Since the bankruptcy filing of MF Global on October 30, the brokerage firm’s creditors have started to take action to recover their losses. These include suing the company’s advisers, searching for assets overseas and seeking information from a probe into the mingling of customer accounts. MF Global’s liabilities amount to $39.7 billion and its assets are valued at $41 billion. The firm has said it has about $26 million in cash. But about $593 million of MF customer funds cannot be unaccounted for.
At this point, the trustee overseeing the liquidation of MF Global’s operating unit, James Giddens has started an investigation into possible fraud or misconduct, as has the FBI. Giddens was allowed by the bankruptcy court to investigate the company’s directors and officers, lenders and other investors. The investigation will be centered primarily on customer recoveries. Besides the FBI, other government agencies investigating are the Commodity Futures Trading Commission and the Securities and Exchange Commission. MF Global requested an extension to the usual 14-day period to provide its list of assets and debts and was granted an extension till January 30 to do so.
The trustee is facilitating the formation of a creditors’ committee to look after their interests. The majority of these creditors are unsecured bondholders. But creditors and bankruptcy lawyers may hesitate to get involved in the case because of fears that it may have insufficient funds to pay the committee’s legal fees.
Another group taking action are members of exchanges who provided liquidity for MF Global to trade. Among them are members of the New York Mercantile Exchange, COMAX and Intercontinental Exchange.
MF Global’s financial problems began escalating when the firm issued two tranches of $325 million in repo-to-maturity debt and made bets amounting to $6.3 billion on financially-strapped European countries like Portugal, Italy and Spain, among others. US regulators had questioned MF Global’s use of so-called repo-to-maturity transactions as early as March.
MF Global tried to sell itself before filing for bankruptcy but there were no buyers. The firm subsequently filed for bankruptcy. Usually, such a company would seek loans to fund their operations in bankruptcy from a lender who wants to protect its prior investment, or a potential buyer. In MF Global’s case, the financier is likely JPMorgan Chase & Co. JPMorgan Chase & Co., agent to a $1.2 billion unsecured loan, also provided a $300 million secured loan to MF Global’s brokerage. JP Morgan has asked for all of MF Global’s remaining collateral.
MF Global’s bankruptcy could end up as complex as that of Lehman Brothers, where disputes arose over whether parties holding collateral for one transaction have a right to hold it because they have an unrelated claim against MF Global.
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Filed under Chapter 7 (Tampa) by on Nov 8th, 2011. Comment. 
Southern Montana Electric (SME) Generation and Transmission Cooperative Board, a wholesale electric company made up of five rural electric co-ops in Central and Southern Montana, has filed for bankruptcy citing ‘acute cash flow problems’ as the reason. At the same time, three members of the board voted to raise electricity rates by 20%. This has been the fourth increase since December. However, some other board members claim they were kept in the dark. Dave Kelsey, an SME board member from the Yellowstone Valley Electric Cooperative said, “We had no clue this bankruptcy thing was coming. We should have been alerted to it.”
The five cooperatives that make up Southern Montana Electric Generation and Transmission are Yellowstone Valley in Huntley, Beartooth in Red Lodge, Fergus in Lewistown, Tongue River in Ashland and Mid-Yellowstone in Hysham. Among them, Yellowstone Valley and Electric City Power of Great Falls has sued to terminate their association with SME but the bankruptcy proceedings will take precedence over the lawsuits.
On the other hand, the bankruptcy filing also put a stop to SME’s efforts to apply for a loan of up to $300 million to complete the phase two of the Highwood Generating Station. This project alone cost co-op members millions of dollars because it was changed from a coal-fired plant to a natural gas-fired plant.
It appears the voting to file for bankruptcy and raise the rates was carried out under somewhat acrimonious conditions. The five member board voted 3 to 2 to include a new board member, Arleen Boyd representing the Beartooth co-op. As a result, the board members from Yellowstone Valley and Electric City Power walked out in protest. After that, the remaining 3 board members voted for bankruptcy and upping the rates. The bankruptcy filing was done last Friday.
Great Falls City Commisioner, Bob Jones commented that the vote may have lacked the necessary quorum. He said, “You’d think something of this magnitude, they would have called a special meeting. It wasn’t on the agenda. Everything is secretive.” But board attorney Jon Doak advised the remaining members that they had a quorum because the meeting had started with five members.
According to bankruptcy papers, SME owes nearly $7.6 million to PPL EnergyPlus and $1.16 million to the Bonneville Power Administration. It also lists a debt of $4.85 million in credit lines, $4.29 million in construction costs, nearly $1 million in engineering costs and more than $330,000 in legal fees.
Yellowstone Valley general manager Terry Holzer contends that SME bought too much power from PPL such that it had to sell the excess into the market, resulting a loss of about $9 million from April through August.
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Filed under Chapter 7 (Tampa) by on Oct 24th, 2011. Comment.
If you are a homeowner association member filing for bankruptcy, there is an obscure provision in the law you must be aware of. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) passed in 2005 allows these associations to impose fees and other costs on you even though you are struggling financially. And since it is quite common for certain home development areas to make it compulsory to join their homeowner associations, this provision in the law directly affects you.
Even if you have filed for bankruptcy protection, the BAPCPA contains an explicit provision that prevents you from escaping any fees that are incurred during the bankruptcy process. Before the law was passed, bankruptcy courts had more freedom to excuse bankrupt homeowners. But the BAPCPA has made such fees “non-dischargeable,” and this means the judge cannot forgive the debt.
Even selling your property and filing for bankruptcy does not absolve you from paying home association fees and other related charges. As long as the ownership of the home is still under your name, you are liable regardless of whether it has been foreclosed or is due for auction. Failure to pay up may result in legal action against you.
Homeowner associations assess fees to finance amenities, and typically establish rules on home maintenance and related matters. And they impose monthly fees on every homeowner member. When the BAPCPA was drafted in 2005, some lobbyists in Washington must have spoken up for homeowner associations, which explains the provision in the law to protect their interests.
The best way to preempt this type of situation is for you to consult an experienced bankruptcy lawyer before filing for bankruptcy. More often than not, careful planning of a bankruptcy filing can help you overcome the problems related to homeowner association fees.
Jeanne Ketley, president of the nonprofit advocacy group Maryland Homeowners’ Association (MHA) said, “It’s a story that needs to be told as a warning to homeowners. The terrible thing about it is that it is all legal.” Although the homeowner associations have the legal right to press charges for its dues, it also has the discretion whether to initiate a lawsuit or negotiate other means of settlement with the homeowner. The MHA advocates for the rights of individual homeowners against the overbearing homeowner associations, but does not involved itself in bankruptcy cases.
If you want to consult a bankruptcy attorney on filing for bankruptcy or to discuss homeowner fees in your situation, call us at (813) 200 4133 for a free consultation.association member filing for bankruptcy, there is an obscure provision in the law you must be aware of. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) passed in 2005 allows these associations to impose fees and other costs on you even though you are struggling financially. And since it is quite common for certain home development areas to make it compulsory to join their homeowner associations, this provision in the law directly affects you.
Even if you have filed for bankruptcy protection, the BAPCPA contains an explicit provision that prevents you from escaping any fees that are incurred during the bankruptcy process. Before the law was passed, bankruptcy courts had more freedom to excuse bankrupt homeowners. But the BAPCPA has made such fees “non-dischargeable,” and this means the judge cannot forgive the debt.
Even selling your property and filing for bankruptcy does not absolve you from paying home association fees and other related charges. As long as the ownership of the home is still under your name, you are liable regardless of whether it has been foreclosed or is due for auction. Failure to pay up may result in legal action against you.
Homeowner associations assess fees to finance amenities, and typically establish rules on home maintenance and related matters. And they impose monthly fees on every homeowner member. When the BAPCPA was drafted in 2005, some lobbyists in Washington must have spoken up for homeowner associations, which explains the provision in the law to protect their interests.
The best way to preempt this type of situation is for you to consult an experienced bankruptcy lawyer before filing for bankruptcy. More often than not, careful planning of a bankruptcy filing can help you overcome the problems related to homeowner association fees.
Jeanne Ketley, president of the nonprofit advocacy group Maryland Homeowners’ Association (MHA) said, “It’s a story that needs to be told as a warning to homeowners. The terrible thing about it is that it is all legal.” Although the homeowner associations have the legal right to press charges for its dues, it also has the discretion whether to initiate a lawsuit or negotiate other means of settlement with the homeowner. The MHA advocates for the rights of individual homeowners against the overbearing homeowner associations, but does not involved itself in bankruptcy cases.
If you want to consult a bankruptcy attorney on filing for bankruptcy or to discuss homeowner fees in your situation, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Oct 12th, 2011. Comment.
With speculation rife that the US is heading for a double recession, many people are contemplating filing for bankruptcy protection. If you are burdened with debt and considering bankruptcy, it would do you well to consider what bankruptcy really holds for you. On one hand, bankruptcy protection is not the end of your financial life; on the contrary, it could be your financial life saver. But on the other hand, filing for bankruptcy can be a rough ride.
I’m going to be upfront and tell you the real deal behind bankruptcy and how to survive a bankruptcy filing.
They say the best remedy is prevention. Here’s a tip that can possibly help you avert a bankruptcy filing. Go for credit counseling classes (something you will eventually have to do after filing for bankruptcy anyway). If you go for such classes before filing for bankruptcy, you will learn useful debt management tips that might help you prevent bankruptcy.
Bankruptcy is the best way to clear your unsecured debts like credit card bills, medical expenses, phone bills and any loan that is not backed up with some collateral. But the downside to that is filing for bankruptcy will adversely affect your credit rating unless you do something about it. Here’s what you should do.
Completely pay up one or more of your credit cards before filing for bankruptcy. You may need to raise some cash to pay off your card by liquidating some assets that have fewer consequences. Do it, because by bringing your card balance down to zero, this card will not be listed as one of your creditors and hence, even after filing for bankruptcy, you can keep the card to build up credit at a lower interest rate than you could possibly get after bankruptcy.
Here’s another tip to help you protect your assets from creditors. Before filing for bankruptcy, do not deposit any money at the banks where you have credit card or loan accounts. They can seize your deposits if an account goes delinquent, as yours is about to.
However, bankruptcy is not the panacea for all your financial ills. Bankruptcy will not clear away secured debts like your house, car or anything that has a lien on it. But don’t worry, if you have been making your payments (at least partially), chances are you won’t lose these important assets when you file for bankruptcy. Also, even though you file for bankruptcy you will still need to pay alimony, child support, student loans, income taxes and the like as these are financial obligations given protection under the law.
If you like these tips and want to find out more about how to survive a bankruptcy, discuss your situation with an experienced bankruptcy attorney. The bankruptcy process is getting more complex so it is advisable to seek legal counsel. You should be wary of bankruptcy specialists who charge high fees. Call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Oct 7th, 2011. Comment.
If you are facing financial difficulties in this economic recession, it may be time to consider filing for bankruptcy. Bankruptcy filing is a way to eliminate debt and get a fresh start worth considering. In 2010, 110,304 Floridians filed for bankruptcy, placing Florida in 13th spot in the country for per capita bankruptcy filings.
On the flip side, bankruptcy does have its long-term repercussions like a black mark on your credit score. So it might not be the panacea for all financial ills for everyone. If you are considering filing for bankruptcy, here are a few pointers to help you decide if this is a suitable move for you.
Firstly, review if your debts exceed (or are starting to exceed) your assets. If so, then you should seriously consider filing for bankruptcy. However, it also depends on what type of debts you have. If you have debts that cannot be wiped out by bankruptcy, then it’s pointless filing for bankruptcy. One such example is a student loan. But on the other hand, there are other debts that are particularly suited for bankruptcy to deal with, such as credit card loans or medical bills. At times, high credit card debts make it virtually impossible for you to catch up with your payments without filing for bankruptcy.
Secondly, if you have already tried other means of settling your debts without success, then you should think about the bankruptcy option. For example, you may have tried soliciting the help of a credit counseling organization. But if credit counseling has been failed and efforts to negotiate directly with your creditors have also failed, bankruptcy may be a viable option for you.
Thirdly, look at what your creditors have been doing to pursue their dues. If the incessant collection efforts like phone calls, notices, letters and such have been increasing and driving you up the wall, then you might think of filing for bankruptcy. If you get visits from debt collectors or there is a possibility your salary might be garnished, your home be foreclosed or worse you might be facing a lawsuit, then you should consider bankruptcy. Any or all of these occurrences might signal the real need for a bankruptcy filing.
Last but not least, consider how you are coping with your financial distress and all that comes along with it. Do you feel it is worth going through all the stress of trying to pay off your debts by your own efforts? If you have come to the end of your resources, you should consider the bankruptcy route.
If you wish to file for bankruptcy, or just want to talk to a professional about this, call us at (813) 200 4133 for a free consultation.cial difficulties in this economic recession, it may be time to consider filing for bankruptcy. Bankruptcy filing is a way to eliminate debt and get a fresh start worth considering. In 2010, 110,304 Floridians filed for bankruptcy, placing Florida in 13th spot in the country for per capita bankruptcy filings.
On the flip side, bankruptcy does have its long-term repercussions like a black mark on your credit score. So it might not be the panacea for all financial ills for everyone. If you are considering filing for bankruptcy, here are a few pointers to help you decide if this is a suitable move for you.
Firstly, review if your debts exceed (or are starting to exceed) your assets. If so, then you should seriously consider filing for bankruptcy. However, it also depends on what type of debts you have. If you have debts that cannot be wiped out by bankruptcy, then it’s pointless filing for bankruptcy. One such example is a student loan. But on the other hand, there are other debts that are particularly suited for bankruptcy to deal with, such as credit card loans or medical bills. At times, high credit card debts make it virtually impossible for you to catch up with your payments without filing for bankruptcy.
Secondly, if you have already tried other means of settling your debts without success, then you should think about the bankruptcy option. For example, you may have tried soliciting the help of a credit counseling organization. But if credit counseling has been failed and efforts to negotiate directly with your creditors have also failed, bankruptcy may be a viable option for you.
Thirdly, look at what your creditors have been doing to pursue their dues. If the incessant collection efforts like phone calls, notices, letters and such have been increasing and driving you up the wall, then you might think of filing for bankruptcy. If you get visits from debt collectors or there is a possibility your salary might be garnished, your home be foreclosed or worse you might be facing a lawsuit, then you should consider bankruptcy. Any or all of these occurrences might signal the real need for a bankruptcy filing.
Last but not least, consider how you are coping with your financial distress and all that comes along with it. Do you feel it is worth going through all the stress of trying to pay off your debts by your own efforts? If you have come to the end of your resources, you should consider the bankruptcy route.
If you wish to file for bankruptcy, or just want to talk to a professional about this, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Sep 19th, 2011. Comment.
