Atlanta Jeweler Shane Co. files for Chapter 11 reorganization

by Sundeep Kothari

Atlanta, Georgia Bankruptcy Attorney

Shane Co. files for Chapter 11 protection

Famous longtime Atlanta jeweler Shane Co. files for Chapter 11 bankruptcy. This will allow the company to get rid of some unsecured debts, but continue as a viable entity.

No store closings in Atlanta are scheduled.

Charter Communications considers bankruptcy filing

by Sundeep Kothari

Atlanta, GA Bankruptcy Attorney

Charter considers bankruptcy

Cable television giant Charter Communications has retained counsel to consider bankruptcy filing. Charter, owned by Microsoft founder Paul Allen, has lost money for the last 10 years.

Equal Sweetener Parent Co. Merisant Files for Chapter 11 Bankruptcy

by Sundeep Kothari

Atlanta Bankruptcy Attorney

Merisant files for Chapter 11 protection

Merisant Worldwide Inc., maker of Equal Sweetener, files for Chapter 11 Bankruptcy.

Chapter 11 bankruptcy generally is a reorganization plan for businesses, whereas Chapter 7 bankruptcies are liquidation plans whereby the assets of the business are sold and the company ceases operations.

Merisant will continue to operate, but is filing for Chapter 11 protection because they cannot operate and pay all of their creditors 100% of their credit obligations.

In Chapter 11, the debtor continues to control the business but is subject to the oversight and jurisdiction of the court.

Surprisingly, no job losses are expected. Merisant has suffered financially as the artificial sweetener Splenda has taken a share of the market. Nutrasweet was discovered in 1965 and was approved by the FDA in 1981.

Goody’s Family Clothing To File for Bankruptcy Liquidation

by Sundeep Kothari
Atlanta Georgia Bankruptcy Lawyer

Goodys liquidation filing

Goody’s had 9,000 employees and 282 stores nationwide.

China/Crystal Giant Waterford Wedgwood Files for Bankruptcy

by Sundeep Kothari
Atlanta, Georgia Bankruptcy Lawyer

Waterford Wedgwood files for bankruptcy

Treasury gives $5 billion to GMAC in bailout funds

by Sundeep Kothari

GMAC receives $5 billion in bailout money

The Treasury Dep’t will give $5 billion to GMAC from the $700 billion bank bailout program (TARP). In addition, GM will receive an addition $1 billion in loans to buy equity from GMAC. This $6 billion will allow GMAC to avoid bankruptcy, which would more than likely have also brought down GM into bankruptcy as well.

This money is in addition to the previous $17.4 billion already promised from TARP to GM.

GM owns 49% of GMAC, while the rest is owned by Cerberus.

This money will allow GM and GMAC to survive to the Obama administration, but deep and severe cuts are necessary for GM and GMAC to survive. Toyota couldn’t even make money in this economy, and GM’s cars are generally less well received.

Fulton County set to get $3 billion for foreclosure help

by Sundeep Kothari

Atlanta, GA Bankruptcy Attorney

Fulton County, Georgia set to receive $3 billion for foreclosure help

Fulton County is set to receive $3 billion from the federal government to deal with foreclosures. There will be two hearings this week:

1) Monday night, December 29 at 6 p.m. at the South Fulton Service Center on 5600 Stonewall Tell Road in College Park.

2) Tuesday, December 30, at 6 p.m. at the North Fulton Service Center at 7741 Roswell Road in Sandy Springs.

This money is available as part of the Neighborhood Stabilization Program.

NY Times calls for credit card reform

by Sundeep Kothari, Roswell, GA Bankruptcy Attorney

NY Times Editorial on credit card reform

Excellent article on credit card reform.

One way to help the economy is simply if Congress were to pass a law limiting the maximum rate on credit cards to 15%. More people would pay down their credit card bills faster, which would leave them with more cash to spend in the economy. Also, there would be less second mortgages and home equity lines, leaving more money for individuals to improve their homes or invest.

This would be a very popular issue with voters, but for whatever reason this issue hasn’t gained steam with the American public.

GMAC awaiting approval of debt swap by shareholders to avoid bankruptcy

by Sundeep Kothari

Roswell, Georgia bankruptcy lawyer

GMAC awaiting approval of debt swap

One minute before midnight Friday is GMAC’s deadline for bondholders to swap $38 billion in debt for new bonds that are worth less money — a deal that could help the finance company avert bankruptcy and qualify to become a bank holding company.

Becoming a bank holding company would give GMAC access to financing under the $700 billion government bank rescue fund. The financing company needs about 75% of its bondholders to agree to restructure the debt.

The government has said GMAC must have $30 billion in assets to qualify as a bank holding company. The debt swap is a significant part of the financing arm’s attempt to raise that money.

If it fails to meet that target, bankruptcy looms as a real threat for GMAC, which once was General Motors’ (GM)crown jewel. GMAC has said that failing to become a bank holding company would have dire effects on its business.

Standard & Poor’s said earlier this month that failure would mean “the potential for a bankruptcy filing would be high.”

However, President Bush’s decision last week to use federal financing to help bail out the automakers could be a good sign for GMAC, says Himanshu Patel, an analyst at JPMorgan.

 

“GMAC will probably be safe, regardless of GMAC’s bond-exchange results,” Patel said in a recent research note. “We think Treasury will take the needed steps, in the end, to help GMAC remain solvent.”

So, GM is in good shape, but not totally out of the woods yet. Yesterday, I was reading how Detroit’s unemployment rate right now is at 21%. If the Big 3 had been allowed to go into bankruptcy at this point, that number might have reached 30-40%.

That doesn’t change the fact that the Big 3 still don’t have a realistic plan to make cuts and reorganize to adapt to today’s market. They still are running their companies like it is the 1960s or 1970s or 1980s.

Analysis of Pay Day Lenders

by Sundeep Kothari

Payday loans

This article discusses pay day loans. I am absolutely, 100% against these types of lenders. They charge interest rates which are an abomination.

If President-Elect Obama wants to do something courageous and great, he can either ban these places entirely, or get a law enacted that reduces the maximum annual interest rate to 15% on these loans.

Bank Execs Pocket $1.6 Billion

by Sundeep Kothari

Bank Execs pocket $1.6 billion

“Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.”

Just ridiculous. Amazing. Rewarding people for horrible, horrible failure.

Factors used in lowering credit card limits

by Sundeep Kothari, Atlanta-Sandy Springs Bankruptcy Attorney

Factors used in lowering credit card limits

This article discusses factors that credit card companies use when lowering credit card charge limits.

These include payment history, whether you exceed your credit limit, credit history with other credit cards, where an individual shops, whether other individuals who shop there default on their cards, which mortgage company you have, if you live in an area with falling housing prices.

Many companies are saying they can no longer guarantee customers will be considered low risk if they pay their bills on time and don’t exceed their credit limits.

President Bush approves $17.4 billion loan for GM and Chrysler

by Sundeep Kothari

17.4 billion loan approved for GM and Chrysler

“President George W. Bush offered a lifeline to ailing U.S. automakers Friday to keep them operating in one if the worst financial crises since the 1930s.

The automakers will get $13.4 billion in short-term financing, which would come from the government’s $700 billion financial bailout fund. An additional $4 billion could be available in February.

The auto companies must use the funds to become financially sound. If they are not financially viable by March 31, 2009, the loans will be called and all of the funds will be returned to taxpayers.”

Unfortunately the language of financial viability is pretty worthless. If the companies aren’t financially viable by then, and the loans are recalled, then that means these companies would collapse and the workers would lose their jobs.

The only hope that is out there is if management and unions really face reality that their industry is in severe, severe crisis and that without massive concessions by both sides, GM and Chrysler will go under and re-emerge as parts of Ford or foreign companies.

Shake it like a Polaroid Picture: Polaroid files for Chapter 11 Protection

by Sundeep Kothari

Polaroid files for Chapter 11

Polaroid, famous for its instant film (which is no longer in production), files for Chapter 11 protection.

Polaroid’s owner Tom Petters, is under criminal investigation for fraud.

“Doug Kelley, the court-appoint receiver who oversees Polaroid and a number of other Petters companies, said that a tight credit market and the taint of Petters’ pending criminal charges in an alleged investment fraud scheme have hurt Polaroid’s efforts to obtain financing to help it to move from the old, instant film technology into the digital arena.”

The beat of large companies who have overextended themselves goes on.

New Credit Cards Rules Coming

by Sundeep Kothari

New credit card rules

 

New credit card rules are coming. These rules ban:

_Placing unfair time constraints on payments. A payment can’t be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.

_Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account.

_Unfairly computing balances in a computing tactic known as double-cycle billing.

_Unfairly adding security deposits and fees for issuing credit or making it available.

_Making deceptive offers of credit.

Some opposed the proposed changes as unnecessary government interference. In addition, many are concerned that these rules will make it much more difficult for those with bad credit to get credit cards at subprime rates.

These changes are expected to cost the banking industry more than $10 billion per year in interest payments.