The North Carolina Bankruptcy Information Blog

In a classic case of what goes up, must come down, the world’s forth largest airline is now seeking the safe havens of bankruptcy so that it might once again be “something special in the air.”

According to Reuters, American filed for Chapter 11 bankruptcy protection this week “to cut labor costs in the face of high fuel prices and dampened travel demand, capping a prolonged descent for what was once the largest U.S. carrier.”

Apparently, the U.S. company “which employs about 88,000, has been mired for years in fruitless union negotiations, complaining that it shoulders higher labor costs than rival domestic and foreign carriers that have already restructured in bankruptcy.…

We’ve talked a lot about the recent record-breaking Black Friday, but it was our nation’s President who instead promoted shopping on the second annual “Small Business Saturday,” a day (November 26) devoted to spurring growth and hiring in some of our country’s most hard-hit business sectors.

According to Reuters, “Promoting “Small Business Saturday”, the second annual event to help Main Street merchants in a tough U.S. economy, [President] Obama visited a local bookstore with Malia, 13, and Sasha, 10, in the diverse, upscale Du Pont Circle area of downtown Washington.

“This is Small Business Saturday so we’re out here supporting small businesses,” said Obama, standing next to Malia who was hugging an armful of books to her chest.…

Threats of a double-dip recession — a recession, followed by a short-lived recovery, followed by another recession — permeated the headlines in 2011, at a time when there were plenty of signs that this second coming of an economic downturn had begun. Stagnate hiring, a paltry job market and plummeting real estate prices, as well as low consumer confidence, all made another financial reckoning feel less like a fiction and more like a reality.

But did this double-dip economic climate put the freeze on one of the country’s most popular purveyors of subzero sweets?

Such seems to be the case with the recent bankruptcy of Dippin’ Dots.…

When President Obama released his eagerly anticipated $45 billion jobs plan last week, many economists were quick to criticize the efficacy of the strategy’s payroll tax cuts.

But many small business owners across the country are praising the plan, saying that these exact incentives would allow them to immediately hire a number of workers they’ve been needing for months, if not years, but formerly had no way of subsidizing.

This news comes as small business is facing a far from booming economic environment, amid ongoing debates about the debt ceiling which have stymied any stimulus from Congress, consumer confidence plunges and many projects drying up in all sectors.…

Local Businessman Files for Chapter 11 Bankruptcy (And You Can Too)

A North Carolina businessman recently filed sought the safe havens of a Chapter 11 bankruptcy after being hit with two civil complaints in the past year, based on a recent story by the Johnston County’s The Herald. According to the paper, “The Dueas filed for bankruptcy protection on April 29 – about two weeks after a Smithfield cardiologist sued Jody Duea. Dr. Frank Wefald, owner of Millenia Cardiovascular, leases office space in Neuse River Commons. According to the doctor’s civil complaint, Jody Duea managed Millenia’s finances and Wefald’s personal accounts as Wefald’s office manager from February 2009 to September 2010.…

Arts and cultural organizations are not immune to the economic impacts of the recent Great Recession. Falling attendance and rising costs of real estate, overhead and administration marked the decline of many museums, galleries and theatrical venues in recent years.

This same scenario appeared to be problem for the Philadelphia Orchestra, long considered one of the best in the country. This month, the world-renowned group filed for Chapter 11 bankruptcy protection—an apparent first in recent history for a major American orchestra.

According to a report by The Huffington Post, “Board chairman Richard Worley said members made a nearly unanimous vote Saturday to file for reorganization in a federal bankruptcy court in Philadelphia after a “long meeting, thoughtful meeting, emotional meeting.…

Not that long ago, green industries like ethanol producers were on par to make a ton of greenbacks, capitalizing on the needs of a public clamoring for cleaner and less costly alternatives to fossil fuels and rising gasoline prizes. But fast forward to 2011, a time when corn prices have more than doubled while ethanol prices refused to keep pace proportionally with these rises in corn prices.

This economic imbalance became a recipe for disaster for North Carolina’s first-ever ethanol plant, Clean Burn Fuels, causing the company to close in early March and file for Chapter 11 bankruptcy this week. The company, founded in 2005, filed for Chapter 11 according to a company statement “to preserve its assets while creating a plan to emerge from bankruptcy protection in late summer or early fall.” “By that time, the new corn crop will be available, thus providing more clarity regarding the relative levels and stability of corn and ethanol prices,” continued the company statement.…

Chicago’s own Giordano’s, one of the most popular purveyors of stuffed pizza, is filing for bankruptcy protection.

It’s not unusual to hear of any business filing for bankruptcy in these tough economic times. During the Recession, less consumer demand and fewer customer orders often caused a rise in inventory, losses in sales margins, and high debts with no solution other than going out of business or restructuring via a Chapter 11 bankruptcy.

But for a culinary institution like Giordano’s, the story was different. As The Chicago Times put it, “It wasn’t the pizza, it was the real estate.”

It turns out that throughout a five-year period during which many other restaurants lost business, served fewer customers, and eventually were forced to close shop, Giordano’s had actually thrived.…

With the resurgence of the nation’s rabid appetite for news and information, the emergence of online shopping, and the advent of e-readers, with their promise of any book, any time, anywhere, as well as cheaper pricing, shoppers are now abandoning bookstores like Borders and Barnes & Nobles as they did music stores more than 10 years ago. Despite these troubles, however, the news isn’t all bad for companies like Borders, willing to seek the safe havens of a Chapter 11 bankruptcy.

This week a bankruptcy judge refused to throw the proverbial book at well-known retailer, Borders. This news comes as the nation’s number two bookseller attempts to reorganize so it can emerge from bankruptcy protection a smaller and profitable company.…

The recent unrest in the Middle East is creating economic issues for many consumers and small business owners across the country, as insecurity in oil-producing countries causes skyrocketing gas prices here at home. Specifically, struggling companies that thought they had survived the worst of the Recession are now faced with soaring oil prices and no solution to handle this sudden need for more cash assets.

According to a new report by The Huffington Post, “A higher oil price translates into higher gas prices for consumers and higher transportation costs for businesses. Small businesses, which create 70 percent of the nation’s jobs, according to government estimates, have been hit especially hard.…

The publishing industry is undergoing some pretty dramatic changes in recent years, with many of these changes reflected in brick and mortar bookseller bankruptcies. And Borders Group Inc. (BGP) is likely the most recent victim of the increasing movement towards e-books and digital media.

According to The Wall Street Journal, the Ann Arbor, Michigan-based national chain which made its major imprint with physical shelf-space for literary best-sellers and popular music CDs, is set to file for bankruptcy this week. With its Chapter 11 bankruptcy, Borders will likely close more than 600 stores nationwide and lay off thousands of its nearly 20,000 employees as it attempts to restructure to become more competitive with online retailers like Amazon.com and more nimble book retailers like Barnes and Noble.…

In every film there’s a protagonist, a conflict, and a resolution. And over the years, famous film directors from Kubrick to Polanksi have painted the Metro Goldwyn Mater film lots with many of these three-part cinematic elements—elements that, in the golden age of filmmaking of the 20^th century, brought in billions for MGM’s coffers.

Cut to the 2000s, and MGM itself became the protagonist in its own conflict to stay solvent as the famous Los Angeles-based film distributor for Rocky and James Bond, which foundered after piling on debt to go private, sought quiet resolution by filing for Chapter 11 bankruptcy.…

Months after a number of debated stimulus efforts on the part of our federal government to help bolster an ever-weakening economy, Chairman of the Federal Reserve Ben Bernanke is bringing to light yet another move designed to try it again. Given the mood of the people and their recent display of frustration at the polls, it’s not very likely that Bernanke’s message will reach accepting ears.

It’s an odd time for our country. People are financially hurting. Our bankruptcy law offices have been quite busy helping many in the Triangle area file and deal with personal bankruptcies, the reasons for which are as varied as the people themselves.…

Serious debt happens to most people before they realize it. Even though it’s always there, only when the income stops do the debt obligations get really noticed. And in a recession like the one that has plagued our country for the last three years, loss of income is a common thing.

Bankruptcy can serve as a lifeline for those who finally reach the point where decisions have to be made about which bills get paid. Lately, it seems as if a lot of people are choosing their credit cards and utilities over their mortgages, as “strategic defaults”—people purposely not paying their mortgage—are on the rise.…

In these tough financial times, finding people with a steady job, much less a job that provides a higher income, can be difficult. As a result, it may be surprising to find a lot of these high-income debtors are currently considering bankruptcy. But in this economic downturn, many of these men and women are suffering from unexpected challenges to their steady income and business, and, as a result, joining millions of other Americans by seeking the safe harbors of bankruptcy to protect what they’ve worked for.

If you happen to be one of these high-income debtors, you may be wondering what bankruptcy can offer and if you’re even eligible.…

In the new HBO series Treme, viewers follow the lives of New Orleans residents a mere three months following the physical, emotional and economic devastation of Hurricane Katrina. The cast of characters represents a cross-section of ordinary New Orleanians—from police to piano players—trying to rebuild their lives, their homes and their unique culture in the aftermath of the 2005 storm. Like a bellwether for our nation’s tough financial times, Treme captures the proverbial “perfect storm” that led to one city’s economic fallout, full of stark imagery of people losing everything and attempting to rise from the ashes in any way they can.…

In a move that, as The New York Times described it, “will affect most American corporations,” the Labor Department has announced its latest mandates for company compliance with plans to end wage violations, increase workplace safety and adhere to equal employment laws.

As The New York Times’ Steve Greenhouse reported, “The effort, aimed in part at reducing the incidence of employers not paying overtime and improperly classifying workers as independent contractors, will require them to document many of their decisions and share that information with their workers and the government. In announcing the department’s intentions on Thursday, Deputy Labor Secretary Seth Harris said his department wanted to foster a culture of compliance among employers to replace what he described as a ‘catch me if you can’ system in which too many companies violated employment laws.”

Within these broader strategies for corporate compliance is the potential for added protections for employees considering the benefits of bankruptcy.…

Since the Great Recession began in 2007, small businesses across the country have been squeezed.  Exacerbated by the flagging economy, small business owners everywhere are not only facing high employee health care costs and lagging consumer and commercial spending, but also fewer credit options. And while loans have always been the lifeblood of the small business, all across our great nation, mom and pop endeavors with even the most solid credit histories face tremendous obstacles in qualifying for much-needed capital. And because small business accounts for some 65% of employment in a nation already facing off-the-charts job losses, any squeeze on small firms is a serious matter—with last year’s disconcerting lending figures illustrating just how serious—for the long haul.…

Are you feeling too broke to break out of debt? For those ready to end the cycle of debt, it is important to understand that bankruptcy is not a one-size-fits-all solution, and bankruptcy filings are complex cases catering to your individual economic needs.

Bankruptcy, like so many areas of the law, is in a constant state of evolution, having been refined and redefined over the decades and through several important pieces of legislation. The first major bankruptcy legislation since the Chandler Act of 1938— Bankruptcy Reform Act of 1978—brought some of the most significant changes to the U.S. Bankruptcy Code. Within this Act, there were a host of important changes that the Act brought to the U.S.…

In this economy, qualifying for a bank loan or line of credit can feel impossible—even for people with perfect credit—and much more so if you’re trying to bounce back from a recent bankruptcy. But a bit of patience (targeting smaller community banks rather than large corporate banks) and a bit of help (getting others to vouch for you) can improve your odds tremendously—even in this uncertain economic climate.

As Robert C. Seiwert, senior vice-president of the Center for Commercial Lending & Business Banking at the American Bankers Association told Businessweek,  “A bankruptcy can hurt your chances of getting new credit for at least seven years.…