Wichita Eagle | Pawnbroker A-OK cites embezzlement in multimillion-dollar bankruptcy Wichita Eagle Wichita's largest pawnbroker, A-OK, has filed for Chapter 11 bankruptcy because of embezzlement, said owner Bruce Harris. In the bankruptcy filing last week, A-OK says that it has about $9.5 million in assets and $11 million in liabilities $4 ... |
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Pawnbroker A-OK cites embezzlement in multimillion-dollar bankruptcy - Wichita Eagle
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Greece escapes brush with bankruptcy but austerity still bites - FRANCE 24
New York Times | Takata Said to Ready Bankruptcy Filing Ahead of Sale to Rival New York Times TOKYO Takata, the troubled Japanese airbag maker, is moving to file for bankruptcy protection as soon as next week in preparation for the company to sell itself to a rival, a person briefed on the matter said on Friday. Any such move has long been ... Takata bankruptcy filings could come next week Takata said to plan bankruptcy filings as soon as this week Airbag Maker Takata Will Reportedly File for Bankruptcy |
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Takata Said to Ready Bankruptcy Filing Ahead of Sale to Rival - New York Times
Illinois residents may feel some solidarity with the likes of Puerto Rico and Detroit.
A financial crunch is spiraling into a serious problem for Illinois lawmakers, prompting some observers to wonder if the state might make history by becoming the first to go bankrupt. At the moment, it's impossible for a state to file for bankruptcy protection, which is only afforded to counties and municipalities like Detroit.
Chapter 9 bankruptcy protection could be extended to states if Congress took up the issue, although Stanford Law School professor Michael McConnell noted in an article last year that he believed the precedents are iffy for extending the option to states. Nevertheless, Illinois is in a serious financial pickle, which is why radical options such as bankruptcy are being floated as potential solutions.
Ratings agency Moody's Investor Service earlier this month downgraded Illinois' general obligation bonds to its lowest investment grade rating, citing the state's growing pile of unpaid bills and its mounting pension deficit. Illinois, by the way, has the lowest credit rating of any state. Lower ratings mean higher borrowing costs, since lenders view such borrowers as riskier bets.
"Legislative gridlock has sidetracked efforts not only to address pension needs but also to achieve fiscal balance, allowing a backlog of bills to approach $15 billion, or about 40 percent of the state's operating budget," the agency noted.
As noted by the Fiscal Times, Illinois is the only state that's been operating without a balanced and complete budget for almost two years.
"We're like a banana republic. We can't manage our money," Gov. Bruce Rauner said after the Illinois Legislature failed to produce a full 2017 budget earlier this month.
The situation has prompted comparisons with Puerto Rico, which earlier this year announced a historic restructuring of some of its $70 billion in debt through courts after negotiations with bondholders failed.
Like Puerto Rico, Illinois has a massive pension crisis. Its unfunded pension liability for the state's five major plans grew 25 percent alone in one year, reaching $251 billion, according to Moody's. On a per-household basis, the state's pension debt burden stands at $27,000, according to the conservative-leaning Illinois Policy Institute.
So how did the state's pensions balloon into such a crisis? First, the pension problem has been a long time in the making. The state has more than 660 government pension funds, which are sometimes called defined benefit plans because they promise workers will receive a specific pension when they retire.
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But critics say some of those pensions carried overly optimistic assumptions, especially given periods of market turmoil like the global financial crisis, which ate into investment returns. The state's general assembly wasn't required to fully fund pensions, which meant tax money was spent on other priorities such as schools or infrastructure.
The result? Growing unfunded liabilities, or money promised to workers in their pensions when they retire that the state doesn't have. Other contributing factors include inadequate employer contributions and benefit increases, according to the Civic Federation.
Adding to the state's financial pain is a shrinking tax base. For the last three consecutive years, Illinois has lost residents. Its population is now at its lowest in a decade. Tepid wage growth on top of fewer residents puts a strain on the state's ability to grow its tax revenue.
It's not unprecedented for a state to default on its debt. Arkansas defaulted in 1933 as it struggled to repay debt during the the Great Depression. Spending on an ambitious road-building project and a series of natural disasters heightened the Southern state's problems.
Bankruptcy is often seen as a last-ditch effort, but it also can help struggling cities or companies reinvent themselves on a stronger financial footing. Detroit serves an example of how a reorganization can help, at least in the near-term. The city is now paying its bills and is keeping up with maintenance, although it still has a looming pension payment that could spell trouble in just a few years, according to the Detroit Free-Press.
As Michigan Treasurer Nick Khouri told the publication, "We certainly know many people were hurt during the bankruptcy, but what would have been the alternative and how would they have been hurt under the alternative?"
As for Illinois, Rauner on Thursday called state legislators to a 10-day special session starting next week to hammer out a budget deal and end an unprecedented impasse that could soon enter a third year.
The Republican announced the news in a Facebook video and statement, accusing majority Democrats of "ignoring" his recommendations.
"We have tough, urgent choices to make, and the Legislature must be present to make them," he said.
Lawmakers adjourned last month without a deal before a critical May 31 deadline, triggering the need for a three-fifths majority vote instead of a majority on a budget agreement. The new fiscal year begins July 1. Rauner has called for a special session running from June 21 to July 30.
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Could Illinois be the first state to file for bankruptcy? - CBS News
A foreclosure auction on a 616-acre Middleburg parcel to be held in front of the Leesburg courthouse was canceled Friday morning. The property owned by Travellers Rest, LLC, filed for Chapter 11 bankruptcy Thursday in the U.S. Bankruptcy Court in the Eastern District of Virginia.
Travellers Rest, LLC managing members are T. Nelson Gunnell and Alfred Rogers Smithwick, both of Middleburg. Gunnell also is the founder and co-owner of the Banbury Cross polo facility that is not part of the 616 acres.
In recent months, Gunnell has been seeking investors for a proposed expansion of the polo facility along Route 50 that would include a resort and clubhouse and a number of homes. Those plans included using some of the acreage in the 616-acre parcel, which is now on hold, and the polo expansion now is in serious jeopardy.
According to the bankruptcy filing, the liabilities were listed between $1 and $10 million. The minimum bidding price on the 616 acres in the foreclosure auction would have been $5 million. The bankruptcy documents also identified nine creditors with a list of more than $401,000 in unsecured claims, including unpaid legal fees, unpaid real estate taxes and a deposit on a piece of land.
The note-holder on the property is Marshall Capital, LC in Marshall, Virginia. In previous court filings, Travellers Rest LLCs original promissory note on the property was $4 million, not including interest.
Neither Gunnell, nor his attorney, Alexandria-based Jeffrey Martin, returned phone calls after the auction was called off. D. Brook Middleton, who is listed as the manager for Marshall Capital LC, also did not return a call to his office, though his receptionist said he would have no comment. Leesburg attorney David Culbert, listed as the trustee for the property before the auction was cancelled, also declined comment.
Chapter 11 filings are generally made to give a business or corporation time to reorganize their finances or raise more capital in order to pay off their creditors. All judgments against that business are suspended, as are collection attempts, foreclosures and repossessions of the property.
Travellers Rest LLC now has 120 days to file a reorganization plan. Another 180 days is then granted after the chapter 11 bankruptcy petition is filed for creditors to accept the companys reorganization plan. Several attorneys familiar with the procedure said it could take months, even several years to sort out.
Leonard Shapiro can be reached at badgerlen@aol.com
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MANCHESTER, N.H.
A federal judge has ordered the auction of many of the vehicles involved in the Dusty Old Cars bankruptcy case.
The consignment company and its owner have been at the center of a controversial bankruptcy proceeding for months. About 200 of the cars involved in the case will be liquidated, but it's unclear how much money the original owners of the cars will get.
The troubled consignment company and its owner, Stephan Condodemetraky, have been accused by customers of paying them little or no money once the cars have been sold.
"My view is the case is very much in wind-down mode," said Bill Gannon, attorney for Dusty Old Cars. "The trustee will liquidate the inventory. He's released a lot of the consignment cars."
The original owners of the consigned cars have the option of getting them back, but there could be a fee involved. Others could move forward with the court-sanctioned auction and get what money they can.
Customer Carl Zecha his experience with Dusty Old Cars has been "a nightmare." He said he had five vehicles on consignment through the company. Two were sold, but he said he only received a fraction of his money. He found out Friday that he can get his other three cars back free of charge.
"I'm happy to get them back, but it's still a loss no matter how you look at it," Zecha said. "I don't know what to say."
Condodemetraky was not at Friday's hearing, but his lawyer said he never intended to harm anyone.
"I think he's happy it's being resolved," Gannon said. "I think both he and I thought it could have been a better resolution outside of this court, and we tried hard to make a better resolution inside this court and could not get it done."
Officials said it's likely that all of the cars will be liquidated in about a month.
WEBVTT THE ORIGINAL OWNERS OF THOSECARS WILL GET IS STILL VERY MUCHUP IN THE AIR.A FEDERAL JUDGE HAS ORDERED THATABOUT 200 VEHICLES BE SOLD ASPART OF THE BANKRUPTCY CASEINVOLVING DUSTY OLD CARS ANDIT'S OWNER STEPHANCONDODEMETRAKY.THIS IS THE LATEST CHAPTER INTHE ONGOING STRUGGLES OF THETROUBLED CONSIGNMENT COMPANYTHAT'S BEEN ACCUSED BY CUSTOMERSOF A VARIETY OF ISSUES THATINCLUDE PAYING THEM LITTLE OR NOMONEY ONCE THE CARS HAVE BEENSOLD.>> MY VIEW IS THE CASE IS VERYMUCH IN WIND DOWN MODE.THE TRUSTEE WILL LIQUIDATE THEINVENTORY.HE'S RELEASED A LOT OF THECONSIGNMENT CARS.ANDY: THE ORIGINAL OWNERS OF THECONSIGNED CARS HAVE THE OPTIONOF GETTING THEM BACK, BUT THEREMAY BE A FEE INVOLVEOWNERS MAY WISH TO MOVE FORWARDWITH THE COURT SANCTIONEDAUCTION AND GET WHAT MONEY THEYCAN.>> AND THE WHOLE EXPERIENCE THAT -- >> A NIGHTMARE.ANDY: CARL ZECHA SAYS HE HAD 5VEHICLES ON CONSIGNMENT THROUGHDUSTY OLD CARS.HE SAYS TWO WERE SOLD, BUT HEONLY RECEIVED A FRACTION OF HISMONEY.HE FOUND OUT TODAY THAT HE CANGET HIS OTHER THREE CARS BACKFREE OF CHARGE.>> HAPPY TO GET THEM BACK, BUTSTILL A LOSS NO MATTER HOW YOULOOK AT IT.I DON'T KNOW.I DON'T KNOW WHAT TO SAY.ANDY: CONDODEMETRAKY WAS NOT ATTODAY'S HEARING, BUT HIS LAWYERSAYS HE NEVER INTENDED TO HARMANYONE.>> I THINK HE'S HAPPY IT'S BEINGRESOLVED.I THINK BOTH HE AND I THOUGHT ITCOULD HAVE BEEN A BETTERRESOLUTION OUTSIDE OF THIS COURTAND WE TRIED HARD TO MAKE ABETTER RESOLUTION INSIDE THISCOURT AND COULD NOT GET IT DONE.ANDY: OFFICIALS SAY IT'S LIKELYTHAT ALL OF THE CARS WILL BELIQUIDATED IN ABOUT A MONTH.
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Vehicles involved in Dusty Old Cars bankruptcy to be auctioned - WMUR Manchester
Wall Street Journal (subscription) | France's CGG Group Files for Bankruptcy Protection Wall Street Journal (subscription) Oil-services company CGG Group filed for bankruptcy protection Wednesday in the U.S. and France after reaching a restructuring deal with lenders and bondholders that will eliminate about $2 billion in debt from the company's books. Under the deal ... French oil services firm CGG files for bankruptcy | Reuters |
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France's CGG Group Files for Bankruptcy Protection - Wall Street Journal (subscription)
Soupman, made famous by a beloved Seinfeld episode, filed for bankruptcy this week.
The Chapter 11 filing comes less than a month after Soupman's chief financial officer was arrested and charged with tax evasion.
The bankruptcy was caused by a "combination of legal liabilities and recent company developments," Soupman CEO Jamie Karson said in a statement.
Soupman's soups are made from the recipes of Al Yeganeh, a chef who inspired the angry Seinfeld character known to bark: "No soup for you!" to customers who didn't know what to order when it was their turn at the counter.
But customers don't need to worry about going soup-less. Soupman said its soups will remain on grocery store shelves because the company secured $2 million in financing to keep it afloat during the bankruptcy process.
"We anticipate that there will be no disruption in the quality of our product or service," Karson said.
Related: Seinfeld's "Comedians in Cars Getting Coffee" is heading to Netflix
Staten Island-based Soupman owes up to 100 creditors between $10 million and $50 million, according to the bankruptcy filing in Delaware. The company listed $1 million to $10 million of assets.
Last month, Robert Bertrand, Soupman's chief financial officer, was arrested for allegedly failing to pay nearly $600,000 worth of Medicare, Social Security and federal income taxes.
Bertrand, who denied wrongdoing and pled not guilty, also paid workers unreported cash and stock awards worth $2.8 million between 2010 and 2014, according to the indictment.
While the Soup Nazi was made famous by the 1995 Seinfeld episode, Yeganeh opened his first Manhattan store nearly a decade earlier in 1984. Today, the company sells soup to grocery chains and also at its New York-area restaurants under the brand name "Original Soupman."
CNNMoney (New York) First published June 15, 2017: 11:56 AM ET
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Wells Fargo faces new accusations that it tried to capitalize financially on its customers without their permission this time by allegedly modifying mortgage terms for people who had filed for bankruptcy protection.
With the smoke still lingering from the firestorm that erupted from the bank's opening of fake consumer accounts, Wells was hit with multiple lawsuits alleging that the bank surreptitiously extended loan lengths, potentially costing some homeowners tens of thousands of dollars.
The bank pulled off a "virtual hijacking" with the alleged scam by implementing "illegal stealth modifications" in at least 100 cases across the country, plaintiffs attorneys said in court papers filed June 7 in the U.S. Bankruptcy Court for the Western District of North Carolina, where they are hoping to assemble a class-action group.
Wells Fargospokesman Tom Goyda said the bank "strongly denies the claims" because the company clearly identified "modification offers" in letters to customers, their attorneys and the respective bankruptcy courts.
"In no event would we finalize a modification without receiving signed documents from the customer and, where required, approval from the bankruptcy court," Goyda said in an email.
The latest accusations ensure a fresh round of scrutiny over Wells Fargo's practices, not long after the bank reached a $185 million federal settlement over an acknowledgment that aggressive sales incentives and pressure prompted many branchemployees to open fake accounts to meet their goals. That episode led to the resignation of CEO John Stumpf and the clawback of tens of millions in executive pay.
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To be sure, modifications of loan terms, including extending payment over longer periods and lowering monthly amounts, are often helpful to customers who are seeking short-term breathingroom on their finances. But longer loan periods often involve larger payments over time.
The complaint seeking class-action status was submitted on behalf of North Carolina residents Christopher Dee Cotton and Allison Hedrick Cotton, who filed for Chapter 13 bankruptcy protection in February 2014 with a Wells-serviced mortgage balance of $171,215 at a 20-year interest rate of 4.875%. They remained current on their payments before and during the bankruptcy, according to their lawyers.
But the bank nonetheless submitted routine documentation through the legal system that resulted in an extension of their original 20-year loan to 40 years, with a reduced interest rate of 3.875% ultimately costing them an extra $84,939 in interest over the life of the mortgage, according to the suit.
The accusations come fewer than two years after Wells reached a settlement with the U.S. Justice Departmentin which it agreed to pay $81.6 million over an alleged failure to notify customers of payment changes on a timely basis for more than 68,000 homeowners in bankruptcy from December 2011 through March 2015.
The company agreed as part of that process to overhaul its operations and accept oversight from an independent reviewer.
It was not immediately clear whether the latest accusations would carry implications forthe Nov. 5, 2015 Justice settlement.
Contributing: Kevin McCoy
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
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Lawsuit: Wells Fargo revised mortgages in bankruptcy without permission - USA TODAY
Oil-services company CGG Group filed for bankruptcy protection Wednesday in the U.S. and France after reaching a restructuring deal with lenders and bondholders that will eliminate about $2 billion in debt from the company's books.
Under the deal, bondholders will swap nearly $2 billion in debt for most of the equity in a reorganized CGG, the company said. The restructuring plan calls for up to $500 million of new money to be raised from a $125 million rights offering and the issuance of $375 million in new debt.
CGG's senior lenders, owed about $800 million, will extend the maturity on their loans in return for $150 million payment from the proceeds of the new money investment. Existing shareholders, who will be able to participate in the rights offering, will see their investments reduced to a 4.5% stake in the restructured CGG following completion of the debt swap, according to filings in U.S. Bankruptcy Court.
Beatrice Place-Faget, general counsel of parent company CGG SA, said in court papers the prolonged downturn in oil and natural gas prices left the company unable to pay its debts.
CGG's 2016 annual revenue was roughly one-third of what it was before the current downturn began, she said. In 2012, before oil prices dropped, the company had total operating revenues of more than $3.41 billion. By 2016, that number was $1.195 billion.
In addition, the company has been losing money for years, including losses of $1.14 billion in 2015 and another $404.7 million last year.
CGG was founded in 1931 as " Compagnie Gnrale de Gophysique" and focuses on seismic surveys and other techniques to help energy companies locate oil and natural-gas reserves. The company also makes geophysical equipment under the Sercel brand name.
CGG launched its court-supervised restructuring bid in Paris on Wednesday by opening a "sauvegarde" proceeding, the French equivalent of a chapter 11 bankruptcy filing. Fourteen CGG subsidiaries filed for chapter 11 in U.S. Bankruptcy Court in New York and the parent intends to seek U.S. court recognition of the Paris case under chapter 15, the section of U.S. bankruptcy law dealing with international insolvencies.
CGG's legal advisers are Linklaters LLP and Weil Gotshal & Manges LLP for the sauvegarde and chapter 15 case, and Paul, Weiss, Rifkind, Wharton & Garrison LLP for the chapter 11 cases. The company's financial advisers are Lazard and Morgan Stanley, and its restructuring adviser is Alix Partners LLP. Judge Martin Glenn has been assigned the case.
Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com
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The bankruptcy case of Strack & Van Til parent company Central Grocers has been moved from a Delaware court to the U.S. Bankruptcy Court for the Northern District of Illinois, where creditors tried to force the embattled company into involuntary bankruptcy.
Judge Pamela S. Hollis issued an order moving the case back to Illinois, where Joliet-based Central Grocers is headquartered. The century-old wholesaler filed for Chapter 11 Bankruptcy after it amassed $225 million in debt, and unpaid creditors filed an involuntary bankruptcy case, seeking to liquidate its assets and get whatever they could.
Judge Hollis consolidated both bankruptcy cases and transferred the proceedings to Illinois because its court has jurisdiction over Central Grocers and many of the other parties involved. Central Grocers once supplied produce, meat, Centrella brand generic products and other supermarket staples to more than 400 independent grocers throughout Chicagoland.
All the orders of the U.S. District Bankruptcy Court in Delaware remain in full force, according to Hollis's order. That court authorized an auction in which Jewel-Osco put in a starting bid of $100 million for 19 remaining Strack & Van Til and Town & Country stores.
Jewel or the highest bidder will take over the stores while Central Grocers will wind down after a century in business.
The troubled wholesaler, which acquired Highland-based Strack & Van Til in the late 1990s, is closing 14 stores, mostly Ultra Foods discount supermarkets, and laying off nearly 2,000 workers. The fate of Ultra Foods stores in Highland, Merrillville and Kankakee remains undecided.
The three Ultra stores were not included in the stalking-horse transaction; however, they are open and operating through the current timeline that has been established through the court-supervised process," a Central Grocers spokesman said in a prepared statement. "The company is continuing to explore all options in pursuit of a sale of those stores.
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Strack & Van Til bankruptcy case moved to Illinois - nwitimes.com
File photo taken in 2010 shows people standing in line for the reopening of the Original SoupMan gourmet takeout shop that inspired the Soup Nazi character on "Seinfeld."(Photo: BEBETO MATTHEWS, AP)
Soupman, the New York City food company made famousby the popularSeinfeld TV sitcom, has sought bankruptcy court protection, weeks after its chief financial officer was indicted on federal tax evasion charges.
Based on Staten Island, the company licenses the name and recipes of Al Yeganeh, the model for the gruff "Soup Nazi" character in the popular 1989-1998 series that starred comedian Jerry Seinfeld.The characterfocused fanatically on his culinary creationsand refused to serve some would-be customers, barking what became a much-repeatedcatchphrase:"No soup for you!"
A Chapter 11 bankruptcy petition filed Tuesday in Delawarestated that Soupmanhad estimated assets between just over $1 million and $10 million, and estimated debts ranging from just over $10 million to $50 million.
The company said in a news release that it has secured a new $2 million debtor-in-possession credit facility from an independent private investment firm to fund working capital needs "and allow businessoperations to continue as usual."
However, the business was jolted in late May when federal prosecutors in Brooklyn announced an indictment that accusedSoupman CFO Robert Bertrand of failure to payMedicare, Social Security, and federal income taxes.
Hisjob included collecting, accounting for and paying the taxes for Soupman's employees. However, the indictment alleged that between 2010 and 2014Bertrand instead paid Soupmanemployees with unreported cash, and compensated certain workers with unreported stock awards.
As a result, the federal government lost $593,971 in total tax paymentsthat should have been paid by the company, prosecutors charged.
Bertrand, who has pleaded not guilty, was released on $50,000 bond, pending a scheduled July 18 legal hearing, court records show.
"The combinationof legacy liabilities and recent company developments have made it necessary to seek bankruptcy protection," Soupman CEO Jamie Karson said in a statement announcing the court filing. "This will ensure that our delicious soups remain on grocery shelves throughout the country, which is in the best interests of all our stakeholders and customers."
Julia Louis-Dreyfus in a scene from Seinfeld's "Soup Nazi" episode.(Photo: Castle Rock Entertainment)
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc
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Soupman of 'Seinfeld' Soup Nazi fame files for bankruptcy protection - USA TODAY
DAILY NEWS CONTRIBUTOR
Wednesday, June 14, 2017, 12:00 PM
Bankruptcy proceedings are supposed to be standard and nearly identical for everyone involved, with a magistrate who presides over the proceedings, and a trustee who receives a commission by going after money on behalf of creditors.
The problem is that trustees usually only go after the low-hanging fruit, the easiest money to collect, and so people often just cruise through their bankruptcy process without complications.
However, when the person going through bankruptcy is a celebrity, such as "Dance Moms" star Abby Lee Miller, or a person of public interest like Bernie Madoff, the trustees suddenly become more diligent. They look under every rock for assets to satisfy creditors and possibly to get their names in the newspaper or on TV.
Regular people who file for bankruptcy are usually not subjected to this level of scrutiny, and I think this is a big mistake. We often hear there are two levels of justice: a lenient one for the rich and famous, and a much harsher one for everyone else.
But when it comes to bankruptcy, I've often found the reverse to be true: non-celebrities skate by without a close look, when maybe someone should look a little closer and try a little harder.
For example, I became involved in a recent divorce case at the New York County Supreme Court. The husband had millions of dollars in assets and companies he used to pay his bills, only to file personal bankruptcy a year later. He even divested himself of publicly traded stocks and then had those stocks reassigned back to him after his debts were discharged by the court.
The court saw the fraud, the wife and her attorney saw the fraud, and others involved in the case saw the fraud. But no one referred the matter to the District Attorney's Office for prosecution, or to get the fraudulent bankruptcy set aside by the court so the creditors could get paid.
The only reason the husband could get away with this level of fraud is because he's not a celebrity or person of public interest. We are now a country of selective justice where some people are deemed "deserving" of justice, usually out of a sense of schadenfreude, while others don't always get it.
It's a sad reality, but we need to talk about the elephant in the room so justice will be applied equally to all, as the framers of the Constitution expected, and not only when the media are watching.
Yoni Levoritz founded his own firm, the Law Office of Yonatan S. Levoritz, which later evolved and expanded into The Levoritz Law Group, soon after being admitted to the New York Bar in 2005. In 2008, Levoritz was named Professional of the Year in Matrimonial Law by Strathmore's Who's Who. At the time, he was the youngest attorney to be awarded this honor.
For more DAILY VIEWS, The News' contributor network, click here.
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Bankruptcy cases show we've become a nation of selective justice - New York Daily News
Nasdaq | RBI, Banks And NPAs - First, Reform India's Bankruptcy Code, Then Force Defaulters Into It Forbes It has to be said that Arun Jaitley and Narendra Modi are doing many of the right things in their management of the Indian economy. No, this is not to make a party political point and it's most certainly not to say that they're doing everything right ... India says banks must start bankruptcy proceedings against 12 major defaulters India's bankruptcy code process for creditors, defaulters RBI identifies 12 accounts with 25% of bank bad loans for bankruptcy proceedings |
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RBI, Banks And NPAs - First, Reform India's Bankruptcy Code, Then Force Defaulters Into It - Forbes
More than 300 retailers have filed for bankruptcy so far this year, according to data from BankruptcyData.com. That's up 31% from the same time last year. Most of those filings were for small companies -- the proverbial Mom & Pop store with a single location. But there are also plenty of household names on the list.
Most of these stores are suffering from the same thing: A shift away from traditional storefronts to online shopping.
Not all of these chains will eventually go out of business. Most of them fled for Chapter 11, which allows a company to keep operating while it restructures its debt. But the sector is already on course for a record number of store closings this year.
Here's a list of some of the more prominent retail bankruptcies to date.
Gymboree: The children's clothing retailer filed for bankruptcy on June 11, saying it may close 375 of its 1,300 stores under the Gymboree, Crazy 8 and Janie and Jack brands.
rue21: The teen clothing retailer filed for bankruptcy on May 15, and said it has plans to close about one third of its 1,200 stores.
Payless ShoeSource: The discount shoe retailer filed on April 4. It said it would move to close nearly 400 U.S. stores out of the 4,400 locations it has worldwide.
Gordmans Stores: A century-old regional department store chain, Gordmans had 106 stores in 22 states in the Midwest and western U.S. It filed for bankruptcy on March 13 and is shuttering all of its stores.
Gander Mountain: The hunting and outdoors retailer, which operated under the Gander Mountain and Overton names, filed for bankruptcy.
The RV retailer Camping World bought some of the company's assets at auction in April and will keep some stores open. Its remaining inventory will be sold through liquidation sales.
RadioShack: The iconic electronics retailer first filed for bankruptcy in 2015, and tried to stay in business through a deal with Sprint in which the wireless provider operated stores within the RadioShack stores. But in March the company that now owns RadioShack filed for bankruptcy once again, putting it on the path to close its remaining stores.
hhgregg: The appliance, electronics and furniture retailer filed for bankruptcy in March and has closed all of its 132 stores.
Wet Seal: The troubled teen clothing retailer, which made a previous trip through bankruptcy in 2015, filed for bankruptcy again in February. This time it went out of business, closing 171 stores and putting 1,750 employees out of work.
The Limited: The once popular women's clothing chain filed for bankruptcy in January and closed all of its remaining stores.
CNNMoney (New York) First published June 13, 2017: 12:05 AM ET
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TAMPA Square 1 Burgers & Bar, a restaurant chain based in Tampa, has filed for Chapter 11 bankruptcy protection.
The restaurant chain, known for its wide ranging menu of burger creations, will close some of its locations in Florida, but stores in the thee locations in the Tampa Bay area will not be affected. However restaurants will close in the Orlando and Sarasota markets, according to the filing.
Square 1 Burgers could be feeling the pinch from too many competitors in the burger market. Drama Burger, a Lithuanian burger restaurant that opened on Kennedy Boulevard last year, shuttered recently. Other newcomer chains similar in concept, from Smashburger to Burgerfi, continue to expand in Tampa Bay as well as throughout the state.
The parent company of Joe's Crab Shack, which has one restaurant in the Clearwater area, also recently filed for bankruptcy.
Tampa's Square 1 Burgers files for bankruptcy protection 06/14/17 [Last modified: Wednesday, June 14, 2017 11:41am] Photo reprints | Article reprints
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Tampa's Square 1 Burgers files for bankruptcy protection - Tampabay.com
The list of brick-and-mortar retailers in financial distress continues to grow. On Monday, Fitch Ratings Inc. warned that a new batch has significant risk of default on their debt obligations over the next 12 months, CNBC reports, including: Sears Holdings Corp. (SHLD), J.Crew Group Inc., Claire's Stores Inc., Vince Holding Corp. (VNCE), Nine West Holdings Inc., 99 Cents Only Stores, True Religion Apparel Inc., Charlotte Russe Holding Inc., Charming Charlie LLC and NYDJ Apparel LLC. Meanwhile, Gymboree Corp. has filed for Chapter 11 bankruptcy protection, joining the likes of Payless ShoeSource Inc. and rue21 Inc.
"A number of these names have been at the forefront of past restructurings," observed Joshua Friedman, a legal analyst for fixed income research firm Debtwire, in an interview with CNBC. Gymboree, the most recent to declare bankruptcy, plans to close 375 of its 1,300 stores, per CNBC.
In addition to discount retailers and online merchants, Fitch's research note also cites "fast-fashion" apparel and "shifts in consumer spending toward services and experiences" as contributing to the woes of retailers such as those listed above, as quoted by CNBC. For elaboration, Investopedia spoke to Rose Klimovich, who teaches fashion marketing and entrepreneurship at Manhattan College in New York City.
Regarding fast fashion, Klimovich explains that fashion-conscious consumers increasingly gravitate towards retailers that get the latest styles to market the quickest, adding to the woes of the laggards. Meanwhile, a growing segment of the young adult market is spending less on hard goods, and more on experiences and services, such as travel, entertainment and social activities. Meanwhile, the accelerating closure of retail storefronts is creating a downward spiral for malls and their remaining tenants, as consumers have less and less reason to visit increasingly empty shopping centers. (For more, see also: These Mall REITS May Turn Into a Nightmare.)
Privately-held J.Crew Group Inc. is straining under the weight of over $2 billion in debt, a burden increasingly difficult to service given the clothing retailer's 11 consecutive quarters of declining same-store sales, according to the Wall Street Journal. Particularly worrisome is a $567 million slug of debt scheduled to come due in May 2019. The company is scrambling to get the maturity date pushed back to September 2021, while also trying to convince creditors to accept more debt in lieu of interest payments, the Journal says.
Fundamentally, the clothing retailer has a multitude of marketing problems, according to Bloomberg. These include, for example: high prices relative to product quality, a J.Crew Factory website that offers deep discounts on the same merchandise offered on its full-price website, and shipping that takes six to eight business days and costs $5 for orders of under $150.
Meanwhile, J.Crew's maneuver to shift intellectual property into a separate subsidiary, to get it out of the reach of creditors, has sparked lawsuits, and the company is crafting incentives for creditors to drop this litigation, the Journal says. Claire's Stores has made a similar move, and other struggling clothing retailers may be candidates for trying the same, per another Bloomberg report. Much, if not most, of the value of these companies' intellectual property involves their brand names, so this may be a ploy to keep creditors at bay, lest they be stuck with "nameless stores selling anonymous" merchandise, as Bloomberg puts it. On the other hand, as Rose Klimovich of Manhattan College notes, the value of these brand names is rapidly diminishing, and may plummet further in bankruptcy.
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Sears, J. Crew, Claire's Are Bankruptcy Risks (SHLD) | Investopedia - Investopedia
Forbes | Gymboree Files For Bankruptcy, Plans To Close At Least 375 Stores Forbes Children's clothing retailer Gymboree filed for Chapter 11 bankruptcy protection on Sunday evening as it attempts to escape from a crushing amount of debt. The retailer will seek to eliminate more than $900 million of debt from its balance sheet ... In the wake of Gymboree's bankruptcy filing, here are the retailers that could be next Gymboree files bankruptcy, closing up to 450 stores Gymboree files for bankruptcy protection to reduce debt |
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Gymboree Files For Bankruptcy, Plans To Close At Least 375 Stores - Forbes
Kansas City Business Journal | Big KC manufacturer files for bankruptcy Kansas City Business Journal Kansas City-based CST Industries Inc. filed a Chapter 11 bankruptcy petition to rightsize its balance sheet and potentially identify a new partner. Founded in 1893, CST Industries (originally known as Columbian Steel Tank) is the largest manufacturer ... |
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Big KC manufacturer files for bankruptcy - Kansas City Business Journal
The number of Canadians filing for either a consumer proposal or bankruptcy that owned a home fell to just 7% at the end of May 2017 from an all-time high of 35% in February 2011. This might sound like good news, but not when we look under the headline. Credit is the most important cycle and the debt expansion this time has continued much longer than most. Canadians were already highly-indebted by 2011, but rapidly rising home prices the past couple of years have allowed them to sustain the unsustainable a while longer through refinancing and second mortgages. This has left them (and the banks) even more financially fragile and vulnerable as we stare into the next cyclical downturn in the global economy. See Canadians are using second mortgages to avoid [Delay] bankruptcy:
Hoyes Michalos has a very simple explanation for that, Canadians are using their homes like ATMs, withdrawing equity. Homeowners with significant unsecured debt are currently able to refinance this debt through a second mortgage or home equity line of credit (HELOC) claims Hoyes Michalos. Theres 1.91 million Canadians with HELOCs, and even more with a second mortgage. Not exactly signs of booming incomes that would be the ideal reason to see delinquencies decline.
They warn that any softening of the market that results in a correction of home values will result in a sudden spike in homeowners filing for insolvency. They go on to warn if this combines with even a modest rise in interest rateswe could see this index rise above levels experienced after the 2009 recession.
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Canadians Have Been Refinancing To Delay Bankruptcy - Seeking Alpha