Appliance World Goes Bust

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.

Six US Banks Face Bankruptcy

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.

Tampa Bay Bankruptcy Lawyers Ready to Help

For many years people have had a misguided impression about bankruptcy. There has been a social stigma attached to it that makes it something to avoid, even for those who have crippling debts. But thankfully, this public perception has begun to change. The fact is, the law has provided bankruptcy as a solution for those who are struggling with insurmountable debts. No matter how you may have accumulated those debts, you deserve a second chance through bankruptcy.

The Tampa Bay Bankruptcy Bar Association has more than 300 qualified bankruptcy attorneys who can help you start a new life free from the burden of debts. Please call your Tampa Bankruptcy Attorney at (813) 200 4133 or toll free (800) 965 5074. I will mobilize my entire team of professional Tampa lawyers to respond to you.

The first thing you will want to do is check out our section, ‘Bankruptcy Evaluation’ to see whether you are likely to need bankruptcy protection. Once you have ascertained that, then contact us at the number above and we will help you decide what form of bankruptcy you want relief from. There are two Chapters in the Bankruptcy Code you can apply for – Chapter 7 and Chapter 13.

Generally, you can only qualify to apply for a Chapter 7 bankruptcy when you income is less than Florida’s average minimum income for a family the size that you have. This is known as ‘passing the means test’. Please refer to our section, ‘Florida Bankruptcy’ to see the means test table. Chapter 7 eliminates your unsecured debts like credit card bills, medical bills and other unsecured loans. Once you have been discharged from these loans, you can start rebuilding your credit immediately although your bankruptcy record stays with you for 10 years. With your unsecured loans wiped out, you can now apply for fresh credit. The law sets a time bar of 8 years before you can make another application for a Chapter 7 bankruptcy. This may work in your favor in your fresh credit applications.

A Chapter 13 bankruptcy is where you restructure your loans to repay your debts over a period of 3 to 5 years. This is also known as the Wage Earner’s Plan. Once you make a Chapter 13 filing, you can obtain a court order to halt all foreclosures or repossessions that are pending on your assets. Likewise, the court will prevent your creditors from continuing to harass you over your debts.

Last year, over a million people all over the nation filed for bankruptcy. They are on their way to a new lease in life, without crippling debts. How about you? Call us at (813) 200 4133 or toll free (800) 965 5074 for a free consultation.

Harrisburg Fights to Stave Off Bankruptcy

The city of Harrisburg in Pennsylvania currently stands at the verge of bankruptcy, according to consulting firm Management Partners. Harrisburg’s mayor Linda Thompson says the city has an immediate need of $3.8 million. This figure is set to grow to $164 million in five years’ time. A major part of this amount is because of the $288 million debt the city guaranteed on the Harrisburg Authority’s incinerator. The city has yet to pay $68.7 million in debt-service payments this year.

To address the situation, the city will embark on a concerted drive to avoid the bankruptcy courts. Management Partners has laid out 21 steps of action the city needs to take. Among them are selling off some of the city’s assets, negotiating with the company that runs the Harrisburg Authority incinerator to either sell or lease it in the long term and reviewing labor agreements with the unions. The city also has had to deal with other parties such as Dauphin County. One action step the Harrisburg city authorities are in the process doing is reviewing its emergency financial plan with Dauphin in order for the county to fulfill its financial obligation to make debt-service guarantee payments.

In addition to these steps the city will implement some other potential deficit reducing measures. Some of the actions they could take include doubling the parking tax, a 20% increase in water and sewer rates, increasing sanitation fees and parking infringement fines by 100%, raising property taxes by 117 percent next year and selling the city’s parking garages. The city’s employees are also required to take 5 days’ no pay leave a year each.

For now, Management Partners has not recommended that the city apply to the state to be declared financially distressed under Act 47 of Pennsylvania state. Act 47 states that financially distressed cities in Pennsylvania need to submit to the state’s oversight although it still may receive funds. This is usually the final step before formally filing for bankruptcy. It appears an Act 47 declaration may become a reality by the middle of this year.

Various city officials have differing opinions about bankruptcy. City controller Dan Miller is one of the proponents for the idea of applying for bankruptcy sooner rather than later. He feels that bankruptcy protection would stave off creditors and save some of the city’s assets. However, Mayor Thompson feels otherwise. Bankruptcy is not one of her immediate options.

Dauphin County, meanwhile is happy that the city is considering selling its assets. This was something the County had proposed in the past.

Bankruptcies Everywhere

In these economically challenging times, the number of bankruptcy filings has skyrocketed, to no surprise. Take Wisconsin for example. In 2009, the figure rose by 30% compared to the previous year, which itself had risen 35% compared to the year before that. Nationally, the picture is just as gloomy. More than 1.4 million bankruptcies were filed last year, representing an increase of 32% from the year before. This situation is set to continue so long as the unemployment rate remains the way it is.

In Wisconsin, there were 27,413 bankruptcy petitions filed last year. This figure was higher by 21,144 compared to that in 2008. Despite the enforcement of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) that was meant to push more people toward Chapter 13 filings, more than 80% were Chapter 7 cases instead, the kind that eliminates unsecured debts such as credit card balances, medical bills and other types of consumer liabilities.

The rising incidents of bankruptcies are exacerbated by the continued lack of jobs. Bankruptcies can wipe out debts but in order to move forward, one must have a continual source of income. But with the sluggish economy, employers are tightening their belts and are slow in hiring. Thus a bankrupt may not be able to obtain gainful employment, thus rooting him to square one. Thus the vicious cycle is prolonged. Unless the employment rates improve, the number of bankruptcies is set to continue to rise.

Another sector that is severely affected is housing. Apart from the subprime mortgage crisis, house owners are finding it difficult to keep up with their mortgage payments due to the loss of their jobs. An increasing number of people have resorted to working more than one job but still earn less than they did working one job 5 years ago. This is especially so for commission-based workers and small business owners. Thus home foreclosure rates are on the rise.

Financial analysts predict that 2010 will be a really tough year for many Americans.
In the Eastern District of Wisconsin last year, the number of Chapter 11 bankruptcy filings showed a significant rise to 76 compared to only 21 in 2008. On the other hand, in Western Wisconsin District, the number of Chapter 11 filings reduced marginally to 40 in 2009 compared to 44 the year before.

Unfortunately, even those who were well off in good economic times are seeking bankruptcy protection. Bankruptcy attorneys have the unenviable task of dealing with depressed clients offering little hope that things will turn for the better in the near future.

JAL Files for Bankruptcy

Under a $10 billion turnaround plan, Japan’s national airline JAL has filed for bankruptcy due to its crippling debt of about $25 billion. The airline plans to continue its operations but will be laying off some of its staff, cancel routes that are not making profit and ground some of its older planes. At present, the plan is that JAL will cut its workforce to 36,201 from 51,862, retire its 37 Boeing 747-400s and halt several of its international and domestic routes.

The airline has gone through 4 government bailouts but none succeeded in lifting the airline out of its liabilities.

One other aspect of concern is the pilot training center that JAL has been operating in Napa County Airport since 1971. The training program trains 101 trainee pilots at present. The Napa County Airport houses a main terminal building, maintenance facilities for the planes, flight simulators and 36 airplanes, both single and twin engine ones. At present, the training program entails returning to Japan to fly bigger aircraft upon successful completion of the initial training at Napa.

At this point of time, it is uncertain if the bankruptcy filing will affect the pilot training program, and if so, how. Speculation is rife that at the very least, the number of student pilots will be reduced in future. One thing for certain was that JAL’s training operations over the last one year at Napa has been somewhat declining.

Japan Airlines or JAL was started in 1951 and was worth more than $6 billion as recently as March last year. But in the turnaround exercise, the national carrier will be delisted from stock exchanges thus wiping out shareholders.

US airlines Delta and American airlines, have expressed their individual interest in investing in the troubled Japanese carrier. Both companies have firmly stated that talks will continue despite the bankruptcy filing. Under bankruptcy procedures, JAL will likely receive a cancellation of $8 billion of its debts, $3.8 billion of which are from financial institutions.

The entity leading the turnaround plan is Enterprise Turnaround Initiative Corp. of Japan, a state- affiliated fund. In a move to reassure concerned creditors, Enterprise Turnaround has reiterated that their restructuring plans included continuing to pay vendors and aircraft lessors, as well as maintaining the carrier’s frequent-flyer program.

On Tuesday, JAL also filed for bankruptcy in New York, where it sought protection from a U.S. court from creditors who were trying to collect debts while the Japanese case is pending, according to court documents.

Philly’s Orchestra Mulls Bankruptcy

The Philadelphia Orchestra needs $15 million to stay afloat. Its newly appointed President and CEO, Allison Vulgamore is faced with the daunting task of increasing ticket sales and finding a new musical director. Verizon Hall, the Orchestra’s home is only 62% full at best this season, even after offering tickets at discounted prices. This is down from 80% last year.

One possible course of action is to file for bankruptcy. But no firm decision has been made on this thus far. At this point of time, Vulgamore is more concerned about finding other means to boost revenue.

At the same time, recently there has been an in-house squabble between the Orchestra and its pop subsidiary, Peter Nero and the Philly Pops which Vulgamore as the President had to step in to mediate. The decision that needs to be made is whether they stay together or go their separate ways. That aside, she is also discussing with various parties on the most likely candidate for musical director, someone who she says needs not only musical ability and charisma to draw crowds but also be a willing partner with her to restructure the organization of the Orchestra.

But in tandem with the need of a musical director is the pressing need for funds. Pledges from the public have amounted to $8 million so far but at least $15 million is needed to restructure and revive the operations of the Orchestra the way Vulgamore would like to see it.

The Orchestra has an endowment fund that amounts to $112 million as at Nov. 30. But this is far below the targeted $250 million the Orchestra was aiming for during its last fund raising effort. Furthermore, not all of the endowment fund is free to be used by the Orchestra. Only a meager $5.5 million out of the $112 million is entirely free for the Orchestra’s board to use. How the balance of the fund is used is determined by the donors.

The Philadelphia Orchestra is not the only one in the country facing severe financial difficulties.

The respected Cleveland Orchestra, considered by many to be one of the world’s best, was faced with a crippling strike last week when members of the Orchestra protested at proposed pay cuts by the management.

Even the famous New York Philharmonic Orchestra that performs in a much wealthier city compared to Philadelphia or Cleveland, ended last season with a $4.6 million deficit. Good thing they’re not considering a Tampa Bankruptcy since it would be the incorrect jurisdiction.