Category Archives: Bankruptcy

The companies, which operate Ryan's, Old Country Buffet, Tahoe Joe's Famous Steakhouse, HomeTown Buffet, Fire Mountain, and Furr's Fresh Buffet, turned to bankruptcy afterCOVID-19 significantly disrupted operations and severely limited demand.

Before the pandemic, the companies operated roughly 90 stores across 27 states.But as federal, state, and local governments implemented shelter-in-place orders, customer spending and foot traffic declined and the restaurants liquidity took a major hit. At the time of the filing,all of the stores had closed except six Tahoe Joes locations in California. Those six restaurants had a combined revenue of roughly $21 million per year before the pandemic.

As with almost every one of our peers, buffet restaurants took the brunt of the loss of sales during the pandemic and as such, the path to success requires hard choices to be made, including the rationalization of our overall footprint, said Jason Kemp, co-founder and CEO of VitaNova, a company that provided management services to the restaurants.

The precipitous decline in sales at the restaurants resulting from occupancy restrictions and the banning of family-style buffet dining forced the companies to take extraordinary steps, including the closing of multiple locations, he continued.

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6 Restaurants that Filed Bankruptcy in 2021 - FSR magazine

Are Democrats serious about confronting the impending collapse of Social Security and Medicare? It sure doesnt seem so.

Instead of focusing on the looming bankruptcy of these programs, Democrats are pushing to spend $4-$5 trillion on a progressive wish-list of expensive new federal giveaways. Perhaps they believe that promising voters free college, free child care, free elder care and so much more will distract them from realizing that our most important safety nets are falling into disrepair.

Moreover, President Biden and congressional Democrats want to significantly hike taxes to pay for shiny new entitlements. But taxpayers are already facing big hits just to maintain the ones we already have.

This week, the trustees of the Social Security and Medicare programs released their annual reports; the news is not good.

The bottom line: Both funds are running out of money, faster than expected. Both Medicare and Social Security will need to be propped up, the sooner the better. Specifically:

The date of projected insolvency for these entitlements moved closer over the past year; the proposed remedies from the Committee for a Responsible Federal Budget (CRFB) become more draconian as time goes on.

In other words, the longer we wait to shore up these programs, the stiffer the increases in taxes will have to be or the fewer the number of retirees who can count on receiving benefits.

To achieve long-term solvency for Social Security, the CRFB advises, would require a 27 percent hike in the payroll tax today; if legislators dont act until 2034, when the program will be broke, that payroll tax hike will be 34 percent.

That is, even if Congress acts today, the increase in the deduction from a workers wages will be more than three percentage points; if they wait, it will be over 4 percentage points. Thats a major hit to paychecks.

The other approach is to cut retiree benefits. The CRFB estimates that, Social Security solvency could be achieved with a 21 percent across-the-board benefit cut today, which would rise to 26 percent by 2034. Cuts to new beneficiaries would need to be 25 percent today, but eveneliminatingbenefits for new beneficiaries in 2034 would not be enough to avoid insolvency.

Is anyone listening?

The alarming reports were greeted with silence from the left, including from Sen. Bernie SandersBernie SandersManchin would support spending plan of at most .5T: report On The Money Businesses scramble from Texas abortion law Pelosi dismisses Manchin call for 'pause' on .5T spending plan MORE (I-Vt.), head of the Budget Committee and author of the $3.5 trillion social infrastructure bill that Democrats hope to pass via reconciliation. Apparently, for Sanders and his progressive colleagues, new programs are better than the old ones, even though most Americans rely on Social Security and Medicare.

In fact, in July, Sanders and Sen. Chris Van HollenChristopher (Chris) Van HollenSpendthrift Democrats ignore looming bankruptcy of Social Security and Medicare Progressive pollster: 65 percent of likely voters would back polluters tax Senate backlog of Biden nominees frustrates White House MORE (D-Md.) introduced a bill that would exacerbate Social Securitys financial problems. According to the Maryland senators website, the proposed legislation would extend Social Security benefits to age 26 for students who are survivors, children of disabled workers, and eligible grandchildren of retired workers.

While it is true that benefits are paid to children or workers who have died young or who are disabled, Social Security was not intended to support young people through college, as is the purpose of Sanderss and Van Hollens bill. Given the current projections reported by the trustees, adding to the demands on the programs finances is reckless.

In the same vein, Sanders wants to lower the eligibility age for Medicare from 65 to 60 or 55 and to expand coverage to include dental and vision outlays. He proposes paying for these changes by allowing Medicare to negotiate prices with drug companies.

Studies have shown that lowering the eligibility age to 60 would cost as much as $100 billion per year, while a 2019 plan to add vision and dental coverage was estimated to cost $350 over 10 years. Estimates of savings from Medicare negotiating drug prices totally some $500 trillion over 10 years do not come close to covering the added costs.

Earlier this year President Biden fired Andrew Saul, a business executive who was commissioner of the Social Security Administration. Saul worked under both Republican and Democratic presidents, initially as chair of the Federal Thrift Investment Board, where he modernized the organization that provides retirement savings plans for military and federal employees. The Republican got such high marks for his stewardship that the federal employees unions backed his reappointment by President ObamaBarack Hussein ObamaWhy the pro-choice movement must go on the offensive How will Biden's Afghanistan debacle impact NASA's Artemis return to the moon? Iran president: Country ready to resume nuclear talks without Western 'pressure' MORE.

Biden fired Saul not because he was doing a bad job, but apparently because he was doing a good job cutting down on fraud and waste in an effort to make the Social Security Administration more efficient, even as he improved services to clients. Biden has not nominated a successor to Saul, despite Social Security being the largest single item in our federal budget. And that is how serious Democrats are.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.

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Spendthrift Democrats ignore looming bankruptcy of Social Security and Medicare | TheHill - The Hill

Which Boy Scout sexual abuse victims will receive settlement money and how much? Court records filed this summer offer the first glimpses of big decisions ahead.

The sizeof the case alone more than 90,000 claims were filed suggest the complicated path ahead, which will involve determining the value of a claim based on its severity, believability and location.

There is little precedent to rely on because, although the Scout bankruptcyis one in a chain of modern-day sexual abuses cases, its scope and legal challenges set it apart. The largest Catholic diocese bankruptcy cases involved a few hundred claims.

A USA TODAY analysis of court filings suggests that most could end up with a fraction of what their counterparts have been allotted in more than a dozen bankruptcy cases involving Catholic dioceses.

Read how these vexing decisions are made: In Boy Scouts bankruptcy, which sexual abuse victims will get a settlement?

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As Boy Scouts eye end to bankruptcy, tough work lies ahead in vetting, valuing sexual abuse claims - USA TODAY

The Boy Scouts of America is pushing to exit bankruptcy after seeking chapter 11 protection last year from a growing number of sex-abuse claims. The bankruptcy case, which spotlighted past failures by the organization to protect children, may be nearing its end as a settlement offer gains momentum. The youth group has said it needs to make peace with sex-abuse victims for its mission to survive. Heres what you should know about the chapter 11 case, the largest ever filed over sexual abuse, and what could happen next:

Sex-abuse claims dogged the Boy Scouts for years, especially after a court-ordered release in 2012 of internal files on reports of abuse by volunteers. The youth group turned to bankruptcy when states including New York, New Jersey and California suspended statutes of limitations on abuse claims, opening the door to lawsuits alleging childhood trauma regardless of when it happened.

The Boy Scouts filed for chapter 11 protection in February 2020 amid intensifying legal pressure over alleged abuse and with billions of dollars of land, buildings, cash and investments to protect. Bankruptcy halts pending lawsuits and offers a way to negotiate settlements with large numbers of individual claimants.

The chapter 11 filing covered the national Boy Scouts organization headquartered in Irving, Texas, but excluded roughly 250 affiliated local councils across the U.S. that hold the bulk of the 111-year-old institutions wealth, much of it in property holdings. Part of the chapter 11 strategy was to blunt the financial consequences of sex-abuse litigation for the local councils, which are chartered by the Boy Scouts to administer scouting programs.

When the bankruptcy began, the Boy Scouts reported roughly 275 pending lawsuits alleging sexual misconduct by employees or volunteers, and roughly 1,400 other known abuse claims. The number of claims ballooned to 82,500 after the youth group urged abuse victims to step forward and file claims by a bankruptcy-court deadline last year.

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Boy Scouts Draw Plan to Settle With Sex-Abuse Victims, Exit Bankruptcy. Heres What We Know - The Wall Street Journal

The IowaConference of the United Methodist Church is advising local churches to stop sponsoring Boy Scouts of America units until the organization emerges from bankruptcy.

The BSAfiled for Chapter 11 bankruptcy protectionin February 2020to protect it from hundredsof lawsuits by victims who have said they were sexually abused during their time with the organization.A federal bankruptcy judge in Delaware last week signed off on part of an $850 million settlement agreement BSA reached with a majority of the attorneys for sex abuse claimants in the case.

The $850 million offer was praised in Julyas the largest settlement of sex abuse claims in U.S. history, according to USA Today.BSA made past assurances that the organization had insurance to cover chartered organizations the civic and religious groups that host and sponsor BSA units according to a letter sent Wednesday by Iowa Area Bishop Laurie Haller.

But her letter said BSA did not have "enough or sufficient" coverage to protect chartered organizations. The letter also said that local churches may have to pay legal fees to defend themselves in lawsuits.

"They are leaving their chartered organizations out on a limb by themselves," Haller wrote in the letter. "The local churches are at risk of having to pay significant sums to victims to compensate them for the damages they suffered at the hands of some scout leaders ... All of this is because the BSA did not fulfill their promise to have enough insurance to protect the local churches."

Last week: Settlement OK'd by judge, but amounts for survivors still unknown

The Rev. Bill Poland,with the Des Moines-based Iowa Conference of the United Methodist Church, said the letter is similar to one being sent out by Methodist churches across the country. Poland has pastored at three churches with Boy Scout troops. Faith is an integral part of scouting, he said.

"While we highly value scouting, we also want to make sure we're doing our best to protect our local churches and all of the people in them," Poland said.

Specifically, the letter recommends that churches that currently charter a scouting unit not renew the agreement with their local councils, although churchescan extend current agreements until Dec. 31, the letter said.

Churches with existing charters could also decline to renew charters but sign facilities use agreements with local councils through Dec. 31. This would essentially allow local councils to lease spaces from churches.

"After Dec. 31, we should be in a better position to see how the future will unfold," the letter said. "Once a BSA plan is approved by the bankruptcy court, we will know better how to proceed."

TheDes Moines-based Mid-Iowa Council of the Boy Scouts of America covers 27 counties in central Iowa.Matt Hill, the council's executive, said themove will affect 50 Cub Scout, Venture and Scouts BSA groups in central Iowa.

The Mid-Iowa Council supports about 2,900 volunteer leaders and 10,600 Boy Scouts and Cub Scouts in 27 counties, including the Des Moines metro and Ames.

"Scouting is going to continue to remain viable," Hill said. "We value our partnership with all of our chartering organizations and, on a local level, we've had a longstanding relationship with so many of these charter partners."

Previously: Boy Scouts offer to compensate sexual abuse victims in historic $850 million bankruptcy settlement

Nationwide, the United Methodist Church charters almost 20% of Boy Scouts of America units serving more than 350,000 youths,according to the Memphis Conference of the United Methodist Church. Poland said officials don't have an exact count, but Methodist churches serve at least 135 Boy Scouts units in Iowa.

On Aug. 17, the United Methodist Church joined the Roman Catholic Church in objecting to the Boy Scouts of America's reorganization plan in federal bankruptcy court in Delaware. The churches argued that the reorganization shifted much of the burdenforpaying survivors to the chartered organizations that could be sued.

The plan also denied chartered organizations adequate insurance coverage to shield them from lawsuits, the brief said.

Previously: Impact of Boy Scouts of America bankruptcy filing unclear; Iowa leaders say local councils, activities won't be affected

"While the Catholic and Methodist Committees would like to see debtors emerge from bankruptcy, undermining chartered organizations contractual rights is not a proper path forward," the brief said.

It has still not been determined yet how much each local council will contribute to a victims' trust fund, according to USA Today. After the Boy Scouts of America filed for bankruptcy, theMid-Iowa Council of the Boy Scouts of America did not file for bankruptcybecause BSA and the Mid-Iowa Council are legally separate entities.

Hill said he could not say how much money the Mid-Iowa Council may have to pay because negotiations are ongoing.

A hearing was scheduled for Wednesday to review the latest BSA reorganization plan, which would have been the next milestone in the case. Attorneys for the Boy Scouts of America postponed the hearing until Sept. 21, casting uncertainty over the future of the case, according to Insurance Journal,an insurance trade publication.

Philip Joens covers breaking news for The Des Moines Register. He can be reached at 515-443-3347at pjoens@registermedia.com or on Twitter @Philip_Joens.

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Iowa's Methodist churches advised to cut ties with Boy Scouts troops until bankruptcy case is resolved - Des Moines Register

The following report was delivered at the Socialist Equality Party (US) 2021 summer school, held August 1 through August 6, by Johannes Stern, the deputy editor of the German-language edition of the World Socialist Web Site and a leading member of the Sozialistische Gleichheitspartei (Socialist Equality Party) in Germany.

Over the last year, the initial propaganda of the European governments that they had responded more responsibly to the pandemic than the US governmentfirst under Trump and now under Bidenhas been exposed as a murderous fraud. As in the US, the European population faces a ruling class that puts profits before lives and effectively pursues a policy of social murder.

There are officially over 1.1 million dead on the continent. This includes more than 150,000 in Britain, more than 160,000 in Russia, about 130,000 in Italy, 110,000 in France, 92,000 in Germany, 82,000 in Spain, 75,000 in Poland and 53,000 in Ukraine. Such numbers are unprecedented outside times of war. And as in the US and India, the real numbers are certainly much higher. And they continue to rise.

As we hold this school, a deadly fourth wave of the pandemic is developing, exacerbated by the spread of the highly contagious Delta variant. In the UK, Spain and France, 20,000 to 30,000 new infections are reported every day. In Germany, the numbers are rising rapidly and, as a result of the governments reckless reopening policy, it is only a matter of a few weeks before daily infection figures reach new records.

Earlier this week, Chancellery chief Helge Braun of the Christian Democratic Union (CDU) even warned of 100,000 new daily infections in Germany in September. Incidence rates of over 800 infected with COVID-19 per 100,000 inhabitants are unfortunately not unrealistic, she said.

What such an incidence rate means is clear: the complete overload of the health system and a renewed wave of mass death. A recent study published by the RKI calculated that intensive care capacities would be overwhelmed at an incidence rate of 400. Already in the second and third waves of the pandemic, the health care system was at its limit, and tens of thousands of people succumbed to the virus in Germany alone.

As in the first waves of the pandemic, the mass suffering is a direct result of the aggressive opening policies pursued by the European ruling class. Governments of all stripes are pursuing a deliberate policy of herd immunity, putting profits before lives.

In order not to jeopardize the orgy of enrichment on the stock exchanges, governments across Europe insist that there must be no more lockdowns and that one must live with the virusor, rather, die with the virus. British Prime Minister Boris Johnson summed up the ruling classs policy in his infamous statement, No more f***ing lockdowns, let the bodies pile high in their thousands!

With this the governing parties in Europewhether conservative, social democratic or pseudo-leftare in essence implementing the program of the extreme right, which has long called for an end to all pandemic containment measures. In Germany, just a few weeks ago, the CDU leader and likely next chancellor, Armin Laschet, openly declared his solidarity with the Alternative for Germany (AfD) in a diatribe against new lockdown measures.

The WSWS has described the pandemic as a trigger event that enormously accelerates the already advanced economic, social and political crisis of the capitalist world system. This is especially visible in Europe. The ruling class has used the pandemic to further advance its policies of social austerity and rearmament, which it had already steadily intensified after the 2008-09 financial crisis.

As in the US, trillions were handed over to banks and large corporations last March. As a result, the fortunes of the super-rich have continued to explode in the year of the pandemic. According to this years Forbes list, Europes billionaires have grown richer by a total of $1 trillion over the past year. These 628 people now have a total wealth of over three trillion dollars, an increase of around 50 percent in just one year.

These gigantic sums are now to be squeezed out of the working class again. Hence the aggressive back to work and back to school policies supported by all capitalist parties and organized in close cooperation with the trade unions.

The herd immunity policy and social attacks go hand in hand with calls for a more aggressive imperialist policy. Like the US government, the European powers are taking advantage of the crisis to intensify their rearmament policy. All the central European powers have massively increased their defence budgets in the year of the pandemic. Germany is leading the way. Next year, for example, the defence budget is set to rise by another five percent, to well over 50 billion.

We have written about the aggressive NATO manoeuvres in the Black Sea, which heighten the danger of a direct military confrontation with the nuclear power Russia. And the European powers are also becoming increasingly aggressive toward China, despite close economic ties.

In a fit of megalomania, Berlin sent a frigate towards the Indo-Pacificon the pretext of securing freedom of navigation there. Aggressive anti-Chinese comments in the press bring back dark memories of Kaiser Wilhelms infamous Hun speech almost 121 years ago to the day.

We have discussed in detail the January 6 coup and the danger of fascism in the US in this school. In Europe, too, the turn of the ruling class toward dictatorship and fascism is well advanced and has been further exacerbated by the pandemic.

I have already mentioned that fact the ruling class in Germany is adopting the program of the far-right AfD. In France and Spain, there are far advanced coup plots in the army. The Macron government in France and the PSOE-Podemos government in Spain are downplaying the danger and are themselves responding to the far-right threat with a sharp shift to the right.

Their stance expresses the same class interests that we have analysed with respect to the Democrats in the United States. The nominally democratic parties in Europe reject any serious struggle against the far-right danger because they defend the interests of finance capital and, above all, fear the growing militancy and resistance of the working class. To suppress the class struggle, they themselves increasingly adopt the program of the extreme right.

At the same time, the pandemic has aggravated the deep crisis of the European Union and the tensions between the imperialist powers on the continent.

While the European powers in general agree on issues of social cuts, militarism, and war, they have been utterly unable to organize a common approach to contain the pandemic. When the virus spread dramatically last spring, for example, the German and French governments imposed export bans on medical protective equipment. Since then, tensions have continued to grow, especially between France and Germany. In mid-July, French neo-fascist and possible next president Marine Le Pen threatened to break the alliance with Germany and develop a close military cooperation with Britain and the United States.

The spectre of catastrophe returns. Germany and France have fought three bloody wars against each other in the last 150 years. Now the escalating economic, social and political crisis is reviving all the unresolved problems of European capitalism in the 20th century.

The entire history and development of the European Union confirms the Marxist analysis summarized by Leon Trotsky in 1917: A halfway complete and consistent economic union of Europe coming from the top by means of an agreement of the capitalist governments is sheer utopia.

And further: The economic union of Europe, which offers colossal advantages to producer and consumer alike, and in general to the whole cultural development, becomes the revolutionary task of the European proletariat in its fight against imperialist protectionism and its instrumentmilitarism.

This is the perspective that the Trotskyist movement has defended against Social Democracy and Stalinism, and which now takes on immediate significance. Among workers and youth, resistance is developing across Europe.

First, there was a wave of spontaneous strikes in key auto, manufacturing and food factories in Italy and across Europe that forced European governments to implement the initial lockdowns last spring. Then in the fall of 2020, there were renewed strikes and protests against the opening policy, including school strikes in Greece, France and Germany.

Now strikes and protests are developing across the continent against attacks on workers jobs and wages. As in the US, corporations, with the help of the unions, are using the COVID-19 pandemic to push through historic attacks on wages and working conditions.

These are only some examples we have been covering extensively on the WSWS: the struggle of the Banbury300 at JDE in Britain, the strikes and protests of the Gorillas delivery workers in Berlin, the struggle of the WISAG airport workers in Frankfurt and the spontaneous strikes of electricity workers in Turkey.

In all these struggles, we have not only commented on events, but intervened as active participants in the class struggle. We fought to organize workers independently of the unions and clarified central questions of political orientation and perspective. On this basis, we have been able to set up rank-and-file committees among teachers and students and make similar developments in other workplaces and industries.

We are in a situation where our partys intervention is becoming the most decisive factor in determining how political developments play out.

The example of our intervention among Volvo workers in the Belgian city of Ghent is worth considering again. Our intervention there and the support we won for the strike of the Volvo workers in Dublin, Virginia directly strengthened the struggle of the rank-and-file there. At the same time, the strike in Dublin, which we told Volvo workers in Ghent about, spurred their fight against the 40-hour week. Just one day after our first intervention, there was a spontaneous walkout at Volvo Cars in Ghent.

We cannot underestimate the influence we have. Similar to the response of the WSWS to the 1619 Project, we have understood that the rewriting of history in Germanythe trivialization of Nazi crimes by far-right professors such as Jorg Baberowskihas far-reaching consequences. We have not only noted this, but we have mobilized a powerful intellectual and political offensive against it, which has found such a great response because it articulates the enormous opposition among workers and youth to fascism and war.

There is one other more recent experience that I want to share with you. We are currently in the midst of a federal election campaign. We decided to intervene strongly after the recent flood disaster, in which more than 200 people died because they were not warned and no safety measures were organized. Like the pandemic, this disaster is again exposing the criminality of the ruling class and the bankruptcy of capitalism. Our latest video report, with interviews of those affected, was viewed over 200,000 times within only five days. This underscores the impact we have when we respond aggressively to political events.

In his report to the summer school two years ago, Comrade North explained, The attack on our German section by the Verfassungsschutz is a clear political statement that the ruling elite recognizes that the program and ideas of our movement have the potential to gain a mass following in the working class.

He added: This acknowledgment of the political stature of the Sozialistische Gleichheitspartei is, in one sense, a compliment. But it is also a threat, and it must be taken seriously... To meet the demands of this global development of the class struggle it is necessary for the cadre of the International Committee to draw upon the entire theoretical and political capital of our world party.

This is the orientation of this school and the basis on which we must now continue to develop the work of the SEP and the entire International Committee of the Fourth International.

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The pandemic exposes the bankruptcy of European capitalism - WSWS

Erika Jayne. Jaxon/MEGA

Erika Jayne is being sued for $25 million by the trustee who is overseeing the bankruptcy case involving her estranged husband Tom Girardis law firm, Girardi Keese.

The Real Housewives of Beverly Hills star, 50, was implicated in the lawsuit because she allegedly knew the firm was paying for her expenses for at least 12 years, according to court documents obtained by Us Weekly. Therefore, the trustee requested that the court order Erika to repay the company the $25 million she allegedly spent plus interest.

It would be a miscarriage of justice if [she] was allowed to simply walk completely free of owing over $25,000,000 to the estate, the filing stated.

The suit further argued that Erika should be held personally responsible for the funds, although the money allegedly went to her company, EJ Global LLC. She attempts to create a distinction between handing her money directly versus paying all of her bills directly, the papers read. The distinction, like her prior motion for reconsideration, is meritless. Any payments made for her benefit are her responsibility.

The trustee claimed that the glam cannot be supported by a sham, referring to the money she allegedly spent on her glam squad as well as PR, assistants and her credit card bill.

Ronald Richards, the attorney for the trustee, told Us in a Friday, August 27, statement that the lawsuit was filed to provide a come-to-Jesus moment for Erika.

The law firm paid out over $25 million in expenses which were approved and generated by one person, Erika Girardi, the statement continued.We are hopeful that Ms. Girardi comes down the mountain from a place of privilege and obscene wealth and returns some of these expenses so the former clients and creditors of this law firm can mitigate the horrific and unfair losses perpetrated by her husband and others.

Girardi Keese is $101 million in debt, according to court documents obtained by Us earlier this week. It will not compensate the estate for the full amount but some effort to do the right thing would go a long way in backing up her public claim that the victims should come first, Richards added.Ms. Girardi enjoys a large salary from her talents as well as access to large sums of money from anonymous sources.We are hopeful she finds it a better path to resolve this matter without any further avoidance of her obligations to this estate instead of constantly draining estate resources with meritless legal positions and threats.No more investigation is needed to prove the money in one direction: To Erika Girardi.

Erikas lawyer, however, told Us in a Friday statement that the suit is another example of the trustee and her counsel jumping to conclusions without a full investigation, and bullying and blaming Erika for actions taken by Girardi Keese for which Erika does not have legal liability.

The attorney claimed that just because Erika owned 100 percent of the interests of EJ Global LLC doesnt mean that she has liability for its debts and alleged that Girardi Keese managed the EJ Global LLC finances.

Erika filed for divorce from Tom, 82, in November 2020 after 20 years of marriage. She has since claimed that she was not aware of his alleged mistreatment of his clients and their money. The legal case is ongoing.

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Erika Jayne Sued for $25 Million in Bankruptcy Case Involving Tom Girardis Law Firm - Us Weekly

Indicating that some stakeholders actions were scuttling the intended outcomes of the Insolvency and Bankruptcy Code (IBC), Chief Economic Adviser Krishnamurthy Subramanian invoked the concept of Dharma on Friday to urge Indian industry to stop being practical and strive to be ideal, instead.

The IBC regime, he said, had helped India emerge from a feudalistic system where a corporate debtor felt it was his divine right to retain control, and shifted the focus to a Creditor in Control regime.

Citing Indias ancient literature, including the Bhagavad Gita, Mr. Subramanian said problems arise when there is a wedge between socially optimal behaviour and conduct that is individually optimal for an economic agent.

I think, in the case of IBC, you can clearly see that there are some actions that every stakeholder can take, which would be optimal for the entire IBC system as a whole; visibly what every entity is doing that is basically privately optimal for them. And this wedge is whats actually leading to the preservation of this Nash equilibrium, where we are stuck where we are, he said.

When you think about the concept of Dharma from an economic angle, you start realising why it was such a powerful idea (it means) there is a much bigger goal And in some sense, if you think from an economists perspective, Dharma is actually this concept of aspiring for what is socially optimal, he said at a CII meet on five years of the IBC, urging industry captains to think beyond the I, Me and Myself perspective.

Stating that some listeners may just think of him as a young guy just talking impractical stuff, the CEA said that he thoroughly disliked the word practical as it often becomes an alibi for compromises.

In contrast, the word that really inspires me a lot is ideal. So why dont we actually think about disbanding that word practical, and instead actually stick on to the word ideal. And I think just that simple thing you can do, can do us a world of good, he asserted, adding that detailed suggestions to fix the IBC may not suffice unless this macro perspective of Dharma is taken into account and acted upon.

I am absolutely sure that progress will happen going forward. And the next time were actually talking, maybe at the 10th anniversary of IBC, we will all be congratulating ourselves at the wonderful progress that weve made in the next five years, he concluded.

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Self-seeking individuals scuttling intentions of Insolvency and Bankruptcy Code: CEA - The Hindu

What do the following 15 people have in common: Presidents Thomas Jefferson,Abraham Lincoln, Ulysses S. Grant, and William McKinley; Senator George McGovern; businessinnovators Henry Ford, J.C. Penney, and Henry John Heinz; financial advisor Dave Ramsey; talkshow host Larry King; celebrated author Mark Twain; entertainment entrepreneurs Walt Disneyand P.T. Barnum; actress Debbie Reynolds; and NFL Hall of Fame Quarterback Johnny Unitas?

They are all well-known and successful, to be sure. But in addition, they all sufferedinsurmountable financial reverses, and they all got a second chance by filing for bankruptcy.

This list shows the wide variety of people who may need the protection of bankruptcy. Many other widely recognized names could be included, too. It also shows that many people willencounter financial reverses and difficulties in their lives and incur debts they are unable to repay. Often this is through no fault of their own. Financial reverses can result from a downturn in the economy or a serious illness, or through poor financial planning or management, bad business decisions, or other personal or financial reasons.

Indebtedness from such reverses can become so great that a person or business will neverbe able to pay it all back. In addition to the financial burden, such debt can place a heavy mentaland emotional burden on those trying to carry on with their lives. Individuals and businesses inthis position need a second chance.

The Framers of the Constitution recognized this need for a second chance. Article I of the United States Constitution gives Congress the power to establish . . . uniform laws on the subjectof bankruptcies throughout the United States. Through the years, Congress has not only passed laws creating bankruptcy protections, but has also created bankruptcy courts to handle bankruptcy proceedings. Bankruptcy courts are federal courts and are components of U.S. District Courts. Wherever there is a U.S. District Court, there is a corresponding U.S. Bankruptcy Court.

The Framers also recognized that laws on bankruptcy should be consistent throughout the country. For this reason, the Constitution refers to uniform laws on bankruptcy. Uniformity isachieved in part by Congresss giving federal courts exclusive jurisdiction over bankruptcyproceedings. This means that all bankruptcies are handled in federal courts and not in state courts.

Bankruptcy proceedings start when a person or business who can no longer repay their debts files a petition with the local bankruptcy court. In some cases, creditors of the person orbusiness may file the petition to have the person or business declared bankrupt.

Bankruptcy may result in the debts being liquidated or in the development of a repayment plan. Whether through liquation of debt or the institution of a repayment plan, the goal is to befair not only to the bankrupt individual or business, but also to the creditors. Sometimes this willrequire that the property of the bankrupt person or business be sold to pay back as much of thedebt as possible. This may be necessary because the goal of a bankruptcy proceeding is not a freepass, but a new start.

As is clear from the list of names above, bankruptcy is not a reflection of bad character or a sign of poor business judgment. And it does not preclude a person from achieving great successlater on. The federal courts, through bankruptcy proceedings, provide an important opportunityfor a second chance and a new start in business and in life.

Curtis L. CollierUnited States District JudgeChair, Eastern District of Tennessee Civics and Outreach Committee

Carrie Brown StefaniakLaw Clerk to the Honorable Curtis L. CollierImmediate Past President, Chattanooga Chapter of the Federal Bar Association

Eliza L. TaylorLaw Clerk to the Honorable Curtis L. Collier

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Bankruptcy Court - The Court Of Second Chances - The Chattanoogan

The Boston Herald, Chicago Tribune, Dallas Stars, Los Angeles Dodgers, Nebraska Book Company, Tropicana Las Vegas Casino, and Washington Mutual all proudly bear the name of a city or state where they are based. Yet all filed for Chapter 11 Bankruptcy in Delaware, taking advantage of a loophole in bankruptcy law that allows businesses to flee their home states and have their Chapter 11 cases heard in jurisdictions to which they have no meaningful connection. This frequently-used loophole enables bankrupt businesses to pick the court, the applicable case law, and sometimes even the judge who will hear their Chapter 11 cases.

This practice, called venue shopping, has been deemed the single most significant source of injustice in chapter 11 bankruptcy cases by retired bankruptcy Judge Steven Rhodes, who administered the City of Detroits bankruptcy. Outside of bankruptcy, plaintiffs and defendants may only sue or be sued in locations based upon strict, constitutionally-based principles of personal jurisdiction. Current bankruptcy law, however, allows medium to large businesses to file their bankruptcy cases basically anywhere in the country. The Boy Scouts of America, a federally-chartered corporation based in Texas, filed for bankruptcy in Delaware, while the National Rifle Association, a New York corporation with headquarters in Virginia, filed for bankruptcy in Dallas, Texas.

These runaway cases create opportunities for unjust results tucked away from the scrutiny of those most concerned. Big business debtors and their advisors often choose bankruptcy venue far away from headquarters, making it difficult for creditors, employees, retirees, and the home-town media to observe and participate in the case. Venue shopping forces creditors who are sued by debtor companies to defend themselves in a remote forum chosen by the company and without any connection to their dealings with the debtor. Forcing participants to hire local counsel (as required in Delaware) and travel to the remote venues imposes significant costs, often on those who can least afford them, and may preclude them from participating in the bankruptcy.

Venue shopping enables the owners and managers of bankrupt companies to seek out a friendly landing place, perhaps one where they will be personally protected or where they believe the court will approve large bonuses for the executives who took the company into bankruptcy. Purdue Pharma, the opioid manufacturer with headquarters in Connecticut and principal manufacturing plants in Rhode Island and North Carolina, shopped its chapter 11 bankruptcy into White Plains, N.Y., where the sole presiding judge had ruled in another case in a way that might protect the Sackler family that owns Purdue.

Venue shopping has caused a concentration of large business bankruptcy cases in a handful of courts perceived of as being management-friendly, despite having little connection with the debtors business. The overwhelming concentration of runaways is in Delaware, which has little connection with most of the businesses that file there as either the location of their headquarters or principal assets. At the moment, other favored courts include the Southern District of Texas (Houston) and the Richmond Division of the Eastern District of Virginia, although changing judges and more recent rulings may cause lawyers to pick other locales as time goes by. Some of these filings go beyond picking a district to looking for a specific judge that the debtors management would prefer, which they can do where a judicial district or division has only one or two judges.

The judges in the favored districts are capable and honorable public servants, but Congress never intended for only a handful of judges to handle large business cases, and there is no legitimate reason for doing so. Bankruptcy judges throughout the country have the ability to handle all types of cases, including large Chapter 11 reorganizations, because they are appointed based on merit by appellate judges, not politicians, and they are vetted for their knowledge and experience in bankruptcy procedures and the local law applicable to the companys business and to its customers and suppliers. No person or corporation should be allowed to pick the judge in its own case.

The best way to stop venue shopping is for Congress to amend the bankruptcy venue statute, a no-cost solution. The Bankruptcy Venue Reform Act of 2021 (H.R. 4193), a bipartisan bill introduced by Representatives Zoe LofgrenZoe Ellen LofgrenBiden to meet with 11 Democratic lawmakers on DACA: report House GOP blames Pelosi not Trump for Jan. 6 House erupts in anger over Jan. 6 and Trump's role MORE (D-Calif.) and Ken BuckKenneth (Ken) Robert BuckGOP lawmakers demand answers on withheld restitution following Nassar revelation Hillicon Valley: Biden: Social media platforms 'killing people' | Tech executives increased political donations amid lobbying push | Top House antitrust Republican forms 'Freedom from Big Tech Caucus' Top House antitrust Republican forms 'Freedom from Big Tech Caucus' MORE (R-Colo.) in the House, would close the loophole and stop the manipulation of venue by requiring businesses to file bankruptcy where their headquarters or principal assets are located, resulting in a better distribution of cases around the country. A more even distribution of cases will better utilize existing judicial resources and better ensure that that the tens of millions of Americans who interact with bankruptcy courts have confidence in the system that decides their financial futures. Public confidence in the bankruptcy system depends on eliminating this dangerous practice and Congress enacting this reform.

Joan Feeney and Steven Rhodes are former bankruptcy judges; Adam Levitin and Jay Westbrook are law professors who teach bankruptcy at Georgetown University and The University of Texas at Austin, respectively.

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