Categories
Chapter 7

Chapter 7 Bankruptcy Filing Denied for CNET Founder

Today's tough economy has led many individuals to make tough choices regarding their finances. Many Americans have had to create strict budgets to try and save what they had before the economy declined. But some were in too tough a position for a simple budget to help. Some have had to turn to bankruptcy to get out of their tough financial situations.

There are two types of personal bankruptcy. One type is Chapter 7, which allows for liquidation of the filer's debts. The other type is Chapter 13, which allows the debtor to create a debt reorganization plan to pay back creditors and eliminate or reduce fees and interest. One benefit of filing for bankruptcy is that it puts an automatic stop on all creditor actions.

The founder of CNET, Halsey Minor, filed for bankruptcy last month. He is now trying to get his case reinstated because his attorney missed the deadline for filing the proper paperwork. His filing was dismissed in Los Angeles bankruptcy court because of the failure to file the proper schedules or plan required for the case. Minor filed his asset information June 7. In his filing, he listed his assets at $32 million and his debts at $104 million. Apparently the attorney did not have all the information needed to make a complete filing. The initial filing was completed on May 24.

Now, Minor's new attorney is claiming that he does not think it is fair for the debtor to be punished because his attorney did not file the correct paperwork on time.

Source: Bloomberg Businessweek, "Halsey Minor tries again for bankruptcy after missed deadline," Dawn McCarty, June 15, 2013

Categories
Chapter 7

Prominent Thoroughbred Owner Files for Bankruptcy in CA

It doesn't take too big of a downturn in the economy to affect an individual's ability to keep up with their bills. Before long, the individual may get so far behind in payments that he or she may be unable to catch up. In these instances, one of the only options available may be to file for bankruptcy. There are two options for bankruptcy; liquidation or debt reorganization. Chapter 7 bankruptcy allows the debtor to discharge most if not all of their bankruptcy. Chapter 11 or 13 allows the debtor to create a debt reorganization plan to reduce or eliminate interest rates and fees associated with the debt.

A prominent horse owner filed for bankruptcy last week. He filed for Chapter 7 bankruptcy in California May 24. He listed his liabilities between $50 and $100 million and his assets as $10 to $50 million. Bankruptcy will sell off his assets to pay creditors and satisfy some of his debt.

This horse owner sold CNET to CBS in 2008 for over one billion dollars. But he ended up in debt shortly after through the purchase of homes, horses and art.

His horses are located in Virginia and they were purchased in 2007 for about $15 million. The creditors listed in his filing include others in the horse industry as well as a few veterinary services. He is also in debt to the attorneys he used to purchase other horse related ventures.

One of the biggest benefits to filing for bankruptcy is that it places an automatic stay on creditor actions. This includes liens, repossessions and foreclosures.

Source: Horse.com, "Owner Minor files for Chapter 7 bankruptcy," Frank Angst, Jun. 1, 2013

Categories
Business & Commercial Bankruptcy

Internet-based Company Files for Chapter 11 Bankruptcy

It doesn't take much of a change in the economy for a business to be affected. Once an owner falls behind with one creditor, it doesn't take much more to fall behind with most of them. This can leave a business in serious debt that the owner may or may not be able to get out from under. One available option to get out from the debt is to file for Chapter 11 bankruptcy.

Bankruptcy can give a business owner a means to reduce or even eliminate some debt. It also stops all creditor actions against the company, such as repossessions and mechanics liens.

YBT International, an online marketing company, filed for Chapter 11 recently in Illinois. The company listed their assets at $1.31 million and their debts at $7.18 million. The current business plan is to use the bankruptcy to reorganize and start again.

YBT currently is in agreement with a lender for the lender to provide a line of credit to the company to help pay off the debts.

YBT is an internet-based company that began by selling travel service websites to outside agents. In 2009, the company settled a lawsuit with the California attorney general over deceptive marketing.

In 2011, the company sold its headquarters and surrounding property when it faced a fall in revenue. Substantial management changes and canceled mergers have left YBT in its current economic situation.

Chapter 11 bankruptcy works with the creditors and vendors of the company that filed to create a solution to the mounting debt. Bankruptcy will allow the company to create a debt reorganization plan under the supervision of the court. Bankruptcy will reduce interest payments, and the penalties and fees may be reduced or even eliminated.

Source: St. Louis Business Journal, "YBT International files for Chapter 11 bankruptcy," Diana Barr, Mar. 5, 2013

Categories
Chapter 7

Two California YMCA's file for Chapter 7 Bankruptcy

Individuals and businesses can hit a bump in the road at any time. Some can be overcome easily, but others may require more substantial measures to fix the problem. One available solution may be filing for Chapter 7 bankruptcy.

Two California YMCAs were permanently closed on January 11. The facilities closed were in Riverside and Hemet. These centers announced last month that they would be filing for bankruptcy. They originally filed for Chapter 11 reorganization bankruptcy to try and handle their financial problems. On January 14, however, their financial problems worsened after a deal with a sister YMCA fell through. The deal would have given the sister YMCA control of the facilities.

After the deal fell through, the closed YMCAs decided to change their filing from Chapter 11 reorganization to Chapter 7 liquidation. This new filing will most likely lead to the sale of their assets and property to satisfy their debts.

The court documents show that the organization has assets of over $5 million but liabilities of $4.6 million.

There are two types of bankruptcy for which a business can file. Chapter 11 is the most common form, which allows the business to reorganize and restructure its debt without closing. Chapter 7 allows the business to liquidate its assets to pay for debts and eliminate debt that cannot be paid for by the assets. To file for Chapter 7 bankruptcy, the individual must qualify for the protection. There must not be enough disposable income based on the amount of debt and the income to pay creditors even at a restructuring level.

Filing for bankruptcy will not only eliminate debt, but also, it will stop creditor actions such as foreclosure.

Source: pe.com, "REGION: Riverside, Hemet YMCAs shuttered amid bankruptcy," Richard K. De Atley, Jan. 15, 2013