fully adapt to. Additionally, apps like Airbnb poached a considerable amount of business from Thomas Cook as customers began to book holiday accommodation on their own, rather than using the help of a travel agent. As customers moved away from booking Thomas Cook package holidays, the companys airline arm also witnessed a decline in passenger numbers and profits.

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The gradual decline in bookings made through travel agents is something that has hit businesses industry-wide. But, unfortunately for Thomas Cook, it didnt own many large, valuable assets that it could sell off. Youd think that aircraft would be just the sort of assets that could be sold to raise large sums of money. But Thomas Cook leased all its aircraft and didnt own hotels. This meant that when the time came to scale down business operations, the companys options for raising capital were severely limited.

By 2019 Thomas Cook Group had started racking up huge losses. In the first half of 2019, Thomas Cook revealed that it had lost 1.5 billion. Despite these losses, Thomas Cook Group was still confident it could secure enough money from investors to keep the company afloat.

Management went through many rounds of negotiations with various different parties in hopes of finding a buyer for the company. The most promising option was Chinese conglomerate, Fosun International, which was already the companys primary shareholder. At one point it looked like Fosun was about to seal Thomas Cooks rescue deal. But a last-minute change of tack from creditor banks spelled the end for Thomas Cook.

Alas, the company was unable to find the additional 200 million the banks said it needed to secure the takeover deal, which led to the company abruptly suspending its operations. The U.K. government was left to pick up the pieces, arranging Operation Matterhorn to repatriate stranded customers.

Were you affected by Thomas Cooks demise? Share your experience with us by leaving a comment.

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What Led To Bankruptcy: Thomas Cook Airlines - Simple Flying

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Sen. Elizabeth Warren (D-Mass.) wants to fix American bankruptcy law. Indeed, as she's told people many times, studying bankruptcy is what convinced Warren to quit her career as a Harvard professor and enter politics it's largely why she jumped ship from the Republicans to the Democrats, and why she became a populist progressive firebrand. As part of her campaign for the Democrats' presidential nomination, Warren just released a meaty plan to reform U.S. bankruptcy law.

The proposals are designed to once again make bankruptcy what it's intended to be: a balanced process that allows creditors to recoup some losses and gives debtors a genuine fresh start, while making sure both parties share responsibility for the failure. But how did American bankruptcy break in the first place? The key turning point was a 2005 law, backed by the banking and credit card industries, that made personal bankruptcy a lot harder to obtain.

Personal bankruptcy comes in two forms. Chapter 7 bankruptcy more or less wipes out people's debt, in exchange for their handing over assets and cash not protected by law from bankruptcy proceedings. The basic idea there is to allow the debtor to start over with a clean slate and make sure the creditor is reimbursed to some degree, but also that the debtor retains enough resources that they can actually start over. Chapter 13 bankruptcy allows the debtor to keep much more of their property, but also puts them on a long-term payment plan.

The Bankruptcy Abuse Prevention and Consumer Protection Act (or BAPCPA) of 2005 made a number of changes: It significantly increased the paperwork and fees required to file Chapter 7 for people making over 150 percent of the poverty line. It also made it a lot harder for people to take Chapter 7 over Chapter 13 if they made more than their state's median income. The law forbade Americans from getting rid of student loan debt through bankruptcy, and it instituted a number of other changes that generally made the process less forgiving.

In the years before the 2005 law, personal bankruptcies were on the rise, and champions of BAPCPA claimed people were abusing an overly lax system hence all the additional hurdles that BAPCPA brought. The law's proponents also argued that making bankruptcy harder to obtain would lower the cost of credit for all the other Americans who didn't file for bankruptcy. (Interestingly, BAPCPA's fans included one Senator Joseph Biden a Democrat from Delaware, where a huge proportion of America's credit card companies are based, and one of Warren's current challengers for the partys presidential nomination.)

Taking the opposite side of the fight were people like Warren, who argued that rising bankruptcies were caused not by personal shiftlessness, but by a decades-long trend of Americans getting squeezed by stagnating wages and ever-rising costs of living. That left working people in ever more precarious financial straits, in which one run of bad luck could pitch a family over the precipice. "The data showed that nearly 90 percent of these families were declaring bankruptcy for one of three reasons: a job loss, a medical problem, or a family breakup," Warren wrote.

Since BAPCPA's passage, it does look like credit became cheaper for Americans: "Typical credit card interest rates for people with fair credit might be in the mid- rather than low 20s had the reforms not been adopted," according to a summation of the research by Vox's Matt Yglesias. But the price of that reduction was that a lot of low-income families who aren't quite poor enough to fall below 150 percent of the poverty line got slammed by the increased paperwork and fees and the shift to more Chapter 13 filings. Filings for bankruptcy due to medical debt fell, and of course a lot of Americans were condemned to labor under student debt they couldn't get rid of. The period of time where people and families struggle with the decision whether to file bankruptcy nicknamed "the sweatbox" also grew considerably. That's more time in which people are bleeding down their finances, while banks and creditors continue to profit from their debt payments.

Warren's new plan proposes a number of reforms to BAPCPA. The centerpiece is she would combine Chapter 7 and Chapter 13 into one singular bankruptcy process, while doing away with the income tests and the higher fees and paperwork. Debtors would be able to choose the wipe-the-slate-clean approach or the payment-plan approach, depending on their needs. Warren would include student debt in the mix of debts that bankruptcy can do away with. Warren would also raise the amount of home equity that filers can hold onto during the bankruptcy process, and she would empower bankruptcy judges to adjust the payment terms of mortgages something the Obama administration promised to do in response to the 2008 housing crisis, and then reneged on.

Other noteworthy changes include allowing parents to protect more money for spending on their children during bankruptcy; allowing union members to keep paying their union dues; and allowing people to keep paying rent, so that the bankruptcy process doesn't result in their eviction. In fact, a lot of these alterations started life as amendments that lawmakers tried to attach to BAPCPA itself, but that were ultimately shot down.

In sum, Warren would make bankruptcy more affordable, accessible, and flexible for debtors, while simultaneously expanding the types of debt they can get rid of and the critical resources they can hold onto like homes, cars, and union benefits so that they actually can start again.

As for alternative ways to lower the costs of credit across the economy, Warren doesn't get into that. But lawmakers should consider hard legal caps on interest rates an idea floated by Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen Bernie Sanders (I-Vt.) rather than trying to appease the banking industry by essentially sacrificing more American families to them.

Zooming out to the big picture, capitalism only functions when people are free to take risks without fearing that failure will be the end of them. Every loan is a risk; an effort to do something in the economy better than was done before. And a crucial thing to realize is that the decision to create the loan is a risk taken by the creditor as much as by the debtor both are equally responsible if the risk happens to not pan out. It's worth noting that corporations and wealthy individuals file for bankruptcy all the time often with far more advantages and options for protections than everyday consumers have and yet failure to pay debts in full only gets treated as a distinctly moral failing when everyday Americans are the debtors.

In that sense, the moral and social scales of bankruptcy have shifted much too far in favor of creditors which is to say, in favor of the rich and the powerful. Let's take a cue from Warren and push them back.

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How bankruptcy was broken - The Week

Elizabeth Warrens new consumer bankruptcy plan (Full disclosure: I consulted with the Warren campaign on the policy) aims squarely at unwinding one of former Vice President Joe Bidens chief legislative accomplishments, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). The bankruptcy bill was perhaps the most antimiddle class piece of legislation in the past century. It was also Warrens introduction into the bare-knuckle world of legislative politics. She fought the bill tirelessly and succeeded in blocking it for nearly a decade. Her new plan makes clear that she hasnt given up the fight.

Bidens support for BAPCPA is well known, but his numerous roll call votes on amendments to the bill have never been previously examined. Warrens plan draws sharp attention to these votes by adopting many of the very positions Biden opposed. An examination of Bidens roll call votes paints a very different picture of Bidens involvement with the bill than the vice president likes to present. The record makes clear that as a senator, Biden used his clout to push for the laws passage and to defeat amendments to shield servicemembers, women, and children from its harsh treatment. When votes were taken, Middle-Class Joe was no friend to the middle class.

Bankruptcy is the last resort for millions of families that find themselves overburdened with debt, often through no fault of their own, as a result of uninsured medical expenses, life savings stolen by a drug-addicted child, or a global financial crisis. By enabling honest but unfortunate debtors to wipe out debts, bankruptcy serves as a financial safety net for families desperately trying to stay in the middle class.

Bankruptcy law offers debtors a choice between a Chapter 7 and a Chapter 13 process. In Chapter 7, debtors surrender their current assets above a minimum level to creditors, but retain all of their future income. In Chapter 13, debtors retain their assets, but are required to devote all of their disposable income for several years to a demanding payment plan. Chapter 7 gives debtors an immediate fresh start, by wiping out most debts. Chapter 13 debtors have to repay more, and many ultimately fail to complete payment plans.

As the Prospect detailed Tuesday, BAPCPA made it harder for consumers to file for Chapter 7 by imposing a means test for Chapter 7 eligibility, and by substantially increasing the cost of filing for bankruptcy. This caused debtors average total out-of-pocket costs for filing for Chapter 7 to rise from $600 to $2,500. The subsequent result was a permanent 50 percent drop in Chapter 7 bankruptcy filings. BAPCPA made bankruptcy too expensive for the most broke households, making financial stress, mortgage defaults, and foreclosures more likely, particularly after the 2008 financial crisis.

Not only did the law discourage bankruptcy filings, but it made it harder to wipe out credit card debt and student loans in bankruptcy. The result was greater profits for consumer lending businesses, many of which are based in Bidens state of Delaware. Not surprisingly, then, by lowering the risk of bad lending decisions, the Biden bankruptcy bill unleashed a glut of aggressive private student lending, which has contributed to the massive rise in student loan debt.

The bankruptcy bill was perhaps the most antimiddle class piece of legislation in the past century.

BAPCPAs passage was one of Bidens long-sought goals as a senator. Not only did Biden vote for the legislation four times between 1998 and 2005, but he was so singularly committed to its success that he inserted it into a foreign-relations bill in 2000, and later was the sole Democrat on the Senate Judiciary Committee to vote for the bill.

Biden also consistently voted against efforts to soften BAPCPAs blow on vulnerable populations. He voted against three amendments to ease bankruptcy requirements for consumers whose financial troubles stem from medical expenses. He voted against an amendment that would have helped seniors keep their homes. He voted against exempting servicemembers and widows of servicemembers killed in action from the laws eligibility restrictions. He voted against an amendment to exempt women whose financial troubles stemmed from deadbeat husbands failure to pay child support or alimony. And Biden even voted against an amendment that would have ensured that children of debtors could still be given birthday and Christmas presents. Biden also voted against allowing debtors to pay their union dues during bankruptcy, potentially imperiling their employment and ability to achieve financial rehabilitation.

Several of these amendments are resurrected in the Warren bankruptcy plan, including the union dues and children of debtors amendments.

Its not as if Joe Biden was opposed to all amendments to the legislation: He voted to enshrine a millionaires loophole that allows wealthy, well-counseled debtors to shield their assets from creditors by placing them in asset-protection trusts. Nor did he act to cut off the loophole that shields assets placed by wealthy families in dynasty trusts, such as are offered by Delaware.

Biden claims that he worked to ensure that the legislation protected the interests of women and children by making the repayment of alimony and child support obligations the top priority in bankruptcy. This is false. Prior to BAPCPA, domestic support obligations were formally eighth in line for repayment. Functionally, however, they were second in line, right after the administrative costs of the bankruptcy, because the obligations ranked second through seventh priority, such as emergency bailout loans from the Federal Reserve or money owed to grain elevators, do not exist in consumer bankruptcy cases. The Biden bankruptcy bill rewrote the statute to provide that domestic-support obligations are to be paid firstunless there are administrative expenses. In other words, BAPCPAs protections for women and children wereall window dressing. Women and children still stand behind administrative expenses in bankruptcy. The claim that BAPCPA helped women and children is simply dishonest.

If anything, BAPCPA actually hurt women and children, as womens groups argued at the time. Because BAPCPA made it impossible to wipe out certain credit card and student loan debt in bankruptcy, it meant that banks would be able to compete with child support and alimony claims for deadbeat ex-husbands remaining assets after the bankruptcy.

Its hard to reconcile the Biden bankruptcy bill with Bidens claims of being Middle-Class Joe. When it counted, Joe Biden looked out for millionaires and the banks, not the middle class.

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The Americans Joe Biden Left Behind on the Bankruptcy Bill - The American Prospect

Wasted at work? There are steps you can take before overextending yourself leads to emotional ... [+] bankruptcy and burnout.

The Hustle Joyride: This Centurys Cocaine

Overextending yourself is this centurys cocaine, its problem without a name. Workweeks of sixty, eighty, even a hundred hours are commonplace in major law firms and corporations; tribes of modern-day male and female Willy Lomans, manacled to cellphones, trundle through the nations airports at all hours with their rolling luggage; cafes are filled with serious young people bent over laptops; young workers at dot-coms are available for work 24/7. Could this be you?

The research team at ZenBusiness recently surveyed over 1,000 managers and employees to explore what motivates people to work overtime, how frequently it occurs and what employees think of their colleagues working overtime. The study found the top six reasons employees work overtime are:

If youre clocking overtime as you start the new year, youll be excited to learn from ZenBusiness that over 70% of managers perceive employees who work overtime as hardworking and committed. While this is good news, and all of us want to be perceived as hardworking and committed, theres a huge downside if you allow your bosss accolades to outweigh your own self-care. Be careful to interpret this study as a message that you should work harder to be successful, even if it means hitting the point of emotional bankruptcy. Researchers report that employees who regularly put in overtime work of 11-hour days or more are at higher risk for cardiovascular disease, major depression, decreased productivity and poor job performance. Other long-standing research shows that overextending yourself leads to escalating anger, depression, perfectionism, generalized anxiety, health complaints, greater unwillingness to delegate job responsibilities and higher incidences of burnout. And the story doesnt end there. The Harvard Business Review, reports that the mental and physical problems of burnt-out employees costs corporate America around $125 billion to $190 billion a year in healthcare spending. So lets back up for a second.

At first the accolades, slaps on the back, fat paychecks and gold plaques make you feel its all worth the effort. But after a while, it starts to feel like an unwelcome burden. You have a lot on your plate. Youve got to do it perfectly. Can you measure up? Or will you let others down? Youve got to prove you can do it. If you fall short, you dig your heels in deeper. You cant let up because everyones depending on you. Some folks wear their always on label like a prize, but if youre like most workers, the picture is far more subtle. You dont party or stay out late. You dont waste your time or throw money down the drain. Youre level-headed and rational. Youve been called dedicated, responsible and conscientious. You work long and hard, and youre always at your desk or available electronically.

Burrowing itself deeper into your soul, the habit of overextending yourself is like a prisoners chain that moves with you wherever you go. When youre not at your desk, your exhausting compulsive thoughts are still there. They beat you to the office before you begin the day. They stalk you in your sleep, at a party or while youre hiking with a friend. They loom over your shoulder when youre trying to have an intimate conversation with your main squeeze. You cant stop thinking about, talking about or engaging in tasks and projects. You have rigid thinkingsometimes called stinkin thinkingpatterns that feed your anxiety, reminding you how much you have undone. When youre preoccupied with completing tasks, you dont notice signals, such as physical aches and pains or a reduced ability to function, that warn of serious health problems.

Your projects take priority over every aspect of your life. You get soused by overloading yourself with more tasks than you can possibly complete. You toil around the clockhurrying, rushing and multitasking to meet unrealistic deadlines. You might even throw all-nighters, sometimes sleeping off a work binge in your clothes. The compulsive thoughts engulf you in a work fog called a brownout, numbing you to anxiety, worry and stress as well as to other people. Work highs, reminiscent of an alcoholic euphoria, run a cycle of adrenaline-charged binge working, followed by a downward swing. Euphoria eventually gives way to work hangovers characterized by withdrawal, depression, irritability, anxiety and in extreme cases even thoughts of suicide.

The Adrenaline Rush

Studies link overextending yourself to a rush of adrenalinea hormone released in times of stressthat has an effect similar to amphetamines or speed. The release of adrenaline, like other drugs, creates physiological changes that lead to work highsthat become addictive and may even be fataloften described as a rush or surge of energy pumping through the veins and an accompanying euphoria as an adrenaline high. At some point, the euphoria requires larger doses to maintain the high, created by adding more to the to-do list and increasing stress levels to the maxto get the body to pump its fix.

After a long week, a university professor left his office, butterflies in his stomach, at the thought of facing an unplanned weekend. On his way out, he was handed a memo announcing grant-proposal deadlines. Suddenly, calm descended on him, and the adrenaline began to flow as he folded the three-inch-thick computer printout under his arm. Like an alcoholic with a bottle under one arm, who was assured of plenty to drink, the professor was calmed by the guarantee of having more to do, filling the hours and giving him purpose. It was an anesthetic, a tranquilizer. After the proposal was written, the feelings of emptiness, unrest and depression returned. That professor was me, unknowingly on my way to burnout.

If youre always on, the need for adrenaline, in effect, creates a dependence on crises that lead the body to produce the hormone and give you the drug. Pushing subordinates or yourself to finish designated assignments within unrealistic deadlines is one way crises are achieved. Another is biting off too much at one time or attempting to accomplish many tasks at once. But while you get high, coworkers and subordinates experience stress and burnout. The adrenaline flow also has a boomerang effect, blocking the bodys ability to clear dangerous cholesterol from the bloodstream. Elevated cholesterol levels clog arteries, damage their inner lining and can cause heart attacks.

Are You Overdrawn? Preventing Emotional Bankruptcy

If youre burning the candle at both ends, you could be headed for emotional bankruptcy or burnoutthe physical exhaustion and depletion of emotional energy brought on by the stress of producing at the expense of taking care of yourself. Fortunately, self-care can recharge your batteries if youre facing burnout.

Think of yourself as a bank account. When overloading yourself withdraws more than self-care, its time to make some deposits toward your well-being. Practice setting limits on the demands placed on you or that you place on yourself, leaving yourself elbow room to stretch and breathe and time to look out the window or take a walk around the block. Set aside fifteen minutes to an hour each day to relax, exercise, play, meditate, pray, practice deep breathing or just watch the grass grow. Eat nutritious foods instead of fast food on the run and get ample sleep. Then look inside yourself and examine your motivations for overextending yourself. If you end up helping someone, make sure youre in the habit of showing them how to fish instead of feeding them fish. Sometimes the best way to accomplish you career goals is to have the goal of caring for yourself first.

Think of these practices as building investments in you. Make sure your daily deposits equal the withdrawals that overextending debits from your personal account. Ask yourself if you made a to-be list alongside your to-do list, what you would put on it such as soaking in a hot bath, enjoying a hobby, getting a massage or nature bathing with a hike. One item on my to-be list is sitting outdoors listening to the sounds of nature. Jot down a few of your items and check a few off in the next twenty-four hours. Continue to excel at your job and savor your managers praise, but take steps to prevent overextending yourself to the point of burnout. Youll be happier and healthier, thrive and enjoy more productivity and job performance. And instead of overextending yourself, youll overextend your career trajectory.

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Wasted: How To Prevent Emotional Bankruptcy When Youre Overdrawn In Your Career - Forbes

About 450 of its stores are being cast off to sea..(Photo by Joe Raedle/Getty Images)

Pier 1 Imports is trimming its salesabout 450 of them.

In announcing another quarter of losses and declining sales, the company dropped a bombshell in saying it would close 450 of its stores, representing nearly half of its overall fleet.

The news comes amid swirling rumors, unconfirmed, that the retailer will file for bankruptcy soon. Such a move would not be unexpected given the task of getting out of store leases without the benefit of bankruptcy proceedings.

They would also be consistent with the prior history of the companys CEO, Robert Riesbeck, who was named to the post only this past November and has a history in turnaround efforts and bankruptcies. Earlier in his career, he was CEO of consumer electronics chain HH Gregg when it filed for bankruptcy in 2017. It was eventually liquidated.

Along with the store closings, a timetable for which was not announced, the company said it would cut its headquarters staff as well as some distribution centers. Bloomberg has reported the staff cuts amount to 40% of its corporate staff, or about 300 people. Pier 1 has not commented on these reports.

While the company had previously said it would close 70 doors later upped to as many as 150 this new round clearly represents a major step-up in its efforts to stay afloat. It has had declining comp store sales for nine quarters, including 11.4% this quarter, and losses for the most recent period exceeded those of a year ago.

Trading in the companys stock was halted mid-afternoon on Monday after falling nearly 17% and that continued to decline in after-hours trading.

Pier 1 has struggled for years, churning through a series of executives and marketing strategies, all the while dealing with a store count increasingly out of proportion to its overall business and the rise of e-commerce. Under prior management, online sales were discontinued for a period of time and while they were resumed the company has had to play catch-up online ever since.

With a radically reduced physical presence, Pier 1 could be in a position to be better suited to the retail landscape, but its lackluster stores, often poorly located and underinvested in over the past few years, will still have to carry the load as it tries to get fully up to speed online.

Riesbeck, in announcing the bad news, said he remained hopeful these steps would buy the company some time to fix its problems: Looking ahead, we believe that we will deliver improved financial results over time as we realize the benefits of our business transformation and cost-reduction initiatives.

Its what CEOs are paid to say when all signs would seem to indicate the ship is going down.

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Pier 1 Is Closing Half Of Its Stores; Is Bankruptcy Next? - Forbes

A quiet crisis is unfolding for U.S. hospitals, with bankruptcies and closures threatening to leave some of the country's most vulnerable citizens without care.

As a gauge of distress in the health-care sector has soared, at least 30 hospitals entered bankruptcy in 2019, according to data compiled by Bloomberg. They range from Hahnemann University Hospital in downtown Philadelphia to De Queen Medical Center in rural Sevier County, Arkansas and Americore Health, a company built on preserving rural hospitals.

There's more distress to come. Already this week, the bankrupt owner of St. Vincent Medical Center in Los Angeles said it plans to shut the facility after a failed sale attempt.

The pressures on the sector are as tangled as the health-care system itself.

Americans are fleeing rural areas in favor of urban centers, reducing the demand for hospital services in already struggling communities. In both cities and towns, many hospitals that care for impoverished citizens often rely heavily on government payments that reimburse less than private insurers and may fail to cover rising costs.

The American Hospital Association, an industry group, calculated that payments from Medicare and Medicaid, the federal programs for the elderly and poor, lagged costs by $76.6 billion in 2018. Hospitals are also losing key income as more profitable procedures move to lower-cost outpatient centers.

If that weren't enough, with both Republicans and Democrats making a political football out of health care ahead of the 2020 presidential election, significant policy change could be near.

"How are you supposed to craft a business plan if you don't know if you're going to have an America with Medicare for all, or a complete repeal of the Affordable Care Act, or a million options in the middle?" said Sam Maizel, a partner with the Dentons US law firm who focuses on health-care restructuring. "If you knew Elizabeth Warren was going to get elected, you'd be writing a very different business plan."

Even before the election, the current system is being challenged, according to Georgetown University health-care policy professor Edwin Park. The Trump administration is trying to tighten eligibility rules for Medicaid, while a rule proposed late last year could also cut billions of dollars in supplemental payments to hospitals, he said. In a closely watched case, a district judge in Fort Worth, Texas is weighing whether Obamacare can survive after an appeals court ruled that its broad mandate requiring people to have health insurance was unconstitutional.

The usual playbook for managing distress doesn't readily apply. Shutting down a hospital isn't the same as boarding up a storefront. Hospitals are not only major employers, their closures often leave the most vulnerable patients bereft. Bankruptcy judges tend to push back on approving hospital closings in ways they wouldn't for a retailer, said Andrew Sherman, head of restructuring at law firm Sills Cummis & Gross.

In May, a 25-bed hospital in Sevier County, Arkansas shut down after sliding into such financial disrepair that a receiver was appointed, local newspaper The De Queen Bee reported. For many of the county's 17,000 residents, the hospital's emergency room provided the only such services within an hour's drive, court papers show. In suburban Chicago, Westlake Hospital was losing more than $1 million a month before it commenced a liquidation bankruptcy in August, sapping that community of about 550 jobs and 230 hospital beds.

"In a typical restructuring you're dealing with widgets," Sherman said. "In a health-care restructuring you're dealing with people's lives."

In many rural areas, the population just isn't large enough to justify keeping the lights on, according to Bloomberg Intelligence analyst Mike Holland. Morgan Stanley analysts led by Vikram Malhotra in 2018 found that 8% of U.S. hospitals were at risk of closing and another 10% were considered weak. AHA statistics released Tuesday show the number of U.S. hospitals fell by 64 to 6,146 in 2018, the most recent year available.

There's little reason to believe the situation has improved. The Polsinelli TrBK Health Care Services Distress Index, which tracks bankruptcy filings in the health-care sector, had nearly quadrupled as of the third quarter. The index uses 2010 as its benchmark year.

"Most of the cases we see, you're struggling to survive on a cash basis to try to get to a sale process," Sherman said. "People need to understand that these hospitals will continue to falter. Communities are going to have to inject more money if they want to maintain health care."

Some of the more recent closings are the result of large health systems weeding out weaker facilities. That's the case with hospitals run by Community Health Systems Inc. and its spin-off, Quorum Health Corp.

Quorum's revenue has been falling since it separated from Community Health in 2016. After bleak third-quarter results, the company said it would ask lenders to modify its debt agreements and reiterated a warning that it may not be able to stay afloat. Its shares and bonds plunged in the aftermath.

Late last year, KKR & Co. offered to take the company private at $1 a share in a deal that may help it refinance and stave off deeper distress.

Community Health, meanwhile, has piled up about $5 billion in losses in recent years as it labors under more than $13.5 billion in debt. A concentration of rural hospitals dependent on Medicare and Medicaid hurts Community Health, BI's Holland said. Expanded insurance coverage under the 2010 Affordable Care Act, or Obamacare, also means more people are getting care earlier and not ending up in the company's hospitals, he said, or are being directed to lower-cost outpatient facilities.

"It's a problem now for hospitals to have sufficient inpatient revenues," said Eileen Appelbaum, co-director of the Center for Economic and Policy Research.

A representative for Community Health said in a statement that factors including its recent refinancing, asset sales and a program to increase margins have positioned the company to continue to improve its operating performance.

A representative from Quorum didn't respond to a request seeking comment, while KKR declined to comment.

While rural hospitals are most at risk of failing, the controversial shutdown of Philadelphia's Hahnemann University Hospital could invite more disruption in urban centers, Appelbaum said.

Private-equity investor Joel Freedman bought Hahnemann in early 2018, but failed to revitalize the money-losing hospital and shut it after a trip through bankruptcy. Excluded from the filing, however, was its prime real estate in the heart of the city, which was separated into another entity.

Freedman didn't respond to requests for comment.

Despite the successful 2006 acquisition of HCA Healthcare Inc. by a consortium that included Bain Capital LP and KKR, private equity has found it isn't easy to make money running hospitals, Appelbaum said. The Hahnemann case may provide a new template, she said, calling the transaction "proof of concept" that if a hospital isn't profitable, you can shutter it and sell the real estate.

"Hahnemann is a safety-net hospital in a gentrifying area," Appelbaum said. "Probably every major city in America has safety-net hospitals in gentrifying areas, where the real estate is so much more valuable than the hospital to the private-equity company."

-- Bloomberg's Steven Church, Olivia Rockeman and Rick Green contributed to this report.

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Hospital bankruptcies leave sick and injured nowhere to go - Houma Courier