The Head of the European Commission, Jose Manuel Barrosso is not optimistic about the future of Spain, Portugal and Greece. In view of these countries’ enormous debt problems, Barrosso warned that unless stern measures are taken to address the problem, the repercussions may be apocalyptic. The countries might slide back to dictatorship rule and democracy will be no more. That was what Barrosso, a former Prime Minister of Portugal, revealed at an extraordinary briefing with the Trade Union Chiefs (TUC).
In the meantime, European Union (EU) chiefs have begun talks aimed at arranging for the bailout of Spain which is anticipated to run into hundreds of billions of pounds. Greece has already accepted a bailout package amounting to £650 billion. John Monks, the head of the European TUC, expressed his personal shock at Barrosso’s prediction. According to Monks, Barrosso sees no other alternative except for these countries to embrace austerity measures, however painful they might be.
If Spain, Portugal and Greece fail to adopt austerity measures, then there is a very real possibility of a takeover by the militaries which might then usher in a dictatorship. Bearing in mind the recent riots and popular uprisings in Athens and Malaga and elsewhere, a military coup is not too far-fetched a notion in these three countries. They do have a history of military uprisings and themselves only became democracies in the 1970’s.
Greece has already had its share of street protests as interest rates and taxes soared and public spending was drastically cut. Similarly, Portugal and Spain have announced austerity measures to avoid defaulting on their national debts. Likewise, other European countries that have had similar incidents of riots and protests include Hungary, Italy and Romania where public sector employees’ salaries are to be cut by 25%.
Mr Barroso’s warning exposes the concern of the EU that that the economic crisis could also lead to the collapse of the beleaguered euro and the unraveling of the EU itself.
On the other hand, Mr. Monks feels that the austerity measures themselves could push the EU back to the 1930s during the time of the Great Depression. He revealed that union chiefs throughout the EU are preparing for a coordinated ‘Day of Action’ to protest the cuts on September 29.
Meanwhile, EU leaders are meeting to discuss a rescue package for Spain. It is expected to come up to at least £100 billion to start with, although this figure could very well balloon as the economic crisis deepens.
Even huge countries can suffer financial calamities, what more ordinary citizens and companies? If you or your company are faced with financial problems, consider filing for bankruptcy. It is your right under the law to seek bankruptcy protection from your creditors. Bankruptcy gives you the chance to start anew financially. Call us at (813) 200 4133 for a free consultation or visit http://tampabankruptcy.pro.
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Filed under Chapter 7 (Tampa) by on Sep 1st, 2010. Comment. 
By now, almost everyone realizes that the oil spill by the BP Deepwater Horizon oil rig in the Gulf of Mexico is the worst in history. Already, the British oil company has spent $1.43 billion to stop the flow of oil and clean up the environment since the accident on April 20. This does not include the potential payouts on over 200 lawsuits that have been filed against the oil company thus far.
According to a Credit Suisse report, BP’s liability might come up to $37 billion in damages and clean up costs on the 5 states (Florida, Louisiana, Texas, Alabama and Mississippi) affected by the oil spill that has threatened wildlife, wetlands, fishing and tourism. The potential liability for BP has been so high that analysts have predicted bankruptcy as one of the ways out. But while filing for bankruptcy would cancel some debts, it will not enable BP to evade having to pay for most damages and cleanup costs. Bankruptcy lawyers feel that it is unlikely that any claim would be too large of itself for BP to pay.
The oil giant itself has categorically denied it would seek bankruptcy protection. At the same time, BP shares fell today to its lowest price in 13 years, down by 48% from the day the Deepwater Horizon oil rig blew up, where 11 employees perished. The cost to protect $10 million of BP debt for a year reached $695,000. This rose from only $29,000 on April 30. The shares fell 13.45 pence to 342 pence in London trading, the lowest price since April 1997.
In the meantime, the US government has stepped in to dictate certain matters. President Obama has gotten an assurance in writing from BP CEO Tony Hayward that they will bear the full cost of restoration and cleanup of the environment. White House advisor David Axelrod has called upon BP to set up an escrow account to pay for the legal claims pertaining to the spill.
U.S. Senate Majority Leader Harry Reid asked the oil company set up a $20 billion fund to be administered by an independent trustee. There are also suggestions that the government insists that BP be put under receivership bearing in mind that bankruptcy is a possibility.
While bankruptcy would not absolve BP from paying for the cleanup, it may provide the company with a single venue from which to pay claims quickly. The alternative to bankruptcy protection would be a nightmare 5 to 10 years as BP deals with each lawsuit.
If you are struggling with insurmountable debts, consider filing for bankruptcy as a means to solve your debt problems. Bankruptcy protects you from your creditors and enables you to repay your debts by either liquidation of assets or a payment plan over a period of time. Call (813) 200 4133 for a free consultation or visit http://tampabankruptcy.pro.
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Filed under Chapter 7 (Tampa) by on Sep 2nd, 2010. Comment.
The number of bankruptcies in South-Central Idaho still remains high for this year as the unemployment rate showed little improvement. The sector most hard hit is construction, as many contractors, plumbers, builders and others working in the construction industry have lost their jobs.
Even though the South-Central region has posted a lower jobless rate for the third consecutive month in May, the rate did not change very much from previous months. The Twin-Falls micropolitan area and its surrounding regions experienced a one-tenth percentage point rise in its unemployment rate to 7.8% whereas in the Burley micropolitan area, the rate was 7.2% after a rise of three-tenth of a percentage point.
The state-wide unemployment rate stood at around 9%, the highest since 1983 according to the Idaho Department of Labor. Among the sectors that have shown improvements in unemployment rates year-on-year are the professional and business services, healthcare and private education. The construction and manufacturing industries have not yet recovered to pre-recession levels.
Nationwide, the high-tech manufacturing industries suffered a drastic decline in job growth from 2008 to 2009. In 2008, high-tech jobs declined by 2% while in 2009, it plunged 11% largely due to layoffs in big corporations like Dell, Hewlett-Packard and Micron Technology. This has had a spin off effect in Idaho where 7,000 people lost their jobs in this sector from a high of 17,300 in November 2006.
This year, the increase in the number of bankruptcies was not as drastic as it was from 2008 to 2009, although the 2010 level is still high.
Is a recovery on the cards? Analysts say it’s hard to tell just by the results of one quarter. Come the end of 2010, the picture will become clearer. By then, most people in financial distress would have worked through the bankruptcy process already.
Some analysts feel that the economy is not the only factor causing bankruptcies. Other pertinent causes are the slow job creation process and the fact that legislators are not renewing the unemployment extension. The rising cost of medical care has contributed to another form of bankruptcy – medical bankruptcy. When people lose their jobs, they forfeit their employment medical insurance and this further exacerbates the situation where they cannot afford proper medical care when an emergency takes place.
Nationally, the number of job vacancies rose in April to its highest in 16 months, which is a good sign indicating private employers may hire more people in the coming months. The number of jobs advertised in the country rose by 2.8 million to 3.1 million from the end of April last year to March 2010.
Times are certainly bad. You deserve some respite from your debt problems. Bankruptcy can give you that respite. Call us at (813) 200 4133 for a free consultation or visit http://tampabankruptcy.pro.
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Filed under Chapter 7 (Tampa) by on Sep 3rd, 2010. Comment.
Auto parts supplier Visteon Corp had their reorganization plans approved by bankruptcy judge Christopher Sontchi, paving the way for the company to allow its creditors to vote on it. The vote is expected to give unsecured bond holders controlling stake in the company.
The plan came under heavy objections from some of the shareholders and holders of unsecured trade claims but the judge overruled them. The judge also scheduled a plan confirmation trial to proceed on September 28, while giving creditors until July 30 to vote on the plan.
Under Visteon’s reorganization plan, unsecured bond holders would become 95% stakeholders in the reorganized company after they buy over $300 million worth of stocks and raising a further $950 million by backing a stock rights offering to pay off secured creditors who hold $1.6 billion in debt. These secured creditors are fighting the unsecured bond holders for control of the company. In the event that the bond holders fail to raise the money, Visteon will revert to an earlier plan where the secured creditors take up 85% ownership of the reorganized company and the rest of the equity be given to the bond holders.
But should the controlling stake be held by the unsecured bond holders, the present shareholders of the company could be left with nothing and the trade creditors could 50 cents or less for every dollar they are owed. The trade creditors are claiming a total of $48 million. Their attorneys contend that the disclosure statement outlining Visteon’s reorganization plans did not present sufficient information on the company’s valuation and that the plan itself could not be confirmed because of the way it treats various groups of creditors.
On the other hand, Visteon’s lawyers claim that the objections to the disclosure statement were baseless and that they should be brought up at the plan confirmation trial, which is expected to stretch over two weeks. Judge Sontchi ruled that the valuation information in the disclosure statement was “more than adequate and exhaustive”.
Another point of contention has to do with the fees incurred in the entire process. The fees for arranging and purchasing the stock rights offering amount to more than $60 million, payable to the bond holders. Visteon’s financial adviser, Rothschild, would be paid $62.5 million. This led to objections from the lenders and objecting shareholders that Visteon’s deal with the bond holders could cost the company more than $100 million in unnecessary fees.
Visteon was a former subsidiary of Ford Motor Co. and one of its top suppliers of parts based in Van Buren, Michigan, filed for bankruptcy in May 2009 after automakers cut production due to the recession.
Filing for bankruptcy has saved Visteon and it can save your personal finances or company business also. Call us for a free consultation at (813) 200 4133 or visit http://tampabankruptcy.pro.
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Filed under Chapter 7 (Tampa) by on Sep 4th, 2010. Comment.
The national bankruptcy rate rose 14% for the first 6 months of 2010, the highest since landmark legislation was enforced to curb abuse in bankruptcy cases in 2005. According to the American Bankruptcy Institute (ABI), the number of filings rose to 770,117, the highest year-on-year since the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) came into being aimed at reducing the number of Chapter 7 bankruptcies where debts can be wiped out without paying them.
However, month-on-month, the June statistics indicate a glimmer of hope. It is the third consecutive month where the bankruptcy rate has fallen. The number of bankruptcy filings in June came up to 127,000, down more than 7% compared to May. But this number is higher compared to June 2009 by more than 8%, according to the National Bankruptcy Research Center. The ABI expects another 1.6 million individuals and companies to file for bankruptcy before the year is out, according to its Executive Director, Samuel J. Gerdano.
Statistics in a report by Professor Ronald Mann of the Columbia Law School in Alaska show that among the states, Nevada recorded the highest bankruptcy filing rate of 16,000 filings for each one million households (this is more than double the national average of 6,800 filings per million) whereas South Carolina and Washington D.C. came in the least with less than 40% of the national average. The regions most hard hit by bankruptcies are the South East and South West of the country. While most states have increased in the number of bankruptcy filings, Tennessee and Alabama and some other Southern states have shown lower filings.
Even some people in public office have not been spared. Part-time mayor for Layton, a city of 67,000 residents, filed for bankruptcy in March this year after winning the election to a second term in November 2009. Steve Curtis, mayor of Layton, the largest city in Davis county, Utah lost his job due to downsizing. Curtis said that bankruptcy was something he tried very hard to avoid as it was something he felt was distasteful.
Yet Curtis intends to fulfill his duties as mayor as he had not broken any law and should not have to resign. Curtis added that he was very humbled to receive the support of many residents facing the same experience due to layoffs. He receives an annual salary of $21,800 and a monthly travel allowance of $800. In addition, he also receives a small stipend as a director of Wasatch Integrated Waste Management district that encompasses Layton’s landfill and burn plant.
No one is exempted from the effects of the economic crisis. It has driven countless people into debt. If you have been drowning in debt, consider bankruptcy as a way out. Many may not realize that bankruptcy actually protects you from your creditors and gives you the chance to discharge your debts. Call us at (813) 200 4133 for a free consultation or visit http://tampabankruptcy.pro.
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Filed under Chapter 7 (Tampa) by on Sep 5th, 2010. Comment.
