The parent company of the Harborside Nursing & Rehabilitation Center is Ravenwood Healthcare, Inc. That company is based in Louisiana, where the Chapter 11 bankruptcy was filed. The company estimated both its assets and liabilities in the range of $10 to $50 million.
]]> One of the recurring reminders of our recent posts has addressed the business advantages of filing for Chapter 11 protection. The Chapter 11 process is meant for companies that intend to remain in business while consolidating debts and reorganizing the company business model. Chapter 11 bankruptcy is intended to allow the company to emerge from the process as a more streamlined and efficient organization.Ravenwood Healthcare has indicated that it intends to take advantage of these protections, specifically to restructure the company's debt obligations.
Business bankruptcy proceedings can be complex and lengthy, but quite often the benefits after the process is completed are impressive. The idea of restructuring a company's business model makes for a great opportunity to address some key financial problems while continuing to strive toward making a profit.
Source: The Baltimore Sun, "Harborside Nursing parent files for Chapter 11 bankruptcy," Hanah Cho, April 30, 2012
]]>Maryland residents will likely remember Suleman, a woman who just a few years ago was the subject of national debate after she gave birth to octuplets who were conceived through in vitro fertility treatments. Suleman actually has 14 children altogether, and her octuplets are the longest-surviving set in the world. The part of this story that had many people in an uproar was that she was already in a very precarious financial situation at the time of the octuplets' birth.
]]> Suleman has now filed for Chapter 7 bankruptcy, a process whereby her assets will be liquidated, with the proceeds used to pay off her creditors. In filing for bankruptcy, she listed approximately $50,000 in assets, with liabilities of nearly $1 million. Suleman's filing shows that even the most dire of financial situations can be redirected down the path toward a more manageable future.While the debt troubles faced by the "Octomom" may seem like a very extreme case of financial mismanagement, it is important to keep in mind that crushing debt can result from all kinds of circumstances. The process of Chapter 7 bankruptcy is intended to help consumers deal with unmanageable debt even if they think it is too late.
Through her filing, Suleman is likely addressing her financial struggle with the best option available. The news media may take this story and allege the filing to be evidence of Suleman's bad decision-making, but what the case can show our Annapolis area readers is that Chapter 7 bankruptcy is available for all who qualify, and just about everyone would agree that people deserve a second chance.
Source: The Washington Post, "'Octomom' Nadya Suleman files for bankruptcy, owes more than $30K in late rent payments," May 1, 2012
]]>TW attempts to stay afloat with the loan from the subcontractor, who would take over almost 24 contracts the company owns to provide security services to federal agencies. The bankruptcy filing included an emergency request to promptly transfer the contracts to the subcontractor in order to ensure that its clients, including President Obama, remain protected without interruption.
]]> The company has specifically cited concerns about national security if its services are disrupted. In addition to the White House, the company provides guards for the Department of Homeland Security and the U.S. Army.Previous posts have mentioned the advantages of Chapter 11 bankruptcy for businesses. In this type of bankruptcy filing, the company is able to continue operations while streamlining the overall business structure, paying creditors over time, and emerging as a more financially fit company.
When a company with debt problems wants to deal with debt, reorganize its business structure, and remain in operation, a Chapter 11 filing is often the most realistic option. The process can help a business retool and modernize with a view toward a fresh financial start. Although the process may be lengthy and complicated, tackling an unmanageable debt load head-on is often the best way to free up capital for other essential expenses.
Source: The Wall Street Journal, "Security Firm Files for Bankruptcy," April 19, 2012
]]>These are valid concerns. The prospect of having poor credit can be the most daunting proposition for someone who is dealing with unmanageable debt. While filing for bankruptcy is often a necessary step in the financial reorganization process, the potential negative effect it can have on a credit score often makes people think twice about going through the procedure. There are ways, however, to rehabilitate your credit after filing for bankruptcy. Although it can take time, it can be done.
]]> A recent article from MSN Money suggests seven tips for improving a credit score after bankruptcy. The article offers some solid advice for setting out on a path to a better financial future.The first tip is fairly basic: to review your credit report to know exactly where you stand. The second step is to begin paying bills on time, since a major aspect of how your credit score is calculated involves how promptly bills are paid. The next steps are to add a credit card down the line, and then also a loan. Next, beware of credit repair services, and know your limits on your post-bankruptcy credit cards. Lastly, do not close accounts, even if you have vowed to never use a credit card again. Closing an account means shrinking your available credit, which can negatively impact your credit score.
The thought of filing for bankruptcy can make many people nervous about the possibilities of an uncertain financial future. But Maryland residents should keep in mind that filing for bankruptcy protection is meant to help consumers regain their financial footing and stop creditor harassment. Knowing that a patient pursuit of credit rehabilitation is available after bankruptcy should ease the mind if bankruptcy becomes the best option.
Source: MSN Money, "7 credit tips for after bankruptcy," April 12, 2012
]]>Route 95 Publications, LLC, which is based in Rockville, Maryland, placed the winning bid of $1.26 million, which was approved April 5 by a judge. Route 95 is also the owner of Washington Jewish Week. The paperwork for the transaction has reportedly been completed, and a deposit has already been paid.
]]> Although plans moving forward for the Jewish Times are uncertain, one of the investors with Route 95 stated that the company intends to remain headquartered in Baltimore.As noted in previous posts, the process of Chapter 11 bankruptcy is meant to give a company some breathing room to pay its creditors back over time while improving an overall business model. Alter Communications, owner of the Jewish Times since 1919, has now asked the federal bankruptcy court to change its filing from Chapter 11 to Chapter 7. A Chapter 7 filing, as opposed to Chapter 11, permits for the liquidation of assets to repay creditors, rather than a repayment plan. The intent is to dissolve Alter Communications, with all creditors paid within four to six months.
The type of resolution seen in the Jewish Times case can be a plausible solution when a Chapter 11 reorganization plan does not come together as laid out. A bankruptcy auction can allow for an orderly transition of ownership, and many times the company for sale can remain in business.
Bankruptcy procedures have the potential to be enormously complicated, but when companies find themselves in an untenable financial situation, business bankruptcy may be the best option for the good of owners and employees alike.
Source: The Baltimore Sun, "Judge approves sale of Jewish Times publisher," Arthur Hirsch, April 5, 2012
]]>The product known as pink slime is actually meat trimmings that have been treated with ammonium hydroxide. The product is most commonly used in the burger patties sold by fast food restaurants. As more information about the product came out, the public started to reject the use of pink slime in their food.
]]> Popular restaurants such as McDonald's, Burger King, and Taco Bell have declared that they no longer accept the product, and many supermarkets in the country have stated they will no longer sell food items that contain the ingredient.AFA Foods, which is based in Pennsylvania, is one of the largest ground beef processors in the country. The National Meat Association has stated that the impact could reach beyond AFA Foods and affect the entire meat industry.
In previous posts, we've described the main goals for a company filing for Chapter 11 bankruptcy protection. The process is meant for companies to submit reorganization plans for their business structures while staying in operation. A company under Chapter 11 protection can then pay their creditors over time, as the company takes steps to emerge as a stronger and more successful business.
The type of public backlash that AFA Foods has suffered in the "pink slime" controversy can be hard to overcome. But Chapter 11 bankruptcy protection will help the company through the process and perhaps allow it to re-brand itself as a business consumers can trust.
Source: International Business Times, "Pink Slime Bankruptcy: Ground Beef Processor Files For Chapter 11 After Heated Backlash," April 3, 2012
]]>American Airlines filed for business bankruptcy after losing approximately $10 billion since 2001. Facing growing expenses, the company aims to stay in operation by cutting $2 billion annually, of which labor cuts are to account for $1.25 billion.
]]> This newest request is reportedly designed to help American Airlines move quickly through the reorganization of their business structure amid rising oil costs.Usually the ultimate goal of any business bankruptcy is to allow the company to streamline operations, cut expenses, and emerge with a more efficient and powerful business model. Chapter 11 bankruptcy, in particular, focuses on debt relief and company reorganization.
When a company is dealing with unions while reorganizing in bankruptcy, federal law allows the business to break from union contracts if the company can show that they cannot profitably operate under the terms of the contract, and that talks attempting to modify the agreements with the union have not produced results.
American Airlines has negotiated with its labor unions throughout the bankruptcy process. There are no indications that any new agreements are within reach. Union leaders have stated that the company has rejected one proposal that would have reportedly saved the business money and allowed American Airlines to avoid layoffs. It will be interesting to see how the federal judge rules.
As many business owners in Maryland have found, going through the bankruptcy process can be beneficial if a business is struggling financially or seeing growing expenses and reduced profits. Reorganizing the company's business structure and creating a comprehensive plan to attack debt can allow a business to continue operating and eventually return to profitability.
Source: The Washington Post, "American Airlines asks bankruptcy judge to break union contracts, impose cuts on workers," David Koenig, March 27, 2012
]]>As the company goes through the bankruptcy process, Coach America reports it will continue business as usual without negatively impacting Maryland routes or customers. The company filed for Chapter 11 bankruptcy to reorganize its debt burden, promising to keep current routes in operation throughout the process.
]]> Chapter 11 bankruptcy can be an effective tool for all types of businesses that have seen declining profits in recent years. With signs pointing toward a slow economic recovery, filing for Chapter 11 now could position a company to be a powerhouse once the recovery is in full swing.The Chapter 11 process is meant for companies that are struggling financially to reorganize their business structure and address their debt burden through gradually paying creditors over time. The choice to file for bankruptcy is difficult, but it could be a turning point for a company's survival. The best part of Chapter 11 is that businesses going through the process are meant to continue operating, allowing them to come out the other side on much firmer financial ground.
This type of bankruptcy can be especially important for small businesses. Starting a company is stressful, and the recent economic crisis may have pushed many small business owners to the financial brink. Chapter 11 is a tool that can provide a means to address a dire financial situation before it is too late.
Coach America is an example of an important company in Maryland that is looking on the bright side of their bankruptcy filing, planning to continue operations uninterrupted and re-emerge with a stronger business model.
Source: SoMdNews.com, "Bankruptcy will not affect So. Md. Commuters, business says," Jeff Newman, March 16, 2012
]]>In exchange for giving up rights to sue the banks for originating and servicing bad mortgage claims, Maryland will receive $1 billion that will be broken into four separate funds.
]]> The first and largest portion of the settlement is reserved for Maryland homeowners for whom foreclosure is almost a certainty. This fund is valued at approximately $810 million, of which the settlement directs that at least $485 million be reserved for reducing principal. The remaining amount will be applied to short sales and modifications of existing loans.The second portion totaling $64 million is earmarked to help homeowners who are underwater on their mortgages but current on their payments. That money is meant to help lower monthly payments.
A third fund of $59 million will be established to help fund housing projects.
And lastly, the final portion of the settlement will be distributed to Maryland residents who already lost their homes in foreclosure. Depending on the situation, these residents will receive between $1,800 and $2,000.
Maryland's attorney general has previously said that the state was number six on the list of states hit hardest by the foreclosure crisis. The financial relief provided by this settlement could save Maryland residents from going into foreclosure or filing for bankruptcy.
The settlement does not prevent Marylanders from filing lawsuits against the five banks for fraud.
People in the Annapolis area who fit into any of the categories mentioned above need to make sure they are aware of their rights to pursue their individual portions of this historic mortgage settlement.
Source: Southern Maryland Online, "Md. Gets $1 Billion Mortgage Settlement," Daniel Menefee, March 13, 2012
]]>People with financial difficulties often find that bankruptcy can be a workable solution to their financial problems. Bankruptcy filings in Maryland rose steadily throughout the recent economic downturn. As part of the bankruptcy process, credit card debt is usually canceled or forgiven.
]]> Afterward, the financial institution that forgave the debt is required to mail the cardholder a Form 1099-C, which details the amount of debt forgiven. Some reports show that these forms can be received even if the debt was discharged years earlier in bankruptcy proceedings, and the financial institution involved has finally ended collection efforts and is now writing the debt off as a tax deduction of its own.But if a person is unable to show that this debt was discharged through bankruptcy proceedings, the forgiven debt will be counted as income and taxed accordingly.
Current estimates show that the number of 1099-Cs mailed out in 2011 nearly doubled from the number sent out in 2010. Receiving this form can cause confusion and stress, and to make matters worse, the forms are sometimes duplicates or may even contain incorrect information.
As many readers in the Annapolis area know, bankruptcy is a tool for the consumer. The process allows individuals with a stressed financial situation to get their affairs in order. And that means there are steps people can take to avoid being taxed on the debt forgiven through bankruptcy. Being aware of the relevant laws can ease the minds of Maryland residents as they avoid a tax liability by keeping those bankruptcy documents handy.
Source: Time Magazine, "Why you might owe taxes on canceled credit card debt," Josh Sanburn, March 6, 2012
]]>A former World Series of Poker Commissioner, he said the company began looking for a partner months before filing for bankruptcy but was unsuccessful, leaving Chapter 11 as a last hope for reorganization.
]]> In light of financial difficulties, filing for bankruptcy was the first step in achieving the company's goals of recovery, which include keeping the Epic Poker League, an upstart company linked with Federated Sports and Gaming.In addition to that project, the gaming company also owns the Global Poker Index, the Epic Poker League on Facebook, and the Heartland Poker Tour, among others.
As Maryland residents know, many people think of bankruptcy as the beginning of the end, but that simply isn't true. Often, bankruptcy is a much needed tool for companies to get their affairs in order and make a fresh start.
Chapter 11 can provide a business the time it needs to move forward in securing the help of a partner, which is just what Federated Sports and Gaming aims to do in the long run.
Business and commercial bankruptcy can be complicated, and business owners who are considering bankruptcy will want to be aware of all of their options in planning a reorganization of finances.
In the case of Federated Sports and Gaming, the future may still be uncertain, but thanks to the company's recent decision to file for bankruptcy, there is still hope for a brighter financial future.
Source: Ante Up, "Federated Sports+Gaming Files for Chapter 11 Bankruptcy; Exclusive with Duke and Pollack," Feb. 29, 2012
Source: Las Vegas Review Journal, "Epic poker league company files for bankruptcy," Howard Stutz, Feb. 29, 2012
]]>Over the years, Sherwood purchased a number of other confectionary companies and eventually consolidated its businesses and holdings, moving its New England plants to Chase City and Keysville. By the late 1990s, Sherwood received funding for an even more ambitious expansion plan through a Governor's Opportunity Fund. Sherwood also received money from the local IDA community to move ahead with its expansion plans.
]]> Unfortunately, the expansion was more ambitious than expected, and Sherwood Brands has since filed for reorganization under Chapter 11. Everything Sherwood owns will be going up for auction, including company assets and the assets of its affiliates, trade names, intellectual property, inventory and equipment, and stock and real estate holdings.Managing a bankruptcy of this size is highly technical, requiring in-depth experience in commercial bankruptcy law. While no one wants to file for bankruptcy, sometimes companies have no other option. Fortunately, allowing a company the opportunity to reorganize and keep some of its creditors at bay may prove indispensible to the life of the business. Company owners who are facing financial struggles might do well to learn how Chapter 11 bankruptcy can provide much needed debt relief.
Source: News-Progress, "Sherwood up for auction," Dallas Weston, Feb. 22, 2012
]]>With more bankruptcy filings, people have the need to rebuild credit.
]]> To respond to this growing need, Maryland residents will likely want to consider the best credit cards to use for rebuilding credit in 2012. For instance, one thing many people will want to avoid when rebuilding credit is a prepaid debt card. These cards often have hidden fees, but the biggest downfall is that they do not have the potential to improve FICO scores.Maybe a more solid approach to rebuilding credit after a bankruptcy is a secured credit card. Larger banks can offer secured credit cards with low fees. The banks issue a line of credit that is backed by a security deposit that you leave in a CD. If you manage your account well, you not only build your credit but also get the security deposit back in the end.
There are many ways to rebuild your credit after a bankruptcy, but the important thing to remember is that it is possible. Bankruptcy can be a nerve-racking experience, and often people become stressed about the future of their credit and whether they will ever be able to buy a home. But bankruptcy is not the end of the world and can often provide much needed relief while debtors get their finances in order and look forward to a financial fresh start.
Source: Fox Business, "Best credit cards for rebuilding credit in 2012," Curtis Arnold, Feb. 13, 2012
]]>Phantom income refers to the difference between what a homeowner still owes and what he or she receives for the sale of a home in a short sale or following a mortgage restructuring.
]]> When homeowners lose their homes through foreclosure or a short sale, they are required to pay taxes if a portion of their mortgage was forgiven or cancelled by the bank. Under the federal tax code, cancelled debt is considered income for taxation purposes. Unfortunately, homeowners facing foreclosure are rarely in a position to pay the additional taxes.There is a federal law that in the past has protected homeowners in similar situations, but the law is set to expire. Maryland legislators have decided to step in to avoid the pending expiration. According to one of the legislators who introduced the bill, it would provide an extra cushion for people with underwater mortgages.
For more insight regarding debt relief, a personal bankruptcy attorney can help describe the debt relief options available to individuals who are facing possible foreclosure. Filing for Chapter 13 bankruptcy is one way of achieving the debt reorganization and mortgage modifications that could set many Missouri residents on the path for a financial fresh start.
Source: gazette.net, "Montgomery, Prince George's lawmakers introduce bill to help underwater homeowners," Danielle E. Gaines and Daniel Leaderman, Feb. 3, 2012
]]>In any case, the five signed-on mortgage servicers -- JP Morgan Chase, Citigroup, Bank of America, Wells Fargo and Ally Financial -- have agreed to provide $17 billion in mortgage relief to about one million homeowners nationwide. Another $3 billion will go to refinancing borrowers to allow for lower interest rate loans. The federal government will receive $1 billion of the settlement, to be used also for relief for homeowners.
]]> In addition, the settlement may grow to $30 billion if nine other mortgage servicers sign on.To date, the settlement represents the largest attempt by mortgage servicers to write down the amount owed by homeowners on underwater mortgages that resulted from falling property values.
The deal is expected to affect almost all 50 states, and reductions in loan principal are expected to account for at least 60 percent of the $17 billion mortgage relief. The purpose of writing down principal is to help more people avoid defaulting on their loans.
While write-downs will be much larger in some cases, the average principal write-down could be about $20,000. To be eligible for a principal write-down, a borrower must be delinquent on a mortgage.
Officials say the effects of the principal reduction could go further than the initial dollar amount, since servicers will get credits for writing down underwater loans. It was estimated that the $26 billion settlement could offer up to $40 billion in mortgage relief.
This historic deal is good news for many struggling Maryland homeowners who are on the verge of foreclosure, but the settlement will not provide adequate relief for the great majority of homeowners who have continued to make payments while home values dropped. Annapolis residents who are in need of mortgage debt relief still have the option of considering Chapter 13 bankruptcy, which can allow for the necessary relief to restructure debt with a view toward a healthy financial re-start.
Source: USA Today, "Feds, states, banks agree to $26 billion mortgage settlement," Julie Schmit, Feb. 9, 2012
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