As an indication that the economy is not heading for a recovery anytime soon, six US banks have been identified as on the verge of bankruptcy. According to the Federal Deposit Insurance Corporation (FDIC), these six banks are Florida Community Bank, the First Regional Bank in Los Angeles, the First National Bank of Georgia, Community Bank and Trust in Georgia, Marshall Bank in Minnesota and American Marine Bank.
Should these 6 banks file for bankruptcy, it would bring the total number of US banks in bankruptcy this year to 15. Last year, 140 banks filed for bankruptcy while in 2008, the figure was a much lower 25.
The FDIC expects 2010 to be the year when a record number of banks would go bankrupt.
Filed under Chapter 7 (Tampa), Tampa Bankruptcy News by on Feb 1st, 2010. Comment. 
Well-known appliance retailer, Appliance World stores in Denver, Colorado have been closed because its parent company, GCF Holdings LLC filed for bankruptcy three months ago. This does not only affect its Denver operations but also involve its other metropolitan stores namely those in Arvada, Aurora, Highlands Ranch, Littleton and Colorado Springs.
According to the retailer’s official website, the closure is permanent.
In its October 20 bankruptcy filing, GCF Holdings, a company based in Denver applied for bankruptcy protection in the US Bankruptcy Court in Tampa under Chapter 11 of the Bankruptcy Code. In its filing the company stated it had a combined total of between $1 million and $10 million in assets and liabilities and between 100 and 199 creditors.
Existing customers who have already been informed that their order is in may collect them at the Appliance World Denver warehouse at 320 S. Lipan on February 2. Other customers with existing orders who have not received confirmation that their order is ready for collection are advised to refer to the company’s website for the latest information on receiving their products or a refund.
Besides Appliance World, GCF Holdings is also the holding company of several other subsidiary companies in Florida and New Mexico. It appears that the bankruptcy has affected these other subsidiaries in very much the same way.
One of these other subsidiaries, DCE New Mexico LLC has been operating 2 electronics and appliance stores that they bought over from the Baillio family. But since the bankruptcy filing, the family have resumed control of the stores.
Another subsidiary, Riverview Ventures Inc. of Bradenton, Florida that did business as DeSears Appliance and Home Entertainment had to cease the operations of 4 of its stores in Florida on December 2 last year.
Filed under Chapter 7 (Tampa), Tampa Bankruptcy News by on Feb 2nd, 2010. Comment.
In 2009, 372 cases of bankruptcy were filed in the Midland Division of the Western District of Texas’ US Bankruptcy Court. This figure was a rise from the 243 filed in 2008 and represented an increase of about 53%. Most of these were filed by companies under Chapter 11 bankruptcies. In a typical year, an average of 80% of bankruptcies are Chapter 11 ones. But of late, there has been also a rise in filings by individuals who file either under Chapter 7 or 13.
The rise in bankruptcies is seen as a domino effect originating from a weaker economy and falling oil prices that result in poor business performances of many companies. Especially hit were smaller companies with up to 100 employees in the oil service industry that had to implement drastic belt tightening measures including laying off workers. This naturally resulted in workers working fewer hours and eventually trying to pay their overdue bills on credit or resorting to money lending services. These desperate attempts to stay financially afloat would only exacerbate the situation and eventually many file for bankruptcy.
Despite the rise in number of bankruptcies last year, the numbers were still lower compared to before the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) came into effect in 2005. The average number of bankruptcies pre-BAPCPA was 911 a year (the highest was 1,205 cases in 2005). But after the BAPCPA took effect, the numbers have become closer to 273 a year, a reduction of about 70%.
The BAPCPA made it mandatory to attend pre-bankruptcy credit counseling and a financial management course before your debts could be discharged. But the most prominent feature of the BAPCPA is a system that makes it more difficult to obtain a Chapter 7 bankruptcy approval thus forcing people seeking bankruptcy to file under Chapter 13 instead. A Chapter 7 bankruptcy eliminates your unsecured debts like credit card and medical bills whereas a Chapter 13 bankruptcy restructures your debts such that you repay them over a period of 3 to 5 years.
But the BAPCPA is not enough on its own to reduce the number of bankruptcies if oil prices continue to plummet. Should the oil prices stabilize, it would still take 60 to 90 days before the oil companies can benefit from it and even longer for it to be felt by the workers.
Hence, there is unlikely to be a significant reduction in the number of bankruptcies filed this year at least for 6 to 9 months.
If you are contemplating filing for bankruptcy either for your company or yourself, contact our team of Tampa lawyers at (813) 200 4133 or toll free (800) 965 5074 for a free consultation.
Filed under Chapter 7 (Tampa), Tampa Bankruptcy News by on Feb 3rd, 2010. Comment.
For the last few years, the East Chicago Community Health Center has been losing money in their operations despite government funding. These loss-making activities culminated in a Chapter 11 bankruptcy filing on January 12. As a consequence, the board gave its long time executive director and founder, Cornell Brantley the boot. The Center carries out essential health services to the public irrespective of their status, income or insurance standing. Presently, the Center serves about 12,000 patients and its bankruptcy jeopardizes their very existence.
According to its bankruptcy filing, the Center has assets worth $5.1 million while its liabilities amount to $2.3 million. In the course of its operations, the Center has lost over $2 million over a period of 5 years. However, it is still allowed to run its operations but under federal bankruptcy rules. This means providing services, paying workers and vendors from the revenue generated.
But the financial deficits have compelled the Center to cut down on some of its services in an effort to stem the decline. Centier Bank, one of the Center’s creditors, agreed to receive a reduced payment on the mortgage it holds for the loan of $1 million for a building it financed. It suspended its Obstetrics and Gynecology services in one of the neediest areas in Illinois while it has not given dental treatments since 2008.
A spate of financial mismanagement was found to be the cause of the Center’s losses. In general, the Center made expansion plans beyond its means, for example it entered a three-year rent and equipment lease for a Hammond satellite clinic it has not operated in years. It also employed too many physicians when the number of patients and amount of revenue did not warrant it. Furthermore, the Center obtained a $1 million to build and staff two clinics at separate sites. What made it worse was that contracts like the one for the Hammond clinic was concluded by the management even before presenting them to the board, according to one former board member, Luis Molina.
To make matters worse, the Center is also experiencing strained relationships with other parties. The Healthy East Chicago building, the Center’s previous landlord tried to evict them over nonpayment of $301,708 in back rent. The Center also owes the city of Chicago $68,820 in unpaid telephone charges and business bills. In addition, they also owe other hospitals, namely St. Catherine hospital and Methodist hospitals together more than $250,000.
Should the Center be forced to shut down altogether, it would be a severe loss to the public in East Chicago.
Don’t let bankruptcy be your last resort. Call us, your friendly Tampa bankruptcy attorneys at (813) 200-4133 for a free consultation today and we will show you how bankruptcy can protect you from your creditors and provide you a fresh start financially.
Filed under Chapter 7 (Tampa), Tampa Bankruptcy News by on Feb 4th, 2010. Comment.
Montgomery Credit Card company, Advanta Corporation is in liquidation leaving thousands of its investors, mainly from the older age bracket, in a quandary over their lost investments. Many of its investors bought its much publicized investment notes that promised 9% interest even though it does not have Federal Deposit Insurance Corporation (FDIC) coverage.
In total, Advanta owes 3,400 investors some $138 million as at November last year when it filed for Chapter 11 bankruptcy. To help alleviate its financial burden, the company plans to sell its assets that are no longer needed, among which are two limos, two early 1990s Mercedes Benz sedans and a 1997 Porche 911 Carrera. Since May 2009 it had already ceased issuing new credit cards. It may also sell its collection of modern art paintings valued at $4.3 million and draw from other assets, such as receivables from subsidiaries but they are of uncertain value. Furthermore, its chief executive office, Dennis Alter has failed to find new business streams for the compamy.
Advanta also owes institutional investors some $96 million although the company considers this of lower priority compared to the debt to individual investors. In the days when business was still booming, Advanta’s main asset was the backing of a Utah bank that issued Advanta credit cards. But the bank itself got into financial trouble with losses arising from defaulting loans to small businesses. The FDIC has ordered the bank to wind down its operations since July last year leaving little for Advanta investors to hope for.
According to the bankruptcy filing, Advanta has some $98 million in cash reserves. This would amount to a payback of about 42 cents per dollar owed to the two classes of creditors. But this does not take into account the cost of filing for bankruptcy and other intrinsic costs. As it stands, two bankruptcy legal firms have billed the company for $180,000 for their work since the November 8 filing.
What may have caused Advanta to get into the financial problem they are in now? Among the many reasons might be because its chief executive officer Dennis Alter made some doubtful decisions. For example, he built a 38,000-square-foot house in Whitemarsh Township and donated $15 million for a building at Temple University.
What comes next for all the investors and creditors of Advanta Corporation remains to be seen. But if you are in a similar situation, consider bankruptcy as one of your options in getting out from under the financial burden you are shouldering. Call us at (813) 200-4133 for a free consultation. We are a group of Tampa attorneys who specialize in bankruptcy filings.
Filed under Chapter 7 (Tampa), Tampa Bankruptcy News by on Feb 5th, 2010. Comment.
