Bankruptcy Judge to determine who controls Creative Loafing

by Sundeep Kothari

Atlanta Georgia Bankruptcy Attorney

BK Judge to determine who controls Creative Loafing

The bankruptcy judge in the Chapter 11 case filed by Creative Loafing will determine who controls the popular Atlanta alternative publication, Creative Loafing, as well as its sister publications in other cities.

Ben Eason, whose families started the business, claims that he should retain control. Atalaya Capital Management, which lent Creative Loafing $31 million and is still owed that money, claims that it should be in control.

Creative Loafing has publications in six cities.

Why the housing mess is such a mess

by Sundeep Kothari

Atlanta Georgia Bankruptcy Attorney

Why is the housing mess such a mess?

1. There are a glut of unsold houses and condos due to overbuilding. Banks kept building and building and building and they didn’t really consider whether people would buy these houses or not. They simply assumed that there would always be sufficient numbers of buyers.

2. In addition, there are currently people that own houses that they simply can’t afford. It would be better for them to leave their houses and move into apartments. But if they do that, then those houses go onto the market and add to problem #1.

3. Many people are afraid of buying homes because of deflating home equity – i.e. today the home is worth 200,000, but then in one year it could be worth 180,000. This is a gigantic disincentive for people to people to want to invest in homes in the short term.

4. Bad word of mouth on home buying – when people lose their home, they tell their family and friends what a horrible nightmare it was. This bad word of mouth scares some people not to buy a home.

5. Job losses and wage cuts – people who are renting and who could qualify are terrified of losing their jobs or having their wages cut and being stuck in a mortgage that they might not be able to afford in the future.

6. Bad word of mouth on selling a home – many people who are trying to sell their home complain to their family and friends about how hard it is to find a buyer. This scares qualified, potential new home buyers from purchasing new homes.

7. Banks afraid of deflating home values – similar to buyers being afraid of deflating home equity, banks have the same fear – i.e. today the house is worth $150,000, but in three years that house could be worth $75,000. Banks have the fear that they will give out loans, and their loan will be worth less than the collateral on the note. Meaning they have created more “toxic assets” or “bad paper”.

8. Sellers competing with foreclosures – i.e. a new house in a subdivision is worth 250,000. A foreclosed house in that subdivision that is only one year old can be purchased for 175,000. This is a significant price difference and why new buyers are strongly considering foreclosed properties over new homes. The seller of the new house can’t compete with that price, unless the seller of the new house is willing to take a massive loss.

New Means Test Information Goes Into Effect on March 15th

by Sundeep Kothari

Atlanta Georgia Bankruptcy Attorney

New information for means test

The USDOJ has released new information regarding the means test for Chapter 7 and Chapter 13 bankruptcy filings. This new information goes into effect for cases filed on March 15, 2009.

For Georgia, the income test for automatic presumption of eligibility (income only test – other tests still apply) to file for Chapter 7 bankruptcy is:

One person household: $40,760
Two person household: $54,054
Three person household: $61,959
Four person household: $71,554

For households with additional members, the USDOJ instructs filers to add $6,900 for each individual in excess of 4.

In some situations, even if filers have income above these amounts, they might still be eligible for Chapter 7 bankruptcy filing, depending upon their expenses.

Robert DeNiro Looks To Obtain Father’s Paintings From Art Gallery in Chapter 11 Bankruptcy

by Sundeep Kothari

Atlanta Georgia Bankruptcy Lawyer

DeNiro seeks father’s paintings from art gallery

Robert DeNiro has asked the bankruptcy court that is handling the Chapter 11 filing of Salander-O’Reilly Galleries LLC to turn over paintings by his father to him.

In bankruptcy, once a case is filed an automatic stay goes into effect, meaning that creditors are prohibited from collecting on debts. The property that was in the possession of the debtor becomes part of the bankruptcy estate and can only be released through court order or via voluntary surrender by the debtor with notification to the trustee (who then must give no objection).

Six Flags, facing severe debt, considers bankruptcy

by Sundeep Kothari

Atlanta Georgia Bankruptcy Lawyer

Six Flags considers filing for bankruptcy

Six Flags is considering an August 2009 bankruptcy filing if it cannot reach deals with its lenders to re-structure outstanding debt.

From the article:

A spokeswoman for the company, Sandra Daniels, said yesterday that a bankruptcy filing would not disrupt park operations. “Whatever the end result is of our discussions . . . Six Flags is open for business,” she said.

Six Flags’ warning that it might turn to bankruptcy court came after its announcement that last year it lost $113 million, compared with $253 million in 2007, as attendance at its parks nudged up despite the economy. Its loss for the fourth quarter, however, widened to $201 million from $127 million in the fourth quarter of 2007.