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Chicago’s pension system is headed for a meltdown according to a Chicago business group.  Furthermore, the problems facing the pension system may be beyond repair at this time.  According to The Commercial Club of Chicago, the November elections did not force lawmakers to make the reforms necessary to deal with the $200 billion debt that the state faces. The Governor does not have a plan but he does have a new mascot - - “Squeezy, the Pension Python.”    When introducing the new state mascot, … [Read more...]

In an attempt to prevent the liquidation of Hostess Brands through bankruptcy, it has agreed to mediation with the Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union.  Because of continuing strikes, Hostess said that the Union had made it impossible to conduct business and filed for bankruptcy relief.  The Union was striking, in part, because of reduced pay and cuts in pensions. Judge Robert Drain stated in court that he had serious questions about the logic of … [Read more...]

Illinois Attorney General Lisa Madigan urged Congress, along with Attorney Generals from other states, to extend the tax relief granted under the Mortgage Debt Relief Act beyond its current expiration of December 31.  Under the current act, a homeowner that gives up his home through foreclosure, a short sale or loan modification does not have to include the forgiven mortgage debt as taxable income.  Without Congressional action, this tax relief will expire at the end of the year. For more … [Read more...]

After missing a $97 million payment on its unsecured bonds, Edison Mission Energy announced that it might have to file for bankruptcy relief within the month.  Citing decreases in power prices, Edison cannot service its $3.7 billion in unsecured bonds and may need to restructure that debt through a bankruptcy.  However, the process of restructuring through a bankruptcy will not be without its problems. The company has retained the services of restructuring lawyers in hopes of avoiding the … [Read more...]

Steven Huntley tries to teach us a lesson from Denmark’s ‘fat tax’ in his article “A ‘fat tax’ lesson from Denmark” this week. Denmark tried to fight the country’s rising obesity levels by enacting higher taxes on foods that contained more than 2.3 percent saturated fat such a cheese and butter.  Danes were outraged and began finding cheaper versions or crossing the boarder to stock up on their favorite foods. Huntley relates the lessons learned from the ‘fat tax’ to America’s current … [Read more...]

The Chicago-based BMO Harris Bank has been sued by the trustee in the Tom Petters bankruptcy case asking for unspecified damages.  The trustee is accusing the bank in aiding Petters in by ignoring the massive amounts of funds flowing in and out of the bank account Petters used to launder money for is Ponzi scheme. A representative for the bank denies the allegations and states the bank will fight the lawsuit.  BMO Harris is also involved in a lawsuit by a trustee in Florida in regard to a … [Read more...]

This week the Chicago City Council approved the Mayor’s 2013 budget for the city by a vote of 46 to 3.  According the news reports, the $8.3 billion budget balances the city’s finances without adding new taxes, fines or fees.  It also gets rid of the employee head tax by the end of 2013. The city budget did have a $369 million projected deficit; however, that was dealt with through spending reforms, spending cuts and additional savings and revenues.  For more details on Mayor Emanuel’s 2013 … [Read more...]

Republicans are still arguing that lower tax rates will generate more revenues according to the “dynamic scoring” theory.  They are still standing steadfast that they will not support any deal that includes raising taxes for the wealthy.  On the other hand, President Obama is worried that those revenues will not materialize thereby forcing cuts in programs that are vital to the middle-class.  Obama is seeking over $1 trillion in revenue from increased tax rates for the wealthiest … [Read more...]

The Allerton Hotel, an historic hotel on Michigan Avenue in downtown Chicago, had filed for bankruptcy in May 2011.  After battling its largest creditor for days this summer, the hotel has finally reached a settlement with the creditor thereby allowing its bankruptcy plan to be confirmed. Under the terms of the plan, Allerton must put the plan into effect by January 18 or the hotel will be auctioned.  As part of the plan, Allerton must pay a $5 million principal payment to its largest … [Read more...]

“We want to highlight this issue of gun violence and we also want to add to our resources to address it," Cook County Board President Toni Preckwinkle told reporters on Friday as the Board passed the gun tax by a vote of 9-7.  The proposed tax on bullets was withdrawn earlier last week. The tax is to help defray the health costs incurred by the county from gun shot wounds.  In addition to the gun tax, the board also approved a $1 per pack cigarette tax also to assist with the costs of public … [Read more...]