All Articles Tagged "bankruptcy"
Oh Canada! Seeking to send a message to officials in Detroit who shut off water service to Detroit residents who couldn’t pay their bill, a convoy of Canadian activists came across the border with hundreds of gallons of water.
“What that means is that every country in the world is responsible for looking after their most vulnerable people,” said Maude Barlow, a water rights advocate and national chairwoman of Council of Canadians, an advocacy group.
More than 15,000 people have had their water shut off in Detroit as the city’s Water and Sewerage Department attempts to collect payment on past due water bills. More than half of the city is having trouble making payments. There are reports of $90 million in unpaid fees with the average delinquency totaling $540. The average monthly bill is $75.
“The department says thousands of delinquent customers have had their water restored within 48 hours after paying overdue bills or enrolling in a payment plan,” says The Detroit News.
Protests have taken place and a number of financial aid groups and programs have launched in the wake of the shut off. Besides the Canadian effort, a group called The Detroit Water Project is organizing donations to help delinquent residents. The organization was started by two women who don’t live in Detroit and only know each other from social media.
The city has suspended the cut off for 15 days to make sure that people with true hardship aren’t being penalized. But really, above all else, the point is that people need water to survive. Turning it off, even for nonpayment, is a cruelty.
Moreover, Detroit is a bankrupt city with many residents living in poverty. This is a municipal group that should be more sensitive to economic hardship, not less.
Hopefully this will be resolved so that, when the 15 days are up, we don’t have thousands of our fellow Americans living without a basic necessity.
Detroit just got a little boost out of the financial doldrums of its tremendous municipal bankruptcy. Michigan’s governor just authorized a package of bills that will give almost $200 million to the city.
In a symbolic gesture, GOP Gov. Rick Snyder signed the bill on Friday at Detroit’s Globe Trading Co. building, a 122-year-old building that was formerly an auto manufacturing facility and foundry.
“The Globe building is a great representation of the comeback of Detroit,” Snyder said. “It’s a 100-year-old-plus building that was essentially vacant in the last 20 years. It was one of the key industrial buildings in Detroit for decades. It’s been vacant and now it’s coming back.”
The building was to be demolished under a plan to relocate all three casinos in Detroit along the riverfront, but when that plan died the building fell into disrepair. Finally, the state put $12.8 million to transform the building into a recreation center for the 10-year-old, 31-acre William G. Milliken State Park along the river.
The bill signed by Snyder will give Detroit $194.5 million–but with strings attached. “A nine-member commission will oversee the city’s finances, budgets and contracts for at least 13 years and set the level of contributions made to city employees’ retirement and health care plans,” reports USA Today.
These funds will be combined with $370 million pledged from charitable foundations and $100 million from the Detroit Institute of Arts.
But retirees must agree to the city’s plan of adjustment and Snyder urged them to do just that “because it’s in their best interest, along with the city and state. So far, the voting is working in a positive fashion.” Retirees have until July 11 to give their vote.
Already, trustees of Detroit’s pension fund for police and firefighters agreed and called for retirees and workers to do the same as the money from the state, museum and foundations will disappear if retirees vote against the plan of adjustment.
On a more local political level, Detroit’s Mayor Mike Duggan is working to stem the tide of Detroit dwellers who are leaving for greener pastures. The city, which is one of the 20 biggest in this country, has seen a population decline from 1.85 million in 1950 to 688,000 today. Mayor Duggan aims to bring back services lost to the financial turmoil, demolish rundown buildings and sell empty homes that are next to current residents. With the city’s financial fortunes still being hashed out, there are many obstacles to overcome. But already, there are signs that Detroit might be preparing for a big turnaround.
What would you do with a fortune? Girls Gone Wild founder Joe Francis spent it all — $50 million — and was just arrested for assault. And he’s not the only one to have it all and then hit rock bottom. Here are 15 other celebrities who had millions then lost it all.
Allen is the poster boy for balling out of control.
Back in 1996, Allen Iverson was rookie of the year. He went on to earn $154 million during his career, but by 2012 he’d spent it all and owed some — including an $860,000 bill to a jeweler.
Allen had a chance to recoup some of that with a position on the NBA D-League’s Texas Legends. But the 38-year-old former baller said he’d rather hold out for another shot at the NBA…
It looks like Mekhi Phifer is facing some financial hardship.
According to TMZ, the former “ER” actor has recently filed for bankruptcy. In court documents, which were filed on behalf of Phifer last month, he claims rougly $67,000 in assets. Unfortunately, he’s claiming that he’s nearly $1.3 million in debt.
Legal documents pertaining to the filing also reveal that Phifer’s monthly expenses of $11, 600 per month greatly exceed his monthly earnings of $7,500 per month.
As for his debt breakdown, he currently owes $1.2 million in back taxes, $50,000 in lawyer fees and $4,500 in unpaid child support payments. His assets include a leather bed, a 12-year-old Segway and a colleciton of firearms. Reps on behalf of the actor have yet to publicly comment on the filing.
Hopefully Mekhi can find a way to get his finances in order soon.
Lisa Price Comments On Carol’s Daughter Bankruptcy Reports: ‘It’s Important To Set The Record Straight’
Last week we told you that popular cosmetics supplier Carol’s Daughter closed five of their seven store locations through the bankruptcy process. Though CD reps insisted that the filing was not a reflection of the financial health of the company, many still found it odd that the beauty brand would be shutting down most of its stores and laying off so many of its employees. Carol’s Daughter founder Lisa Price recently took to Facebook with a statement regarding the recent reports. Here’s what she had to say:
I know you have read the misleading news that has been circulated around the internet during the past week because I have heard from so many of you. Thank you all for your support and concern.
It is important to set the record straight. Carol’s Daughter is still going strong after twenty-one years and the future has never looked brighter. As part of our increased focus on new retail channels, we have decided to close five of our stores. This was portrayed as if we are having some challenges, but nothing could be further from the truth.
Initially, I felt it was inappropriate to toot my own horn, if you will, in the midst of some of our stores closing and the day-to-day work that must be done to continue to ensure our success. However, in this day and age of information speeding ahead of us and becoming fact before it has been verified, fact checked or vetted I fear that inaccurate perception will become my company’s reality in the minds of those I hold so dear, you. My friends, supporters, cheerleaders, fans and second family.
From the days when some of you rang my doorbell looking for Healthy Hair Butter to the day my website crashed because of my first national TV appearance you have always been there for me and you are who I care about. Because of your dedication over the past twenty-one years, I have been able to do amazing things. The nationwide Target launch this past March is an opportunity that very few companies receive. I am proud of that. I am also proud and blessed to have valuable partners, like HSN, Ulta and Sephora inside JC Penney. These partnerships have enabled me to distribute Carol’s Daughter in over 2,500 stores and on direct TV which is far beyond the reach of my living room in Brooklyn.
I am going to live through this bad headline knowing that our brand is as strong as ever…and right now I have to get back to work.”
Longtime supporter Jada Pinkett Smith also took to Facebook to defend the company against recent reports.
“I know you all often see my hair in various ways, but what you see in these pics is my natural hair,” the actress wrote. “I’ve taken care of this mane with CAROL’S DAUGHTER products for over 15 years, specifically…Lisa’s Hair Elixir. With that said, Carol’s Daughter is still going strong, despite some misleading press, so much so you can now find it in Target, on HSN, Ulta and Sephora inside JCPenny. My hair would like to say thank you to Lisa Price of Carol’s Daughter for making products that actually nourish the scalp and hair.”
As soon as we saw this story, we remembered the shock we felt that Dionne Warwick was in such terrible financial straits. Now it looks like she may be off the hook on a huge tax bill.
To bring you up to speed, Dionne Warwick filed for bankruptcy last year, claiming she had $1,000 in the bank, about $25,000 in assets including a two-year- old computer and has an income of $10 per month. Moreover, she owed Uncle Sam millions.
Now a bankruptcy trustee has recommended that the government excuse the $10.7 million-plus that she owes, debt that goes back to 1991. The trustee also recommends that she be allowed to keep all of her stuff, which includes a couple of fur coats, two sets of diamond earrings and $1,500 worth of furniture and the aforementioned computer. The decision will come soon.
Does this sound fair to you?
Originally posted March 27, 2013
Poor Dionne Warwick! The iconic singer had to file for Chapter 7 bankruptcy late last week because of tax liens that go back 20 years. According to her attorney Daniel Stolz, who spoke with Rolling Stone, Warwick actually has been paying taxes, but fell victim to a bad business manager and the penalties and fees that come along with mismanagement.
Warwick’s tax problems began sometime around 1998 and by 2009, it was being reported that she owed $2.2 million. The IRS corrected the record to $1 million. Despite her continued payments, it wasn’t enough to pay for the fees that were accruing. This bankruptcy filing is an attempt to clear off the debt once and for all.
Rolling Stone says that her income has fallen and, according to the bankruptcy petition, when you take her expenses into account, Warwick is making $10 per month. An internationally-known singer with decades of celebrity and hit songs under her belt is making a net income of $10 per month at the age of 72. The magazine says this is “a figure that is not unusual for a celebrity after living costs and mortgages are factored in.”
Are you shocked by any of this? Because you could knock me over with a feather right now.
Update: The New York Daily News provides more financial information, which only makes the picture look worse. Besides living on a net income of $10 per month, the newspaper says she only has $1,000 in her bank account and $25,500 in assets including a two-year-old computer. And, according to the bankruptcy filing, she’s in debt to the tune of $10.7 million. Most of that ($10.2 million) is owed to the IRS, but there’s also $20,000 in credit card debt. Yikes. We wish her the best.
The first couple of months of 2014 have not been great for some companies. In fact, some have been struggling for quite some time — whether because of a changing market or diminished demand for their goods and services — and we seem to to be just waiting for the other shoe to drop. Unfortunately the downside to business is that there is no guarantee of success or longevity. As some things in life must come to an end here’s a look at some stores that might close up shop.
Six months after having her debts cleared, Toni Braxton is getting right back in to the swing of things. According to TMZ, the “Braxton Family Values” star recently purchased a lavish Calabasas mansion for $3 million. The swanky 5, 323 sq. ft. pad reportedly has four bedrooms, five bathrooms and is located in Calabasas’ exclusive gated community The Oaks. Her new neighbors reportedly include Kourtney Kardashian, Scott Disick and Justin Beiber.
If you recall, the “Un-Break My Heart” singer filed for bankruptcy for the second time back in 2010, claiming that she was nearly $50,000,000 in debt. After paying back a small fraction of the amount owed, Toni’s debts were cleared a few months ago.
We’re glad that Toni found a way to make a financial turn-around. Apparently those “Braxton Family Values” checks came in handy. On top of that, she’s gearing up to release her duet album with Kenneth “Babyface” Edmonds, “Love, Marriage & Divorce,” in February, as well as her forthcoming memoir, “Un-Break My Heart,” in the Spring. We see you, Toni! Get that money, honey!
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.”