Bankruptcy Judge Rules for Musicians in Louisville

In the dispute between Louisville Orchestra Inc. and its musicians, bankruptcy judge David Stosberg has ruled in favor of the musicians and denied the Orchestra’s request to suspend its collective agreement with its musicians for 120 days.  The ruling is not appealable.  The suspension was to have taken place retroactive from December 15.  The suspension would also entail canceling the orchestra’s remaining performances this season except for April and May’s performances.
The Louisville Orchestra Inc. is currently under bankruptcy protection, having filed for Chapter 11 reorganization bankruptcy on December 3 last year.
The management for the orchestra submitted the request to suspend the agreement because they could not find the means to pay the musicians and needed time to renegotiate the agreement so that they could find new sources of income to finish the season.  The management also intended to reduce the size of the orchestra from 71 full-time musicians to 55 and reduce the number of weeks in the season from 37 to 33 weeks.
Under the terms of the agreement, the musicians draw a salary of $2.4 million per annum, $130,000 in pensions and $273,000 in healthcare benefits.  This amounts to an average salary of $34,366 per musician, excluding benefits.
In his judgment, Judge Stosberg said that the Orchestra had not presented sufficient proof that continuing the agreement would cause irreparable harm to the orchestra.  On the other hand, if the agreement were to be suspended, there would be worse repercussions.  The Orchestra would be answerable to more creditors – the people who already paid to see the concert and guest performers scheduled to perform at the concerts.
Not to mention the reputation of the Orchestra would suffer and the Orchestra’s funding from the Fund for the Arts might be withdrawn.
According to the Louisville Musicians Association chairwoman Kim Tichenor, suspending the agreement might cause the Orchestra to lose several performers who have been offered other offers while holidaying and might not return should it be suspended.
On behalf of the Orchestra, its attorney Mark Robinson said a single page among the orchestra’s exhibits clearly displayed the orchestra’s projected cash flow from December to March and forms the basis of the Orchestra’s arguments.
The Orchestra’s CEO Rob Birman testified in the hearing that under the best case situation where the orchestra receives all its funding, pays its musicians their salaries and benefits and holds all its scheduled performances, it would leave it nearly $646,000 in the red by March.
Orchestra president Charles Maisch said the orchestra’s board of directors will now decide how to proceed next and declined any further comment.
A bankruptcy filing can be the way to a fresh start for you financially.  Call us at (813) 200-4133 for a free consultation.

Bankruptcy of Quigley Unit of Pfizer to Continue

In September last year, bankruptcy judge Stuart M. Bernstein overruled the application of Quigley Company Inc to exit bankruptcy for the fourth time in its Chapter 11 plan.  In his ruling, Judge Bernstein found that Pfizer, the parent company, had manipulated the bankruptcy process for its own benefit.  The judge went on to say that the Chapter 11 plan was filed in ‘bad faith’ and made mention of claims against Quigley that could exceed $4.45 billion over the next 42 years.  Pfizer plans to the judge’s ruling.
Lawyers for the US trustee claim that the bankruptcy protection of Quigley should have been dismissed by now.  The bankruptcy protection, which has been in force since 2004, has protected Quigley from its creditors and prevented those with asbestos-related health problems from taking up lawsuits against Pfizer.  Many of these have even died.  The many individuals who have filed asbestos claims against Quigley and Pfizer are still waiting to be heard.  According to court papers filed December 23, the court has decided to give a hearing to the US bankruptcy trustee’s request on January 13.
Pfizer said they were prepared to contribute funds to Quigley for it to satisfy whatever conditions the court has set in order for it to exit bankruptcy.  It plans to use the January 13 hearing to offer fair compensation to all claimants.
Some 43,100 claimants have formed an ad hoc committee to represent them in Quigley’s bankruptcy case.  The committee has asked the judge to end the case and dismiss the injunction that has protected Pfizer from being sued since 2004.
Judge Bernstein has ruled that Pfizer should put an amount of money into a trust equal to the alleged present and future claims against it.  Under the proposed Chapter 11 plan, Pfizer would have paid $450 million into a trust to satisfy claims of derived asbestos-related liability.
Pfizer said in its appeal against the judge’s ruling that it was working with Quigley to come up with a plan that took into consideration some of the points brought up by Judge Bernstein.
The bankruptcy code would direct all future claims against 3 products that Quigley produced for the steel industry (Panelag, Damit and Insulag) that contain asbestos to the trust.  These claims include death and personal injury claims.  These 3 products were made by Quigley from the 1940s to the 1970s and were bought over by Pfizer in 1968.
If you are considering filing for bankruptcy either for yourself or your business, call us at (813) 200-4133 for a free consultation.

About Local Government Bankruptcies

State governments are often divided over the issue of allowing local town governments to file for bankruptcy.  The state of Indiana, for example, does not have legislation that allows for this while most other states in the US do.  Indiana governor Mitch Daniels is pressing for statute to be passed for this effect.
Indiana state senator Ed Charbonneau (R-Valparaiso) proposed legislation last month to allow local government an option for bankruptcy.  Under Charbonneau’s proposal, the Indiana Distressed Unit Appeals Board would be empowered to appoint an emergency manager for a distressed unit who in turn could recommend filing for bankruptcy.
But even though a state does have statute that permits bankruptcy filing, there may still be other obstacles.  For instance, the city of Hamtramck has been trying to file for bankruptcy for some time but has not been permitted to do so by outgoing Michigan governor Jennifer Granholm.  According to city manager Bill Cooper, the governor does not want to set a precedent for other cities and towns in Michigan to follow suit.  But Hamtramck is adamant in pursuing the matter.
Many city municipalities are struggling under the heavy weight of debt and depleting revenue.  Hamtramck has its own unique situation.  The small 2.1 square mile city has a tax-sharing agreement with the city of Detroit for General Motor’s Detroit-Hamtramck assembly plant from which it derives much of its $18 million annual revenue.
But Detroit has been facing its own financial woes and alleged that they have overpaid Hamtramck for the last decade or so.  Last year, Detroit withheld $2 million in its annual payment.  As a consequence, Hamtramck sued for the money and Detroit counter-sued.  The matter is now in court.
Hamtramck has taken as many cost-cutting measures as possible.  After cutting overheads on most city services, the city now intends to cut down on salaries, benefits and pensions for public workers which would force unions to reopen negotiations for contracts.
On its part, the state government offered Hamtramck 3 options to ease its $3 million deficit.  They could take up a loan for the entire amount in deficit repayable over 20 years or take up a tax anticipation loan of up to half of what the city anticipates to collect in terms of property taxes in 2011 or opt for a fiscal stabilization bond which allows the city to borrow 3% of its assessed value.
The state government has left it to the city to decide which option it wants to take up.
If you or your business are struggling financially, you may want to consider filing for bankruptcy protection.  If that is the case, call us at (813) 200-4133 for a free consultation.

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10 Things to do After Bankruptcy part 2

In part 2 of this article, I will tell you more about what you should do to re-establish your credit standing after being discharged from bankruptcy:
6. Apply for a Secured Credit Card
A secured credit card is one that is backed up by cash.  You give some money to the credit card company and in exchange, they grant you a credit card up to the limit of the money you gave.  But when you are granted a secured credit card, be sure that the three credit bureaus are informed of it.  Ask if the credit card company has reported it.
It is important that you insist that all three credit bureaus are informed of the issuance of a secured credit card to you.  This is because if you need to apply for another form of credit, your lender may only look at the credit report from one credit bureau.  This might cause your application for credit to be denied even though you hold a secured credit card.
Most creditors look at a combination of the credit reports from all three credit bureaus.  Hence one bad credit report from a credit bureau may lower the score of the other two bureaus and deny you a loan.
It is also wise to find out from the credit card company when you are allowed to increase your credit line and when you may apply for an unsecured credit card.  Try to find a lender who will help you improve your credit.
7. Apply for an Unsecured Credit Card
As soon as you can, apply for an unsecured credit card.  Some credit card unions offer low-limit credit cards for those who have been discharged from bankruptcy.  These low-limit credit cards can help you reestablish your credit score but you need to ensure that the credit union reports your credit line to all three credit bureaus.  Then be prompt in your repayments so that you can have an increased credit limit.
8. Deal with Larger Institutions
Wherever possible, do business with banks and credit unions, rather than finance companies or rent-to-own lenders.  This is because generally, your credit score will be higher when you have business dealings with larger institutions.
9. Aim to Re-establish your Pre-bankruptcy Credit Score
Have a plan to reestablish your pre-bankruptcy credit score.  Be determined to have a good credit score again.
10. Do Not Give Up
It is almost certain that you will be rejected the first few times you try to re-establish credit.  But be optimistic because many people have been in your situation before and through persistence, they have been able to re-establish their credit scores.
If you wish to discuss filing for bankruptcy, give us a call at (813) 200-4133 for a free consultation.

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10 Things to do After Bankruptcy part 1

In 2011, experts predict another 1.5 million people will file for bankruptcy in the US.  If you are contemplating filing for bankruptcy, your most pressing consideration would be how to get back in good credit standing after the bankruptcy is over.  Here are 10 tips that will ease your life after bankruptcy (should you choose to file):
1. Plan your Story
When you apply for credit or employment after bankruptcy, your prospective lender or employer would likely want to know your reasons for filing for bankruptcy.  Most bankruptcies are filed due to major personal disasters like divorce, loss of job or serious illness.  So plan how you will explain your reasons behind your bankruptcy filing.  Make it factual without any sob stories or shame.
2. Update Information on your Credit Report
After you have exited bankruptcy, do not forget to update all your personal information on your Credit Report with the most current information that shows your status.  This includes removing items that can legally be removed or revised.  This gives indication to potential employers and lenders that you have gotten your life back on track.
3. Make Sure there is no Negative History in Your Credit Report
You certainly would not want any negative history showing up in your credit report after your discharge.  For example, if you have surrendered your car as part of your bankruptcy agreement, you should make sure the creditor does not show any more late payments after you have done so.
4. Keep Track of when Your Debts can be Removed
Each record of debt will be on your credit report for a certain length of time.  Credit card debts and personal loans will stay for 7 years effective from the date of your last payment towards that account.  It is your responsibility to keep track of when each debt will be removed from your record.  So use a calendar to remind yourself of each debt record and when it is due to be removed.
5. Find Lenders with Favorable Credit Requirements
Begin asking around credit companies, finance companies and banks especially those that give loans for motor vehicles, issue credit cards and personal loans.  You may or may not apply straight after you have been discharged from bankruptcy but you would do well to find out their terms and conditions for the time when you might need to apply for credit facilities.
You should ask these companies whether they offer credit to those who have filed for bankruptcy, how they check for credit-worthiness (do they check with only one credit bureau or all three), how long after being discharged would they accept applications, their minimum credit score requirement, whether they will approve your application without a co-signer etc.
If you are contemplating filing for bankruptcy, give us a call at (813) 200-4133 for a free consultation.

Bankruptcy Judge Scuttles Plan to Sell Martin Cadillac

The Newark US Bankruptcy Court Judge Rosemary Gambardella rejected a plan to sell the Martin Cadillac dealership in Eaglewood Cliffs to a company headed by Jonathan Sobel, once a managing partner at Goldman Sachs.  The selling price was to have been $2.25 million.  Instead, the judge ordered a bankruptcy trustee to oversee the finances of the dealership.
The attorney for Martin Cadillac, Gregory S. Kinoian, confirmed that the judge disapproved the sale because of ‘unresolved issues’ with the main creditor, General Motors.  Judge Gambardella expects the bankruptcy trustee to recommend to her whether to lift the blockage to the sale.
General Motors, Martin Cadillac’s biggest creditor, made its own bid to buy over the ailing dealership but its bid was lower than that of DTF Holdings LLC headed by Sobel.  When Sobel, who was the chief risk officer at Goldman Sach’s investment management division up to 2008, made his bid, General Motors complained that the sale would not sufficiently repay them what they were owed.  Bankruptcy court papers showed that the debt Martin Cadillac owed General Motors was about $1.9 million.
Besides GM, other creditors namely Ally Financial Inc. and landlord Argonaut Holdings Inc. also objected to the sale to DTF.  DTF won the auction on Dec 3 when its bid of $2.25 million beat that of Platinum Holdings LLC’s of $2.2 million.
In August, the US bankruptcy trustee had filed a motion seeking to convert Martin Cadillac’s case from Chapter 11 reorganization bankruptcy to a Chapter 7 liquidation bankruptcy because they were unable to keep up with their payments while their owner Timothy Martin looked for a buyer.
Martin Cadillac has been in business for the last 6 years before they filed for bankruptcy protection in June and closed down their operations in October this year citing the effects of the economic recession, the squeeze of the credit crunch and overwhelming debt as the main reasons for their financial problems.
It was only in 2009 that the Cadillac dealer was ranked among the top 5 dealers in the country and was top in the US for the sales of the Escalade Sport Utility Vehicle.  Their customers included famous rap singers like Diddy, Fat Joe and Jay-Z.
The court granted Ally Financial, formerly known as GMAC Financial Services the permit to repossess an inventory of 60 of Martin Cadillac’s vehicles on October 18.

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Businesses Going Bankrupt

Which businesses you know are filing for bankruptcy?  Most businesses facing insurmountable debts are opting for bankruptcy protection.  A&P Supermarkets recently filed for Chapter 11 bankruptcy protection, leaving its 58 city stores facing the prospect of closing down.  This gave rise to the United Food and Commercial Workers Union (UFCW) appeal to City Council Speaker Christine Quinn and New York City Mayor Michael Bloomberg.
In separate letters sent to Quinn and Bloomberg, the UFCW local 1500 asked for a meeting to discuss the ‘tremendous negative effects on the city of New York’ in the event A&P Supermarket stores shut down and lay off its workers.  As it is, the city already faces a food desert crisis.  This is anticipated to get worse if the 58 A&P Supermarket stores are forced to shut down.  These stores are seen to provide the essentials for a good economy – good food, good jobs and good health.
There are about 15 A&P stores in 10 locations in the Queens area alone, employing some 1,500 workers.  If these stores were to close, the workers would find it hard if they are transferred elsewhere because most supermarket store workers work and live in the same area.
But A&P Supermarket CEO Sam Martin gave his assurance that the management has no intention of closing any of the stores.  They fully intend to keep up their stocks and carry on business as usual despite the Chapter 11 filing.  Martin said the bankruptcy filing was merely a necessary step to take in the process of turning the company around.
The 58 A&P Supermarket city stores operate under the Pathmark, Waldbaum’s and Food Emporium banners.  They have almost 6,500 workers on their payroll throughout the five boroughs that include 15 stores in Queens, 20 in Manhattan, 12 in Brooklyn, 5 in the Bronx and 6 in Staten Island.
Elsewhere, in New Jersey, Atlantic Broadcasting has also filed for Chapter 11 bankruptcy recently.  The broadcasting company based in Linwood owns 5 local area radio stations including news-talk station WOND and classic-rock station WMGM.
In its bankruptcy filing, Atlantic revealed that Northwood Ventures is the largest investor in the company, owning 75% of its shares while Northwood Capital owns another 12%.  The company’s biggest creditor is the Arbitron ratings company who are owed more than $500,000.  Other creditors include the American Society of Composers, Authors and Publishers, CBS Sports and the Associated Press.
Like A&P Supermarket, Atlantic Broadcasting also intends to carry on broadcasting despite its Chapter 11 filing.
If you or your business is considering filing for bankruptcy, call us at (813) 200-4133 for a free consultation.

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    News about Bankruptcy

    Trucking and Logistics Company Exits Bankruptcy
    USA Dry Van Logistics Company formally emerged from bankruptcy protection on November 30.  Most of its 600 employees kept their jobs.  The logistics company, which was started in 2000, kept up with its operations throughout the bankruptcy and was able to weather the storm.  The company’s business is primarily focused on moving cargo shipments between the US, all over Canada and Mexico.
    When the company filed for bankruptcy in February this year, its creditors including General Electric Capital Corp and CapitalOne decided to keep the company intact and not break it apart and sell it in pieces.  But one strategy the company employed was to restructure its business which included revamping the management staff.
    As such, two of the three original founders of the company were replaced.  Another thing the company was determined to do was to try to keep as many jobs as possible because the company had the business volume to justify retaining their employees.
    Now that the company has exited bankruptcy, they are looking to the future.  There are plans to expand the sales force and do other things to improve efficiency in the company.  One step would be to ensure full loads as often as possible to save costs.
    Although the company transports a lot of goods across the border to Mexico, none of the American drivers actually go into Mexico.  This eliminates the fear of sending Americans into the line of fire.  Instead, the company loads the freight and hauls it to the border where a Mexican carrier pulls it into the interior of Mexico.  The reverse process is done when goods are brought from Mexico into the US or Canada.
    Greensboro Housing Project Gets Go Ahead from Bankruptcy Judge
    6 years after filing for bankruptcy in 2004, the once third largest home builder in Guilford County finally received Judge William L. Stock’s approval for the bankruptcy trustee’s final distribution plan.  Under the plan, unsecured creditors of the now defunct Project Homestead will receive back less than 15 cents out of every $1 of debt owed to them.  This includes Greensboro taxpayers who received $93,228 out of their claim of $640,000.
    Greensboro as a city spent nearly $18 million on housing projects over the years until an audit revealed poor record-keeping on state and federal grants coupled with questionable spending.
    Project Homestead was founded in 1991.
    If you or your business is drowning in debt, consider filing for bankruptcy.  Bankruptcy is your right under the law and gives you protection from your creditors.  Call us at (813) 200-4133 for a free consultation.

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      Former Mayor’s Assets Saved through Bankruptcy

      Robert Pastrick, the former mayor of East Chicago had his assets saved from being seized to help pay for his $108 million debt when he filed for bankruptcy protection in the nick of time.  At first, US bankruptcy judge Christopher Nuechterlein ruled allowing US Marshalls access to Pastrick’s assets in his Ogden Dunes home and a storage locker in Portage to seize and dispose of them to raise money to pay his debts.
      The state has been making attempts to collect the outstanding amount of $108 million that came about when Pastrick and other East Chicago city officials participated in the sidewalks-for-votes fraud scheme.  They were convicted by a federal court judge of racketeering and running a corrupt activity.  Under the scheme, the city spent $25 million to pour sidewalks, patios and driveways and remove trees from private properties in order to gain votes for Pastrick in the primary elections in 1999 when he was facing his challenger, Stephen Stiglich.
      The other city officials, three city councilmen and three city administrators, each received criminal convictions whereas Pastrick’s case is civil.  The state requested the court for permission to seize Pastrick’s assets of value such as jewelry, bonds and works of art found on his properties to pay for his debts.  The state also surveyed local banks to find out if Pastrick held any accounts with them.  All the banks questioned by the state replied that he did not.  Subsequently, Pastrick applied for bankruptcy protection and as a result, his assets were saved.
      Pastrick’s bankruptcy filing valued his assets at between $100,000 and $500,000 whereas his debts amounted to more than $100 million.  According to the filing, Pastrick has only one creditor which is the Indianapolis law firm who represented the state against him.
      Pastrick’s attorney, Michael Bosch stated that Pastrick has no means to repay the debt of $108 million that he owes even if his assets are seized and sold.  The other co-defendant, James Harold Fife III is also deemed to be unable to pay up.  The third co-defendant, Frank Kollintzas is believed to have been in hiding for a few years somewhere in Greece.
      A meeting of creditors for Pastrick is scheduled to be held January 25.
      If you are facing insurmountable debts, you have the option of seeking bankruptcy protection as a way out.  Call us at (813) 200-4133 for a free consultation.

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      Two Media Giants Emerge from Bankruptcy

      Publisher of National Enquirer to Exit Bankruptcy

      American Media Inc, the publisher of National Enquirer is set to exit Chapter 11 bankruptcy protection by end of this month, if all goes as predicted. A judge in the Bankruptcy court for the Southern District of New York is expected to approve the publisher’s planned exit from bankruptcy paving the way for it to emerge with a stronger capital base, less debt in its books and an improved cash reserve.

      American Media, the publisher based in Boca Raton, Florida owns about a fifth of the market share of newsstand circulation in the US and Canada, filed for bankruptcy protection last month with debts amounting to $879 million.

      The publisher filed a pre-arranged bankruptcy petition in which it discussed its plans to emerge from bankruptcy with its creditors before lodging the bankruptcy filing in court. American Media had already received agreement from most of its creditors to convert their outstanding debts into equity owned by the creditors in the restructured company. The publisher also managed to arrange financing for about $565 million to fund its operations.

      The common plight of most publishers of print media also hit American Media as it tried to cope with the economic recession and the popularity of the Internet as a source of news and information. In addition, the rising prices of fuel, postage and paper have also added to the cost of doing business.

      In its bankruptcy filing, American Media stated that its drop in revenue was attributed to the decline in single copy sales at check-out counters, which together with subscriptions accounted for half its revenue. Most of its other revenue is derived from advertising income.

      American Media’s single copy sales for the fiscal year of 2010 amounted to an average of 560,000 per week and its total average weekly circulation was about 784,000.

      MGM Movie Studios Come Out of Bankruptcy

      Metro-Goldwyn Mayer, the movie studio company famed for the James Bond franchise, has emerged from bankruptcy with about $500 million to use for rebuilding its business. The movie studio’s pre-packaged bankruptcy plan received approval from its creditors on December 2 to eliminate about $5 billion in debts in exchange for ownership in the revamped company.

      MGM’s new co-chairman and CEOs, Roger Birnbaum and Gary Barber, who operate Spyglass Entertainment, plan to make only a small number of films at MGM every year in order to reduce distribution costs and production capacity. The company had laid off about 50 workers recently as part of the reorganization plan.

      If you or your company need help overcoming your debts, consider filing for bankruptcy as a way out. Many companies and individuals have been saved through bankruptcy. Call us at (813) 200-4133 for a free consultation.

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