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The Chapter 11 bankruptcy trustee for Louis Pearlman, the person behind ‘N Sync and Backstreet Boys, filed his proposed bankruptcy plan after numerous lawsuits to secure funds for creditors. Kapila fled more than 700 lawsuits since 2007 when he was appointed to try to claw back more than $100 million. To date, he has collected about $30 million from the lawsuits. This translates into about four cents for every dollar owed to creditors. Creditors still must vote on the proposed plan. For … [Read more...]

When a debtor files for bankruptcy relief, if they fail to file all required schedules, statements and documents, they have 14 days to file the documents. In the event the forms are not filed, the case can be dismissed. This is what happened in the Halsey Minor case. His attorney is asking that the dismissal be reversed because the attorney made the decision not to file the documents on the deadline as they were missing some information. The attorney is arguing that the debtor should not be … [Read more...]

The House passed a bill that will allow the Federal Housing Authority (FHA) to limit the amount of lump-sum payments that lenders are allowed to offer borrowers on their reverse mortgages. The FHA can also now require that escrow accounts be established to pay for property taxes and insurance on the mortgaged properties. Under the bill, the FHA can change the terms for new reverse mortgages in an attempt to make reverse mortgages more financially sound for the FHA to insure. For more details … [Read more...]

Kevyn Orr, the emergency manager appointed for Detroit, is working hard to make deals with the city’s creditors in an attempt to avoid bankruptcy. In a statement last week, Orr said that creditors refusing to make deals in the belief they will have a better chance if the city files for bankruptcy under Chapter 9 of the United States Bankruptcy Code are mistaken. Even though he has significant power know, bankruptcy might help even more. To get a better understanding of Chapter 9 and how it … [Read more...]

It is common knowledge that in most instances if you take an early withdrawal from your IRA you will pay a penalty. However, if you are willing to adhere to the requirements of 72(t) of the United States Tax Code, you can take an early IRS withdrawal without paying a penalty. You will still be taxed on the amount you withdraw but you will not be charged a penalty provided the distributions are “substantially equal periodic payments” or SEPPs under 72(t) and meet each of the requirements set for … [Read more...]

More details are coming out in regard to Sly Stone’s former manager and the bankruptcies filed for two of his companies. Apparently, Stone’s attorneys arranged to purchase a $1.7 million judgment against Jerry Goldstein from the First California Bank. Goldstein’s lawyers claim that Stone purchased the judgment in an attempt to foreclose on Goldstein to obtain assets including the name Sly and the Family Stone. Therefore, Goldstein moved to place two companies in bankruptcy to move the fight … [Read more...]

In another blow to the electric car industry, two more electric car companies filed for bankruptcy relief under Chapter 11 this week. Miles Electric Vehicles Ltd. and Lio Energy Systems Holdings are both affiliates of Coda Automotive, which filed for bankruptcy on May 1. Even though major car companies have invested in electric cars, sales have been slow as evidenced by the bankruptcy filings. Consumers have not jumped on board with electric cars due in part to the cost and inconvenience. … [Read more...]

Exide Technologies, which makes vehicle batteries, filed for relief under Chapter 11 this week. The battery company hopes to restructure its debt through the bankruptcy filing. Higher product costs have caused profits to be lower than expected. Creditors holding debts that total over $1 billion are prohibited from collecting the debts from the company by the bankruptcy filing. Company assets are reported to be almost $1.9 billion as of the date of filing. For more details about this … [Read more...]

New guidelines for attorney’s fees in Chapter 11 bankruptcies are scheduled to take effect on November 1. The guidelines are aimed at taming some of the enormous fees that some attorneys charge in Chapter 11 cases - - in some cases up to $1,000 per hour. The new guidelines will apply in Chapter 11 cases where debtors have at least $50 million in assets and $50 million in debt. The guidelines will instruct trustees on when and how to request more information from attorneys with regard to fees … [Read more...]

A bankruptcy judge gave AMR approval to send its bankruptcy plan to creditors for a vote. This came after objections by the United States Trustee’s office. As part of the plan, AMR will merge with US Airways with current shareholders receiving 3.5 percent of the newly formed airline. One key problem, a $20 million severance package for AMR’s Chief Executive will now be subject to creditor approval. For more details read, “AMR can send restructuring plan to creditors for a vote: judge.” … [Read more...]