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Archive for the ‘Bankruptcy News’ Category

September 8, 2009 – According to the Tampa Bay News Journal, The Kennedy Law Group, a law firm that is known for providing legal advice on a local Florida television station, is seeking protection from its creditors through the U.S. Bankruptcy Court.

Kennedy Law Group, known as A Advocates & Attorneys of Kennedy Law Group PA, has formally done business as A Professional Association of Trial Lawyers and A Personal Injury Law Firm.

They have filed for Chapter 11 reorganization with the U.S. Bankruptcy Court’s Middle District of Florida Friday, reporting asses of between $100,000 and $500,000 and liabilities of between $1 million and $10 million.

Thomas J. Kennedy is president of the firm, which is located at 5100 W. Kennedy Blvd., Tampa. Kennedy appears on WFLA-Channel 8 weekday mornings to answer general legal questions from viewers, according to the firm’s Web site.

A Advocates & Attorneys owes $2.5 million to its top 12 creditors, according to court filings, with $1.5 million of that earmarked for advertising expenses.

The firm says it owes Idearc Media LLC, the official publisher of print telephone directors for Verizon Communications Inc. (NYSE: VZ), $1.1 million. Idearc filed for Chapter 11 bankruptcy protection in Dallas in March.

A Advocates & Attorneys also owes Dex Yellow Pages of Maitland, a publisher owned by R.H. Donnelley Corp. that prints telephone directories for Embarq, nearly $182,000.

A Advocates & Attorneys also said it owes AT&T Yellow Pages $124,000, Wenstrom Communications of Clearwater $70,000 and Yellow Book of Dallas $44,500 in advertising fees.

The firm also owes on two lines of credit including one for just under $400,000 with Wachovia Bank and another for $132,000 with Bank of America.

Washington Redskins

Last Oct. 8, the Redskins sued Pat Hill, a 72 year old grandmother, in Prince George’s County Circuit Court for backing out of a 10-year ticket-renewal agreement after the first year. In the lawsuit the Redskins sought payment for every season through 2017, plus interest, attorneys’ fees and court costs.

Due to hard economic times, loyal Washington Redskins’ fan, Pat Hill, from Alexandria VA., can’t afford to pay for her season tickets anymore.

Hill is a real estate agent and loyal fan of the Washington Redskins and has  had season tickets since the early 1960s.

Because Hill  could not afford a lawyer, the Redskins ended up winning a default judgment of $66,364.

Hill says, that the judgment is now forcing her into bankruptcy.

“It really breaks my heart,” Hill said. I don’t even believe in bankruptcy. We are supposed to pay our bills. I ain’t trying to get out of anything.”

According to the Washington Post, Redskins General Counsel David Donovan said the lawsuits are a last resort that involve a small percentage of the team’s 20,000 annual premium seat contracts. He added that the team has accommodated people in hard-luck circumstances hundreds of times.

“The Washington Redskins routinely work out payment plans and alternate arrangements with hundreds of ticket holders every year,” Donovan said. “For every one we sue, I would guess we work out a deal with half a dozen.”

Donovan said he was unaware of Pat Hill’s case.

What would happen if we as average citizens issued IOU’s to cover our debt or to pay our taxes? You can imagine. Yet California is doing just that. Why don’t they start by cutting the jobs of the legislators who got us into this mess in the first place?

Reuters reports California’s controller, John Chiang, said on yesterday that he would have to issue IOUs in a week if lawmakers can’t quickly solve a $24 billion budget deficit, and the state’s treasurer plans to tap a reserve fund to meet debt service costs.

The legislature is gridlocked and has failed to pass a proposed $11 billion in cuts.

“Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression,” Controller John Chiang said in a statement announcing that he would be forced to use IOUs to pay the state’s bills beginning on July 2.

“The state’s $2.8 billion cash shortage in July grows to $6.5 billion in September and after that we see a double digit freefall,” Chiang said. “Unfortunately, the state’s inability to balance its checkbook will now mean short-changing taxpayers, local governments and small businesses.”

State Treasurer Bill Lockyer, meanwhile, is planning to draw on reserves for economic recovery sales tax bonds, according to a spokesman.

Rating agency Standard & Poor’s warned it may downgrade the bonds, given the problems California is likely to face in replenishing its emergency funds.

The state is expecting to file a material event notice on Thursday to alert bondholders to the move that comes in response to plunging sales tax receipts, said spokesman Tom Dresslar.

“The senior coverage account will be drawn on and debt service on all economic recovery bonds will be paid in full on July 1,” Dresslar said.

California has been in crisis since the housing slump and credit crunch caused a severe decline in revenues. The state has seen its unemployment rate climb steadily to 11.5 percent in May from 6.8 percent a year earlier, according to labor department data.

Legislature Rejects Proposed Cuts

The government dipped into the same reserve fund in December to make a principal payment on economic recovery bonds, but was able to top the reserve back up within days.

The California Legislature on Wednesday voted down $11 billion in proposed cuts to state services, sending members seeking a budget deal back to the drawing board.

The vote failed largely along party lines in both houses, with the Republicans saying it falls short of the savings needed and amounted to posturing by Democrats.

Standard & Poor’s said it will review its economic recovery bond, or ERB ratings “after further evaluation of state projections as to the size and timing of potential draws on the ERBs’ reserves.”

The bonds, which were approved by voters in 2004 to help the state through another fiscal crisis, are secured by a sales tax and a general obligation pledge of the state.

California has about $8.6 billion of the bonds outstanding, although some have credit support and will not be affected by any rating change, S&P analyst David Hitchcock said.

S&P rates the bonds at A-plus, or fifth-highest investment grade and six notches above speculative, or “junk” status.

That’s one notch above the A rating assigned to California’s $57 billion of general obligation debt, the lowest rating of any U.S. state.

S&P has the GO debt on alert for a downgrade.

Moody’s also has the state on review and has warned of a potential multi-notch downgrade.

Draws on debt service reserve funds are rare and will likely make waves in the bond market, said Dick Larkin, director of credit analysis at the Iselin, New Jersey, office of broker Herbert J. Sims & Co.

“I am not aware of a situation where an issuer has drawn on a debt reserve for sales tax bonds,” he said in emailed comments.

“I am also not aware of a situation where a unit needed to draw on a formal debt reserve fund to pay normal debt service on general obligation bonds,” he said.

Larkin said the latest developments reflect the strain on California’s cash flow and may signal a situation that leads to a temporary disruption of normal debt service payments.

“In the end, though, I still believe that California debt holders would be paid in full, even if there is a temporary disruption because of this financial crisis,” he said.

Locate A Lawyer is an attorney directory where one can find a lawyer by practice and location.  Find California attorneys and lawyers.

June 17, 2009 – Famous clothing retailer, Eddie Bauer Holdings Inc., has filed Chapter 11 bankruptcy protection in the United States Bankruptcy Court of the District of Delaware. It reported a $44.5 million loss for the first quarter.

Eddie Bauer is based in bellevue Washington. The Wall Street Journal reported that the company is likely to be acquired by private-equity company CCMP Capital Advisors.

Find bankruptcy attorneys at LocateaLawyer.com

Hank Greenberg

The following is a report from The Associated Press

New York – a lawyer for AIG told jurors Monday at the start of the AIG civil trial, that former CEO Hank Greenberg of AIG plundered an AIG retirement program of billions of dollars because he was angry at being forced out of the company.

Attorney Theodore Wells told the jury in Manhattan that former AIG Chief Executive Officer Maurice “Hank” Greenberg improperly took $4.3 billion in stock from the company in 2005, after he was ousted by the company amid investigations of accounting irregularities.

“Hank Greenberg was mad. He was angry,” Wells said in U.S. District Court of the emotional state of the man who, over a 35-year-career, built AIG from a small company into the world’s largest insurance company.

Wells said that Greenberg, within weeks of being forced out in mid-2005, gave the go-ahead for tens of millions of shares to be sold from a trust fund. The fund was set up to provide incentive bonuses to a select group of AIG management and highly compensated employees that they would receive upon their retirement.

Greenberg, 84, has contended through his lawyers that he had the right to sell the shares because they were owned by Starr International, a privately held company he controlled.

Starr International was named after Cornelius Vander Starr, who created a worldwide network of insurance companies in the early 1900s.

AIG maintains that Starr and Greenberg, his protege and successor, decided in the late 1960s to organize the various companies under one holding company, AIG.

Starr International remained a private company and its shareholders decided in 1970 that the amount that its shares of AIG were worth above book value of about $110 million should be used to compensate AIG employees, AIG has said.

The embattled insurer is trying to reclaim the money from Starr it says was wrongly pocketed through stock sales by Greenberg.

Locate A Lawyer is an attorney and lawyer directory where one can find a lawyer by practice and location.

June 13. 2009 – Six Flags amusement park filed for chapter 11 bankruptcy in a Deleware court Saturday.

Six Flags has filed for chapter 11 bankruptcy in order to reorganize and rid itself of over $1.8 billion in debt. The company plans to stay open while bankruptcy takes place. Six Flags, which operates theme parks in the U.S., Mexico and Canada, says  they plan to continue their the day to day operations.

Although Six Flags did well in 2008, it was unable to handle it’s onerous debt.

Locate A Lawyer is an attorney directory where one can find a lawyer by practice and location. Here you can find bankrupcty attorneys.

DETROIT — The decline of General Motors may be putting thousands of auto workers and managers out of work, but it will be putting a lot of lawyers to work.

In part, that is because so many top lawyers are already running up lots of billable hours working on the Chrysler bankruptcy case, while others have been hired by the government, which is financing the way through bankruptcy for Chrysler and, presumably, G.M. Read the story here: