Category Archives: Bankruptcy

(Reuters) - Bonuses for executives of bankrupt companies have been commonplace for many years now, occurring either during a bankruptcy or shortly before a company files its Chapter 11 petition. Now, politicians on both sides of the aisle have decided its time to rein that practice in.

A report from the Government Accountability Office in late September found that in fiscal year 2020, $165 million in bonuses were paid to 223 executives across 42 companies shortly before they filed for bankruptcy and another $207 million in incentive bonuses were granted for 309 executives across 47 companies during their Chapter 11 cases.

Representative Cheri Bustos, a Democrat from Illinois, recently spoke with Reuters about the bonuses and her bill, introduced last week, that would prevent executives of bankrupt companies who make more than $250,000 per year from receiving bonuses either during, or in the six months before, a bankruptcy.

This interview has been edited for clarity and length.

REUTERS: Why is this an important issue?

BUSTOS: I think it's an incredibly important issue when you look at what most people in a congressional district like mine make maybe $50,000 a year for a family of four. And we get this (GAO) report back and it shows that we have C-suite level folks in these companies that are paid as much as $13 million dollars while they have filed bankruptcy.

The way I look at this is that if you're a worker, you're not getting big bonuses for screwing up. And here you've got these CEOs and CFOs and all the C-suite folks who are getting paid while they're laying off people at their companies. So we thought that it was important to commission this report. And now that we've gotten it back, we want to take this to the next level.

REUTERS: What were your key takeaways from the report?

BUSTOS: I think really that it was so widespread, this abusive practice. We're talking about hundreds of companies that laid off their workers, that filed for bankruptcy and then took in millions of dollars in incentive bonuses.

REUTERS: Do you have co-sponsors?

BUSTOS: We have a Republican co-sponsor. I'm a Democrat that's in a Trump district. So the people back home for me want to make sure that we are working across the aisle. So we have Tim Burchett out of Tennessee, who's our Republican lead on this.

What our next goal will be is that we get as many co-sponsors as possible bipartisan and my hope is that we can get this all the way through the House. Hopefully we'll be able to get some leads in the Senate as well and be able to send this over to President Biden to sign into law.

REUTERS: Some bankruptcy scholars say executives play a critical role in the bankruptcy process and need to be compensated at a level that ensures they won't leave. What is your response to that?

BUSTOS: Ill go back to what I started out saying these are folks who at minimum would be making $250,000 a year. These are folks who have in many cases driven their company to bankruptcy. This bill doesn't do anything to their base salary. This is just saying that you don't deserve a bonus if your company has filed for bankruptcy.

REUTERS: The report mentioned that almost no bankruptcy judge rejected these bonus plans. Is that a concern?

BUSTOS: That's actually why we've added this provision that would let trustees claw back bonuses paid in the six months before a bankruptcy was filed. I think whether you're a bankruptcy judge or you're somebody who's trying to make decisions about bonuses, this is the right thing to do.

Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at maria.chutchian@thomsonreuters.com.

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Bankruptcy bonuses for top executives are in trouble, if this congresswoman gets her way - Reuters

Your vendor or key customer files for bankruptcy. What do you do?

Heres what you dont do: Wait until that moment and send a note to your lawyer, asking them to file a proof of claim. It wont be worth much.

Unfortunately, for many companies, thats the only option they have. But it doesnt have to be that way.

So said Rob Nies and Sam Della Fera, the co-chairs of the Bankruptcy and Creditors Rights Group at Chiesa Shahinian & Giantomasi, who will be hosting a webinar on the subject on Oct. 26 (register here).

Nies and Della Fera advise that the time to make the call is when you suspect your vendor or customer is headed for bankruptcy (and there are plenty of warning signs for that).

The pair would then instruct their clients to restructure their agreements before bankruptcy hits and do it in a way that ensures you get paid first.

It may sound easy and obvious but not everyone does it.

Nies gave a recent example where their client, who operates warehouses, benefited during the bankruptcy of a retailer. Working with the client, Nies put language in the contract that would allow a court to find that it was an executory contract, and therefore, the warehouser falls into a different category than an unsecured creditor.

The result: The owners of the warehouse were fully reimbursed the millions they were owed, while others received only pennies on the dollar.

Nies and Della Fera will discuss all this and more during a webinar that will show steps companies can take, including:

The one thing it wont do? Tell you what to do after a bankruptcy is declared. By then, its often too late.

Our objective is always to maximize recovery to distinguish the clients claim from all other unsecured creditors, such that you get paid, Nies said.

Register for the webinar, which is free, here.

ROI-NJ will serve as the moderator.

Continued here:

Fear a key customer will file for bankruptcy? Webinar will tell you how to act before it happens - ROI-NJ.com

The COVID-19 pandemic along with the expiration of the eviction moratorium is expected to fuel a rise in bankruptcy filings at the beginning of 2022, according to an Indianapolis-based lawyer.

After the eviction moratorium ended over the summer the Consumer Financial Protection Bureau put new rules into place to curb foreclosure.

What the mortgage company cannot do under the new rules is they cannot foreclose unless the borrower has been behind for over 120 days, said Indianapolis bankruptcy attorney Mark Zuckerberg.

But unless those rules are extended beyond the new year, Zuckerberg said he is expecting a flood of bankruptcy cases not seen since the housing crisis a decade ago.

People generally file for Chapter 7 or 13 after suffering a significant event that hurts their finances.

It's either divorce, loss of job, medical bills for death of a family member, and they just can't handle the burden of debt that they're under, he said.

A person qualifying for Chapter 13 will be required to pay back what they owe over a three-to-five-year period.

The bankruptcy code sets forth how the money is going to be passed out. It's called the priority system, said Zuckerberg.

Chapter 7 releases the debtor from paying unsecured debts, such as credit card and medical bills, but you may be required to relinquish some luxury items.

If you owe $100,000 on a house and you haven't paid on it for two years, because of COVID. You can't file bankruptcy and keep your house, he said.

If you file for Chapter 7 bankruptcy, it will stay on your credit report for 10 years; Chapter 13 will remain on your credit report for seven years.

Originally posted here:

Bankruptcy lawyers expect filings to increase in 2022 - WFYI

DebtorName

DBA/FDBAOther namesused

BusinessType

BankruptcyCourt

Assets

Liabilities

FilingDate

Aguila, Inc.(New York,NY)

CommunityFood andHousing, andEmergencyandOther ReliefServices

ManhattanNY

$1,000,001to$10,000,000

$1,000,001to$10,000,000

10/15/21

Teligent,Inc.(1)(Iselin, NJ)

IGI Laboratories,Inc

Pharmaceuticaland MedicineManufacturing

WilmingtonDE

$50,000,001to$100,000,000

$100,000,001to$500,000,000

10/14/21

Igen, Inc.(Iselin, NJ)

Pharmaceuticaland MedicineManufacturing

WilmingtonDE

$50,000,001to$100,000,000

$100,000,001to$500,000,000

10/14/21

TeligentPharma,Inc.(2)(Iselin, NJ)

IGI Labs, Inc.,Immunogenetics,Inc.

Pharmaceuticaland MedicineManufacturing

WilmingtonDE

$50,000,001to$100,000,000

$100,000,001to$500,000,000

10/14/21

TELIP LLC(Iselin, NJ)

Pharmaceuticaland MedicineManufacturing

WilmingtonDE

$50,000,001to$100,000,000

$100,000,001to$500,000,000

10/14/21

Gulf CoastHealth Care,LLC(Pensacola, FL)

Nursing CareFacilities(SkilledNursingFacilities)

WilmingtonDE

$10,000,001to$50,000,000

$100,000,001to$500,000,000

10/14/21

GCHManagementServices, LLC(Pensacola,FL)

Nursing CareFacilities(SkilledNursingFacilities)

WilmingtonDE

$10,000,001to$50,000,000

$100,000,001to$500,000,000

10/14/21

HUDFacilities, LLC(Pensacola,FL)

Nursing CareFacilities(SkilledNursingFacilities)

WilmingtonDE

$10,000,001to$50,000,000

$100,000,001to$500,000,000

10/14/21

Gulf CoastFacilities, LLC(Pensacola,FL)

Nursing CareFacilities(SkilledNursingFacilities)

WilmingtonDE

$10,000,001to$50,000,000

$100,000,001to$500,000,000

10/14/21

FloridaFacilities, LLC(Pensacola,FL)

Nursing CareFacilities(SkilledNursingFacilities)

WilmingtonDE

$10,000,001to$50,000,000

$100,000,001to$500,000,000

10/14/21

PensacolaAdministrativeHoldings, LLC(Pensacola,FL)

Nursing CareFacilities(SkilledNursingFacilities)

WilmingtonDE

$10,000,001to$50,000,000

$100,000,001to$500,000,000

10/14/21

PensacolaAdministrativeServices, LLC(Pensacola,FL)

Nursing CareFacilities(SkilledNursingFacilities)

WilmingtonDE

$10,000,001to$50,000,000

$100,000,001to$500,000,000

10/14/21

Gulf CoastMaster TenantHoldings, LLC(Pensacola,FL)

Nursing CareFacilities(SkilledNursingFacilities)

WilmingtonDE

$10,000,001to$50,000,000

$100,000,001to$500,000,000

10/14/21

Gulf CoastMaster Tenant,LLC(Pensacola,FL)

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Bankruptcy Updates for Week of October 17th - The National Law Review

The company is looking to resolve the cases in bankruptcy court.

October 20, 2021, 1:46 PM

3 min read

Citing what it calls an unrelenting assault by greedy lawyers, Johnson & Johnson is hoping to use the bankruptcy process to dispose of 40,000 lawsuits that claim its baby powder products caused cancer.

A J&J subsidiary created to hold the liabilities from the litigation announced last week it was filing for chapter 11 protection.

During Wednesdays hearing, the first in the case, the judge is expected to hear from J&J why bankruptcy is the best method to resolve the lawsuits and from critics who called the move an unconscionable abuse of the legal system.

There are countless Americans suffering from cancer, or mourning the death of a loved one, because of the toxic baby powder that Johnson & Johnson put on the market that has made it one of the most profitable pharmaceutical corporations in the world. Their conduct and now bankruptcy gimmick is as despicable as it is brazen, Linda Lipsen, of the American Association for Justice, an advocacy group pushing for change in bankruptcy laws, said in a statement.

The company has denied its signature Johnsons Baby Powder and other talc-based products contained asbestos and caused cancer, as alleged by tens of thousands of plaintiffs. J&J has spent nearly $1 billion defending itself, according to a court filing.

Debtor continues to stand behind the safety of its cosmetic talc and does not believe the claims have merit, J&J said in a court filing. The unfortunate reality is that this filing is necessitated by an unrelenting assault by the plaintiff trial bar, premised on the false allegations that the Debtor's 100+ year old talc products contain asbestos and cause cancer.

The company stopped selling Baby Powder in the United States and Canada in May 2020.

Johnson's Baby Powder has been a staple for hundreds of millions of people for over 125 years. If claimants' allegations were correct that the product causes disease, there should have been long ago an epidemic clearly attributed to the use of the product. That is not the case, the filing said.

Johnson & Johnson has put $2 billion into a settlement fund to pay the talc claims even though the company said $2 billion is substantially in excess of any liability the Debtor should have.

The rest is here:

Johnson & Johnson looking to bankruptcy to resolve 40,000 baby powder cancer suits - ABC News

FORT WAYNE, Ind. (WANE) A city of Fort Wayne spokesperson said Monday the city was still studying the bankruptcy filing of its trash and recycling contractor, Red River Waste Solutions.

Texas-based Red River filed for Chapter 11 bankruptcy on Thursday. In the filing, the family-owned business, which services 310,000 households across 5 states including Fort Wayne, blamed the COVID-19 pandemic, a credit agreement and operational challenges for its financial struggles.

Red River said in the filing it hoped to reorganize its business through bankruptcy.

What will that mean for Fort Wayne residents, though?

John Perlich, a spokesman for Mayor Tom Henrys office, told WANE 15 there will be an update at Tuesdays City Council meeting. He didnt specify what exactly the update will be, but added: details are being worked out now.

Perlich said in the meantime, garbage and recycling materials continue to be collected.

This was a shock, said Councilman Geoff Paddock (5th District) of Red Rivers bankruptcy filing. Obviously its a disappointment to see their business failing but, I will say one thing in the short term in the last three days since the announcement was made, Red River has been out and they have been picking up trash in the district neighborhoods that I represent.

In 2017, Red River secured a seven-year collection and hauling contract with the city of Fort Wayne. The service has been problematic for many residents from the outset, with regular missed collections that led to fines levied against the contractor.

Paddock said he wasnt sure if the company filing for bankruptcy would void the citys contract with Red River. That would have to be looked into by the citys legal department, he said.

Even considering that extensive history of complaints from customers, Paddock said hiring a new company wouldnt necessarily mean the problem will go away.

Court documents filed by the company said its revenue dropped by $1 million between March 2020 and February 2021. The three primary factors that have transformed Red Rivers relatively stable operation: the COVID-19 pandemic, a credit agreement executed on or around April 1, 2020, and operational challenges.

According to the filing, since the pandemic has confined people to their homes, their levels of residential waste have increased dramatically.

This increase in waste volumes required the Debtor to respond by hiring more workers to collect that waste, said court documents. This was an added challenge because many workers, including Red Rivers employees, were more inclined to stay at home in response to the pandemic.

The company said in addition to struggling to find workers to help pick up the extra trash, the increase in waste volumes has also taken a toll on its vehicles and equipment. These service and equipment problems resulted in substantial fines.

In total, responding to issues created by the pandemic has cost Red River approximately $1.3 million, according to the filing.

Court documents say in April 2020, Red River entered into a $35 million loan. Due to the significant debt service required under the loan obligation, the company was forced to significantly reduce or eliminated the funds it otherwise budgets for the maintenance and repairs required to preserve its vehicle fleet and other equipment.

Since April 2020, the company has built up a deferred maintenance obligation of about $2.6 million, according to the filing. Approximately $1 million of that relates to repairs necessary to comply with safety inspection requirements.

To reorganize its business, the filing says Red River believes it has three reasonable options: a stand-alone restructuring of its business, a reorganization that includes engaging third-party exit financing or selling its business in two parts based on prepetition marketing.

WANE 15 has efforted multiple attempts to obtain a statement from Red River but has not had any luck.

Tuesdays City Council meeting starts at 5:30 p.m.

Read more here:

Fort Wayne officials looking into Red River bankruptcy - WANE

TAMPA, Fla. (WFLA) New filings in the personal bankruptcy case involving the owner ofOlympus Pools, James Staten, and his wife, say Olympus owns a 5% stake in Staycation Pools and Spas, another pool business owned by Statens one-time business partner, Jordan Hidalgo.

Olympus Poolsshutteredin July after a series of investigative reports byBetter Call Behnken.

The new filing, which details claims against the Statens as well as their assets, says Olympus Pools has a 5% Interest in Staycations Pools and Spas valued at approximately $500,000.

Better Call Behnken reached Hidalgo by phone for comment. Hidalgo confirmed he and Staten had signed an agreement for Staten to have a 5% stake in Staycation, but contends the agreement is no longer valid.

According to their court filing, the Statens claim Staycation Pools and Spas is estimated to have a valuation of $10 million.

I would sell my company today for a tenth of that stated value, Hidalgo told Better Call Behnken in a brief phone interview.

The filing shows the Statens owe creditors a total of $5,875,689.31. The couple has a combined monthly income of $7,811, but their monthly expenses total $11,997.03, court records state. A court approved monthly budget allows them to spend $10,874 on expenses.

The document also states their real estate holdings, including their personal home and the office building for Olympus, are valued at $5,525,000. Their personal property is worth $229,993, bringing the total of all their properties to $5,754,933.

The Statens filed for Chapter 11 personal bankruptcy on Oct. 6. The next hearing in their bankruptcy case is currently scheduled for Tues., Oct. 26.

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Olympus Pools owner claims his company owns stake in former business partners company - WFLA

The 2021 water year ended on Sept. 30, and it was another hot, dry year in the western U.S., with almost the entire region in drought. Reservoirs vital for farms, communities and hydropower have fallen to dangerous lows.

The biggest blow came in August, when the U.S. government issued its first ever water shortage declaration for the Colorado River, triggering water use restrictions.

In response, farmers and cities across the Southwest are now finding new, often unsustainable ways to meet their future water needs. Las Vegas opened a lower-elevation tunnel to Lake Mead, a Colorado River reservoir where water levels reached unprecedented lows at 35% of capacity. Farmers are ratcheting up groundwater pumping. Officials in Arizona, which will lose nearly one-fifth of its river water allotment under the new restrictions, even floated the idea of piping water hundreds of miles from the Mississippi River.

These strategies conceal a more fundamental problem: the unchecked growth of water consumption. The Southwest is in an anthropogenic drought created by the combination of natural water variability, climate change and human activities that continuously widen the water supply-demand gap.

In the long run, this can lead to water bankruptcy, meaning water demand invariably exceeds the supply. Trying to manage this by cranking up water supply is destined to fail.

More than 7,000 miles away, Iran is grappling with water problems that are similar to the U.S. Southwests but more severe. One of the driest years in the past five decades, on the back of several decades of mismanaged water resources, brought warnings of water conflicts between Iranian provinces this year.

As environmental engineers and scientists one of us is also a former deputy head of Irans Department of Environment weve closely studied the water challenges in both drought-prone regions. We believe past mistakes in the U.S. and Iran offer important lessons for future plans in the U.S. Southwest and other regions increasingly experiencing drought and water shortages.

As the supply of water from the Colorado River diminishes, Southwest farmers are putting more straws into already declining groundwater that accumulated over thousands to millions of years. But that is a short-term, unsustainable solution that has been tried across the U.S. and around the globe with major consequences. The High Plains Aquifer and Californias Central Valley are just two examples.

Iran offers a case study in what can go wrong with that approach, as our research shows. The country nearly doubled its groundwater extraction points between 2002 and 2015 in an attempt to support a growing agricultural industry, which drained aquifers to depletion. As its water tables drastically declined, the groundwaters salinity increased in aquifers to levels that may no longer be readily suitable for agriculture.

As water-filled pores in the soil are drained, the weight of the overlying ground compresses them, causing the aquifers to lose their water holding capacity and accelerating land subsidence. Irans capital, Tehran, with more than 13 million residents, subsided more than 12 feet between 2003 and 2017. Similarly, some areas of California are sinking at a rate of up to 1 foot each year.

Another proposal in the Southwest has been to pipe in water from elsewhere. In May, the Arizona legislature urged Congress to initiate a feasibility study to bring Mississippi River water to replenish the Colorado River. But that, too, has been tried.

In Iran, multiple interbasin water transfer projects doubled the flow of the Zayandeh Rud, a river in the arid central part of the country. The inflow of water supported unsustainable growth, creating demand without enough water to support it. In dry years now, no one has enough water. Many people in Khuzestan the region supplying water to central Iran lost their livelihood as their farms dried out, wetlands vanished, and livestock died of thirst. People in central Iran also lost crops to the drought as incoming water was cut. Both regions saw protests turn violent this year.

California diverted water from the Eastern Sierra Nevada to support Los Angeles growth in the early 1900s, turning the once prosperous Owens Lake Valley into a dust bowl. Costs of mitigating dust storms there now exceed $2 billion. Meanwhile, California needs more infrastructure and investment to meet its water demand.

Another project, the California Aqueduct, was constructed in the 1960s to transfer water from the Sacramento-San Joaquin Delta in Northern California to the Central Valley and southern parts of the state to support agriculture and some urban demand. This also did not close the water demand-supply gap, and it pushed economically and culturally important native fish species and ecological systems in the delta to the point of collapse.

As the continued influx of population into the U.S. Southwest raises water demand in the face of shrinking water supply, we have to wonder whether the Southwest is heading toward water bankruptcy.

While there is no easy solution, a number of actions are possible.

First, recognize that water shortages cannot be mitigated only by increasing water supply its also important to manage water demand.

Cities can save water by curbing outdoor water losses and excess water use, such as on ornamental lawns. Californians successfully reduced their water demand by more than 20% between 2015 and 2017 in response to severe drought conditions. Replanting urban landscapes with native drought-tolerant vegetation can help conserve water.There is great potential for water savings through efficient irrigation and precision agriculture systems, which could keep agriculture viable in the region.

On the supply side, communities can consider nontraditional water sources, water recycling and reuse in all sectors of the economy, and routing runoff and floodwaters to recharge groundwater aquifers.

There are also emerging technological solutions that could boost water resources in some regions, including fog water collection, which uses sheets of mesh to capture moisture from fog, and desalination plants that turn seawater and saline groundwater into drinking water. One new desalination plant planned for Huntington Beach, California, is awaiting final approval. Environmental consequences of these measures, however, should be carefully considered.

The Southwest monsoon returned this summer after a record dry previous year and a half in the region, but it wasnt enough to end the drought there. Forecasts now suggest a high chance that a La Nia pattern will develop over the winter, meaning Southwest is likely in for another drier-than-normal start to 2022.

Iran is already in water bankruptcy, with demand exceeding supply. It will take a lot more than a wet year to alleviate its water shortages.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Avoiding water bankruptcy in the Southwest: What the US and Iran can learn from each other - Nevada Current

SOLOMONS ISLAND, Md. Two Calvert County seafood staples were recently planned to go up for auction, but court filings have changed the plans.

Stoneys Kingfishers Seafood Bar & Grill in Solomon Island and a sister location in Broomes Island, Stoneys Seafood House, were originally set to go to auction on October 19. However, a recent bankruptcy filing has forced a cancellation of the sale.

"We need to await the outcome in the Bankruptcy Court before we know if the properties will return to the auction block," Paul Cooper, vice president of Alex Cooper Auctioneers toldTheBayNet.com.

The two originally planned auctions included real estate only according to Cooper, as noted by the Baltimore Business Journal.

Stoneys Kingfishers is roughly 4,800-square-feet and rests atop a 0.25-acre waterfront lot on the Patuxent River. Additionally, the restaurant has panoramic views and several boat slips. The property owners currently lease out the restaurant.

Currently, the Broomes Island location is temporarily closed, but it still has some pleasant features. The restaurant is roughly 6,200-square-feet and features a 300-seat restaurant that has been serving the community for over 20 years. The property also shares 1.34 acres of waterfront property with an adjacent bed-and-breakfast. There is also a 5,000 square-foot wedding venue next door.

The auction was supposed to take place at the Circuit Court for Calvert County. We will continue to provide additional details when they come available.

Contact our news desk at news@thebaynet.com

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Stoney's In Solomons And Broomes Island Head To Bankruptcy Court; Could See Auction - Bay Net

(Bloomberg) -- Hertz Global Holdings Inc., the car rental company that exited bankruptcy in June and has been trading over the counter, is planning to list its shares on Nasdaq.

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The company in a filing Friday listed the size of the offering as $100 million, a placeholder that will likely change. Some of its shareholders, who arent identified in the filing with the U.S. Securities and Exchange Commission, plan to sell shares as part of the offering.

Hit hard by the coronavirus pandemic, the company filed for Chapter 11 and emerged after Knighthead Capital Management, Certares Opportunities and Apollo Capital Management bought the business in a $6 billion deal. The group owns 42% of Hertz, the filing shows.

Hertzs shares, which have been trading on the Over-the-Counter Bulletin Board as HTZZ, had become a favorite of investors chatting on Reddit message boards.

The company, based in Estero, Florida, reported $21 million in net income on a revenue of $3.2 billion during the first half of the year. That compared with a $1.2 billion net loss on $2.8 billion in revenue for the same period a year ago.

Last week, Hertz announced that Mark Fields, a former Ford Motor Co. chief executive officer, was taking over as interim CEO. Fields had joined Hertzs board in June.

Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are advising the listing. Hertz plans for its shares to trade on the Nasdaq Global Select Market under the symbol HTZ.

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Hertz Files to List Shares on Nasdaq in Wake of Bankruptcy Exit - Yahoo Finance