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Category Archives: Bankruptcy

Theres a better way out of the PG&E bankruptcy – San Francisco Chronicle

Posted: February 29, 2020 at 11:08 pm

Pacific Gas and Electric Co.s lawyers recently submitted a revised plan to take the company out of bankruptcy, masterfully sprinkling billions among the companys most powerful stakeholders hedge funds, shareholders and bondholders along with perhaps $1 billion in fees to consultants, banks and, yes, attorneys. All will cheer the companys procession out of bankruptcy court and over to the California Public Utilities Commission, again and again, for rate hikes.

But 73,000 wildfire victims and 16 million California ratepayers should not be cheering.

The wildfire victims deserve better. The utility will pay those claimants from a $13.5 billion fund financed half in cash and half in stock PG&E stock. Thats right: The current plan tethers the victims financial futures to the performance of the company that burned down their homes. It also saddles those families with the risk of any future wildfires started by PG&Es failing equipment. Thats chutzpah.

If the victims are worried about uncertain PG&E stock valuations, they should be. In the 23-month span over which the companys wires ignited 18 wildfires killing 107 people and destroying 15,700 homes the companys shares plummeted 90%. What about the next wildfire season?

Last year, a federal court monitor found evidence of shoddy work, poor record-keeping and falsified documents in the companys vegetation maintenance efforts. More recently, PG&E resisted a judges efforts to tie executive bonuses to safety improvements.

The company must compensate wildfire victims entirely in cash, just as it pledged all-cash payments to insurance companies and other claimants. Opportunistic hedge funds gobbled up insurance claims at steep discounts and will reap steep profits on their $11 billion payout in cash, not stock.

PG&Es plan also unfairly dilutes the victims claims by committing to secure bondholders claims over theirs and by allowing the Federal Emergency Management Agency and other government agencies to recover funds from the victims allocation.

Millions of customers dont fare much better under PG&Es plan, which stands to leave us depending on a company with a junk-level credit rating to provide our power. The plans generous distribution of assets to powerful stakeholders will encumber the utility with heavy debts, and many observers doubt it will emerge with the financial soundness to issue investment-grade bonds. Junk-rated PG&E bonds would not only inhibit PG&Es access to capital but also inflate its financing costs a worrisome prospect for a company whose exit plan requires it to take on $38 billion in debt and pay billions of dollars a year in interest.

The result would be hefty rate hikes that force customers to pay hundreds of millions of dollars more to Wall Street through their monthly utility bills. PG&E optimistically projects that electricity rates will increase by a third over the next three years, but more realistic assumptions would push energy bills even higher. Company executives have little to fear, however: By turning wildfire victims into shareholders, they will have created a sympathetic bulwark against customer objections.

There is a better way: transforming PG&E into a customer-owned private company. A customer-owned utility has the best chance of restoring safe, reliable and affordable power delivery by aligning the companys financial interest with the public interest and sharply reducing capital costs. The leaner capital structure of a customer-owned company would avoid billions of dollars in expenses for dividends, high-yield bonds and federal taxes. It would reinvest those savings in grid safety and reliability, compensating victims and dampening rate increases. And unlike a public takeover, a customer-driven buyout would avoid exorbitant costs to taxpayers and endless legal battles.

Getting there wouldnt be easy. We would need a bankruptcy court willing to force shareholders and institutional funds to absorb the losses that any investor should incur in a bankruptcy. We would need a Public Utilities Commission willing to stand up to incessant industry pleas for excessive rate increases. And we would need Sacramento lawmakers to continue resisting company efforts to jam an inadequate plan through bankruptcy.

But we should not waste this crisis or the opportunity it presents to transform PG&E into a responsible, responsive utility. Financial institutions stand ready to effectuate a buyout. We need the states leaders to embrace it as nearly 200 local elected officials, representing more than 9 million Californians, have urged them to do.

Regardless of the outcome, ratepayers collectively face a burden of many billions of dollars in long-overdue investment in maintenance, upgrades, and microgrids. If customers are going to pay for PG&E, we ought to own it.

Sam Liccardo is the mayor of San Jose, the largest city in PG&Es service area. He leads a coalition of 195 mayors, supervisors and other elected officials urging that PG&E become a customer-owned utility.

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The Year in Bankruptcy: 2019 | Jones Day – JD Supra

Posted: at 11:08 pm

Updated: May 25, 2018:

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The Year in Bankruptcy: 2019 | Jones Day - JD Supra

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Fish fry and bankruptcy: Buffalo’s first Friday of Lent – WKBW-TV

Posted: at 11:08 pm

TONAWANDA, N.Y. (WKBW) Fridays during Lent means fish fry for many across Western New York. Joseph Kroczynski has been in charge at Saint Amelia's School fish fry in Tonawanda for more than 15 years.

"We love doing it to see the joy of people coming in. It's like a club, an annual club," Krocynski said. The Catholic school holds a fish fry every Friday during Lent. Seven volunteers man the kitchen cooking up 250 orders. All of the proceeds go back towards the school.

"The price is right. The people are nice. The community is good. I'm a community guy, so I sort of stay in my community and do the best I can," Jerry Niedziela said. He was one of the first for fish fry as a steady stream of people came in throughout the evening.

"It's supporting the church and it's supporting the school and you meet your friends and you don't have to cook," Carol Reingold said. She's been a member of St. Amelia's for 45 years.

But the first Friday of the Lent season in Buffalo was also marked with the announcement of the Diocese declaring bankruptcy. Weather is always a topic of conversation, according to Kroczynski, but adds the news about the Diocese also came up at the dinner table.

"I don't think it effects your faith. That's a financial part. It's not that your faith had anything to do with the finances of the whole situation," Kroczynski said.

Reingold adding, "I believe in my church and there's good and bad in everybody and I guess we can't really pick our people."

"I don't know where the money is going to come from. They're not going to take care of the people as much as they promised, so I have a lot of compassion for everyone in that regard," Niedziela said.

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Fish fry and bankruptcy: Buffalo's first Friday of Lent - WKBW-TV

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Modells begs landlords to help it stave off bankruptcy – The Real Deal

Posted: at 11:08 pm

Modells CEO Mitch Modell and a Modells store in Brooklyn (Credit: Getty Images,Wikipedia)

Modells Sporting Goods is renegotiating leases in a last-ditch effort to avoid bankruptcy.

The 130-year-old retailer, which has more than 150 locations across 10 states, sent letters to 19 landlords pleading with them to dig deeper so the retailer can avoid filing for bankruptcy March 1, the New York Post reported.

So far pledges of help have come from owners of buildings where five stores have launched liquidation sales. More than 2,900 jobs depend on the retailer avoiding bankruptcy.

These people are counting on me; some have been with me for 40 years, Mitch Modell, who is the retailers fourth-generation leader, wrote in a letter to landlords, according to the Post.

It is the latest effort by Modell to save his family business. Last May, The Real Deal reported that the retailer was trying smaller concept stores between 5,000 square feet and 8,000 square feet. The plan was to roll out in 10 locations across New York.

Earlier in 2019, Modells listed its 300,000-square-foot Bronx warehouse for $100 million. [NYP] David Jeans

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Modells begs landlords to help it stave off bankruptcy - The Real Deal

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Watkins Nurseries and related businesses to get bankruptcy financing from a prominent family member –

Posted: at 11:08 pm

Watkins Nurseries Inc., which filed for Chapter 11 bankruptcy protection last week, has reached out to a prominent family member for interim financing

Former state Sen. John C. Watkins, whose son is both the Chesterfield County-based companys president and majority shareholder, has agreed to lend the nursery and two related businesses Virginias Resources Recycled LLC and Watkins-Amelia LLC up to $200,000, bankruptcy court documents show.

U.S. Bankruptcy Judge Keith L. Phillips approved the post-petition financing, also known as debtor-in-possession financing, on an interim basis during a hearing Monday morning. A final hearing on the matter is scheduled for March 10.

John Watkins, a Republican who represented Powhatan and Chesterfield counties in the state Senate and House of Delegates for 34 years, is listed in bankruptcy court documents as a shareholder of Watkins Nurseries and a member of Watkins-Amelia limited liability corporation. He was president of Watkins Nurseries from 1998 to 2008.

He also is chairman of the board of Community Bankers Trust Corp., the Henrico County-based holding company for Essex Bank, which has 24 bank locations, including 18 in Virginia.

His son, Robert S. Watkins, is the fifth generation of his family to run the nursery business. The son holds the largest membership interest in Watkins-Amelia, which owns 331.4 acres in Amelia County that serve as the primary production area for the nursery. Robert Watkins also filed for personal bankruptcy last week.

Under the terms of the financing, the principal amount of the loan from John Watkins is not to exceed $200,000 with an interest rate of 6.25% annually. No payments will be due for the first six months following the judges approval.

The parties have agreed to the terms thereof, which the debtors [Watkins Nurseries and related businesses] believe are normal and customary (if not more favorable to the debtors than current market terms) for financing of this nature, according to the motion seeking approval for the financing.

The debtors contacted various sources about their liquidity issues and refinancing alternatives. Unfortunately, said discussions had not been completed before the debtors had to file these bankruptcy cases. However, in the course of the discussions, it was clear that no entity was willing to provide a short-term bridge loan, the court documents say.

As such, the debtors have concluded that no such prospective lenders were willing to provide unsecured or secured financing to the debtors in these bankruptcy cases under terms that were more favorable than the terms provided herein.

Filing for bankruptcy last Wednesday night was necessary to stop a foreclosure auction that was scheduled to be held Thursday morning to sell a total of 342.3 acres in Chesterfield, Powhatan and Amelia counties to pay off bank loans from Sonabank.

In 1997, Robert Watkins consolidated various individual and corporate loans with what was then Eastern Virginia Bankshares. (Southern National Bancorp of Virginia Inc. merged with Eastern Virginia Bankshares in 2017, and Sonabank is the name used for banking operations.)

The financing was needed, court records show. Unfortunately, recent years have resulted in certain financial hiccups for the debtors as they sought to continue providing their high quality services and products while also experiencing attrition and attempting to accommodate certain family members as they moved on to other endeavors outside of the nursery operations.

The two loans, court records show, were secured by real properties of the businesses and other assets, including substantially all assets of the nursery and Virginias Resources Recycled, a commercial and residential land-clearing, grinding, grubbing and logging business.

But while the businesses tried to address their financial obligations, Sonabank began collection efforts by seizing funds in an account of one of the guarantors, according to the documents.

The debtors have continued efforts to work with Sona and its counsel (which recently was replaced), but all such efforts have been rebuffed, the court documents show. In fact, Sonas response was the publication of foreclosure/auction notices for the properties owned by various debtors with no prior notice to the debtors or guarantors of the scheduled foreclosures/auctions. In addition, Sona has begun efforts to take possession of equipment vital to the debtors operations.

The Watkins Nurseries business as well as Virginias Resources Recycled and Watkins-Amelia each listed assets and liabilities of $1 million to $10 million. The personal bankruptcy filing for Robert Watkins listed assets and liabilities of $100,000 to $500,000.

Watkins Nurseries was founded by J.B. Watkins as a small fruit tree farm in Powhatan County in 1876. It has grown to have more than 500 acres across central Virginia used in the production of field-grown, landscape-size plants, according to the companys website.

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CONFER: The Boy Scouts will survive bankruptcy – Niagara Gazette

Posted: at 11:08 pm

Last week, the Boy Scouts of America filed for bankruptcy. This was not unexpected. Speculation about bankruptcy had been running rampant for over a year now.

It was done in direct response to New Yorks Child Victims Act and similar laws in other states which allow for a temporary lookback for victims of abuse whose claims previously would have been denied by the statute of limitations. Thousands of lawsuits have been filed against churches, schools, clubs and the BSA for transgressions alleged to have been done by leaders and mentors decades ago.

The CVA and its companions are good, as they allow anyone who was abused as a youth in any organization or by any individual to find closure or, in legalese, be made whole after surviving evil and holding dark secrets that are nearly impossible to overcome and/or share as a youth and an adult. Most times, it takes decades to open up about it and these lookbacks recognize that.

The path of bankruptcy isnt the BSA abandoning its responsibility to anyone who was hurt. Instead, it allows the BSA to reach settlements with these parties in an equitable fashion, otherwise potentially large awards in the first rounds of lawsuits would have decimated BSA finances and prevented monetary awards for those who brought lawsuits later in the cycle. The management of finances and settlements ensures that all who deserve something get something and the BSA can continue its mission.

Since early 2019 and especially now following the actual filing, Ive been asked about what bankruptcy and financial reorganization of the BSA means for Scouting; after all, I have long been a champion of Scouting in this column and in the community, having been a scout for eight years and a volunteer in the organization for the past 26.

First and foremost, take comfort in knowing local Scouting is financially sound and protected.

The Iroquois Trail Council (which serves eastern Niagara and the GLOW counties) is, like all councils, a corporation separate from the BSA and it maintains its own 501(c)3 status. Business decisions made on bankruptcy by the BSA will not impact the assets of the Iroquois Trail Council including our camps and donations made to local programs by families, donors and community partners like the United Way. The Council is not on the hook for assisting with the BSAs reorganization.

It is important to note that the Iroquois Trail Council is governed by local volunteers who provide strong oversight on budget development, fundraising, spending and investment. During the past decade, the council has routinely balanced its budget, been creative with its staffing model, made substantial capital improvements to Camp Dittmer and Camp Sam Wood, acquired a new centrally-located headquarters in Oakfield and ensured the future of local scouting through growth in its endowment fund. The Council is also debt-free and has no pending litigation.

Secondly, know that scouting is safe.

At first glance, driven by headlines on smartphones and hot takes on social media, some would wonder why theyd ever want to put their children in scouting for fear that they might be abused, thinking that the spate of lawsuits are recent in nature. They arent; 90% of those filed against the BSA date back 30 years plus. We cant let a few bad apples spoil the barrel, nor can we believe that protections arent afforded. A system is in place to keep out troubled souls and identify and eliminate adults and youths who may put others at risk. As long as Ive been in scouting, there has been detailed and effective youth protection training for all participants, double supervisory control and background checks.

Lastly, know that scouting is just as meaningful now as it was when the BSA was founded 110 years ago.

My Eagle Scout certificate is beside me in my office every day, a reminder of who I am and who I will be because of scouting. The organization and its principled lessons and experiences gave me a deeper understanding of service, leadership, teamwork and humanity and it has helped me greatly at home, work, and in the community. I and my fellow volunteers want to make sure more boys and girls are given such positive experiences in their lives in hopes of making them the very best citizens, spouses and parents they can be. God knows we need that in todays world.

Please know that all of us in scouting cannot and will not let financial restructuring by the national organization distract us from our goals. Scouting will continue to be a guiding light for many children for many decades more even amidst the occasional storm that might shake its very foundation.

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. Email him at

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CONFER: The Boy Scouts will survive bankruptcy - Niagara Gazette

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Supreme Court vacates tax refund awarded to bank in bankruptcy case – Accounting Today

Posted: at 11:08 pm

The Supreme Court vacated and remanded Tuesday an appeals court decision that found under federal common law, a tax refund due from a joint tax return generally belongs to the company responsible for the losses that form the basis of the refund, rejecting a nearly half-century-old precedent.

In Rodriguez v. Federal Deposit Insurance Corporation, the case involved the issue of whether a parent corporation or its subsidiary owns a tax refund during bankruptcy proceedings.

Justice Neil Gorsuch (pictured with President Trump), in his opinion, explained the facts of the case: The trouble here started when the United Western Bank hit hard times, entered receivership, and the Federal Deposit Insurance Corporation took the reins. Not long after that, the banks parent, United Western Bancorp, Inc., faced its own problems and was forced into bankruptcy, led now by a trustee, Simon Rodriguez. When the Internal Revenue Service issued a $4 million tax refund, each of these newly assigned caretakers understandably sought to claim the money. Unable to resolve their differences, they took the matter to court.The bankruptcy court agreed with Rodriguez, the FDIC appealed the ruling, and the district court reversed. The Tenth Circuit Court of Appeals affirmed the district court, ruling for the FDIC as receiver for the subsidiary bank rather than for Rodriguez as trustee for the corporate parent.

In reaching its decision, the Tenth Circuit applied federal common law under the Bob Richards rule, which provided that, in the absence of an agreement, a refund belongs to the group member responsible for the losses that led to it. In this case, there was an allocation agreement, but the Tenth Circuit applied a more expansive version of the rule, applying it even to situations where there is an agreement unless the agreement unambiguously specifies a different result. The Supreme Court held that the Bob Richards rule is not a legitimate exercise of federal common lawmaking, and vacated and remanded the decision. Whether this case might yield the same or a different result without Bob Richards is a matter the court of appeals may consider on remand, Gorsuch stated.

Some tax experts see the case as a significant reversal from previous rulings. I was surprised that the Supreme Court has thrown out the Bob Richards doctrine, since it has been used by most courts as a factor in cases over the last 47 years, said Lee Zimet, senior director with Alvarez & Marsal Taxand LLC. Only the courts in the Sixth Circuit have refused to apply federal common law. The elimination of the use of federal common law in deciding ownership of tax refund cases will make the case decisions less predictable. Without the application of Bob Richards, the cases will be decided solely based upon the nuances of state corporate law and the specific language of a tax sharing agreement.

In the Rodriguez case, the Supreme Court reaffirmed the application of state law to determine property rights in a bankruptcy case, even when the property in question is a federal tax refund, according to Annette Jarvis, a partner in the international law firm Dorsey & Whitney.

The Supreme Court overturned federal court-created federal common law that had existed in many Circuits for over 45 years and, in so doing, severely limited the ability of federal courts to create federal common law, she said. Restricting federal court common lawmaking to that which is necessary to protect uniquely federal interests, the Supreme Court found this narrow ability to create common law not to apply to the allocation of federal tax refunds even when the parent and subsidiary companies were both in federally created insolvency proceedings. In addition to setting an important precedent for the limited ability of federal courts to establish federal common law, the impact of this decision is to allow corporate affiliates to freely decide, in a tax allocation agreement, the beneficiary of a tax refund among a corporate group filing a consolidated tax return, even if the allocation does not align with the company which created the tax losses and even when one or more of the corporate affiliates is in a bankruptcy case or an FDIC receivership. When companies face insolvency, this contractual allocation can be critical to the return available to a particular affiliated companys creditors, and, in some cases, to lenders who may have taken an assignment of tax refunds."

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This week: Should clerics vote? Is bankruptcy a disgrace? And more. – Catholic Culture

Posted: at 11:08 pm

By Phil Lawler (bio - articles - email) | Feb 28, 2020

This weeks news was dominated by reports about the coronavirus. Even in Rome, when Pope Francis curtailed his schedule for a few days because of a slight indisposition, some overeager reporters questioned whether it was possible the Pontiff had somehow contracted the feared virus. Yes, its possible. But not at all probable. There was no report of an outbreak in Rome, and statements from Vatican officialswho were obviously being terse, to discourage speculationsuggested that in the Popes case the culprit was an ordinary winter flu.

By the way, questions about the Popes health will probably remain unanswered next week. After his scheduled public audience on Sunday, he is due to go into seclusion for a week, with the leaders of the Roman Curia, for the annual Lenten Retreat.

Otherwise it was a quiet week. But I was taken aback, I admit, by Archbishop Bernard Hebdas directive that priests and deacons in his St. Paul archdiocese should not vote in Minnesotas presidential primary. Why would a prelate discourage clerics from exercising their civic rightsand, some would say, their duties? Archbishop Hebda explained that voting could be seen as partisan political activity under new Minnesota rules for the primary, and canon law bars clerics from involvement in partisan causes.

The new rules in Minnesota are neither unusual nor extreme. They require primary voters to select the ballot of a particular political party; this is, after all, a primary, to determine the parties candidates. And records are kept of which voters chose which ballots. Pulling a ballot for one party does not necessarily mean that the voter endorses that partys platform or favors that partys candidate. The voter could, if he wished, write in a Republican candidates name on a Democratic party ballot, or vice versa. There is no public record of how the voter marked the ballotonly of which ballot he chose. So a clerics activity inside the voting booth would still be secret, and unlikely to embroil the Church in political disputes. But when a voter chooses not to vote in the primary, he forfeits any opportunity to influence the partysany partyschoices. So the archbishop is asking clerics not to make their voices heard in the political process. Again I wonder: why?

Maybe Im too cynical, but I wonder whether Archbishop Hebda knows that a solid majority of his priests would choose to vote in the Democratic primary. If so, its theoretically possible that some energetic researcher could search the voter rolls and determine which percentage of the local clergy chose to participate in the primary of a party whose leadership is firmly committed to legal abortion on demand, same-sex marriage, and gender ideology. We still wouldnt know how those priests voted. But the data would be interesting, wouldnt they?

This week also brought the news that the Diocese of Buffalo has filed for bankruptcy protection, the 22nd American diocese to take that step. (The neighboring Diocese of Ogdensburg will likely join the list soon.) I can still remember the time in 2002 when the finance council of the Boston archdiocese approved a move toward bankruptcy. At the time the decision was shocking. No American diocese had ever previously contemplated such a radical step, and as things happened the Boston archdiocese never took it. But now there are 22 on the list (23 if you include the Archdiocese of Agana in Guam, a US territory), and the list is sure to grow longer. Signs of unhappy times.

Before I sign off for the week, let me call attention to two noteworthy articles on other sites:

Phil Lawler has been a Catholic journalist for more than 30 years. He has edited several Catholic magazines and written eight books. Founder of Catholic World News, he is the news director and lead analyst at See full bio.

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This week: Should clerics vote? Is bankruptcy a disgrace? And more. - Catholic Culture

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Bernie Sanders says 500,000 people a year declare bankruptcy over medical expenses heres how to avoid that fate – MarketWatch

Posted: January 18, 2020 at 9:55 am

During Tuesdays democratic presidential debate, Sen. Bernie Sanders used one of his most-repeated lines to attack former Vice President Joe Bidens stance on health care.

Youve got 500,000 people going bankrupt because they cannot pay their medical bills, Sanders, an Independent from Vermont, said. Were spending twice as much per capita on health care as do the people of any other country. That estimate is on an annual basis.

Sanders added, Look, we have talked about health care for all in this country for over 100 years. Now is the time to take on the greed and corruption of the health-care industry, of the drug companies, and finally provide health care to all through a Medicare-for-All single-payer program.

As the Washington Post reported, Sanders assertion that 500,000 people have gone bankrupt because of medical bills does not fully comport with the research his campaign has cited as the basis for this claim. His claim is based on research from Consumer Bankruptcy Project.

A 2019 study from this group, based on a survey of 910 people who had filed for personal bankruptcy between 2013 and 2016, found that medical issues contributed to 65.5% of bankruptcies. This included both medical bills for treatment and income lost due to illness.

When that percentage is applied to the total number of non-business bankruptcies nationwide, researchers say that as many as 530,000 families suffer bankruptcies in which medical issues were a factor.

That percentage is roughly the same as before the Affordable Care Act became law, based on previous surveys carried out by the Consumer Bankruptcy Project. (Notably, Sen. Elizabeth Warren, another contender for the Democratic presidential nomination, was one of the researchers who contributed to those previous efforts back when she was a professor at Harvard University.)

Other researchers have argued that this approach is flawed, as its based solely on people as it does not reflect what happened to the millions of Americans who incur medical expenses but dont go bankrupt.

To that end, a 2018 study published in the New England Journal of Medicine found that only 4% of bankruptcies among non-elderly adults were caused medical shocks related to hospitalization. Those researchers argued that missed work caused by illness or injury was a bigger problem than medical debt itself.

Either way, medical debt remains a problem for millions of Americans. A 2018 study published in Health Affairs found that one in six Americans had one or more past-due medical bills on their credit report, representing a total of $81 billion in health-care-related debt.

A 2019 study published in the Journal of General Internal Medicine found that roughly 137.1 million Americans had reported medical financial hardship in the past year.

A 2015 survey conducted by the Kaiser Family Foundation and the New York Times found that one-time medical events more commonly caused problematic bills, rather than chronic illnesses. Two-thirds of people who had trouble with a medical bill said it stemmed from something like a hospital stay or treatment for an accident, versus 33% who said their medical debt built up over time because of treating an ongoing illness or condition such as diabetes or cancer.

Insurance is a factor, as well. The 2018 Health Affairs study further found that medical debt was most common among 27-year-olds, the age at which children are no longer eligible for coverage under a parents health insurance plan based on the Affordable Care Act. The percentage of people with medical debt decreased as they got older and as they became more likely to have health insurance.

While medical debt may often be caused by unforeseen expenses, there are nevertheless steps people can take to avoid letting it snowball to the point where declaring bankruptcy is necessary.

Build up savings: The Federal Reserve reported in 2018 that four in 10 Americans dont have enough savings to cover a surprise $400 expense, although some have suggested this figure may be overblown.

Either way, the first place to start when working to avoid medical debt and bankruptcy is building up a rainy-day fund. The general rule of thumb is to have savings equivalent to six months worth of living expenses. Others say lower-income households should squirrel away approximately $2,400.

Dont be afraid to haggle: Medical costs arent set in stone. It is possible to negotiate a bill down with a medical provider particularly for low-income households. In some cases, hospitals may decide to write off a bill in the name of charity. Experts suggest recruiting a patient advocate or medical bill negotiator to help in the process if its feasible financially, since those professionals will have experience identifying medical expenses that could be adjusted.

Also read: This man will help you get out of expensive medical bills

If you have insurance, watch out for out-of-network providers: A New York City woman received a shocking bill totaling over $28,000 for medical tests a specialty-care clinic ran when she was sick. The reason for the high amount: The clinic and the laboratory were both out of network. This is also a problem when people visit hospitals even when the facility itself is in network because the professionals who work at it including physicians and anesthesiologists may not be.

When youre rendered unconscious by an injury you might not be able to investigate whether a medical provider is in network, but in all other circumstances its important to ask these questions. If possible, get treatment from someone who is in network. Additionally, its good to verify what tests are being performed and why to weed out any unnecessary medical expenses.

Avoid putting big bills on plastic: The combination of a large medical expense and high credit-card interest rates can be a recipe for a never-ending debt spiral. In cases where you cant pay for a medical expense in full at the outset, you should investigate whether you can sign up for a payment plan with the medical provider. Sometimes, these plans can be tied to your income to help ease the burden.

Payment plans from doctors and hospitals may carry interest and other fees, so its important to price those out. Another option for those with good credit could be opening a personal loan, which typically carries a lower interest rate than credit cards.

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Bernie Sanders says 500,000 people a year declare bankruptcy over medical expenses heres how to avoid that fate - MarketWatch

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McMartin farm bankruptcies could wrap up this year – AG Week

Posted: at 9:55 am

McMartin's McM Inc., filed Chapter 7 liquidation bankruptcy in Fargo on Feb. 10, 2017. McMartin Jr. later filed personal Chapter 7 liquidation bankruptcy on Sept. 11, 2017.

McM was a farm that had operated up to 50,000 acres from three farming centers St. Thomas, Grand Forks and Fargo. The case is unusually large for the region, with $64 million in claims, including $43 million from BMO Harris Bank alone. McMartin is notable for the sheer size of his farm, its high-value crops that included sugar beets, potatoes, and dry edible beans, but also for his influence in farmland rent competition, an influence that farming competitors say remains today.


Burton, a lawyer with the Morrison Sund PLLC firm, is working for two trustees in the separate, but intertwined cases. Erik Ahlgren of Fergus Falls, Minn., is trustee in the McM bankruptcy. David G. Velde, Alexandra, Minn., is the trustee in the McMartin Jr. personal bankruptcy.

Burton is handling some of the details in both cases. He says there have been significant recoveries of assets to the trust. Some of those funds have been paid out, but the trustees continue to pursue some assets in related lawsuits called adversary proceedings.

According to documents, several of these proceedings were launched in 2018 and 2019 and remain in play today:

Ahlgren vs. CHS Inc. Ahlgren says CHS owes the McM estate about $793,000 in accumulated patronage dividends for selling grain through the cooperative elevator. The trial is scheduled July 15 in Minneapolis (Fargo Bankruptcy Judge Shon Hastings recused herself and referred the case to Judge Michael Ridgway in Minneapolis.) CHS lawyers have argued the bankruptcy trust has no right to force the co-op to liquidate McM's patronage dividends, and that the grain marketing co-op had the right to "set off" money that McMartin owed them.

Ahlgren vs. McMartin Sr. Ahlgren had alleged that McM in 2016 had improperly provided about $2 million to the parents and their farming operations chemicals, planting, harvesting and the parents did not pay McM for fair value. McMartin Sr. has agreed to pay $775,000 but the settlement hasn't yet been approved by the court.

Ahlgren vs. Kenny Johnson. On behalf of McM creditors, Ahlgren is seeking $740,882 from Johnson, who has residences in Walhalla, N.D., and Florida. Johnson had provided McM about 20,000 of its rented acres.

Ahlgren says McM improperly paid more than $1 million to Johhson from April to June of 2016 on a lease on Johnson land when others did not get paid. Johnson's attorneys have submitted an answer to the court, denying responsibility.

Ahlgren is arguing that there is an "insider" arrangement.

First, Johnson's nephew, Kyle Zak, managed the farms. After the bankruptcy, Johnson briefly employed McMartin and his daughter at the new Elkhorn Farms operation and Johnson also immediately hired Zak as a farm manager.

Second, Ahlgren is arguing Johnson was an insider because Johnson had urged that Zak be on the McM management team. Ahlgren also argues that Johnson effectively was a "general partner" in McM because Johnson and McM did crop sharing in 2015 and 2016 land deals in North Dakota's Towner County.

Ahlgren vs. Morrison Family Trust. Ahlgren alleges that McM had fully paid one of its landlords the Morrison Family Trust a lease payment on about 110 acres in Pembina County, N.D., for the 2017 crop. After McM's bankruptcy filing, however, the Morrison trust had made a second deal with Elkhorn Farms, an entity based in Walhalla, led by Kenny Johnson. The McM trustee is seeking $22,500. That trial began Jan. 14 in Fargo.

Kenny Johnson vs Ahlgren. In December 2018, Kenny Johnson's lawyers filed a countersuit against the bankruptcy estate, arguing that the estate owes Johnson some $325,000 because it used some of his land after the case was filed. That will go to court in February.

Velde vs. McMartin Sr. Velde alleged that approximately $200,000 in assets had transferred from McMartin Jr. individually to his father, McMartin Sr. The case was settled for $126,787.50 in late 2019, and has yet to be approved by the court.

Velde vs. McMartin Sr. and the Ronald McMartin Sr. Irrevocable Trust. The McMartin Sr. trust was created in 2012 with Bonita McMartin, the father's wife, as trustee and McMartin Jr.'s grown daughters as beneficiaries. The case was recently settled, allowing the trustee to sell off what is known as the "Heder Farm" at St. Thomas. There are several acres, plus some buildings. Additionally, the estate can liquidate buildings on Ronald McMartin Sr.'s farmstead, which complicates the matter.

In the documents, Velde alleges that funds were transferred into the trust because of McMartin Jr.'s "abuse of the corporate formalities of McM Inc., which he solely owned and controlled" and that he used McM Inc. as his "alter ego and used its assets as his own." They noted a personal cabin in the corporation's name.

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McMartin farm bankruptcies could wrap up this year - AG Week

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