Bankruptcy and Legal News and Notes
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WhatsNew:
Dealing With This Economy
December 3, 2011
We have been busy at the firm helping our clients deal with this difficult economy. We have had some success recently filing Chapter 11's for a few individuals with multiple properties. A recent court ruling from the Middle District of Florida eliminated a major challenge to this type of bankruptcy. We have seen a drop in the number of Chapter 7 cases compared to last year but have been advised by the foreclosure attorneys that the next waive of foreclosures in coming soon. We expect to see a corresponding increase in Chapter 7 filings. Let us know if we can help you with your financial issues.
CurrentNews:
American Airlines Files Chapter 11
December 2, 2011
The parent company of American Airlines filed for bankruptcy protection in late November, seeking relief from crushing debt caused by high fuel prices and expensive labor contracts that its competitors shed years ago. For most travelers, though, flights will operate normally and the airline will honor tickets and take reservations. American said its frequent-flier program would be unaffected.
Recent Events:
The Local Bankruptcy Scene
November 28, 2011
In the Southern District of Florida, our firm has seen an increase in the unwillingness of Chapter 7 trustees to forgo the collection of potential funds. In Florida, an individual's exemptions in bankruptcy are guided by reference to state-not federal-law. An individual is entitled to certain exemptions of personal and real property. Generally, if an individual was over their exemption limit, i.e. having certain property not entitled to exemption, trustees would generally forfeit their right as administrator of the bankruptcy estate to sell the non-exempt asset if the asset was of little value or considered "unsellable." However, our firm has observed a recent uptick in the willingness of the trustee to sell non-exempt assets worth little, seemingly because trustees do not want to lose out on the potential collection of funds. Often, the sale generates funds in an amount that does little more than pay for trustee and professional fees. If you are considering filing for bankruptcy protection, it is imperative to consult with a bankruptcy attorney who can explain your options and offer pre-bankruptcy planning to avoid these common pitfalls.
In the News
Last updated 12/4/11
American Airlines Files Chapter 11
The parent company of American Airlines filed for bankruptcy protection in late November, seeking relief from crushing debt caused by high fuel prices and expensive labor contracts that its competitors shed years ago. For most travelers, though, flights will operate normally and the airline will honor tickets and take reservations. American said its frequent-flier program would be unaffected.
Book Giant Borders Files for Chapter 11
When Michigan based Borders Group Inc. filed for Chapter 11 bankruptcy protection in February, many assumed its rival, Barnes and Noble, would benefit from Borders misfortune. Surprisingly, this has not been the case.
In the wake of liquidation sales going on as a result of Borders store closings, Barnes & Noble’s sales are diminishing. Barnes and Noble has also seen its stock price flounder recently, hitting an all time low of less than $10 in March.
In part, Borders’ troubles stemmed from the going popularity of electronic books available through sources such as Amazon. Although Barnes and Noble procured a market advantage by developing and marketing its very own electronic book reader, the mainstay of its business is still old fashioned, physical books. However, Barnes and Noble must still weather the same long term difficulties that forced its competitor into chapter 11.
Friendly's - Not a Happy Ending?
The poor economy and decline in consumer spending has claimed another restaurant chain as its latest victim. Friendly's, a chain of ice cream parlors famous for its "Happy Ending" sundaes, filed for bankruptcy protection on October 5, 2011. Friendly's Ice Cream attributed its financial woes to the increasing cost of cream-a staple for any ice cream parlor-and soaring rent costs. As with many casual dining establishments, Friendly's has struggled to reduce prices in an attempt to regain recession affected families who favor cheaper counter-service fast food restaurants.