Monthly Bankruptcy News Updates from Foster Law Offices

Interested in bankruptcy news? Considering bankruptcy, but not sure which bankruptcy lawyer may be best for you? Sign up for our monthly newsletter, once a month you will receive an email from Foster Law Offices highlighting bankruptcy news important to you and Northwestern Pennsylvania.

From fun stories to changes in legislature, tips and more... our monthly bankruptcy newsletter is meant to be an informational tool to help you learn more about bankruptcy.

Don't worry - we will NEVER sell your information, or send you spam and you can unsubscribe at ANY time... how cool is that? January's newsletter will be sent out later this week - so sign up now!  This month we will feature 3 cool tools to help you organize your finances BEFORE tax time and more!

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Posted in bankruptcy news , bankruptcy newsletter , Foster Law Offices

Robosigning Credit Cards: The Next Scandal

A friend forwarded me a brilliantly written blog post, that posed a very important question - Could the 'Robosigning' of credit cards be the next big bank scandal? Even bigger than the mortgage crisis?

You can read the entire article by clicking here... or here are some of the highlights, the cliff notes version, if you are short on time:

• Robosigning consists of blatantly illegal practices in which banks and mortgage companies had their employees sign affidavits and other documents without verifying the information therein; forge signatures on documents; backdate documents; falsely notarize documents; create new documents to replace missing ones; or some combination of all the above. Did I mention that all of this is illegal?

• The companies that did this claimed that they had to cut corners because they couldn’t keep up with all of the paperwork created by the housing boom last decade. But we now know that this is not true — there’s evidence that robo-signing goes back all the way to at least 1998.

• So in short the widespread and systematic robosigning of mortgage documents have created a real unresolved nightmare. And now there are indications that similar issues may exist within the credit card industry. Consider the very curious behavior of JP Morgan Chase, as reported in that little-noticed American Banker article from last week:
  

  JPMorgan Chase & Co. has quietly ceased filing lawsuits to collect consumer debts around the nation, dismissing in-house attorneys and virtually shutting down a collections machine that as recently as nine months ago was racking up hundreds of millions of dollars in monthly judgments.

  When a bank leaves money on the table for no obvious reason, you know that something’s not quite right. 

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Posted in bank scandal , credit cards , jp morgan , robo signing

Kodak Plans Focus on Printing Following Bankruptcy

If Kodak carries through with a Chapter 11 bankruptcy filing in the coming weeks as media reports suggest, it could mark the end of a rich, 131-year history as the king of all-things related to photos and cameras, according to a report by MarketWatch.com.

In the report, Rafferty Capital Markets Analyst Mark Kaufman says the company likely will completely exit the consumer photo and camera business.

"Forget about it. It's not making money now," Kaufman, told MarketWatch.com.

Instead, the plan would be for Kodak (NYSE:EK) to sell off all of its photo business, unload an extremely profitable chunk of its massive patent library and focus almost exclusively on digital printing as a business-to-business company.

"It's not a consumer business, its business-to-business. That's what you're going to have," Kaufman said in the report.

It is not all "doom and gloom" this change would be good news for the Dayton operations, where Kodak has 570 employees at a facility that makes inkjet printers, which are reportedly competing well in the marketplace against such rivals as Hewlett-Packard Company and Cannon.  According to an article published by the Dayton Business Journal, "With the company already having discussed plans for possible growth in Dayton through state and local incentives, an emphasis on the printing side of the business would make those plans more likely to happen. That could lead to more jobs in Dayton and a stronger business for Kodak going forward".

If the reports of how Kodak would look after emerging from bankruptcy are correct, the company may very well boost its operations in Dayton. In fact, the company already has expressed interest in growing locally.

In late September, the state of Ohio approved a tax credit package worth $2.9 million over 10 years to entice Kodak to expand in the Dayton region. In addition, the city of Kettering recently committed a $435,000 grant to the company.

State officials said if the company decides to expand in Kettering, it would invest at least $7.5 million in new manufacturing machinery as well as research and development equipment to help position the Kettering facility for future growth. Read the entire article from the Dayton Business Journal here.

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Posted in Chapter 11 Bankruptcy , kodak , kodak bankruptcy

Baseball: Bankruptcy on Base?

It's a new year and "bankruptcy" has been a hot topic in the game of baseball during 2011 and now 2012... According to an article published by Amazin' Avenue, sources say the Mets have hired CRG Partners — the same turnaround consultants that handled the Rangers' bankruptcy sale — and that a team sale with or without bankruptcy is on the table.

The Mets have confirmed the hiring, stating that they have "engaged CRG Partners to provide services in connection with financial reporting and budgeting processes."

The article further states that "Hiring turnaround consultants doesn't necessarily mean that the team is specifically preparing for bankruptcy and a sale — consultants like these are brought in to figure out how a struggling business can become profitable — but it further underscores the Mets' moribund financial situation. Also, a turnaround company typically gets only a modest fee if it comes in and merely makes recommendations; it has a considerable economic incentive to push for a huge sale when a sizable commission is in the offing".

Several sports-sites infer that Mets fans would actually be EXCITED about the prospect of bankruptcy, considering how well the Rangers' situation turned out following their filing of bankruptcy.

 The Amazin' Avenue article also examines what may be at jeopardy if the team indeed does file bankruptcy,  "Every bankruptcy sale has three parties: the ownership group that is in debt, the creditors, and the buyers. If this process is indeed in the Mets' future, it could be a long and difficult one with no shortage of delays and acrimony to come. William Snyder, the CRG consultant who led the Rangers' bankruptcy sale, made many enemies along the way — including new Rangers owner Chuck Greenberg, who said that he'd "met some duplicitous people in my life, but [Snyder] set a new standard." But part of the reason that the sale worked was because the bidding process upped the price and brought in more money for the team's creditors".

Whether you are excited about the possibility of new ownership and a fresh start for the Mets or upset about all the teams who seem to be "in over their head"... one fact remains, there is light at the end of the tunnel for the Mets. This team in a large market with a new stadium and regional sports network will have plenty of wealthy bidders lining up to the "base" hoping for their chance to "hit a home run" and take over ownership of this team.
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Posted in baseball bankruptcy , mets bankruptcy , new york mets , rangers bankruptcy

Municipal Bankruptcy - Harrisburg, PA Making Headlines

(Reuters) - If knee-jerk reactions could be taxed, Pennsylvania's capital city could be closer to escaping its $315 million financial hole.

David Unkovic, the man the state appointed three weeks ago to find a way out for debt-ridden Harrisburg, initially faced a barrage of criticism, particularly regarding his past relationships with large creditors of the city.
However, he appears to be converting critics while maintaining his pledge that everyone will feel pain when he unveils his recovery plan for the city.

Unkovic was applauded by 150 people who visited a city bookstore Monday evening to hear what he had to say about his work in developing that plan.

"I want to commend you on some of your comments last week, especially concerning the fact that any credible workout to this issue is going to have to have some clawbacks in relation to the outstanding debt and our creditors," Harrisburg resident Bruce Webber told Unkovic.

Among the attendees were members of Occupy Harrisburg and Debt Watch Harrisburg, a group that has favored bankruptcy instead of a state takeover.

The 57-year-old receiver, who drew public scorn from some of the same people because of his ties to several of the creditors who are suing Harrisburg, garnered approval after the only resident to object to his appointment questioned his political ties to Republican Governor Tom Corbett.

"I'm not a Republican either, by the way. I am a Democrat but I am not a partisan person," Unkovic said.
Harrisburg's city council filed for Chapter 9 bankruptcy protection earlier in the fall, but the case was dismissed by a federal judge, paving the way for a state takeover of the city's finances. The state capital is struggling under the weight of more than $300 million in debt from a revamp of its incinerator.

"Fortunately, you don't have a political agenda . your (concern) is the 48,500 people of the City of Harrisburg," said a city employee and member of AFSCME, one of the unions that's been asked to accept concessions in budget talks for 2012.

A member of Occupy Harrisburg, an offshoot of Occupy Wall Street, even appeared to sympathize with Unkovic's task ahead when he asked, "Why did you take this job?"

Unkovic said he's met with every elected official involved in Harrisburg's debt crisis and talked with many groups, including Occupy Harrisburg and the host of Monday evening's forum, Harrisburg Hope.
He said he created a website, www.pa.gov/harrisburgreceiver, to give people a chance to share ideas about how to get the city out of debt.

Unkovic has petitioned Commonwealth Court to give him an additional 30 days to submit his recovery plan for Harrisburg, which would give him until early February, if approved.

He said he plans to stay on as receiver only as long as it takes to turn around the city.
"I'm going to go away as soon as I can. That's my plan," said Unkovic.

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Posted in harrisburg bankruptcy , Municipal Bankruptcy , pennsylvania bankruptcy

Saab Bankruptcy Leads to Warranty Concerns

SAAB, a company that was once renowned for style and sophistication, a thinking person's car, is now in its death rattle.

After its parent company, Swedish Automobile NV, applied to a Swedish court to put three critical parts of the enterprise, Saab Automobile, Saab Powertrain and Saab Automobile Tools, into bankruptcy, the status of warranties on new Saab cars sold here remains under a cloud.

There are about 50 unsold new Saabs in local dealerships and in the Australian distributor's stock, on top of sold Saabs still under warranty.

Last year, Saab sold just 14 cars Australia-wide from eight dealerships. This year it faired better with the release of a new 9-5 model in April, which boosted the brand's sales tally to 139 cars so far.

As the Swedish court is yet to appoint an administrator, it was too early to know how the factory-backed warranty applied, the managing director of the local distributor Saab Cars Australia, Stephen Nicholls, said.
''The new car warranty provision is held by the factory in Sweden, which is one of the entities that's gone into bankruptcy,'' he said.

''At the moment were seeking clarification from the factory how that's going to work.
''That is something that's a question mark.''

Saab spare parts supply is secure, as the global parts distribution company, Saab Parts AB, continues to trade normally, Mr Nicholls said.

Production of Saabs in Sweden has halted and there are no further shipments en route to Australia.
A similar warranty concern confronted Rover and MG buyers when the British group became insolvent in 2005.

In Australia, Rover and MG warranties were honored after dealers rallied to find a reinsurer willing to take on the risk - an approach Saab might follow.

''That's a logical alternative that would be evaluated, but we're not doing anything on that front at the moment,'' Mr Nicholls said.

Mr Nicholls said he expected that Saab would maintain eight dealerships, its 20 authorised repairers and the six staff at Saab Australia.

''Our plan is to cut our costs locally, restructure a little bit, and carry on supplying parts for the dealers,'' he said.

Already the cars are being heavily discounted, with one online retailer slashing $11,000 from the Saab 9-3 model and $16,000 from the Saab 9-5.

The Australian Competition and Consumer Commission was still researching the issue last night after being approached for comment.

Read more: http://www.smh.com.au/national/saab-bankruptcy-leads-to-warranty-concerns-20111220-1p41t.html#ixzz1h5NjGAlj

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Posted in automaker bankruptcy , Saab bankruptcy

Dodgers, Fox Battle Over Media Rights Sale

WILMINGTON, Del. (AP) — Attorneys for the Los Angeles Dodgers and Fox Sports squared off in court Wednesday over the team's plan to sell the media rights to games starting in 2014 as part of its plan to exit bankruptcy.
The Dodgers are asking a U.S. Bankruptcy Court judge in Delaware to approve a process for selling the television rights to future games as part of a settlement with Major League Baseball that also calls for the sale of the team and Dodger Stadium.

Fox, whose Prime Ticket subsidiary owns the current television contract with the Dodgers, is challenging the proposed sale process, saying it would violate Fox's rights under the existing contract. That contract gives Fox an exclusive 45-day period starting in October 2012 to negotiate a new TV deal and prohibits the Dodgers from talking to any other party until Nov. 30 of next year.

The Dodgers contend that a sale of the media rights is the best way to maximize value for the team's creditors and emerge from bankruptcy in a timely fashion.

"It's an obvious place to look for liquidity and long-term stability for the company," said Tim Coleman, a senior managing director for Blackstone Advisory Partners, which is acting as financial adviser to the Dodgers.

But Fox maintains that a media rights sale would result in the Dodgers breaching their existing contract with Fox, leaving the team subject to potential legal claims that could drive down the price potential buyers would be willing to pay for the club.

Coleman disagreed, testifying that even if Fox loses out on bidding for the future television rights, it would not mean a damage claim against the Dodgers or the team's new owner. Coleman said Fox would have virtually the same rights under the proposed sale process as it has now, including an exclusive 45-day negotiating period, with the major difference being that the timetable for reaching a new TV deal would be bumped up by 10½ months. The settlement with Major League Baseball calls for a sale of the team and its assets, including the future media rights, to be completed by April 30.
"The procedures are essentially the exact same procedures as Fox has today, other than dates," Coleman said.

The Dodgers also note that the proposed sale process includes a provision for Judge Kevin Gross to decide whether the media rights sale would result in any damage to Fox and to estimate any payments to which Fox might be entitled as a result. If such payments threatened to significantly reduce the benefits of the media rights sale, the Dodgers could call it off.

But attorneys for Fox Sports argued that the sale process would give a buyer of the Dodgers the ability to reject any new TV deal reached with Fox, something they said the current contract does not allow.
Fox attorney Greg Werkheiser warned that the dispute over the proposed media rights sale could prompt the network to withhold a January royalty payment to the Dodgers that Werkheiser said was at least in the millions of dollars, if not tens of millions.

"We're not going to be able to sit around and wait to see if we're being injured in the process and cough up a large sum of money when we're not getting the benefit of the bargain," Werkheiser said.
The Dodgers sought bankruptcy protection in June after baseball Commissioner Bud Selig refused to approve a new TV deal with Fox that Dodgers owner Frank McCourt was counting on to keep the franchise solvent.

The Dodgers subsequently argued in bankruptcy court that auctioning off the television rights to future games was the best way to maximize the value of the bankruptcy estate for the benefit of all stakeholders.

The league disagreed, saying any plan to sell television rights without its approval was "dead on arrival" and would spell the end of the club. League attorneys argued that such a sale would breach the Dodgers' existing contract with Fox and provide grounds for termination of the franchise for failure to abide by MLB agreements.

But after battling with the Dodgers over control of the ballclub and seeking to force McCourt to sell the team, MLB reached a settlement last month with the help of a court-appointed mediator. Many of the settlement terms remain confidential, including procedures regarding the sale of the Dodgers, approval of prospective buyers, and how the league would apply MLB rules and regulations to the media rights sale.

The proposed sale would include the team and Dodger Stadium, but not the parking lots and land surrounding the stadium, which are owned by a separate company that is controlled by McCourt and not involved in the bankruptcy. The settlement between the Dodgers and MLB gives McCourt sole discretion to sell the parking lots and land surrounding the stadium.

While decrying the secrecy surrounding the settlement, Fox attorneys have zeroed in on the proposed sale deadline of April 30, which also happens to be the deadline for McCourt to pay his ex-wife, Jamie, $131 million as part of their divorce settlement.

Werkheiser accused McCourt of trying to "whiplash" the bankruptcy court into hastily approving a sale of the team and the media rights in order to meet his personal financial commitment under the divorce settlement.

But when Fox attorneys pressed Coleman about why the April 30 sale date was chosen, Dodgers attorneys objected, saying details of the mediation talks that led to the settlement were confidential. The judge agreed.

Testimony was scheduled to resume Thursday morning.

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Posted in Dodgers Bankruptcy , Media Rights