Monthly Archives: February 2022

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If your business is behind on its bills, struggling with too much debt and besieged by creditors, you may be able to catch a break with Chapter 11 bankruptcy and get back on track.

Fee for Settlement

18% to 25%

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Typically, corporations or partnerships file for Chapter 11 bankruptcy, though individuals can use it as well. With this type of bankruptcy, debtors propose a plan of reorganization to pay creditors over time.

Chapter 11 stops creditor collection efforts, facilitates negotiations to settle debts and can even allow a business to get new financing on better terms. The goal is to keep your business afloat and keep creditors at bay while you restructure your debt obligations.

Chapter 11 is fundamentally different from Chapter 7, the other option for a company that is in too much debt to continue doing business. In a Chapter 7 bankruptcy, rather than reorganizing to try and save the business, the business is shut down and its assets are sold, with the proceeds distributed to creditors.

The central element of a Chapter 11 bankruptcy is the creation of a plan to repay creditors all or part of what is owed. Once the bankruptcy court approves this, the business still has to repay its remaining debts but the legal part of the bankruptcy process is essentially over.

The process begins with the business filing a petition for bankruptcy protection in federal bankruptcy court. Creditors can also file an involuntary bankruptcy to force a business not meeting its obligations into court to cut a deal.

Once the court accepts the petition, creditors must end collection efforts. That includes evictions, foreclosures, lawsuits, property seizures and requests for payment. This automatic stay of collections lasts for the duration of the case, although the court may lift it if a creditor asks. The business seeking protection also has to submit details about its debts, assets, income and expenses.

After filing a voluntary or involuntary petition, the business is considered a debtor in possession, which means it retains control of its assets while undergoing Chapter 11. This is unlike other chapters of bankruptcy, which appoint a bankruptcy trustee to take control of the business and its assets. But the debtor in possession must perform all of the duties of a trustee. These duties include, among others, accounting for property, examining and objecting to claims, and filing informational reports.

As a debtor in possession, a firm can get new loans through debtor-in-possession financing, which may be cheaper than any the firm could get before the filing. This can help keep the organization afloat while it undergoes bankruptcy. Even more help can come from the ability of a business in bankruptcy to unilaterally cancel leases and other contracts that are costing too much.

With the courts approval, the business can also raise money for operations by selling underused assets, including those that may have been burdened with liens. The entire business can even be sold.

The linchpin of the entire process is the businesss creation of a reorganization plan, including a proposal for how much to pay each creditor. After the plan is presented to the court, the business meets with a court-appointed committee of major creditors. At this get-together, called a Section 341 meeting, a business representative has to answer, under oath, creditors questions about the business.

Next, creditors submit their desired modifications to the plan, which may be extensive. After some back and forth, the court approves an often-heavily modified version. Then creditors get to vote. If two-thirds accept the plan, the court confirms it and the legal part of the bankruptcy is over.

After this process, the debts are considered discharged and are replaced by the debts confirmed by the court. The business has to make the payments set forth in the plan, but creditors have to accept the plan, even if they will get less than they were originally due.

Not all debts can be discharged this way. For example, sole proprietors seeking Chapter 11 may be held personally responsible for the businesss debts since a sole proprietorship doesnt exist separately from its owner(s), like a corporation. In some cases, the personal assets of members of partnerships may be used to pay creditors. When that happens, only personal bankruptcy can discharge the debts. Shareholders of corporations, on the other hand, are personally shielded from creditor actions.

Sometimes the court converts a reorganization bankruptcy to a Chapter 7 liquidation proceeding. This can happen if a creditor successfully claims managers arent running the business properly, have no chance of continuing operations or are misusing assets. The court can also simply dismiss the case, exposing the business to its creditors again. And even if not converted to Chapter 7 or dismissed, some Chapter 11 proceedings still result in the business closing its doors and liquidating rather than reorganizing.

All this can take a long time. A filer has 18 months to file a reorganization plan and up to 20 more months to get creditors to accept it. As a result, while a Chapter 7 liquidation can be resolved in a few months, a typical Chapter 11 can take six months to two years.

Chapter 11 is also expensive. Theres a standard $1,167 case filing fee and a $571 miscellaneous administrative fee. In addition, filers have to pay quarterly court fees ranging from $325 to $30,000, depending on how much the filer has paid out during the quarter, for the duration of the case.

The complexity of Chapter 11 cases also leads most filers to hire bankruptcy attorneys to represent them and other experts to support the process, significantly adding to the cost.

For all its challenges, Chapter 11 offers some benefits. Here are some of the most important:

Chapter 11s disadvantages include:

Chapter 11 is not a cheap or easy refuge. Reorganization bankruptcies have a lot of moving parts and can cost far more and take vastly longer than the more straightforward, final remedy of a Chapter 7 liquidation. Chapter 11 doesnt erase all debts and its not suitable for all businesses. But in the right cases, it can be a viable way for financially troubled firms to find a path through a difficult time. Before choosing the type of bankruptcy to file, its wise to speak with a bankruptcy attorney and consider all of your options for debt relief.

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In a Chapter 7 filing, the business ends its operations and its assets are sold with the proceeds distributed to creditors. A Chapter 11 case provides for the business to keep operating while negotiating deals with creditors.

Yes, in some cases it may be easier for a business operating under Chapter 11 protection to get new financing.

Not exactly. Creditors often have to accept less under a court-approved reorganization plan. But the idea is for the business to keep earning money so it can pay back as much as possible.

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Chapter 11 Bankruptcy: What You Need To Know - Forbes

Few industries have been clobbered by COVID-19 like restaurants. And nearly two years into the pandemic, the struggle to stay in business is far from over for thousands of operators. While chains like Ruby Tuesday and Golden Corral have teetered on the brink of disaster, it's really the independent restaurantsthe local mom-and-pops without corporate backingthat have borne the brunt of the pandemic's havoc.

For more fast-food news, check out 8 Worst Fast-Food Burgers to Stay Away From Right Now.

With seesawing restrictions and mandates across the country, a hesitant dining community, new variants, and mixed messaging on restrictions from government officials, it's no wonder that independent restaurants have been pushed to their breaking points. A recent survey by the Independent Restaurant Coalition reports that a staggering 42% of independent restaurants that didn't receive government aid are nearing bankruptcy. While $28.6 billion was allotted for the Restaurant Revitalization Fund, more than 177,000 restaurants and bars didn't see a penny of that financial aid, and now nearly half of them find themselves staring down the barrel of bankruptcy court.6254a4d1642c605c54bf1cab17d50f1e

And statistics get even grimmer: 28% of these under-funded independent businesses have either already receivedor are expecting to receiveeviction notices. Some 25% have sold off personal assets, 30% have decreased their employees, and 49% have laid off staff in order to stay afloat.

The survey polled 1,200 restaurants in all 50 states, with 33% of respondents hailing from the Western region, 27% from the South, 22% from the Northeast, and 18% from the Midwest.

It's a stark reminder that no matter how low the COVID positivity rates get, or how optimistic and "normal" things feel, the pandemic still isn't over for the restaurant industry, especially independent restaurants left to fend for themselves.

"Congress and the Biden Administration need to treat this like the crisis that it is and replenish the RRF," said Erika Polmar, executive director of the Independent Restaurant Coalition. "The nearly 200,000 restaurants and bars left behind in the first round of funding do not have much time left."

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These Restaurants Are Nearing Bankruptcy, Recent Data Shows Eat This Not That - Eat This, Not That

If you listen closely to Shelley Luthers six seconds of silence, you can hear many things.

Luther, the Dallas hair salon owner who was turned into a political star by Texas Republicans in 2020 when she defied a pandemic-induced state order to temporarily shut down nonessential businesses, is running for state representative.

At a Feb. 5 candidate forum, the former schoolteacher was eager to demonstrate her culture-war bona fides and figured that trampling on transgender kids was an easy way to get there.

I am not comfortable with the transgenders, the kids that they brought in my classroom, Luther said.

When they said that this kid is transgendering into a different sex, that I couldnt have kids laugh at them, like I couldnt have

On ExpressNews.com: Texas GOP candidate Shelley Luther complains that students cant make fun of transgender children

At that point, Luther stopped for six excruciatingly awkward seconds.

You could hear the panic in her pause.

You could feel the brain freeze that set in when she realized she had said the quiet part out loud; bemoaning the possibility that school bullies would be deprived of the chance to ridicule kids going through the inherently difficult process of transitioning (not transgendering) to a new gender.

You could actually hear the sound of Luthers moral bankruptcy churning like a tape loop of white noise.

Luthers potshot at transgender children came only a month after she tweeted that Chinese students should be banned from all Texas universities.

It was notable because it was so lacking in finesse that it couldnt camouflage the ugliness at the heart of the social-issue crusades being carried out by much of the Texas GOP. It was also notable because Luther is an embarrassingly awful candidate who wouldnt be running for office if Texas Republicans hadnt glorified her two years ago.

On ExpressNews.com: Shelley Luther, anti-lockdown activist and GOP candidate, said Chinese students should be banned from Texas universities

Luthers recent comments were among the subjects discussed on this weeks episode of the Express-News Puro Politics podcast.

What she is saying is, My students, my kids, should have the right to mock other kids who are different, said columnist Cary Clack.

Whether theyre transgender kids, why stop there? If theyre in a wheelchair, why cant they mock them? Because if youre giving permission to mock a set of kids for something that is different, or you perceive as different, then where does it stop?

Hear more about this and other issues on the latest edition of Puro Politics.

ggarcia@express-news.net | Twitter: @gilgamesh470

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Podcast: The awful sound of Shelley Luthers moral bankruptcy - San Antonio Express-News

byMs. Daniela P Romero

Posted on February 18, 2022 inBankruptcy, Debtor and Creditor, Foreclosures

If you have a reverse mortgage and are worried about foreclosure, you may be looking at bankruptcy.So, will bankruptcy keep your home protected? First, you should know what a reverse mortgage is and how it works.

So, How Does a Reverse Mortgage Work?

A reverse mortgage is a loan. However, the homeowner needs to be 62 or older. If that homeowner has enough home equity, they can borrow against the value of their home to receive:

In a reverse mortgage, the homeowner is not required to make loan payments. This is different than a forward mortgage, which is typically used to buy a home. Instead of monthly payments, the entire loan balance will become due if the borrower sells the home, moves away, or if the borrower dies. There are federal regulations ensuring that the loan amount does not exceed the value of the home. The borrower will not be responsible for paying the loan difference in the event it is larger than the homes value.

Reverse Mortgages and Bankruptcy

Since the most common reverse mortgages are secured by the home of the borrower, it is considered a secured debt. There are no laws preventing a person with a reverse mortgage from filing for bankruptcy.

It is important to meet with an attorney, as some reverse mortgages consider a bankruptcy a breach of contract. This could result in a foreclosure. While this is not common, it is still possible. You also may not be able to protect all of the equity in your home. Your attorney will know the best ways to protect you and your assets in your bankruptcy filing.

What are the Problems With Reverse Mortgages?

Be sure that you and your attorney look at your homes value and the reverse mortgages balance before filing. You will want to be sure of how much equity is protected in your bankruptcy. Keep in mind that the monthly amount owed in a reverse mortgage can increase. It may be a good idea to find out a payoff amount from your lender prior to listing an amount in your bankruptcy.

Are You Receiving Reverse Mortgage Payments?

It is likely that your bankruptcy filing may lead your lender to stop these payments. Your lender might also have the ability to attempt a foreclosure if you file for bankruptcy. Using an equity line of credit from your reverse mortgage? A bankruptcy filing might also stop this line of credit. You and your attorney should go over the clauses and terms of your agreement to determine if this is a possibility. You may need to reaffirm the reverse mortgage debt to receive these payments.

Things to Keep in Mind

First, how your reverse mortgage is handled will depend under which chapter of bankruptcy you file.

Do you have a first mortgage as well as a reverse mortgage? If so, this may complicate your bankruptcy. Your reverse mortgage attaches a lien to your house. Your attorney will need to address this in the bankruptcy, so be sure to thoroughly go over your finances with your attorney before filing.

Need More Information?

If you live in California, please contact our office today for a free consultation to see what options work best for you. If you live outside of California, please contact a bankruptcy attorney in your area. Most attorneys offer free consultations.

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What You Need to Know About Filing for Bankruptcy with a Reverse Mortgage - Lawyers.com Blog

From the Ag Information Network, Im Bob Larson with your Agribusiness Update.

**The USDA lowered its estimate for Florida Orange production in its February forecast while holding Florida Grapefruit and Specialty fruit steady.

According to http://www.morningagclips,com, the report projects 43.5 million boxes of Florida Oranges, a 1 million box departure from Januarys forecast.

Florida Grapefruit production is projected at 4.1 million boxes while Florida Specialty Citrus is expected to remain at 800,000 boxes.

Florida Department of Citrus executive director, Shannon Shepp says, the grit and determination of Florida Citrus growers does not waver.

http://www.morningagclips.com/florida-orange-production-declines-slightly-in-february-usda-forecast/

**A new Market Intel analysis from the American Farm Bureau Federation finds Chapter 12 farm bankruptcy filings were down 50% in 2021.

The number of Chapter 12 filings in 2021 is the lowest in the last decade, and this is the first time in at least ten years there were fewer than 300 filings.

For 2021, 276 Chapter 12 bankruptcies were filed across the nation.

**Data from USDAs Economic Research Service details the increase in fertilizer prices.

In late 2021, prices began to spike alongside rising natural gas prices, a primary input in nitrogen fertilizer production.

By December, the average monthly spot prices of natural gas at the Henry Hub distribution hub in Louisiana were 45% higher than in December 2020.

Fertilizer represents an average of 36% of a farmers operating costs for corn, and 35% for wheat.

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Florida Orange Forecast Drops and Chapter 12 Farm Bankruptcy Filings Down - AG INFORMATION NETWORK OF THE WEST - AGInfo Ag Information Network Of The...

The trustee overseeing the Evander Kane Chapter 7 bankruptcy wants to sue Sure Sports, which arranges and underwrites typically high-interest rate loans to athletes. Sure Sports arranged the bulk of the underwater loans to the embattled NHL winger.

Based in Hollywood, Fla., Sure Sports has arranged and underwritten likely hundreds of millions of dollars of loans to professional athletes since its inception in 2009. Disputes between Sure Sports and athletes usually go to private arbitration per the terms of the loans, so the trustees planned lawsuit could trigger transparency in this ultra-private corner of the sports world.

Sure Sports over 10 months crossing between 2018 and 2019 arranged nearly $14 million in loans to Kane, according to court filings. Kane in early 2021 filed for Chapter 7 bankruptcy, declaring $26.8 million in liabilities and unleashing an ongoing vitriolic process between creditors and the hockey star who recently signed with the Edmonton Oilers. Sure Sports itself filed as a creditor, seeking nearly $1.2 million it alleged Kane owed in fees.

But in a filing on behalf of Kanes estate, the trustees lawyer, Gregg Kleiner, wrote not only would he seek to invalidate its claim, but preclude Sure Sports from seeking: further payments. the return of money paid, to ask for damages and attorneys fees and court costs incurred in the prosecution.

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Evander Kane bankruptcy trustee wants to sue firm that arranged his loans - The Athletic