Bankruptcy and Foreclosure Attorney Blog

May bankruptcy filings across the U.S. were up 10 percent from the same month one year ago, according to data released earlier this month by Automated Access to Court Electronic Records (AACER).

Florida accounted for seven percent of the 133,459 U.S. bankruptcy petitions filed in May, second only to California with 16 percent.  Average filings per day also increased over April 2010, from 6,646 to 6,673 in May.

For the first five months of 2010, U.S. bankruptcy filings total 659,516, up 15 percent from the same period in 2009.  This includes 622,798 consumer bankruptcy filings, 36,718 business filings and 6,048 filings to reorganize under Chapter 11 bankruptcy protection.

Financial experts note that bankruptcies usually peak between six and 18 months after an economy hits bottom, because consumers typically try to work their way out of debt for a period of time before filing bankruptcy.

Consumers who find themselves dedicating more than 30 percent of their net income to repaying debt, with no savings for retirement or emergencies may want to consider a Chapter 7 or Chapter 13 bankruptcy filing.

If you need to information on filing Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

U.S. Bankruptcy Court Judge John Dalis rejected a late bid from Starwood Capital Group for the Sea Island Co. luxury resort, saying it must wait until an Oct. 11 auction if it wants to buy the property.

Starwood’s cash bid of $199 million is $1.5 million higher than the bid from Oaktree Capital Management Group LP, Los Angeles and Avenue Capital Group of New York that Sea Island had already accepted. Starwood was in on the initial bidding process this past summer, but dropped out.

Dalis said it would be unfair to permit Starwood to submit a higher bid now, and that they must wait to vie for the luxury resort property at a bankruptcy auction scheduled for Oct. 11 – just one day following the resort’s first PGA Tour event.

Attorneys for an unsecured creditors’ group asked Dalis to block the Oaktree-Avenue sale in favor of the Starwood offer. They said that the higher cash price would help ensure that unsecured creditors are paid.

According to the Chapter 11 bankruptcy filing, Sea Island Co. owes almost $500 million to Synovus Financial Group, Bank of America and Bank of Scotland, which would also benefit from a higher cash sale price.

Sea Island was founded in 1928 and has been a favorite vacation spot of several U.S. presidents. The luxury resort includes the Cloister Hotel, three other resorts, four golf courses and two private clubs.

Blockbuster – the video rental chain that got its start in Florida and was for many years held up as an innovative business model – filed for Chapter 11 bankruptcy protection on Sept. 23 in Manhattan. The company, now based in Dallas, wants to shed $800 million of its $900+ million debt load, and says that a majority of its secured debt holders have agreed to its restructuring plan.

The Chapter 11 bankruptcy filing listed $930 million in debt, including $630 million in secured debt and $300 million in unsecured debt. The company has over 25,000 employees and 3,306 stores as of the end of August.

According to the court filing, Blockbuster fell victim to increased industry competition and new distribution channels (kiosks, digital downloads, mail order). The company tried to avoid bankruptcy by closing over 1,000 stores during the past two years and cutting expenses, but had a poor fourth quarter in 2009 when it reported a loss of over $500 million. Blockbuster also tried to bring in strategic partners, but discussions fell through.

Blockbuster sought Chapter 11 bankruptcy protection so it could restructure its business operations without a huge debt load, which would enable it to compete more efficiently with new competitors and capitalize on emerging technologies in video delivery to consumers.

Once the largest independent mortgage lenders in the U.S., Ocala-based Taylor Bean & Whitaker Mortgage Corp. has asked a Jacksonville bankruptcy court to allow it to walk away from 37 properties it says are worth little to avoid tax and upkeep expenses.

The mortgage lender, which closed down last year amid a criminal investigation as one of the largest loan suppliers to Freddie Mac, said in its filing that the expenses associated with paying taxes and maintaining the 37 properties, which have been abandoned by their owners, is approximately $91,000 more than what they are worth.

The properties are located in economically depressed major metro areas including Detroit, Milwaukee, Chicago and St. Louis. Taylor Bean says that the total worth of all 37 properties together is less than $100,000.

Former Taylor Bean chairman Lee Farkas has a Nov. 1 trial date on 16 counts of bank, wire and securities fraud, as well as a charge of attempting to defraud the U.S. government of over $500 million in Troubled Asset Relief Program (TARP) funds.

The attorneys for Lee Farkas have had to petition the Jacksonville bankruptcy court to unfreeze his assets in order to pay his legal expenses.

Panelists at the Dow Jones Private Equity Analyst Conference in New York said that now is a good time to restructure a company in bankruptcy, according to a Wall Street Journal story.

Analysts said that there is more capital available today and it is easier for companies to obtain debtor-in-possession financing – the most senior loan -- today than it was just two years ago. One investment banker noted that Blockbuster’s recent Chapter 11 bankruptcy filing enabled it to get a $125 million debtor-in-possession loan and that companies today have access to “billions and billions of capital.”

Representatives of private equity firms also reported that they have found it easier to raise money for distressed properties, and that there is a lot of competition for deals. One restructuring company executive said that real estate companies would be a “hot area” in the coming years since many have debt from 2006 that comes due in the next two years.

The American Bankruptcy Institute reported that business bankruptcy filings decreased by four percent in the first six months of 2010, compared with the same period in 2009. Chapter 11 bankruptcy filings were down by 17 percent, and Chapter 7 liquidations were virtually flat from the previous year.

Omni Hotels & Resorts was the successful bidder in the Chapter 11 auction of the Amelia Island Plantation just north of Jacksonville, and the hotel and resort operator says it plans to expand the facility.

According to a Wall Street Journal story, Omni said it would add 125 hotel rooms and another 15,000 square feet of meeting space. Omni has 45 hotels in North America, and is owned by TRT Holdings, a company owned by Texas billionaire Robert Rowling.

The 1,350-acre Amelia Island Plantation includes the Amelia Inn report, four golf courses, spa, beach club and villas. It was purchased in 1978 by investor Richard Cooper and was still under the management of his son, Richard, when the economic recession caused it to run into financial difficulties. Amelia Island Plantation filed for Chapter 11 bankruptcy protection last November.

Omni’s $67.1 million bid was better than offers made by Starwood Capital and Noble Investment Group, the other bidders. U.S. Bankruptcy Judge Paul Glenn in Jacksonville is scheduled to rule on the acceptance of the Omni offer, which will be an approximate 70 percent recovery for creditors.

Contact our Jacksonville, Florida bankruptcy law firm for more information about the Florida Chapter 11 bankruptcy process.

According to a story in the Los Angeles Times, Blockbuster has been quietly informing Hollywood movie studios that it will be filing Chapter 11 bankruptcy in mid-September.

According to the Times, Blockbuster met with studio chiefs to ensure that it would continue to receive an uninterrupted supply of movies during its reorganization. The company reportedly will use Chapter 11 bankruptcy protection to restructure its $1 billion debt load, which has hampered it from growing its business. Blockbuster also plans to close more than 500 of its under performing retail locations in the U.S.

Blockbuster met with studio executives as part of its strategy to enter a “pre-planned bankruptcy,” where most if not all creditors would agree to its reorganization plan prior to the official filing of Chapter 11 bankruptcy. One of its primary goals during the bankruptcy process is to immediately shed pricey leases for 500 to 800 of its worst performing locations. The company closed nearly 1,000 stores in 2009.

Blockbuster was delisted from the New York Stock Exchange in July, and has lost over $1 billion since 2008. In August, most of Blockbuster’s debt holders agreed to a forbearance on interest payments until the end of September, at which time the company said it planned to try a recapitalization.

Contact our Jacksonville, Florida bankruptcy law firm for more information about the Florida Chapter 11 bankruptcy process.

Former Jacksonville Jaguars quarterback Mark Brunell said during a Section 341 creditors’ meeting for his Chapter 11 bankruptcy reorganization that he would make $1.5 million a year from the New York Jets if he makes the team.

According to an article in the Jacksonville Daily Record, Brunell said that a lot hinged on how he played in the Jets’ last preseason game versus the Philadelphia Eagles. (The Jets won the game 21-17, with Brunell connecting on 11 of 17 passes for 118 yards and two touchdowns.)

Brunell filed for Chapter 11 reorganization in late June, listing liabilities of over $24 million and assets of $5.5 million. Most of the liabilities listed are tied to bad real estate and business investments that he entered into with former Jaguars teammates Todd Fordham and Joel Smeenge.

Brunell told U.S. Trustee Timothy S. Laffredi that if he did not make the team, he and his family would return to Jacksonville to live. The family is currently renting a home in New Jersey in hopes that he will make the Jets’ roster. Brunell said that no one is currently living in his oceanfront Ponte Vedra home.

According to the Daily Record article, when Laffredi asked Brunell why he filed for Chapter 11 bankruptcy, Brunell said: “Because I got in over my head and the debt was insurmountable. I’m filing Chapter 11 to reorganize and come up with a plan to make this right.”

Hollywood memorabilia collected for years by actress Debbie Reynolds will be up for auction next June to satisfy Chapter 11 bankruptcy creditors of a defunct Tennessee real estate development that was to have housed the actress’ Hollywood Motion Picture and Television Museum.

Reynolds’ son, Todd Fisher, told the Knoxville News Sentinel that he had once been offered $30 million for the collection from a family in India. The bankruptcy filing values the collection at $10.79 million.

The museum was originally to be part of Belle Island Village, an entertainment development that was to also have included a NASCAR attraction. The firm behind the project filed for bankruptcy last year and Belle Island Village was taken over by creditors. The developer tried to line up enough cash to save the museum, but was unsuccessful. A Tennessee bankruptcy judge approved the sale of the memorabilia by June.

Reports said that the collection includes over 3,000 costumes and “tens of thousands” of Hollywood artifacts, including the red slippers Judy Garland wore in “Wizard of Oz” and the white dress Marilyn Monroe wore when she stood over a subway grate in “The Seven-Year Itch.”

Mark Brunell, the former Jacksonville Jaguars quarterback who filed Chapter 11 bankruptcy earlier this year, has gained a job as the back-up quarterback for the New York Jets and his bankruptcy attorney reports that he is expected to file a plan of reorganization with the Jacksonville bankruptcy court in about a month.

Brunell told a meeting of his creditors earlier this month that he would be making $1.5 million a year as the Jets’ back-up quarterback. When he filed for Chapter 11 bankruptcy protection in June, he listed assets of $5.5 million and liabilities of $24.7 million, mostly related to bad real estate and business investments for which he had given a personal guaranty.

According to a story in the Jacksonville Daily Record, Brunell is continuing to make payments on secured debts like his oceanfront Ponte Vedra Beach home, which he must do in order to keep the property. He is reportedly abandoning his interest in several investment properties with no equity, which the secured creditors will take back.

The Jets signed Brunell to a two-year deal after he filed Chapter 11 bankruptcy, as back-up and mentor to starting quarterback Mark Sanchez.

According to the Wall Street Journal’s Daily Bankruptcy Review, data from U.S. bankruptcy court records show that commercial bankruptcy filings declined in August by five percent from the previous month.

Business bankruptcy filings in August totaled 6,950, compared with 7,299 commercial bankruptcy filings in July, which was the first month since March that saw an increase in commercial filings.

American Bankruptcy Institute executive director Samuel J. Gerdano said that the decline in business bankruptcies could be credited to lenders holding off on taking any action against defaulting borrowers while the economy remains uncertain. More lenders are negotiating with borrowers to restructure debt or extend payment timelines.

During the first six months of 2010, the number of companies filing for Chapter 11 reorganization fell by 17 percent compared with the same period last year. The number of businesses filing Chapter 7 liquidation bankruptcy was about the same as 2009.

However, the ABI’s Gerdano warned that the decline in business bankruptcy filings should not be considered a sign of commercial economic recovery. He said that “there is a sense that something is coming” – although whether it is a tidal wave or a ripple is yet to be seen.

Sea Island Co., a luxury resort complex off the coast of southern Georgia, filed for Chapter 11 bankruptcy on August 11 and plans to sell all of its assets -- including its Cloister Hotel and three other resorts, four golf courses and two private clubs-- to Oaktree Capital Management LP, Los Angeles and Avenue Capital Group, New York, for $197.5 million, subject to bankruptcy court approval.

Founded in 1928 as an exclusive vacation spot for the wealthy, Sea Island is a 2-by-5-mile stretch of private beaches and stately oaks that has been a favorite vacation spot for several U.S. presidents, including George W. Bush, Dwight D. Eisenhower and Calvin Coolidge.

Sea Island Co. is family-owned and operated by Bill Jones III, the grandson of Sea Island founder Bill Jones. The company cannot pay off the $482 million in debt that it incurred primarily as the result of a $395 million expansion and renovation in 2006 and 2007. The lenders have approved the sale, and a Brunswick, Georgia, federal bankruptcy court judge will decide how the sale proceeds will be divided.

According to an Aug. 12 Florida Times-Union article, the current management team is expected to remain in place and the properties are expected to continue business as usual. The PGA Tour visits Sea Island’s Seaside Course on Oct. 7-10 for the McGladrey Classic.

There was a significant slowdown in business bankruptcy filings in the first six months of 2010, but consumer bankruptcy filings rose 15 percent from the same period one year ago, according to statistics from the Administrative Office of the U.S. Courts.

The national rate of Chapter 11 bankruptcy filings fell by 17 percent in the first half of this year, compared with the same period one year ago. Experts believe that better credit availability allowed troubled businesses to restructure their debt without having to file Chapter 11 bankruptcy.

The number of Chapter 7 business liquidation filings in the U.S. for the first half of 2010 was essentially flat.

However, consumers faced with a still-weak economy and soft job market are having to turn to bankruptcy as a solution for their debt woes in increasing numbers. Consumer bankruptcy filings for 2010 are still on track to exceed annual highs since the bankruptcy laws changed in 2005. There were over 781,000 consumer bankruptcy filings for the first six months of 2010, which was 15 percent higher than one year ago.

Florida was 15th on the national list of consumer bankruptcy filings on a per capita basis, with nearly six in every 1,000 residents filing for Chapter 7 or Chapter 13 bankruptcy in the first half of the year.

If you have a large amount of consumer debt and need help in making a good decision about your financial future, contact our Jacksonville, Florida bankruptcy law firm.

Two more bidders described as “top-flight hotel and hospitality investors” by the Amelia Island Company’s special counsel have joined Atlanta-based Noble Investment Group in bidding for the Amelia Island Plantation when it goes on the U.S. Bankruptcy Court auction block on Aug. 23 in Jacksonville.

Amelia Island Co., the current owner of the resort, filed Chapter 11 bankruptcy last November and submitted a reorganization plan to the bankruptcy court in May that featured a $45.9 million buyout bid from Noble. Additional investors must submit higher bids in order to purchase the resort, which features an oceanfront hotel and conference center, four golf courses and nine restaurants.

According to an article in the Florida Times-Union, all bidders say they plan to invest additional monies in the resort to enhance and expand operations. In a filing this week, the current owners said that it is imperative to confirm the plan as soon as possible, as the company does not have available funds to see the property through the slower winter months. The filing also conveyed the current ownership’s concern that if the resort is forced to close its doors, it would lose value.

There will be a hearing to confirm the plan three days following the Aug. 23 auction, on Aug. 26. If the plan is approved, Amelia Island Co. would then emerge from bankruptcy.

Dallas Mavericks Owner Mark Cuban is reportedly doing due diligence on the Texas Rangers finances as he ponders a bid for the MLB’s Texas Rangers franchise, that will be up for auction on Aug. 4 as part of the team’s Chapter 11 bankruptcy filing.

The Dallas News and ESPN both report that Cuban has not yet decided whether or not to submit a bid to purchase the team, and that he is currently reviewing the team’s finances. A U.S. Bankruptcy Court judge in Fort Worth set Aug. 4 as the date for the Rangers auction; bids are due the evening of Aug. 3.

A Wall Street Journal article compared Cuban’s potential bid to that of Jim Balsillie for the NHL’s Phoenix Coyotes, where the NHL prevailed in blocking the sale to the Blackberry mogul. There has been speculation by the media that MLB owners would not welcome Cuban into the fold, based on his high profile antagonistic relationship with the NBA as the owner of the Dallas Mavericks.

However, some legal experts say that if Cuban’s bid is competitive, the bankruptcy judge may find it difficult to dismiss the offer based on MLB ownership preferences. In fact, U.S. Bankruptcy Court Judge D. Michael Lynn has already made it clear that the league does not have total authority over the team’s fate.

Florida hedge fund manager George Levin and his wife Gayla have reached a settlement with the bankruptcy trustee in the Scott Rothstein Florida Chapter 11 bankruptcy case and will make a $5 million payment as well as sell assets to satisfy the terms of the settlement agreement.

Levin is the head of Banyon Capital, a hedge fund that funneled nearly $830 million to a Ponzi scheme run by Fort Lauderdale attorney Scott Rothstein. Rothstein pled guilty in January and was sentenced in June to 50 years in prison.

The Levins and Banyon agreed to an asset sale to repay investors who were victims of Rothstein’s Ponzi scheme. According to court records, the Levins will make an initial payment of $5 million and will get to keep 15 percent of the assets sold. The remainder will go to the bankruptcy trustee for redistribution.

The settlement also allows the Levins to keep their $4.2 million home in Ft. Lauderdale, as well as $750,000 in personal property.

The Levins contend that they were unaware that Rothstein was running a Ponzi scheme. Banyon Capital was sued by investors last November, who claimed that Levin had conspired with Rothstein in the scheme.

Levin retired to Florida at age 32 after making a fortune with several Philadelphia retail businesses.

According to a Wall Street Journal story, the bankruptcy trustee charged with recovering money for the victims of the Bernie Madoff Ponzi scheme is preparing to sue investors who profited from their Madoff investments.

Irving Picard, the Chapter 11 bankruptcy trustee for Bernard L. Madoff Investment Securities LLC, said that about half of the 2,000 investors he calls “net winners” could be sued to recover a portion of their Madoff investments, which would go into a fund for redistribution to other victims.

The so-called “clawback lawsuits” must be filed by December 2010. To date, Picard has filed more than a dozen civil suits seeking more than $15 billion in total from Madoff’s brother, sons, investment firms with ties to Madoff and other wealthy investors who profited from their investments with the convicted Ponzi scheme operator. He has already collected about $1.5 billion in assets.

Picard has already sent hundreds of letters to investors asking them to “resolve the matter amicably.” Not many have taken him up on his offer. South Florida resident Adele Fox is one of those investors who says she received a letter from Picard asking her to repay over $690,000. She told the WSJ that she had all her money tied up with Madoff, which she thought totaled over $3 million. She said if Picard comes after her for the money, which she claims is all she has left, she will be penniless.

An appeals court in Philadelphia overturned an earlier decision authorizing Visteon to end health care and life insurance benefits for 2,100 retirees.

Visteon, the former auto parts supplier subsidiary of Ford Motor Co., filed for Chapter 11 bankruptcy in May 2009 and is currently poised to exit bankruptcy, even though that exit is being protested by shareholders, bondholders and banks that say the company will be able to profit quickly from the resurgence in the American auto industry.

The 3rd U.S. Circuit Court of Appeals in Philadelphia overturned decisions by a bankruptcy judge and a district court judge that allowed Visteon to terminate health care benefits for retirees. The appeals court said that lawmakers had enacted special safeguards for retirees and that Visteon had disregarded those safeguards when it terminated the benefits.

Visteon had argued that the cost of retiree health care benefits was a “crippling financial and competitive burden.” However, the appeals court said that this argument was no substitute for the violating special bankruptcy protections, and reversed the earlier decisions.

The court ordered Visteon to reinstate the benefits to retirees immediately. It also ruled that any future modifications must be negotiated with the union representing the retirees.

Continue reading "Appeals Court Reverses Decision Letting Visteon Cut Off Retiree Health Benefits" »

Riviera Holdings Corp. RVHL.PK, the owner of Riviera Hotel & Casino, located on the northern strip of Las Vegas, filed for bankruptcy protection under a Chapter 11 petition. The decision to file for bankruptcy was part of a pre-negotiated deal that will transfer ownership of the company, Riviera Holdings, to senior secured lenders.

According to court papers, Riviera attributed its financial downfall to the slowdown in the economy and recent developments along the Las Vegas strip. During a period of economic boom, many properties of the north part of the strip were either torn down or sold to make way for new, high-end resorts. However, because of the turn in the state of the economy, the construction on many of the new projects were either halted or did not start at all.

In its Chapter 11 petition, the company listed both assets and liabilities in the $100 million-$500 million range. Riviera, who also owns a casino in Colorado, said recovery for its current shareholders was highly unlikely.

A Chapter 11 Bankruptcy is another type of consumer bankruptcy that is a reorganization used mainly by businesses or individuals who are involved in large businesses.

Former Pittsburgh Steelers offensive lineman Dermontti Dawson joined former Jacksonville Jaguars quarterback Mark Brunell in filing for bankruptcy this month.

And even though the bankruptcy routes they are taking are different – Brunell filed for Chapter 11 business bankruptcy and Dermontti has filed Chapter 7 liquidation bankruptcy – they got there the same way: by personally guaranteeing loans on real estate deals that went bad.

Dermontti filed Chapter 7 bankruptcy in Lexington, Kentucky, where court documents showed he has assets of $1.42 million and debts of $69.66 million. Dermontti retired from the NFL in 2001, after playing his entire 13-year career with the Steelers, where he was the team’s highest paid offensive lineman at $4.2 million per year.

Dermontti’s largest debt claims include several million dollars owed to Fifth Third Bank of Lexington as a result of his ownership interest in several real estate development businesses. The bank had recently won a judgment against one of the businesses for defaulting on a $3.4 million loan.

Brunell’s Chapter 11 bankruptcy documents list assets of $5.5 million and debts of $24.7 million, most of which are personal loan guarantees he provided on commercial loans to several limited liability companies in which he had an ownership interest.

The Middle District of Florida U.S. Bankruptcy Court – with divisions in Jacksonville, Orlando, Tampa and Fort Myers – is the second busiest bankruptcy court in the nation with more than 64,000 bankruptcy cases filed there in the past year. Only the Los Angeles district ranks higher for bankruptcy filings.

At a recent meeting of the Jacksonville Bankruptcy Bar Association, Jacksonville Division Chief Bankruptcy Court Judge Paul Glenn said that while the economy is recovering slowly, bankruptcy filings in Florida could still grow because of the Gulf oil spill and the impact the current European economic downturn might have on the state’s international and trade-related businesses.

The judge said that total business bankruptcy filings – including Chapter 7 liquidation and Chapter 11 reorganization – totaled 3,210 in the Middle District of Florida courts in the past year. He also noted that 23 percent of Florida mortgages are currently in the process of foreclosure.

Approximately 10 million Florida residents are served by the Middle District of Florida U.S. Bankruptcy Court, which covers 35 Florida counties. The four divisions have a total of nine judges; at the current rate of 64,000 cases per year, the average caseload per judge is a staggering 7,000.

A U.S. Bankruptcy Court judge in Jacksonville gave the owners of the Sawgrass Marriott Golf Resort & Spa in Ponte Vedra Beach a win in the first round of their foreclosure fight with Goldman Sachs Mortgage Co. in late June.

The judge denied Goldman Sachs’ motion to proceed with the foreclosure, granting RQB Resort LP and RQB Development RP another six months to file a reorganization plan and approving the hiring of an investment firm to search for investors to raise capital.

RQB filed for Chapter 11 bankruptcy protection last March; it currently owes Goldman Sachs $193 million. Goldman Sachs told the bankruptcy court that they believe the Sawgrass Marriott is worth significantly less than the $220 million purchase price, and that the resort has not been generating sufficient revenue to service its debt.

RQB management has said that while revenue was down 25 percent in 2009, the resort remained profitable. Sawgrass Marriott general manager Jeff Mayers said that normal operations are continuing as usual.

The Sawgrass Marriott is adjacent to the TPC Sawgrass Players Stadium golf course, where The Players Championship is played every May, as well as the Dye’s Valley Course, which will host another PGA event in October. Neither of these facilities is involved in the Sawgrass Marriott Jacksonville bankruptcy case.

Former Jacksonville Jaguars quarterback Mark Brunell has filed for Chapter 11 bankruptcy protection, due primarily to a number of lawsuits he faces over failed business loans and bad real estate deals.

Brunell, who reportedly earned over $50 million during his 11 years in the NFL, was most recently the back-up quarterback last year for the Super Bowl Champion New Orleans Saints. He currently lives in Ponte Vedra Beach, Florida, and is a free agent this year.

An article in the Florida Times-Union reported that Brunell is currently involved in a lawsuit stemming from a $2.2 million loan made by CNL Bank in 2005 for a real estate project in Jacksonville Beach. CNL started foreclosure proceedings on the property in May of 2009.

Brunell also had a judgment entered against him and his partners in two Michigan real estate deals worth $1.1 million.

In a statement, Brunell said that he had been making the payments on the real estate loans himself when the partnership known as Champion LLC – which includes former Jaguars players Joel Smeenge and Todd Fordham – could no longer service the debt. He said he was filing Chapter 11 bankruptcy because he could no longer afford to shoulder the burden of those payments alone.

Brunell also said he remains committed to the Jacksonville community, and to continuing to support his Brunell Family Foundation that raises funds for critically ill children and their families.

May bankruptcy filings across the U.S. were up 10 percent from the same month one year ago, according to data released earlier this month by Automated Access to Court Electronic Records (AACER).

Florida accounted for seven percent of the 133,459 U.S. bankruptcy petitions filed in May, second only to California with 16 percent. Average filings per day also increased over April 2010, from 6,646 to 6,673 in May.

For the first five months of 2010, U.S. bankruptcy filings total 659,516, up 15 percent from the same period in 2009. This includes 622,798 consumer bankruptcy filings, 36,718 business filings and 6,048 filings to reorganize under Chapter 11 bankruptcy protection.

Financial experts note that bankruptcies usually peak between six and 18 months after an economy hits bottom, because consumers typically try to work their way out of debt for a period of time before filing bankruptcy.

Consumers who find themselves dedicating more than 30 percent of their net income to repaying debt, with no savings for retirement or emergencies may want to consider a Chapter 7 or Chapter 13 bankruptcy filing.

If you need to information on filing Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

Bankruptcy filings in Jacksonville for the first five months of 2010 are up 7 percent from the same period one year ago, according to statistics from the U.S. Bankruptcy Court of the Middle District of Florida.

2009 was a record year for bankruptcy filings in the Middle District, and at the current pace of 5,611 per month, the district is on track to hit a new record of over 67,000 bankruptcy filings for 2010.

In the Jacksonville division, there were 4,819 bankruptcy petitions filed in the first five months of this year, an increase of 7 percent over 2009.  At the current rate, Jacksonville could reach over 11,500 filings for the year, up 4 percent from 2009.

A Jacksonville Bankruptcy Bar Association spokesman says he expects to see a large number of filings over the next two years; he noted that early bankruptcy filings by construction companies and contractors has abated, but filings by higher income individuals and professionals is on the rise in Jacksonville.

Expectations are that the weakening commercial real estate market will send more businesses into bankruptcy, and that ongoing unemployment will continue to feed consumer bankruptcy filings.

If you need to information on filing Jacksonville bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

A potential new owner has been found for Amelia Island Plantation, the upscale Northeast Florida resort that was forced into Chapter 11 bankruptcy last fall as the result of lack of financing and a weak economy.

The Amelia Island Co. Chapter 11 reorganization plan calls for a $46 million buyout by Atlanta-based Noble Investment Group, which invests primarily in resort and hospitality properties.  Noble says it is “cautiously optimistic” that the U.S. Bankruptcy Court will accept its plan.

Amelia Island is one of two large Northeast Florida resorts that filed Chapter 11 bankruptcy recently; the other is the Sawgrass Marriott Golf Resort & Spa, which has yet to file a reorganization plan with the U.S. Bankruptcy Court.

The Amelia Island Co.’s reorganization plan calls for separating the golf club facilities from the resort.  The golf facilities include four golf courses and a clubhouse; as part of the Chapter 11 reorganization, club members would have equity ownership of those facilities.

Developed in 1971 by the Sea Pines Co., Amelia Island Co. was purchased by Ohio businessman Richard L. Cooper and two partners in 1978.  The family filed Chapter 11 bankruptcy last November when efforts to secure additional private investors for the resort were unsuccessful.

If you need information on the Florida Chapter 11 bankruptcy process, contact our Jacksonville, Florida bankruptcy law firm.

Bankruptcy filings in Jacksonville spiked to 1,216 in March, reversing a five-month trend of declines since September of 2009, according to U.S. Bankruptcy Court records for the Middle District of Florida.

Jacksonville bankruptcy filings were up over 11 percent in March from the same month one year ago.  For the first quarter of 2010, bankruptcy filings in Jacksonville totaled 2,799 – up almost 10 percent from the same period in 2009.

The U.S. Bankruptcy Court Middle District of Florida – which covers Baker, Bradford, Citrus, Clay, Columbia, Duval, Flagler, Hamilton, Marion, Nassau, Putnam, St. Johns, Sumter, Suwannee, Union and Volusia counties – had over 63,000 cases pending at the end of March.  Based on the current rate of closure for the court of 5,500 cases for the month of March, this represents a backlog of almost one year.

Most Jacksonville legal advisors expect this trend to continue since bankruptcies are a lagging economic indicator, and filings are not expected to slow down until other indicators improve.

According to a Florida Times-Union article on the record Jacksonville bankruptcy filings:

People file for different types of bankruptcies depending on their financial condition. People unable to pay 25 percent of their credit debt with their disposable income may opt for Chapter 7 bankruptcy, which liquidates certain assets and wipes out debt. People who have too much disposable income to qualify for Chapter 7 can opt for Chapter 13, in which they pay a trustee who pays debts on a plan. People with more than $1 million in home mortgages and rental properties can’t qualify for Chapter 13, so many are opting for Chapter 11, a reorganization plan typically favored by companies that seek bankruptcy but want to stay in business.

To fully understand what you need to know about filing bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

Moody’s Investors Service has released a study that shows a number of companies that completed distressed exchanges in 2009 – thus avoiding bankruptcy – could default or fall into bankruptcy this year.

The study examined 100 non-financial companies that participated in a distressed exchange – where a company offers new or restructured debt, cash or other assets to creditors in return for a reduction of its debt – and found that while exchanges have historically been successful in allowing a troubled business to get back on its financial feet, a majority of the companies that completed exchanges last year continue to carry very low credit ratings and a third are at high risk for default.

According to a Wall Street Journal article on the study:

Moody's said the spike in distressed exchanges last year was a key contributor to the corresponding surge in speculative-grade defaults, comprising 34.9% of all defaults last year versus 23.5% in 2008 and 11% between 1983 and 2007.

Juliet M. Moringiello, resident scholar with the American Bankruptcy Institute, attributed the rise in distressed exchanges and other defaults to the collapse of the credit markets that shut off the spigots of cash that had flowed freely to companies just a few years ago.

"We saw a period of time during which credit was really, really tight," said Ms. Moringiello, also a professor at Widener University's law school. "If a company can't go outside to get money, then there's going to be either a bankruptcy filing or a distressed exchange."

While Moody's expects to see "far fewer" distressed exchanges this year, the agency noted that another wave is on the horizon, thanks to a "huge peak" in debt maturities between 2012 and 2014 and low-rated companies' heavy debt burdens.

If you need information on the Florida business bankruptcy process, contact our Jacksonville, Florida bankruptcy law firm.

The court-appointed bankruptcy trustee in the BearingPoint Chapter 11 bankruptcy has filed suit against Yale University, seeking the return of more than $8 million in donations the consulting firm made to endow a chair in management and name university facilities.

From a Reuters report on the suit:

The liquidating trustee, John DeGroote Services LLC, contends in a lawsuit that BearingPoint has gained no tangible benefit from committing to pay $30 million to name buildings and endow a professorship at the Ivy League school.

The money was to have been paid over seven years starting in the first quarter 2007. BearingPoint filed for bankruptcy in February 2009.

"No material consideration flowed to BearingPoint, and no benefit to its business or assets was derived from the endowing of chairs or the naming of buildings at Yale," according to the suit filed on Friday in U.S. Bankruptcy Court in Manhattan.

A Yale University spokesman declined to comment.

According to the lawsuit, BearingPoint paid $2 million to fully fund in perpetuity an endowed chair: a professorship at the Yale School of Management.

The case is In re BearingPoint, Inc., et al, 09-10691, U.S. Bankruptcy Court, Southern District of New York.

BearingPoint originally planned to reorganize under Chapter 11 bankruptcy rules, but later abandoned that plan and liquidated its assets.

If you need to information on filing Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

Last month, the MLB franchise Texas Rangers filed for Chapter 11 bankruptcy in an effort to force a sale of the team that has been road blocked by creditors.

Among those creditors is slugger superstar Alex Rodriguez, who is owed $24.9 million in deferred compensation by his old team and is the largest unsecured creditor in the Rangers’ bankruptcy case (In re: Texas Rangers Baseball Partners, U.S. Bankruptcy Court, Northern District of Texas, No. 10-43400).

The U.S. Trustee recently named Rodriguez as one of three people who will serve on the unsecured creditors committee.  The other two members include the president of a Little Rock construction company and an executive with an architecture and engineering firm.

Creditors' committees can play a major role in chapter 11 cases, and usually consists of unsecured creditors who hold the largest unsecured claims against the debtor.  The duties of the committee include consulting with the debtor in possession on administration of the case; investigating the debtor's conduct and operation of the business; and participation in formulating a plan.

If you have a business that needs protection from creditors and want more information about filing Florida Chapter 11 bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

A Jacksonville bankruptcy attorney says a recent audit of individual Chapter 7 and Chapter 13 bankruptcy cases in the U.S. by the Executive Office of the U.S. Trustee has found that nearly one-fourth of those cases contained “material misstatements”.

What is a “material misstatement?”

The EOUST said “a material misstatement indicates the audit produced information that challenged the accuracy, veracity, or completeness of a debtor’s petition, schedules, or other filed bankruptcy documentation.  Inaccurate or incomplete information deprives the court, the United States Trustee, the private trustee, and creditors of adequate information to decide whether to conduct further investigation, recover assets, or seek or impose relief against the debtor.”

The EOUST is currently auditing one in 1,000 bankruptcy cases.  When a material misstatement is identified, the bankruptcy court and the creditors are notified.  So is there a growing trend of bankruptcy fraud?

It is hard to say, because the EOUST does not specifically define what constitutes a material misstatement.  It could be deliberate fraudulent behavior by debtors, or it could be a clerical error in filling out the proper forms.

If you are considering filing bankruptcy in Florida, consulting with a Florida bankruptcy attorney will ensure that all your documentation is prepared properly and that your case will stand up to any audit scrutiny.  Going it alone may cost you in the long term.

To fully understand what you need to know about filing bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

With creditors blocking a proposed sale, the MLB franchise Texas Rangers took the unusual step of filing for Chapter 11 bankruptcy in an effort to force a sale to Pittsburgh investor Chuck Greenberg and former Ranger pitcher and Hall of Famer Nolan Ryan.

Current Rangers’ owner Tom Hicks is divesting himself of all his sports teams – the Rangers, the Dallas Stars NHL team and British soccer team Liverpool FC.   Rangers’ creditors had been blocking the sale of the MLB team to the Greenberg-Ryan group, saying the purchase price would not provide them with fair compensation for the Rangers’ estimated $525 million loan debt.

Hicks told the Dallas Morning News that, “the creditors seriously misjudge how professional sports work.  It's a club. It's a club that 75 percent of the people have to decide they want to admit somebody into. It can't be forced to be sold to the highest bidder."

The team has asked the bankruptcy court for a “prepackaged bankruptcy” to speed the sale, which they hope to complete prior to the July 31 player trading deadline.

If you have a business that needs protection from creditors and want more information about filing Florida Chapter 11 bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

One Jacksonville bankruptcy attorney says that small businesses that file Chapter 11 bankruptcy may actually be doing the best thing to save their business in the long run.

For a small business in trouble, filing Chapter 11 bankruptcy can mean:

Access to new capital. If a small business still has a viable market and business plan, there are lenders that will invest in a Chapter 11 bankruptcy business, which allows the business to continue operations as it restructures its debt.

Halting creditors’ seizure of assets. When a business is in Chapter 11 bankruptcy, creditors are not allowed to pursue collections against the company.  This provides the necessary protection for the business to continue to utilize its assets and continue to do business.

Time to restructure. Businesses in trouble need time to figure things out.  Chapter 11 bankruptcy provides this necessary “breathing room” for businesses to reexamine their operations and restructure for the future without the distraction of legal threats from creditors.

If you own a small business that has been gravely injured by economic conditions and you are looking for a way to continue to operate now that the economy shows signs of recovery, you may want to consider a Chapter 11 bankruptcy filing.

If you need to information on filing Florida Chapter 11 bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

A comment made in response to a recent Florida Times-Union article on the record number of bankruptcy filings in Jacksonville shows that some consumers are embracing bankruptcy as a viable solution to resolving their personal debt crises:

I filed back in October. I dumped my upside down house and $20k worth of credit cards. If I was going to do it, I was going to do it right. All in all I'm saving about $400,000 over the 12 years it would have taken to recoup the value of my house and get the cards paid off.

It was a financial move, and a good one at that. With all of the free cash I have now I've maxed out my 401k and HSA savings ($19,500 a year), looking towards the future. The only loan I kept was my car loan, which I'm paying extra on now and will have paid off a few years earlier, then all of that cash will go straight to savings too until the car blows up and I need a new (used) one.

This economy is very unstable and its best to have as much cold hard cash as you can have on hand. Bankruptcy can be a very good eye opener and valuable tool. You just have to use it right and then learn to live within your means.

Credit card offers come 6 months after discharge, mortgage offers come 2 years after discharge. If it concerns you that much, and if you can play the game right you can have a 700+ score a year or so after discharge.

Me, I've learned my credit lesson. No more getting suckered by the Credit Industry, I can do without. Now I have a rented condo at the beach and enough disposable income to plan for the future and live comfortably & humbly in the present.

If you need to information on how bankruptcy can help you get out of debt, contact our Jacksonville, Florida bankruptcy law firm.

The Sports Business Journal has reported that Major League Baseball may seize the Texas Rangers soon in an effort to stop the team’s creditors from pushing the franchise into bankruptcy:

MLB as soon as this week plans to dramatically alter the course of the standoff between creditors and the owner of the Texas Rangers, multiple sources said last week, a development that could include the league seizing the franchise.

Were the league to seize the team under its “best interests of baseball” rule, MLB could sell the club to the group led by Chuck Greenberg and Nolan Ryan without, the league believes, the creditors blocking the deal, these sources said. But were MLB to choose that course — and late last week, the situation was still fluid — financial sources predicted a furious legal response from the creditors that could involve an involuntary bankruptcy petition on behalf of the baseball team.

The coming developments, whether franchise seizure or another course of action MLB could be considering, may bring to a climax a bitter 3 1/2-month process that started with the January agreement between Greenberg and Hicks Sports Group (HSG), which owns the team. Many of the sources said they believe MLB’s only option is franchise seizure if it wants to break the logjam, while others stressed that no firm decision had been made.

HSG put the team up for sale after defaulting on $525 million of debt in March 2009, so the creditors have the right to block the sale — which they have done out of dissatisfaction with the proceeds that would flow to them from the proposed Greenberg purchase.

Despite arduous negotiations between HSG and the creditors, with MLB acting as an intermediary, there is a stalemate. Representatives of MLB and HSG did meet last week, sources said, but no talks occurred with the creditors.

If you need more information on the impact of a bankruptcy filing, contact our Jacksonville, Florida bankruptcy law firm.

The Wall Street Journal has reported on comments made by the SEC’s chief bankruptcy counsel that the agency may be taking a closer look at Chapter 11 cases and the reorganization plans that result from them:

The SEC has traditionally looked at issues of corporate fraud and proper disclosure in bankruptcy cases, but it’s now forced to take a wider view in light of historic Chapter 11 filings such as those of General Motors and Lehman Brothers, SEC attorney Alistaire Bambach said at the American Bankruptcy Institute’s spring meeting outside Washington, D.C.

“Dealing with the era of too big to fail and bailouts, we spend more time reviewing plan proposals than we ever had in the recent past,” she said “You might not see us, but we are in there longer than you might expect.”

Bambach cautioned that she was speaking for herself and not necessarily representing the agency’s views.

Fast-moving Chapter 11 sales are of particular concern to the SEC, she said. In the past six months, three of the four companies that were publicly traded when they entered Chapter 11 exited by means of a sale rather than a traditional plan process, Bambach said.

Economic conditions often necessitate quick sales, but protecting creditors’ and investors’ rights must also be on the mind of regulators, she said.

“You want to make sure the ability for other parties to bid and the ability to generate value is not destroyed,” Bambach said.

From an enforcement prospective, Bambach said the SEC is carefully looking at unsecured creditors committees. She said the agency is currently prosecuting a case in which an unsecured creditor allegedly made trades based on information obtained from his position on the committee.

“The danger of potential insider trading is something we are very conscious of in these cases,” Bambach said.

If you are considering filing Chapter 11 bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

The first decade of the 21^st century is already in the books as “the business bankruptcy decade”, in the opinion of one Jacksonville bankruptcy attorney.

According to BankruptcyData.com, 17 of the 20 largest business bankruptcies of all time happened between 2001-2009.  The majority (9) were in the financial services sector, followed by energy (3), automotive (2), telecommunications (2) and industrial (1).

From largest on down, the seventeen 21^st century business bankruptcies include:

1. Lehman Brothers


2. Washington Mutual


3. WorldCom


4. General Motors Corp.


5. CIT Group Inc.


6. Enron Corp.


7. Conseco, Inc.


8. Chrysler LLC


9. Thornburg Mortgage, Inc.


10. Pacific Gas and Electric Co.


11. Refco, Inc.


12. IndyMac Bancorp, Inc.


13. Global Crossing Ltd.


14. General Growth Properties, Inc.


15. Lyondell Chemical Co.


16. Calpine Corp.


17. New Century Financial Corp.

Consequently, the first decade of the 21^st century was also the most lucrative for bankruptcy attorneys and consultants.  According to a recent New York Times article:

The lawyers, accountants and restructuring experts overseeing the remains of Lehman Brothers have already racked up more than $730 million in fees and expenses, with no end in sight.

These megacases — Lehman, General Motors, Chrysler and Washington Mutual, to name a few — are orders of magnitude larger than most bankruptcies in the past, and their size and complexity have created a feeding frenzy of sorts for those asked to sort them out. To date, Weil, the lead law firm representing Lehman, has billed the Lehman estate for more than $164 million.

Think the lawyers are expensive? Meet the consultants. Alvarez & Marsal, a turnaround firm that is essentially running what remains of Lehman, has billed more than $262.1 million.

Many people in the industry agree that Lehman, in particular, is a huge case that tests even the most experienced lawyers. “Lehman is a sufficiently complicated company that it would be safe to assume that if it weren’t for equally sophisticated professionals running the Chapter 11 case, that the creditors would essentially receive nothing,” says Stephen J. Lubben, a professor at the Seton Hall University School of Law. “In those situations, it makes sense for sophisticated professionals to handle the case.”

If you need information on the Florida business bankruptcy process, contact our Jacksonville, Florida bankruptcy law firm.

Less than one year ago, American auto giant General Motors was in Chapter 11 bankruptcy and on its way to being the recipient of $50 billion in federal bailout funds.

Today, GM is making their loan payments ahead of schedule.  And, since emerging from Chapter 11 bankruptcy last July, the company has committed over $2.3 billion to invest in 22 of its U.S. and Canadian manufacturing facilities and restored or created over 9,000 jobs.

From a Wall Street Journal report:

GM Chairman and Chief Executive Edward E. Whitacre Jr. believes repaying what is left of its $6.7 billion U.S. Treasury loan is a critical step toward winning back U.S. customers. Ford Motor Co.'s status as the only Detroit automaker to avoid a government bailout has helped the company outperform its rivals.

An early repayment signals that GM executives are confident it is financially stable without the cash. GM lost $4.3 billion in the last half of 2009, but Mr. Whitacre has forecast a "solid" first-quarter when GM releases its financial results next month.

The automaker’s sales in March were up 17% compared with one year ago, according to Autodata.com.

If you are considering filing Chapter 11 bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

Business bankruptcies are on the rise, and if you are employed by an organization that files Chapter 11 bankruptcy, it could significantly affect your 401(k) plan.

If your employer is a publicly traded company and a sizeable portion of your 401(k) is in company stock, then chances are your plan will take a big hit (think Enron).

In fact, because of large corporate failures like Enron in the past decade, most people are aware that having a large share of your company’s stock in your 401(k) is not really a good idea.  Your plan should be as diversified as any other stock portfolio to minimize risk.

What you may not be aware of is that if your employer files Chapter 11 bankruptcy and, as a result, has to terminate the company’s 401(k) plan, you and your fellow employees could be on the hook plan termination costs.  The plan’s administrators will have to be paid, and if there are no company assets to do so, the investors in the plan will be charged on a pro-rata basis to fulfill that obligation.

If it looks like Chapter 11 bankruptcy could be in your employer’s future, it is probably a wise move to roll over your 401(k) into an IRA.  If you find a new job, be sure you roll your old 401(k) into your new employer’s plan quickly – or, again, into an IRA.

If you need more information about Florida Chapter 11 bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

If you are getting ready to file Chapter 7 or Chapter 13 bankruptcy in Florida, you have likely secured the advice of a Florida bankruptcy attorney – advice that should cover not only what to do before filing bankruptcy, but what NOT to do:

Credit Card Use. If you are filing for bankruptcy, you need to know that any debt over $500 that is incurred 90 days prior to your bankruptcy filing are presumed to be non-dischargeable.  In addition, any cash advances over $750 that are made 70 days prior to filing also fall into the non-dischargeable category.

Retirement Accounts. You may be thinking of cashing out your retirement accounts prior to filing bankruptcy.  Big mistake.  Retirement accounts are usually exempt from a bankruptcy filing, which means you will only be hurting yourself.

Property Ownership. Transferring the ownership of property will not protect it from bankruptcy, and will probably get you in hot water with the bankruptcy trustee to boot.  The trustee can undo any property transfer that occurred during the two years prior to filing bankruptcy.

Family Loans. You cannot pay off any loans made to you by family members prior to filing for bankruptcy.  If you do so within one year prior to your filing, the money will be reclaimed and added to the bankruptcy estate.

If you need help navigating the intricacies of filing Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

The Chapter 11 bankruptcy filing of Hollywood, Florida-based homebuilder Tousa Inc. could lead to additional bankruptcy filings among the firm’s many contractors if they are forced to repay what they earned more than two years ago under federal “preference” laws.

Under these laws, any firm doing business with a company for 90 days prior to that company’s bankruptcy filing must return the money they were paid by the bankrupt entity.  According to a recent article in the Orlando Sentinel on the Tousa Chapter 11 filing, more than 1,000 companies fall into that category – many of them small firms that are already struggling while trying to ride out the slump in the construction market.

Under U.S. federal bankruptcy law, a “preference” is a transfer of assets from a debtor to a creditor that is made while the debtor is insolvent, and gives the creditor more than they would likely obtain through the bankruptcy process.  If the transaction takes place within a certain time prior to the bankruptcy filing – usually 90 days – the debtor’s bankruptcy trustee can recover the assets, which then become the property of the bankruptcy estate.

There are some exemptions to bankruptcy preference laws; if you would like more information on preference laws or have questions about Chapter 11 bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

Jacksonville bankruptcy filings for the first three months of 2010 were up 10% over the same period one year ago, and are on track to surpass 2009 levels.

There were a total of 2,799 Jacksonville bankruptcy filings in the first quarter, 250 more than the first quarter of 2009.  In addition, bankruptcy filings are up 21 percent in the U.S. Bankruptcy Court Middle District of Florida, which includes Jacksonville, Tampa and Orlando.

Throughout the district, Chapter 7 filings increased by 24 percent, Chapter 11 reorganizations nearly doubled, and Chapter 13 filings rose 10 percent.

Economists are predicting an increase in bankruptcy filings as a result of continued high unemployment, housing foreclosures and tight credit markets that continue to plague Florida residents.

The increase in Chapter 11 bankruptcy filings is particularly troubling, since business bankruptcies usually create a ripple effect, with employees being laid off and a number of local creditors going unpaid.

One of the largest Jacksonville business bankruptcy filings during the first quarter was by the Sawgrass Marriott Golf Resort & Spa.  Creditor Goldman Sachs Mortgage Co. is continuing to press foreclosure proceedings, saying the resort owners will be unable to pay off its debt.

For more information on Jacksonville bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

One recent Investopedia article detailed five major companies “on the brink of bankruptcy”, and one Jacksonville bankruptcy attorney says these companies can provide a cautionary tale for other businesses.

The “on the brink” companies include:

Blockbuster – a once-robust business model that failed to change with consumer habits has lost major share to Netflix and Redbox and is burdened by debt.

Rite Aid – an ill-advised acquisition has buried this drug store chain under debt and competitors continue to steal share.

Borders – another victim of changing consumer habits, away from printed books to digitized book readers and content that can be purchased online at a much lower cost.

Palm – the former leader in smartphones has failed to keep pace with competitors like Apple and Research in Motion; a buyout may be its only hope.

YRC Worldwide – this Fortune 500 trucking company faces intense market competition and pricing pressure and has not posted a profit for four years.

The Investopedia article posits that if these companies cannot undergo a major restructuring (which can be accomplished through a Chapter 11 bankruptcy filing) or an acquisition by a competitor, they may collapse before the end of the year.

If your business needs information on debt restructuring or reorganization options, contact our Jacksonville, Florida bankruptcy law firm.

The Shipyards bankruptcy may eventually lead to the development of an entertainment park on 40 riverfront acres along East Bay Street, according to a report by the Daily Record.

Atlanta developer Ben Carter, who lives part-time in the Jacksonville area and is former chairman of the City’s 2007 Downtown Action Plan Retail Task Force, said he met recently with Jacksonville Mayor John Peyton to discuss the possibility of developing the entertainment complex.

Carter said the complex could include a wave pool, carousel, Ferris wheel, roller coaster, restaurants, arts and seafood markets, and other attractions to reach young professionals and their families.  Carter estimated that the development would cost $20 million.

The City of Jacksonville is expected to take ownership of The Shipyards property once the bankruptcy proceedings conclude.  A Peyton spokesperson said that nothing could be planned for the site until the City takes ownership.

The Shipyards’ ownership LandMar originally intended to develop the site into a mixed-use area with restaurants, condominiums and public space.  LandMar failed to pay 2008 ad valorem taxes on the property, leading to foreclosure proceedings by the City.

If your company is considering filing for Chapter 11 bankruptcy protection, contact our Jacksonville, Florida bankruptcy law firm.

SeedAmerica, an Apollo Beach-based charity formed to help communities rebound from business closings and layoffs, has filed for Chapter 11 bankruptcy protection.

SeedAmerica enabled companies to donate their abandoned factories or industrial buildings to the nonprofit in exchange for a tax write-off.  The charity would then work with local communities to lease the vacant properties to new tenants under a federal IRS provision called the 561 Exchange.

The organization paid its operating expenses through loans against the donated properties; as the credit markets tightened, the nonprofit was unable to obtain additional loans and was eventually unable to meet its expenses.

SeedAmerica CEO Joe Johnson said that the threat of creditor lawsuits led to the bankruptcy filing decision.  He said that the charity hopes to reorganize under Chapter 11 bankruptcy protection and eventually build a Christian business school.

SeedAmerica started in 2005 in Alpharetta, Georgia, an Atlanta suburb.  In 2008, the nonprofit registered in Florida as a foreign limited liability company and moved to Apollo Beach, with a reported portfolio of real estate worth $50 million and 60 employees.  The charity’s Chapter 11 bankruptcy filing listed liabilities of $10 million to $50 million.

If you are considering filing business bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

Winn-Dixie Stories, Inc. emerged from its Jacksonville Chapter 11 bankruptcy reorganization over three years ago, and a recent Daily Record interview with chairman, president and CEO Peter Lynch, shows how companies can successfully emerge from Chapter 11 bankruptcy stronger than ever.

The Chapter 11 bankruptcy reorganization allowed Winn-Dixie to renovate nearly 200 of their stores as well as build new stores in markets where they enjoy good market share.  The Jacksonville-based Fortune 500 company is also capitalizing on growing consumer demand for foods that are “fresh and local”, and beefing up their pharmacy presence to serve health-conscious customers.

Lynch says the Chapter 11 reorganization actually increased employee morale: “Here is a company that could have been extinct. We saved it, we’re on track, we’re stable, we have cash and haven’t even gone into the line (of credit) since I’ve been here. So they have jobs and think about this environment people are in today, where it’s tough. They’re feeling good about the direction of the company. They like seeing the stores remodeled. I think morale is very good at Winn-Dixie today.”

He said that customers are also responding favorably to both the physical and attitude changes the company has implemented since its Chapter 11 bankruptcy reorganization: “We think we’re on track to getting stores back to where consumers feel very proud to shop there again...The good news is they are coming back, but it doesn’t happen overnight.”

If you need more information about what filing Florida business bankruptcy might do for your company, contact our Jacksonville, Florida bankruptcy law firm.

Even with all the Jacksonville, Florida bankruptcy filings in recent years, many individuals are still unclear about the different types of bankruptcy options available.  One Jacksonville bankruptcy attorney recently outlined the five most common types of bankruptcy for Florida residents and businesses:

Chapter 7: Also known as “straight bankruptcy” or “liquidation,” Chapter 7 bankruptcy allows individuals or businesses to surrender non-exempt assets to discharge their debts.  To qualify, you must pass a “means test” – or your income must also be less than the median income in Florida, depending on the number of people and wage earners in your household.

Chapter 9: Chapter 9 bankruptcy allows for municipalities to reorganize debt, and operates the same as Chapter 11 bankruptcy.

Chapter 11: Frequently referred to as “reorganization,” Chapter 11 bankruptcy is available to individuals but because it is more complicated and expensive, it is mostly used by businesses to restructure debt while retaining certain assets.

Chapter 12: Chapter 12 bankruptcy allows family farmers and fishermen to reorganize their debt, and operates very much like Chapter 13 bankruptcy.

Chapter 13: Also known as “reorganization,” Chapter 13 bankruptcy is most often used by individuals who do not pass the “means test” for Chapter 7 bankruptcy.  It allows individuals to restructure their debt, usually paying off a percentage or all of their debt over three to five years.

If you are considering filing bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

A significant decline in meeting and convention business led the owners of the Sawgrass Marriott Golf Resort & Spa to file Chapter 11 bankruptcy in U.S. Bankruptcy Court in Jacksonville this week.

RQB Resort LP and RQB Development LP filed Chapter 11 bankruptcy after failing to reach a debt restructuring agreement with Goldman Sachs Commercial Mortgage Co., which helped finance the $220 million purchase of the 65-acre resort in Ponte Vedra Beach in 2006.

The Sawgrass Marriott is adjacent to the TPC Sawgrass Players Stadium golf course, where The Players Championship is played every May, as well as the Dye’s Valley Course, which will host another PGA event in October.  Neither of these facilities is involved in the Sawgrass Marriott Jacksonville bankruptcy case.

According to the RQB Jacksonville bankruptcy court filing, RQB partners said they began negotiating debt restructuring with Goldman Sachs a year go, but were told last October that Goldman Sachs intended to foreclose on the property.  The outstanding RQB debt is $193 million.

RQB management said that while revenue was down 25 percent in 2009, the resort remained profitable.  Sawgrass Marriott general manager Jeff Mayers said that normal operations would continue and that, “this process will protect the resort and allow us to continue business as usual.”

If you are considering filing business bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

A Jacksonville bankruptcy attorney is closely following the Chrysler Chapter 11 reorganization, and found comments made by CEO Sergio Marchionne at the New York International Auto Show this week encouraging about the carmaker’s future.

Marchionne noted that Chrysler, which entered Chapter 11 bankruptcy last May and emerged in mid-June with federal government assistance, expects to break even this year, and has $5 billion in cash on hand that it is utilizing for aggressive new product development.

Fiat took management control of Chrysler after its Chapter 11 reorganization, and Marchionne, who also heads Fiat, said that Chrysler expects to sell 11.5 million vehicles in 2010, up from 10.4 million in 2009.

He also noted that the company’s Chapter 11 bankruptcy filing and reorganization was not without controversy.  Under federal law, companies in Chapter 11 bankruptcy can terminate existing vendor contracts.  Chrysler used this provision to weed out what it considered to be underperforming dealerships – about 800 of them – as part of its Chapter 11 filing.  Dealers have petitioned Congress for relief, and Chrysler has reinstated a little over 10 percent of the dealerships to date.

Marchionne also noted that, “It would be remiss of me not to acknowledge that Chrysler Group owes a deep debt of gratitude to both taxpayers in Canada and the U.S. for the loans that have enabled a new and restructured company to take life.  The government assistance, as we all know, was not universally popular.”

If your company is considering filing for Chapter 11 bankruptcy protection, contact our Jacksonville, Florida bankruptcy law firm.