Consumer Bankruptcy Filings Continue to Fall

According to the Association of Credit and Collection Professionals, August consumer bankruptcies decreased 11 percent nationwide from August 2010, according to the American Bankruptcy Institute, relying on data from the National Bankruptcy Research Center. The data showed that the overall consumer filing total for August declined to 113,432, down from the 127,028 consumer filings recorded in August 2010. Each month of 2011 has recorded fewer bankruptcies than last year.

"Consumer bankruptcies continue to decline over the past year as households deleverage and consumer credit remains tight,” said ABI Executive Director Samuel J. Gerdano. “As a result, total consumer filings will be lower in 2011 than the 1.5 million consumer cases in 2010."

The August 2011 filings also represented a less than a 1 percent decrease from the July 2011 consumer bankruptcy total of 113,470 filings. The percentage of chapter 13 filings for August was 30 percent, a one percent increase from July.

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Posted in american bankruptcy institute , bankrupty decline , consumer bankruptcies

US Postal Services Asks Congress for Help

After a front-page story in Saturday’s New York Times, the woes of the U.S. Postal Service are beginning to sink in. In short, the Postal Service will soon default if Congress does not take action.


Hoping to encourage legislators to step in, Postmaster Patrick R. Donahoe will address the Senate Homeland Security and Governmental Affairs Committee in a hearing Tuesday.

Thomas R. Carper, the Delaware Democrat who serves as chairman of the Senate subcommittee overseeing the Postal Service, spoke with the New York Times about the current situation.

"The situation is dire," said Carper. "If we do nothing, if we don’t react in a smart appropriate way, the postal service could literally close later this year. That’s not the kind of development we need to inject into a weak uneven economic recovery."

The dire straits the post office currently finds itself in are due in large part to the Internet age and the preferred use of e-mail over traditional mail. The change in trends has led to a significant drop in revenue for the Postal Service.

Also affecting the financial health of the Postal Service are decades of contractual promises to union workers that continue to increase the agency’s costs. According to the New York Times, labor currently represents 80 percent of the Postal Service's expenses, while it accounts for 53 percent at United Parcel Service and only 32 percent at FedEx.

The post office is currently so low on cash that it will be unable to make the $5.5 billion payment due this month to finance retirees’ future health care. It is projected that the agency will run out of money to pay employees sometime early next year. Failure to pay employees would force the agency to stop delivering the roughly three billion pieces of mail it handles weekly.

At Tuesday’s hearing, Congress will consider a number of emergency proposals to prevent the agency’s potential bankruptcy. One radical proposal would allow the Postal Service to recover billions of dollars in what it considers overpaid employee pension funds. The proposal would provide a short-term fix, but would not alleviate the crisis entirely.

Postmaster Donahoe claims the agency must also find a way to increase revenue. Ideas for doing so include things like allowing the Postal Service to deliver wine and beer or allowing commercial advertisements on postal trucks and in post offices.

The New York Times reported that Donahoe also intends to seek approval from Congress to lay off employees, an action currently prohibited by a no-layoff clause in union contracts. If given approval, the Postmaster would lay off 120,000 workers in addition to cutting 100,000 jobs through attrition.

Thus far, legislators are divided on the issue with Republicans opposing the cuts and Democrats recognizing that action must be taken. Fredric V. Rolando, President of the National Association of Letter Carriers, warned of the dangers of such partisanship when speaking with the reporters.

"This is about one of America’s oldest institutions," said Rolando. "It survived the telegraph, it survived the telephone, and we have to do everything we can to preserve it and adapt."

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Saab Files For Bankruptcy Protection

STOCKHOLM—Saab Automobile AB Wednesday filed for protection from its creditors, in a move that buys time for the Swedish car maker to secure additional short-term funding to restart production.

The filing, similar to a Chapter 11 filing in the U.S., wasn't unexpected. Labor unions representing employees at Saab Automobile who weren't paid last month were due Wednesday to consider forcing the company into bankruptcy proceedings so that workers could seek state unemployment benefits.

Saab would have to consider filing for bankruptcy if it isn't granted protection from its creditors, it said in its application to the district court in Vanersborg.

But Victor Muller, chairman of Saab Automobile and chief executive of parent Swedish Automobile NV, said it was too soon to speak about that. "It's not appropriate to discuss bankruptcy," he told reporters in Trollhattan.

Saab Automobile has struggled with its finances for months. Production at its plant in the Swedish town of Trollhattan has been halted since April.  continued....

CloseIn a bid to solve its long-term funding needs, the company this summer signed agreements with two Chinese com

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Posted in automobile bankruptcy , Chapter 11 Bankruptcy , Saab bankruptcy

1.2 Billion Dollar Offer for LA Dodgers

Frank McCourt has been offered $1.2 billion to sell the Los Angeles Dodgers to a group backed by Chinese government-owned investment banks, a person familiar with the situation told The Associated Press on Thursday.

The bid to buy the team out of bankruptcy, which was first reported by the Los Angeles Times, was being headed by Los Angeles Marathon founder Bill Burke, said the person who requested anonymity because he was not authorized to discuss it publicly.

The bid terms, put forth in a letter sent to McCourt this week, call for an all-cash payment to buy the Dodgers, all real estate related to the team and the team's media rights. The offer is roughly $800 million more than what McCourt paid for the Dodgers in 2004 at more than $430 million.

The letter, which was presented on behalf of the Burke group by Signal Capital Management of New York, said funding for the bid would come from "certain state-owned investment institutions of the People's Republic of China" as well as unidentified American investors, the newspaper reported.

The bid would expire in 21 days, according to the letter, with the goal of closing a deal within 90 days, subject to the approvals of the bankruptcy court and Major League Baseball.

Burke and a McCourt spokesman, Steve Sugerman, did not return calls from the AP seeking comment.

The proposed sale price would break a record for a Major League Baseball team that had been set two years ago when the Ricketts family paid $845 million to buy the Chicago Cubs from Tribune Co. The participation of overseas investors in the team's ownership would not be unprecedented, with the Seattle Mariners' ownership group including a significant Japanese presence.

Dodgers third baseman Casey Blake is having season-ending surgery to repair a pinched nerve in his neck.

Yankees-Red Sox: A.J. Burnett kept the New York Yankees close, Russell Martin put them ahead with a two-run double, and Mariano Rivera nailed down a satisfying victory over host Boston.

The Yankees trailed 2-1 when Burnett left, then scored three times in the seventh off Alfredo Aceves (9-2) in a tense game that took 4 hours, 21 minutes.

The Yankees moved within a half-game of the first-place Red Sox in the A.L. East by winning two of three in the series.

"I just had a feeling tonight he was going to get it done," New York manager Joe Girardi said of Burnett, "and he did."

Mets: The Mets said that the sale of a stake in the club to hedge fund manager David Einhorn for $200 million has fallen through, denying the flagging franchise the money needed to repay a loan from Major League Baseball and bolster its operating capital.

Marlins: Injured Florida star Hanley Ramirez has left shoulder instability, and the shortstop is contemplating offseason surgery.

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Posted in baseball bankruptcy , LA Dodgers bankruptcy

Oprah Can't Save You From Bankruptcy

Oprah Winfrey can do a lot of things: give you a car, get you to read, inspire a hilarious “Saturday Night Live” skit. But we’ve found one crack in the legendary media maven’s track record of wins. Surprisingly, it seems she can’t save a company from bankruptcy.
In 2003, the then-talk show queen bestowed her stamp of approval on the macaroni and cheese served up by Delilah’s at the Terminal, a southern-style eatery located in Philadelphia’s Reading Terminal Market. Oprah deemed it the best mac and cheese in the country, and buzz followed.

But even Oprah’s praise and tasty southern delicacies like fried chicken and collard greens couldn’t keep Delilah’s in good financial health. Southern Girl Inc., which does business as Delilah’s at the Terminal and Delilah’s at 30th—the restaurant’s outpost at downtown Philadelphia’s 30th Street train station—sought bankruptcy protection on Friday, listing assets of up to $50,000 and debts of $500,000 to $1 million.

Despite its steep debt-to-asset ratio and inability to pay its debts as they come due, Delilah’s, which is led by President Delilah Winder, seems determined to see her company emerge from Chapter 11 intact. The company is seeking permission to tap the cash securing its debt, saying the move could fund operations at both Delilah’s locations and help the company generate $55,000 in proceeds next month. With the cash collateral in hand and the ability to pay its expenses, Southern Girl said it would be able to “facilitate its reorganization and enhance the collateral and going concern of its restaurants.”

The company also wants permission to continue paying its nine employees, calling the move “critical and essential to employee morale and future business needs.” A hearing on that request, made Tuesday, has been set for Sept. 2.

Before she was signing off on bankruptcy forms, Delilah herself had a few moments in the spotlight, going on to write her own cookbook and appear on the Food Network following the Oprah nod. But her brush with celebrity chef Bobby Flay on his competition series “Throwdown! With Bobby Flay” didn’t lend credence to Oprah’s take on Delilah’s signature dish. Flay’s version of mac and cheese took the prize in the competition.

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Posted in bankruptcy protection , Delilahs bankruptcy , restaurant debt

Harrisburg Council Rejects Plan to Address It's Debt Crisis

Aug 31 (Reuters) - Pennsylvania's capital of Harrisburg rejected a rescue plan designed to address its debt crisis on Wednesday, in a move that could prompt a state takeover of its finances. In an 4-3 vote, the Harrisburg City Council rejected a plan put forward by Mayor Linda Thompson. The vote came less than two months after the council rejected another plan presented by a state-appointed advisor.

Harrisburg -- a city of 50,000 about 100 miles west of Philadelphia -- is one of a handful of U.S. cities and counties that have teetered toward economic collapse in the wake of the 2007-09 recession. A string of failures could rattle the $2.9 trillion U.S. municipal debt market.

The mayor has said that Harrisburg could run of money next month, meaning it could miss a Sept. 15 bond payment and be unable to pay city workers.

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Posted in bankruptcy , harrisburg debt crisis

Unions Warns of Saab Bankruptcy If Wages Remain Unpaid

(RTTNews) - Swedish automaker Saab Automobile AB (SAAB-B,0GWL.L: News ) could be forced into bankruptcy if fails to pay wages by the end of this week, the Wall Street Journal reported Monday, citing one of the company's labor unions, IF Metall. Saab Automobile is owned by Dutch automaker Swedish Automobile N.V.

According to the WSJ report, a lawyer at IF Metall said that on August 26, Friday, Saab Automobile received requests for payment of 1,486 union members' wages for August.

The cash-starved company has seven days to pay its staff once it receives the requests, failing which, IF Metall could file for a Saab Automobile bankruptcy at the district court. The process will ensure state coverage of wages in the event of the automaker's failure. The union has three weeks to file for a bankruptcy, or its claims will fall.

Saab Automobile was due to pay its blue-collar employees on Thursday, August 25, and its white-collar workers the following day. However, the company said last Tuesday that it may be forced to postpone payments as "committed" funds from investors may not arrive in time. The company also said there could be no assurance that the necessary funding will be obtained or the funds collected.
Unionen, the union for Saab Automobile's white-collar workers, which has about 1,000 members, is now reportedly gathering from its members pay slips that have not been honored, and expects to send requests for payment to the company Tuesday.

August is said to be the third straight month that Saab Automobile has failed to pay wages on time to its approximately 3,600 employees. The company reportedly paid salaries to its workers about a week late in June and July.

Saab Automobile, which has halted production at its Trollhattan plant in Sweden since April this year due to unpaid supplier bills, was seeking to resume production during the week beginning August 29 at the earliest. It has been scrambling for short and medium-term funding to pay suppliers and employees as well as to restart production.


Sweden's Debt Enforcement Agency has reportedly started a collection process on August 16 after Saab Automobile missed a deadline to pay suppliers. More than 100 debt claims are said to have been filed against Saab with the collection agency.

Swedish Automobile, the owner of Saab Automobile, said last Friday that it will publish its financial results for the half year period on August 31 instead of the previously-announced date of August 26. The company said it was still in the process of finalizing the semi-annual report.

On the Stockholm stock exchange, SAAB-B closed Monday's trading at 129.00 Kronor, up 7.00 kronor or 5.74 percent on a volume of 42,377 shares.

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Posted in automobile bankruptcy , Saab bankruptcy