All Articles Tagged "bankruptcy"
Judge Steven W. Rhodes handed down a ruling today that many of us have expected for some time: he declared the city of Detroit insolvent, saying it needs help to get back on its feet. However, the ruling sets the stage for cuts to things like pensions.
With the judge’s ruling, the city can start the process of reorganizing its debt and restoring basic city services, like ambulances and regular trash pick up, which have been lacking for quite some time. Since the city filed for bankruptcy in July, it has been picking and choosing which of its many creditors to pay, with many fearing they’ll never see the money they’re owed. The hope is that the city will come out of bankruptcy next year. Detroit, home to the American auto industry, is currently in debt to the tune of $18 billion. This is the largest municipal bankruptcy in US history.
“The court finds that Detroit was and is insolvent,” Judge Rhodes said this morning.
Appeals of the ruling are expected; pension groups and others who are owed money maintain that the city government didn’t make any real effort to negotiate with them, throwing into question the need for “good faith” compromising. Judge Rhodes agreed, but also ruled that the city could enact pension cuts. That doesn’t mean they’ll be included in the final reorganization. That plan will be submitted in the next few weeks.
Could there be doubt that Detroit is broke?
A judge is exploring that question in a unique trial that will determine whether Detroit indeed is eligible to erase its debts in the largest public bankruptcy in American history. Unions and pension funds are arguing the city failed to negotiate in good faith before filing for Chapter 9 protection in July, reports NBC.
The judge must determine is the city is eligible for a financial makeover if key steps have been met. This includes good-faith talks with creditors. “It’s a critical decision: If Detroit clears the hurdle, the case would quickly turn to how to solve at least $18 billion in debt and get city government out of intensive care,” reports the network.
Detroit’s bankruptcy case goes to trial Wednesday.
“It’s a crucial point in the case,” said lawyer Chuck Tatelbaum, a bankruptcy expert in Fort Lauderdale, Fla. “There will be others, but this is the go or no-go. … If there was ever a poster child for what Congress decided when they enacted Chapter 9, it’s for a city like this.”
The city’s unions and pension funds are challenging Detroit on the eligibility question. They say emergency manager Kevyn Orr was not sincerely interested in negotiating when they met with his team in June and July. But Orr says pension funds are short $3.5 billion and health coverage also needs to be overhauled.
The unions say there is evidence that will prove Orr “planned to file bankruptcy long before the purported negotiations had run their course, confirming that the ‘negotiations’ were no more than a check-the-box exercise on the way to the courthouse,” Babette Ceccotti, an attorney for the United Auto Workers, said in a court filing.
According to Earle Erman, attorney for Detroit’s public safety unions, the city has slashed wages and changed health care benefits without across-the-table talks. And Sharon Levine, a lawyer representing AFSCME, said the city spent months “mapping out its path to Chapter 9,” not looking for compromises that could keep Detroit out of bankruptcy.
Attorneys for the city, however, said a June 14 meeting and subsequent sessions with creditors were well-intended but fruitless. But they do admit, a bankruptcy filing was being prepared, they acknowledged, but “never set in stone.”
Jim Spiotto, a bankruptcy expert, noted that Judge Steven Rhodes will have much discretion to determine whether the city has met its “good-faith” burden, which only means that he provided the “opportunity” for negotiations.
The trial is expected to last several days. There will be testimony from Orr, Police Chief James Craig, financial consultants and, possibly, the governor, all in the hopes of digging into the bad financial decisions that caused this economic mess and a population decline from 1.8 million to 700,000.
“The city’s restructuring must provide a foundation for the city to begin to provide basic, essential services to its residents in a reliable fashion,” Orr said in July when he took Detroit into bankruptcy. “Without this, the city’s death spiral … will continue.”
Think Like A Man Too actor Terrence J recently stopped by Power 105.1′s The Breakfast Club to promote the release of his new book, The Wealth of My Mother’s Wisdom and his latest film, Baggage Claim. The 31-year-old New York native also opened up about overcoming major financial struggles and his split from former Victoria’s Secret Angel Selita EBanks. Peep some interesting highlight from his interview below.
On almost going bankrupt:
“There was a time when I was at 106 where I almost went bankrupt trying to keep up with other people. You know, you got all of these rappers coming on the show, you gotta keep up with them. You get your first AMEX, you blow through that money. There was a point where I lost everything. Then I get got diagnosed with vitiligo. I was scared about my health and everything. My skin started breaking out and I was just depressed.”
On his work ethic compared to former BET and 106 hosts:
“Giving 99% is the same as giving 0%. If you gon’ give 99%, you may as well stay home. I’m always like 110% in everything I do. You see the things that people do. I’ve seen the paths and I always wanted to excel. I knew I always wanted to do film. I never wanted to feel like I couldn’t pay my rent. When I first started at BET, I did not know how I was going to pay my college tuition. I was sleeping on the couch. I never wanted to feel broke. That’s why I hustle all of these jobs. It’s out of like, desperation. Sometimes I wake up in the middle of the night like, ‘Oh! Someone else is working and I’m not! Let me get back to the grind.’
On his split from Selita Ebanks:
“I think Selita is amazing. Sometimes things just don’t work. She’s a very busy woman. I work as well. I just think she’s amazing and I wish her the best.”
On being a bad host during his early years at BET:
“I didn’t think I was gon’ make it. I didn’t think was gon’ last. I’m just glad they stuck with me. I know for the first 2, 3 years I was terrible. So I’m just happy the network stayed with me. Things at E! are going really well.”
It’s inspiring to see that Terrence was able to roll with the punches and continued to chase his dreams, even while when he was faced with adversity.
Watch his full interview on the next page.
The Philadelphia Eagles didn’t have such a great weekend, suffering a 33-30 loss to the San Diego Chargers. But Michael Vick, the Eagles quarterback, had two touchdowns and threw a career-topping career-best 428 yards. So he had a great game. In fact, he’s actually on the comeback trail. His reputation was much maligned when he was convicted of animal abuse and illegal dog fighting. But Michael Vick is living up to his word to pay back the $20 million in debts he owes to dozens of creditors to complete the arrangements of his bankruptcy case, reports the Virginian-Pilot (h/t EURWeb).
Before going to prison on dog fighting charges, the Vick agreed to repay the $20 million to his creditors after filing Chapter 11 bankruptcy.
He has been working overtime to regain his place in the NFL and public eye after his release from prison four years ago. Prior to his conviction, Vick played for the Atlanta Falcons for six seasons. In 2011 The Associated Press and Sporting News named him the NFL Comeback Player of the Year.
“It was a problem life dealt me,” Vick told the Pilot about having to file Chapter 11 bankruptcy before serving his prison term. “The most important thing to me was just to get myself back to doing what I love to do: play football. I was blessed to be able to come out of prison and get my body back in shape to play.”
Actually Vick’s bankruptcy case is still pending in U.S. Bankruptcy Court in Norfolk, Va, says the Virginian-Pilot, it should be settled in coming months.
When Vick restructured his contract with the Eagles, he lost millions. However, he’ll still make a minimum of $7 million as a starting quarterback and has another endorsement deal with Nike as well as a other companies.
Vick told the Pilot that he felt obligated to repay his debts. “It was one of my goals.”
Making the decision to file for bankruptcy can be both a tough and devastating decision. Not only will it remain on your credit report for 7-to-10 years (depending on the type of bankruptcy you file), but can also place a scarlet letter on your chest, making loans and purchases more difficult to obtain.
And bankruptcy does not just affect us common folk. There have been many celebs who have had to file themselves (just ask Toni Braxton). So what’s a person to do once they have undergone the necessary actions to become bankrupt? Though it may seem like your life is over, there are some steps you can take to pick yourself up.
It’s like the money woes are never-ending for our girl Toni Braxton. Not even one month ago, we happily reported that the pint-sized beauty was finally in the clear of her long-lived bankruptcy debt, after paying $150,000 to her debtors. But unfortunately, the drama continues to linger on. According to TMZ, back when Toni reached an settlement in her bankruptcy case, she agreed to put up the rights to 27 songs from her music catalog as collateral. Part of the agreement was that she could buy the rights back for $20K, the other part was that she could be outbid.
While no one was watching, a man by the name of Ross M. Klein, swooped down and purchased the tunes for double the price of Toni’s $20K offer. Titles in Klein’s acquired collection include “You’re Making Me High,” “How Many Ways” and “Always.” We hear that “Un-break My Heart” is not among the songs acquired by Klein, so hopefully she held back and didn’t give up all of her major hits.
Although it’s really a messed up to think that someone is now reaping the benefits of Toni’s years and years of hard work, there’s not really much that can be said since Klein reportedly purchased the tunes fair and square at an auction. The good news is that not only is six-time Grammy Award-winning singer working on a new album, she’s also going on tour! Hopefully she can save up enough cash to buy back the rights to those 27 songs. Well, if Klein is interested in selling them back, that is.
What do you think of Toni losing the rights to her music?
Follow Jazmine on Twitter @jazminedenise.
The troubling news of Detroit’s bankruptcy has rocked the city and the nation. But high school senior DeQuan O’Neal says bankruptcy means a chance for the city to start over. “Going into the next generation with all that debt would mean it would be hard for me to raise a family.” O’Neal has long been active in his community, making news at age 16 when he led an organization that worked to end gun violence.
For more from DeQuan O’Neal, click through to our sister site, MommyNoire.
News trickled out yesterday afternoon that Detroit, finally succumbing to what we all suspected would have to be done, filed for Chapter 9 municipal bankruptcy. This is the city’s latest effort to get its monster debt under control. It’s suspected that the city owes somewhere around $18 billion and $20 billion.
Detroit is the fourth-most-populous city in the nation, with a population that’s 80 percent black. Citizens are concerned about what the bankruptcy will mean for pensions and public services.
The city grew around a thriving auto industry, with General Motors’ headquarters still visible on the skyline. By 1950, the population of the city had swelled to 1.8 million. Today, it’s 700,000. That loss of population coupled with the ongoing needs of a major city, widespread mismanagement, and constant borrowing over the years has caused the city’s troubles.
In March, the state, which is run by Republicans, sent an emergency manager, Kevyn D. Orr, to try and right the troubled city, which is heavily Democratic. That move has come with what the Times calls “racial implications.” The bankruptcy filing comes after attempts to negotiate with creditors for repayment and unions for cuts in benefits. More than 100,000 creditors are expected to fight to get their money, and to have it repaid at a rate that’s higher than pennies on the dollar. Some debts, including billions in health benefits for retirees are being classified as unsecured debt so that the city can save on payments.
“If enough bondholders decide to duel with Detroit in an effort to squeeze the city for more money, the battle could snarl the Chapter 9 case for months or even years, according to people familiar with the matter,” according to The Wall Street Journal.
Across the city, you can already the signs of the financial trouble that the city is in. The New York Times notes that 40 percent of streetlights don’t work and more than half of the city’s parks have closed. The Journal also notes that it take 58 minutes for police to respond to calls (the national average is 11 minutes) and only one-third of ambulances are in operation.
“The citizens of Detroit need and deserve a clear road out of the cycle of ever-decreasing services,” said Gov. Rick Snyder. “The only way to do those things is to radically restructure the city and allow it to reinvent itself without the burden of impossible obligations.” The White House is monitoring the situation.
Other areas that have filed for bankruptcy include Jefferson County, AL, which previously had the largest amount of debt, $4.2 billion, owing to a botched sewer system and Orange County, CA, which has $2 billion in debt. The first has a population of 659,000; the latter 2.4 million.
She may not be making millions of dollars anymore through album releases but singer Toni Braxton has pulled her resources together and gotten rid of whatever was left of her bankruptcy debt.
According to TMZ, Toni paid $150,000 to get everyone off her back. Just to be clear, this is the second bankruptcy we’re talking about.
If you’ll recall, Braxton filed for bankruptcy back in 2010 and said it mostly stemmed from her health problems, including Lupus, which racked up major medical bills.
There were many layers to the bankruptcy but to clear it up, Toni worked with a trustee on two major things: buying back her property and money made from overseas shows.
In regards to the property, Toni was to pay $5,000 per month for 15 months, with the last payment actually being $50,000. She was doing good until she couldn’t make that last payment.
In terms of the shows, Toni said that she shouldn’t have had to pay money back for the shows – $754,000 in total – because she’d filed for bankruptcy before the shows happened and should, therefore, be able to keep the money. On the other hand, the trustee argued that because Toni was paid before the shows (the money was put in escrow until she held up her end of the deal and performed), she still owed money on them.
A little confused? Okay, well just know this: Toni and the trustee agreed that she would pay $50,000 for the property and $100,000 for the shows.
It looks like Toni needs to keep her Braxton Family Values gig since she now has nothing but space and opportunity to run her bills up again. I kid, I kid…love you, Toni!
Americans just can’t seem to get a grip on paying their mortgages or credit card bills due to outstanding medical charges. Even with health insurance supplementing the costs, medical bills are the biggest cause of bankruptcies in the U.S., reports CNBC.
Unpaid medical bills are expected to drive nearly two million Americans to file for bankruptcy this year, a study by NerdWallet Health said. The findings also show that 56 million people — 20 percent of the U.S. population between the ages of 19 and 64 — will find financial hardship due to healthcare costs.
While most people assume credit card debt is the primary culprit behind bankruptcies, the towering debt is actually caused by skyrocketing health costs. “More than 11 million people will take on additional credit-card debt to cover mounting medical bills, ” CNBC added.
NerdWallet found that 10 million Americans will not be able to cover food, rent, and utilities due to these medical expenses.
As MN recently reported, 25 percent of African Americans found that paying to stay healthy was a struggle; they could not afford the prescription drugs they needed. While health care plans should remove some financial burdens, it turns out that insurance coverage does not alleviate the stress. “The annual family of four—with employer-paid health insurance—annually spends more on medical bills than groceries,” that article said.
Insurance policies with high-deductible health plans take a toll on Americans as they require consumers to pay out-of-pocket more frequently. “With an average American family bringing home $50,000 in income, a high medical bill and a high-deductible insurance plan can quickly become something they are unable to pay,” said Christina LaMontagne, vice president of NerdWallet Health.
Mike Jackson, an African-American man afflicted with high blood pressure and diabetes accumulates a bill of $500 a month, NPR said. Jackson was laid off from his job and lost his health benefits. He was once taking 60 units of insulin to control his diabetes, but now he must settle for 30 units a day to cut prescription costs. However, the cutback caused problems. “Jackson developed numbness in his foot, toes, and nerve damage in his eye—all complications of uncontrolled diabetes,” NPR added.
“It’s one of those things where, if something happens to my car or to me healthwise, I’m in trouble,” Jackson said.
Many Americans swamped in health care bills share in Jackson’s sentiments when he stated, “If anything goes wrong, I’m one step away from disaster.”