Archive for the 'Chapter 11' Category

Bankruptcy & The Economy: A Valuable Session

Published
by
Beth Schenz
on May 6, 2010
in Bankruptcy Court, Bankruptcy Filings, Chapter 11, Chapter 13 and Chapter 7
. 0 Comments

Cleveland, Ohio – May 6, 2010

The William J. O’Neill Regional Bankruptcy Institute, a part of the Cleveland Metropolitan Bar Association, is conducting a bankruptcy seminar offering an entertaining and comprehensive approach to the latest and best in the bankruptcy and insolvency arenas at the Marriott at Key Tower on May 12 and 13.  The two-day seminar, “What Hath the Great Recession Wrought: The Bend, The Bar and Congress Respond,” will feature regionally and nationally recognized speakers, including principal attorneys and judges from some of the nation’s highest-profile bankruptcy cases.

Beth Ann Schenz, an attorney in the Bankruptcy Department at Weltman, Weinberg & Reis Co., L.P.A. (WWR) played an integral part in putting together these dynamic presentations.  Over the last year, Ms. Schenz was Co-Chair of the 2010 Institute.  This undertaking involved coordinating over 58 speakers including 12 federal judges to speak on issues which touch the very heart of our economy.  For more information or if you would like to attend the discussion, visit www.clemetrobar.org/ONeill_Bankruptcy_Institute.aspx. 

The following is a capsule of some of the hot topics that will be discussed: 

Revitalizing a City
With lackluster economic growth, high jobless rates and dynamic talent loss in most of Midwest Cities, this lunch will focus on how a region turns around these staggering statistics.  The luncheon discussion will focus on the positive efforts that area organizations have gained over the course of the last year and what efforts they have planned to help propel this region into a strong, vibrant economic force.

Who Is Behind the Bankruptcy Statistics
The country continues to see statistics of the overwhelming amounts of people filing bankruptcy.  With bankruptcy numbers continuing to rise, the questions that are never asked are: what is behind the numbers, who are behind the numbers and what circumstances are behind the numbers.  This speaker will address those questions by taking the academia approach mainstream.  By understanding the numbers, community and economic leaders can address the situation and make policy that will help our economic future.  

Why Are They Too Big to Fail – We Have Chapter 11
Lead counsel from the Chrysler and Lehman Brothers bankruptcies will discuss the effect on bankruptcy sales of the Second Circuit’s ruling in Chrysler, and of Judge Peck’s recent decision allowing a lawsuit to proceed against Barclay’s, the bankruptcy purchaser of Lehman’s.   These disputes have reshaped the business landscape in important ways. This will be a great discussion considering the ongoing news stories involving companies and banks that are too big to fail.  Also, the discussion will continue on what is in the future of Chapter 11 bankruptcies.

Victims of Madoff & Other Ponzi Schemes
Irving Picard will lead a panel of the primary participants in the Madoff case.  They will review the hotly-litigated issues governing distributions to victims of the Ponzi scheme fraud. 

What is the Federal Legislature Doing
John Rao of the National Consumer Law Center and William A. Brandt, Jr. DSI are no strangers to Washington D.C.  Come hear what they have to say.

Loan Modification Ordered in Bankruptcy
Economic Issues before the Bench is a panel consisting of Judge Drain, Judge Isgur and Judge Morgenstern-Clarren.  Of note is Judge Drain’s piece on court-ordered loan modification procedures, which forces the creditor to enter into talks on loss mitigation.

If you have any questions regarding this bankruptcy seminar or would like a copy of the seminar materials, please contact Beth Schenz. Beth is an associate in the Bankruptcy department of WWR located in the Brooklyn Heights office. She can be reached directly at 216.739.5645 or via email at bschenz@weltman.com.

Bankruptcy Filings Continue to Rise

Published
by
Alan Hochheiser
on March 23, 2010
in Bankruptcy Filings, Chapter 11, Chapter 13 and Chapter 7
. 0 Comments

2009 brought us increased bankruptcy filings. The number of filings approached the levels of 2004. 2009 saw 1.4 million consumer filings. Approximately 71% of the filings were Chapter 7’s and 28% were Chapter 13’s. Less than 1% were Chapter 11 filings.  The first two months of 2010 has seen a continuation in the increased number of cases. According to the American Bankruptcy Institute, over 111,000 filings were made in February. That represented a 14% increase over February of 2009. It also represented an increase of over 9,000 filings from January 2010. March may well be a signal of what we can expect during the rest of the year.

2009’s statistics continue to show the trend where the majority of Bankruptcy cases are being filed. The 9th circuit, which includes California, Arizona and Nevada, saw 324,000 filings. The 6th Circuit, which includes Ohio and Michigan, was second with close to 214,000 consumer filings. The 11th Circuit, which includes Florida and Georgia, was third, with 198,000 filings. When looking at specific states, California led the way, followed by Florida, Ohio and Michigan. These are the states that are seeing the highest number of foreclosure filings. Of the 50 United States, Alaska had the fewest followed by Wyoming.

As the number of foreclosures increase, so should the number of bankruptcies. WWR will continue to monitor the trends and keep you updated as to the status of filings across the country.

If you have any questions, please contact Alan C. Hochheiser, Esq. Alan is the managing partner of the Bankruptcy Practice Group and is located in the Brooklyn Heights office of Weltman, Weinberg & Reis Co., L.P.A. He can be reached at 216.739.5649 or via email at ahochheiser@weltman.com.

New Bankruptcy Relief from Stay Forms to Take Effect in Northern District of Ohio

Published
by
Scott Fink
on February 26, 2010
in Bankruptcy Filings, Chapter 11, Chapter 13 and Chapter 7
. 0 Comments

On February 23, 2010, it was announced that the Bankruptcy Court for the Northern District of Ohio will begin utilizing new forms for the filing of Relief from Stay Motions in Chapter 7, Chapter 13 and Chapter 11.  The forms will need to be used for any motions filed on or after April 1, 2010.

The Bankruptcy Courts affected include:  Cleveland, Toledo, Akron, Canton and Youngstown.  The new forms will require much of the same information as had been provided by creditors previously.  However, the forms will require greater specificity as to the calculation of the total balance and arrears owing on a loan, as well as a more structured and detailed analysis of a creditor’s right to enforce the Note, Mortgage or Security Agreement.

No new forms will be required by creditors filing only for Abandonment.  In addition, no new forms were created for the submission of agreed or stipulated orders.

The Bankruptcy Department at WW&R is reviewing the new forms and will provide a more detailed analysis in the coming weeks. If you have any questions, please contact Mr. Scott Fink, Esq. Scott is an Associate in the Bankruptcy department of the Brooklyn Heights office of Weltman, Weinberg & Reis Co., LPA. He can be reached at 216.739.5644 or via e-mail at sfink@weltman.com.

Commercial Real Estate Slump Likely To Result In Uptick In Bankruptcy Filings

Published
by
Scott Fink
on February 10, 2010
in Bankruptcy Filings, Chapter 11, Commercial and Real Estate
. 0 Comments

With the commercial real estate market in a continued pattern of free fall, coupled with the still-lagging economy overall, creditors are likely to see a continued increase in overall bankruptcy filings for the foreseeable future.  For every strip mall or office park that watches as long-time, valued tenants vacate their spaces, there are landlords who cannot service the debt on their property due to an overall decrease in rental income, and there are small business owners now joining the ranks of the newly-unemployed, along with their employees.

The unfortunate trickle down sees both employees and small business owners seeking bankruptcy protection, along with a growing number of commercial property owners who are unable to find replacement tenants to make up the shortfall in rental income.

Additionally, those tenants remaining behind may see a lag in business as a result of the loss of “anchor stores” which attracted casual shoppers to the area.  This point was driven home by the recent Chapter 11 filing by Movie Gallery, Inc., the operator of the Hollywood Video chain.  Preliminary indications are that a “significant number” of Hollywood Video stores will be shuttered in the coming months, leaving hundreds of strip malls across the country without a valued tenant.

The Bankruptcy Department at Weltman, Weinberg & Reis will continue to monitor trends in bankruptcy filings and will update you as data becomes available.

Business Bankruptcies: Outlook for 2010 and What You Should Know

Published
by
Beth Schenz
on February 5, 2010
in Bankruptcy Filings and Chapter 11
. 0 Comments

While they became stronger in 2009 (yes they became stronger), the financial institutions were more willing to write off the bad debts of companies and were less likely to restructure debts when companies became delinquent.  The result became a substantial increase in business bankruptcy filings in 2009.  The number of businesses filing for bankruptcy in 2009 increased by 38% from the numbers reported in 2008(1). 

The other factor that contributed to the substantial increase in business bankruptcy filings is the economy.  With the high costs of gas, materials and food coupled with low consumer turnout in the marketplace, businesses’ profit margins were unable to meet the demands of the companies’ debts. 

Along with the increase in business bankruptcy filings in 2009, companies’ default rates hit a record high in 2009(2).    While some experts predict that the growth of business bankruptcies will taper off in 2010, the majority of experts think otherwise.  Such factors as being unable to find financing, being unable to instill consumer confidence due to high unemployment and foreclosures and being unable to handle defaults in the commercial real estate industry, means that a slowdown in business bankruptcy filings is unlikely.  The industries that are most suspect to seeing business bankruptcy filings are retail, media, commercial real estate and transportation. 

With the increase number on business bankruptcy filings, creditors need to monitor accounts closer.  The following are some general tips to make sure you are on top of the situation.

Tips for Chapter 11 Creditors with Claim:

  1. Have a game plan on what you as a lender want from the company.  What will yield the best return for you- liquidation or being patience to see if the company will become viable
  2. If you have a first lien on all the business assets, you will need to seek attorney representation to begin negotiations with the debtor in possession(3).   Many times these negotiations may take place prior to the filing.  The most important items as a first lien holder are to protect your first lien position post bankruptcy filing as well as receiving adequate protection payments while waiting for the Chapter 11 Plan to be confirmed.  Look out for a Motion to Use Cash Collateral, which generally is one of the first motions filed after a bankruptcy petition
  3. All creditors holding a secured claim need to make sure that the Debtor in Possession does not attempt to modify the loan contrary to bankruptcy law.  Consult an attorney if you do not agree with any treatment of your claim.  Look out for Disclosure Statements, Chapter 11 Plans or any Motions that might affect your claim (Motion to Sell Property, Motion to Avoid Lien)
  4. File your Proof of Claim
  5. Be on the Creditor’s Committee, if applicable

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(1)Information pulled from Automated Access to Court Electronic Records (AACER)

(2)Information pulled from Standard & Poor’s

(3)Debtor in Possession is a technical term used in bankruptcy.  In essence, the Debtor in Possession is the debtor