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If you prepare and file your own tax returns using one of the popular tax preparation software programs, you have probably been offered their audit insurance. This insurance costs an additional fee and offers a variety of services related to IRS audits. However, do you really need audit insurance if you file a simple, straight-forward tax return? Triggers for audits can include business income, missing information and high income. For more information on what triggers an IRS audit read, … [Read more...]

Affymax is cutting jobs and contemplating selling itself due to financial problems created by the recall of its major product. Affymax produces the drug Omontys which is used to treat anemia in patients on dialysis. The drug was recalled causing shares of Affymax to drop over fifty percent at the beginning of this week. Affymax says that it will lay off three-fourths of its workers and fire its chief commercial officer in an attempt to restructure rather than file for bankruptcy. For more … [Read more...]

Lon Morris College filed for Chapter 11 bankruptcy relief last year when it could no longer pay its creditors. Administrators of the state’s oldest junior college attempted to add a football team and expand the college; however, the expansion only created more debt. They also offered tuition discounts to grow enrollment but when that move proved successful, the school did not have the money to pay operations. Now the school is petitioning the court to sell off its mineral rights to pay … [Read more...]

Most debtors that file for Chapter 11 relief are granted the exclusive right to file a proposed plan of reorganization for creditors to consider. In the Ahern Rentals case, a bankruptcy judge has allowed bondholders to propose a competing Chapter 11 plan for creditors to consider. Creditors can view both plans and vote on the plan that they like best. The deadline to cast ballots for both plans is May 13 with a hearing scheduled to begin on June 3. For more details on this story read, … [Read more...]

Many people assume that bankruptcy is only for poor people. They equate bankruptcy with poverty when that is simply not the case at all. Many people who file bankruptcy have incomes well above the poverty line. They can pay for their basic needs; however, they have accumulated more debt than their income allows them to pay. Furthermore, many people who file for bankruptcy relief do so because of a failed business. To read about three famous people who filed for bankruptcy before they became … [Read more...]

As it claims that it cannot pay its bills or even afford its current payroll, San Bernardino claims it needs the protection of the bankruptcy court while voting to increase salaries for some employees. The city approved over $1 million in additional pay increases for police and firefighters, just days before it is set to appear before a bankruptcy judge to argue that it needs bankruptcy protection. The city claims that its charter forces it to raise the salaries based on a formula used for … [Read more...]

Kevyn Orr was named as the emergency manager of Detroit by Michigan Gov. Rick Snyder. Orr is a bankruptcy attorney and will have many of the same powers that a bankruptcy judge would have including canceling city contracts. This does not necessarily mean that Detroit may not have to file for bankruptcy relief. Orr believes that he can affect a turnaround within eighteen months. The appointment was opposed by city council but backed by the Mayor. For more details read, “Detroit, in … [Read more...]

As part of the merger agreement by American Airlines and US Airways, CEO Tom Horton will receive almost $20 million in severance. Other employees will also receive severance or retention payments under the proposed merger. The United States Trustee’s office has filed an objection to the payments stating that American Airlines, and its parent company, failed to state reasons why the payments would be permissible under the United States Bankruptcy code. To be allowed, the Trustee’s office … [Read more...]

As part of its Chapter 11 bankruptcy filing, Reader’s Digest is required to report payments to individuals and companies that are considered “insiders” within one year of the date of the bankruptcy filing. Insiders include officers, directors, board members, equity owners owning at least 5% of the company and other parties that are directly related to the operation or ownership of the company. Reader’s Digest discloses payments of over $28 million to insiders but does not disclose the identity … [Read more...]

With the filing of its Chapter 7 bankruptcy case, Advanced Interactive Systems, Inc. dumped a huge problem in the lap of the bankruptcy trustee assigned to its case - - what to do with any firearms or weapons owned by the company. Advanced Interactive owns several shooting ranges and trains security professionals. Bankruptcy filings indicate that it has at least 15 guns, including an AR-15 rifle and numerous parts. The duty of disposing of those guns will now be the problem of the trustee. … [Read more...]