Business Bankruptcy

Friday, February 8, 2019

Toys ‘R Us Bankruptcy Negatively Impacts Toys for Tots Program

Toy store giant, Toys ‘R Us, recently broke the hearts of many when it recently filed for bankruptcy. On top of making it much more difficult for parents to find the appropriate toys for their children this past holiday season, it also had a very negative effect on the Toys for Tots program, making it very difficult for the charity to adequately obtain the toys it needed to donate to families in need. 

A Strong Partnership

Toys for Tots, a long-running program conducted annually by the United States Marine Corps Reserve, collects and donates toys to the children of parents who are unable to otherwise afford to buy them. Originally the program used to leave a container outside of most Toys ‘R Us stores so that their customers would be able to drop a toy on their way in or out of the store. By doing so, this enabled stores to collect a nice amount of donations – for some stores even thousands of toys.
Read more . . .

Saturday, November 21, 2015

Adverse Impact of Your Co-Signer's Bankruptcy on Your Loan

Will my co-signer’s bankruptcy negatively affect me?

Perhaps you are, or have been, in this situation. Here is the nightmare scenario: You are signing for a loan, and you have a co-signer, as is sometimes required. Years later, though you have been diligently making your payments as they come due, your loan provider declares you in default. The institution will no longer accept any payments from you or provide any information about the account. The reason given is bankruptcy. You panic; you know you haven’t declared bankruptcy. So what is the problem?

Perhaps the cause of the default status on the loan is that the loan servicer has learned that your co-signer has declared bankruptcy. While it is commonplace for a loan servicer to call an entire loan due if the borrower declares bankruptcy, it is generally not proper to call an entire loan due because a cosigner has declared bankruptcy. This is true of Chapter 13. For the purposes of Chapter 7 and Chapter 11, however, it can depend.

One thing you can do on your own is monitor your credit. This is a proper course of action no matter what your financial situation. You can request your free credit report and look for any reported default. Requesting your free credit report is easy. You can visit to get one free credit report every year from each of the credit bureaus. Be careful, because there are many imitation websites out there that look similar to the real ones.

If you find a default on a report that is due to a co-signer's financial problem, you can file a complaint with the credit bureau to have the default removed from your report. It is important to diligently monitor your reports on a regular basis to protect yourself, hopefully becoming aware of such a situation before it becomes unmanageable.

It is also beneficial to consult with an experienced bankruptcy attorney in your area. This is especially true when your case involves Chapter 7 or Chapter 11 bankruptcy. The laws covering this issue differ depending on which jurisdiction’s laws apply in your situation, and can, therefore, be more complicated to resolve.

Monday, June 29, 2015

Fair Finance Estate to Pay $35 Million to Creditors

What is a claims trade offer?

A settlement has finally been reached in the ongoing Fair Finance case.  A bankruptcy judge in Cleveland recently approved a settlement between the Fair Finance trustee and Fortress Credit Corp.  The parties reached the $35 million settlement in April and filed for approval with the court in May. The Trustee wants to use the settlement funds for interim distributions to satisfy thousands of claims by unsecured creditors.  

The firm is accused of running a $205 million Ponzi scheme that affected more than 5,000 Ohio investors.  The firm’s owners are currently in federal prison.  To date, parties have not been repaid any of the money that they invested in Fair Finance by purchasing uninsured investment certificates.  The settlement does not constitute an admission of liability by Fair Finance and amounts to approximately 17 cents for every dollar originally invested.  The parties allege that Fair Fortress ignored the warning signs of the Ponzi scheme when it provided financing for Fair Finance.  Fair Finance originally processed accounts receivables for other businesses but was sold by the Fair family to Durham and Chochran in 2002.  The offices closed due to FBI raids in late 2009.  The company entered bankruptcy in February 2010.  
This settlement is not the only anticipated money to enter the estate.  Actually, the moviemaker, National Lampoon, also reached an agreement to pay $3 million to the estate at the end of May.  However, that agreement has not been officially entered and or approved yet.

Creditors have received letters offering to buy out their financial interests in the case called claims trade offers.  The trustee is not allowed to advise people on what to do with regard to selling interests or allowed to endorse any of the claims traders.  Claims trading is common in bankruptcy proceedings and anyone who receives a letter should carefully review the contract or have an attorney look at the offer.  Accepting a claims trade offer can result in further liability for the investor.

Brian Lusardi is one of Miami Valley’s leading bankruptcy attorneys with extensive experience helping clients with the intricacies involved in bankruptcy filings and settlements.  Contact him today at (937) 262-4789 for a free consultation.    

Tuesday, May 26, 2015

Thistledown Racino and Horseshoe Casino to Seek Bankruptcy Protection

Can a corporation in bankruptcy continue to operate as normal?

Citing poor regional performance, Caesars Entertainment Operating Company has filed for bankruptcy seeking to climb out of $18.4 million in debt.  Caesars owns 50 casinos worldwide, including a 20% stake in two Ohio Casinos, Horseshoe Casino in Cincinnati and Thistledown Racino in Cleveland.  

The bankruptcy will likely have little to no effect on casino operations.  The company’s CEO, Gary Loveman, assured employees and gamblers that they will continue to host events and meetings.  Guests are welcome at the hotel and all gaming will remain in place.  The director of gaming, lodging and leisure at Fitch Ratings commented on the bankruptcy stating that  “Casinos in the past have operated through bankruptcy with little disruption to loyalty programs or services.  They own a small piece so it’s really not a major factor for those casinos.”

Most bankruptcies do not involve the dissolution of a business.  They protect debtors by reorganizing their debt or discharging it as necessary.  News of the bankruptcy resulted in a 4% drop in stock price of Caesars entertainment (NASDAQ: CZR).  

If you or your business are in need of protection from creditors, bankruptcy may be the best option for you.  You deserve attorneys who have experience and dedication to their clients like the ones at Cox, Keller & Lusardi.  Call us today to schedule an appointment at (937) 372-6921.  We provide a free, no obligation consultation to discuss your legal needs.

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