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Going over the fiscal cliff will affect the poor in addition to affecting the middle class and the wealthy by increasing their taxes.  Those on assistance programs such as food stamps could see a decline or even an end to their aid if Congress does not act quickly.  SNAP (Supplemental Nutrition Assistance Program), is covered by the farm bill, which expired in September.  Congress has not extended the benefits and could even make it more difficult to receive aid in any bill that is passed to … [Read more...]

A123, a government-backed battery maker, filed for bankruptcy relief under Chapter 11 in October.  The plan was to sell its battery business to Johnson Controls, a U.S.company for $125 million.  However, the sale will be subject to the highest bidder at an auction this month.  A company from China, Wanxiang Group Corp, is interested in buying A123’s battery business at the auction. However, because A123 has ties to federal agencies and the military, some senators are worried that the sale … [Read more...]

AMR, the parent company of American Airlines, filed a joint petition with its creditors’ committee asking the bankruptcy court to extend the time within which it can file a proposed bankruptcy plan to exit its Chapter 11.  Currently, the exclusive period for AMR to propose a plan ends on January 28; however, the company has requested an extension until March 11. If the judge does not extend the deadline, creditors or other parties could propose a plan for the court to consider.  This would … [Read more...]

Lenny Dykstra, a former outfielder for the New York Mets when they won the 1986 World Series, filed for bankruptcy during 2009 in an attempt to save property he had purchased from Wayne Gretzky for $18.5 million.  Federal investigators allege that he sold items that belonged to the bankruptcy estate, destroyed assets and hid assets from the court.  He was sentenced to 500 hours of community service and must pay $200,000 in restitution. For more about Dykstra’s legal troubles read, “Dykstra … [Read more...]

William Beavers, Cook County Commissioner, goes to trial this week on charges stemming from a 2009 tax probe.  Attorneys for Beavers argued that he should be allowed to explain why he amended tax returns after he found out about the tax probe.  Beavers will also be able to explain to jurors why he repaid $69,000 in campaign contributions as well. Prosecutors argued that the explanations were irrelevant and would only distract the jurors from the real issues of the case.  However, Federal … [Read more...]

Illinois, along withColoradoandOregonlimit Chapter 9 filings within their states; however, Georgia andIowapretty much ban Chapter 9 filings except in very rare occasions.  Chapter 9 covers municipal cases and has been around since 1934 when local governments went under because of the Great Depression. Even though federal law governs Chapter 9 bankruptcies, they are limited by the 10th amendment of the Constitution and by state and local laws.  For more about Chapter 9 bankruptcies see, … [Read more...]

Claiming that the union has been completely unbendable in contract negotiations, Gov. Quinn said last week that he would terminate the state’s contract with the American Federation of State, County and Municipal employees (AFSCME).  This decision will affect some 40,000 employees, as the AFSCME is the largest employee union working for the state. Claiming that the union refuses to acknowledge “extraordinary financial crisis squeezing the state” and continues to seek more money that the … [Read more...]

As Illinois faces over $7 billion in outstanding bills, state legislators argue about how to pay the debt.  Numerous bills are more than 30 days late.  Rep. Esther Golar, a Democrat from Chicago has proposed a controversial bill to pay for some of the state’s debts. Under her bill, the state would borrow $4 billion to pay debts owed to schools, universities, healthcare providers, local governments and state vendors.  Politicians disagree on whether or not taking on new debt to pay current … [Read more...]

“Kinky Boots” had a successful pre-Broadway showing in Chicago but only after the producers received huge tax theater tax creditors offered by the state.  Illinois faces billions of dollars of debt; however, proponents say the tax credit is successful and benefits not only Chicago but also the entire state.  However, critics wonder how the state can offer such huge tax credits when it cannot pay its own debts. For more details about the state tax credit for shows, see “Tax credit luring … [Read more...]

The theme of “fairness” when it comes to paying taxes has spilled over from the presidential election to the State of Illinois.  Lawmakers in Illinois are pushing for new tax laws requiring corporations to provide more information about their income to make sure that publicly traded companies are paying their fair share of state income taxes. Opponents of the measure claim that companies already provide sufficient information.  They argue that the legislation would require companies to … [Read more...]