Jul 20

A&P closing

Why America’s First National Supermarket Chain Just Filed For Bankruptcy… Again (ZeroHedge, July 20, 2015):

Back in December 2010, we were “stunned” when we learned that in a what was a clear case of a supermarket chain unable to pass through costs to consumers, the Great Atlantic & Pacific Company (“Great Atlantic”, “A&P” or the “Debtors”), which in 1936 became the first national supermarket chain in the US, would file for bankruptcy adding that “it is ironic that instead of passing through costs supermarkets are instead opting out to default”. Although perhaps even back then it was clear to A&P that the capacity of US consumer to shoulder higher prices is far worse than what the mainstream media would lead everyone to believe. Continue reading »

Tags: , , ,

Jun 19

Colt’s Bankruptcy Isn’t Because Civilian Gun Sales Are Down (Government Slaves, June 18, 2015):

(Hognose) The media love the idea that the firearms market is in a state of collapse. This propaganda theme is being fed to them by Bloomberg-funded gun-ban groups, and by Bloomberg’s own propaganda arm, Bloomberg News, and, like any good propaganda campaign, it reinforces the presuppositions, biases, and slants of the intended targets (in this case, Acela Corridor newsmen) with a Narrative® that’s Too Good To Check™.

One writer who didn’t check his Narrative®, or much of anything else, was David Francis at Foreign Policy, the magazine/website that’s expert in strategy because it employs Beltway drones with degrees from The Right Schools. (Most of whom can only function overseas where Loud Slow English is understood). Continue reading »

Tags: , , ,

Feb 23

Record Low Baltic Dry Casualties Emerge: Third Dry-Bulk Shipper Files For Bankruptcy In Past 3 Weeks (ZeroHedge, Feb 23, 2015):

The unintended consequences of a money-printed, credit-fueled, mal-investment-boom in commodities (prices – as opposed to physical demand per se) and the downstream signals that sent to any and all industries are starting to bite. The Baltic Dry Index has plunged once again to new record lows and the collapse of the non-financialized ‘clean’ indicator of the imbalances between global trade demand and freight transport supply has the real-world effects are starting to be felt, as Reuters reports the third dry-bulk shipper this month has filed for bankruptcy… in what shippers call “the worst market conditions since the ’80s.”

Spot the credit-based mal-investment boom

Commodities-Baltic-Dry-Index-Collapse

After 2 brief days of very marginal gains, The Baltic Dry Index dropped again…

Baltic-Dry-Index-Collapse

As Reuters reports,

A third dry cargo shipper has filed for bankruptcy this month following a collapse in freight rates to historic lows in what shippers call the worst market conditions since the 1980s. Continue reading »

Tags: , , , , ,

Feb 06

Update:

RadioShack files for bankruptcy; Sprint to take over some stores (Reuters)


RadioShack Files For Bankruptcy (ZeroHedge, Feb 5, 2015):

As credit markets have been indicating for 15 months, 94-year-old consumer-electronics chain RadioShack has finally pulled the ripcord…

  • *RADIOSHACK FILES FOR BANKRUPTCY PROTECTION AS LOSSES MOUNT
  • *RADIOSHACK WILTS UNDER BIG-BOX, ONLINE COMPETITION

RadioShack lists $1.2bn in assets and $1.38bn in debt. Additionally, Bloomberg reports that a post-bankruptcy deal is being worked on with Sprint. Continue reading »

Tags: , , , ,

Jan 07

The First Shale Casualty: WBH Energy Files For Bankruptcy; Many More Coming (ZeroHedge, Jan 7, 2014):

On Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money. There are many more to come.

Tags: , , , ,

Jul 21

First Detroit, Now Flint Warns Bankruptcy “Train Is Headed For The Cliff” (ZeroHedge, July 19, 2014):

Flint may be Michigan’s second city to plunge into bankruptcy unless retirees accept cuts in health benefits that threaten to unravel a balanced budget. As Crain’s Detroit reports, Emergency Manager Darnell Earley (Flint’s third emergency leader since it was placed under state control in 2011) warned “If we have no ability to mitigate the cost of retiree health care, that’s going to make it very difficult for the city to remain financially stable over the next few years.” As Eric Scorsone notes, “Flint’s at the forefront, but a lot of cities are on the same train, and that train is headed for the cliff.”

As Crains Detroit reports,

As Detroit draws worldwide attention for its record $18 billion bankruptcy, Flint demonstrates the plight of U.S. cities where unfunded post-retirement costs rival or exceed pension liabilities. In Michigan alone in 2011, municipalities had nearly $13 billion in health-care liabilities for retirees, compared with about $3 billion for pensions. Flint is among 17 cities and school districts under some form of state control. Continue reading »

Tags: , , , , , , , , , , , , ,

Apr 25

– No seat at the table: The invisible victims of Detroit’s bankruptcy (Al Jazeera, April 25, 2014):

America Tonight’s Azmat Khan reveals the forgotten creditors who stand to become casualties of the city of Detroit twice over, through no fault of their own and with little means to do anything about it

Tags: , , , , , , ,

Apr 19

George Carlin: The American Dream:


The Political Conspiracy Behind the Bankruptcy of Detroit: Anatomy of a Crime  (WSWS, Feb 21, 2014):

The Workers Inquiry into the Bankruptcy of Detroit and the Attack on the DIA & Pensions was held Saturday February 15 at Wayne State University. The WSWS published an initial report on the meeting on February 17. Today we publish an edited version of the report to the Inquiry delivered by Larry Porter, assistant national secretary of the Socialist Equality Party and chairman of the Workers Inquiry.
Video coverage of Lawrence Porter’s full report to the Inquiry

[Click for slide 1]

[Click for slide 2]

Why was Detroit taken into bankruptcy?

In my report, I have the responsibility of uncovering the evidence of a crime.

Continue reading »

Tags: , , , , , , , , , , ,

Apr 09

Another Chinese High Yield Bond Issuer Declares Bankruptcy (ZeroHedge, April 9, 2014):

Another week, another Chinese default.

A month after Chaori Solar’s default turned on its head a long-held assumption that even high-yielding debt carried an implicit state guarantee, another Chinese firm has succumbed to the inevitable outcome resulting from a lack of cash flows. As a reminder, a technical default late last month by a small construction materials firm, Xuzhou Zhongsen Tonghao New Board Co Ltd, was the first in China’s high-yield bond market. However, in that case the guarantor of that bond eventually agreed to fund the required interest payment, resulting in the first bailout of the first high yield default. Still if Xuzhou didn’t want the distinction of the first Chinese HY default, many are lining up for that particular prize – such as a small manufacturer of polyester yarn based in China’s wealthy Zhejiang province has declared bankruptcy, threatening its ability to meet an interest payment on a high-yield bond due in July.

According to Reuters, the firm sold 60 million yuan ($9.7 million) in bonds in a private placement in January 2013 at an interest rate of 11 percent. The next interest payment is due on July 23, while the bond matures in January next year. Continue reading »

Tags: , , , , ,

Dec 06

“They want your fucking retirement money!”
George Carlin (2005)


Detroit bankruptcy ruling triggers calls for pension cuts across the US (WSWS, Dec 6, 2013):

Within days of a federal judge’s ruling in support of the Detroit bankruptcy, the devastating implications for the working class across the US are becoming apparent. States and cities throughout the country are citing the legal precedent of the Detroit ruling to attack public employee pensions, initiating a new stage in the assault on workers’ rights and living standards.

Politicians of both big business parties, media outlets and financial institutions have welcomed the decision by Judge Steven Rhodes, hailing its categorical assertion that federal courts can override state and local guarantees of public workers’ pensions.

The Michigan Constitution declares that accrued pension benefits are “contractual obligations” that “shall not be diminished or impaired.” Many other state constitutions have similar provisions. But Rhodes brushed aside the Michigan Constitution in order to open the door to the gutting of pensions.

On Thursday, Illinois Governor Pat Quinn signed into law a pension bill that slashes benefits for retired as well as active state employees, in violation of the Illinois Constitution’s prohibition of such pension cuts. Described as a “landmark” law, the Illinois measure will raise the retirement age for younger workers by eight years, slash cost-of-living adjustments for current pensioners, and transfer many workers from state-paid pension plans to employee-paid 401(k) plans.

Continue reading »

Tags: , , , , , , , , , , , , , , , ,

Dec 03

Detroit Eligible To File Chapter 9; Pension Haircuts Allowed Bankruptcy Judge Rules (ZeroHedge, Dec 3, 2013):

Update, and it’s official:

  • JUDGE: DETROIT ELIGIBLE FOR IMMEDIATE BANKRUPTCY PROTECTION
  • DETROIT TO REMAIN UNDER BANKRUPTCY COURT PROTECTION, JUDGE SAYS

As somewhat expected – though hoped against by many Detroit union workers – Judge Steven Rhodes appears to have confirmed Detroit is eligible for bankruptcy protection (after pointing out that the city’s accounting was accurate and it is indeed insolvent) making this the largest ever muni bankruptcy.

  • JUDGE RHODES SAYS HE WILL ALLOW PENSION CUTS IN DETROIT’S BANKRUPTCY
  • DETROIT JUDGE: NOTHING SEPARATES PENSIONS FROM OTHER DEBT

Continue reading »

Tags: , , , , , , , , , ,

Nov 02

Cops in bankrupt Detroit forced to buy own uniforms (RT, Oct 31, 2013):

Patrolling the streets of bankrupt Detroit, Michigan is no easy feat for the local police department, and budget woes are about to make things ever for difficult for law enforcement officers in the Motor City.

The president of the Detroit Police Officers Association told a local CBS affiliate that city cops are going to have to empty out their own wallets if they want to remain fully equipped while on the job. The financially-devastated city is cutting back on spending left and right, and new slashes to the budget mean officers are going to soon be responsible for buying their own uniforms and ammunition.

Continue reading »

Tags: , , , , , , , ,

Oct 30

Batista’s OGX Files Bankruptcy: Largest Ever In Latin American History (ZeroHedge, Oct 30, 2013):

In line with what we discussed last night, once cajillionaire Eike Batista’s net wealth has now collapsed to less than -$746.5 Million according to Bloomberg as Veja notes, his “take over the world” company OGX has declared bankruptcy following the breakdown of restructuring talks with bondholders:

  • *OGX FILES FOR BANKRUPTCY PROTECTION IN RIO, BATISTA LAWYER SAYS
  • *BATISTA’S OGX EXTENDS DECLINE TO 30% AFTER BANKRUPTCY FILING
  • *BATISTA LAWYER BERMUDES COMMENTS ON FILING BY PHONE FROM RIO

The filing puts $3.6 billion of bonds into default – the largest corporate debt debacle on record for Latin America.

As of this morning his net worth was already -$745 million..

Tags: , , , , ,

Oct 29

Eike Batista’s OGX Said To File For Bankruptcy Tomorrow (ZeroHedge, Oct 29, 2013):

Earlier this afternoon, it was Steve Cohen’s final fall from grace. Now, Bloomberg reports that Brazil’s one time super billionaire, and now negativeworthaire, Eike Batista, whose sprawling petroleum empire was once valued in the tens of billions, is set to file for bankruptcy tomorrow.

  • BRAZIL’S OGX SAID TO PLAN BANKRUPTCY PROTECTION FILING TOMORROW

We are confident that just like in Europe, there is no bank with any exposure to either OGX, Brazil, or whatever potential intercreditor avalanche will tear down many more Brazilian companies once this first insolvent domino finally tips over.

Those who missed the preface to this story, we repost it below.

When on October 1, fallen billionaire Eike Batista’s OGX Petroleo & Gas, missed a $45 million bond coupon payment, some were surprised but most  had seen the writing on the wall. After all, Brazil’s second largest oil company after Petrobras, and the crowning jewel of Batista’s EBX Group, had been under the microscope of investors and certainly creditors (and if it wasn’t it certainly should have been) after oil deposits that Batista had valued at $1 trillion turned out to be commercial failures. And so the countdown to the inevitable bankruptcy filing began. Overnight, Bloomberg reports that the wait should not be long (in fact it may coincide with the default of that other insolvent mega-creditor: the United States), and will mostly certainly take place before the end of the month, following the retention of bankruptcy specialist law firm Quinn Emanuel.

From Bloomberg:

Continue reading »

Tags: , , , , , ,

Oct 22

H/t reader M. G.:

“… here is a very interesting story about Detroit and it’s pending bankruptcy.
The greedy guts want it all, and they don’t care who gets hurt or destroyed.”



Detroit isn’t eligible for a makeover unless a judge finds that key steps have been met, especially good-faith talks with creditors earlier this year. Photo: Jason Reed/Reuters

Detroit faces crucial trial three months after bankruptcy filing (Guardian, Oct 22, 2013):

An unusual trial starting Wednesday to determine whether Detroit may scrub its books in the largest public bankruptcy in US history

Thousands of Detroit streetlights are dark. Many more residents have fled. Donors are replacing ambulances that limped around for 200,000 miles. Millions in debt payments have been skipped.

Is there really any doubt the city is broke?

A judge starts exploring that question Wednesday in an unusual trial to determine whether Detroit indeed is eligible to scrub its books in the largest public bankruptcy in US history. Unions and pension funds are claiming the city failed to negotiate in good faith before filing for chapter 9 protection in July.

Continue reading »

Tags: , , , , , , , , ,

Jul 24

Before:

Report: Michigan Judge Orders Detroit Bankruptcy Filing Withdrawn:

State Circuit Court Judge Rosemarie Aquilina ruled that the law allowing Gov. Rick Snyder (R) to authorize the bankruptcy filing was unconstitutional, according to Reuters. Aquilina ruled in favor of Detroit retirees and workers who argued the Michigan Constitution protected the retirement benefits in their city pension funds.

Detroit Plans To Cut Pensions … Cries Of Betrayal

After Detroit Bankruptcy Filing, City Retirees On Edge As They Face Pension Cuts (Washington Post)

“They want your f$$$ing retirement money!”
George Carlin (2005)


Detroit: federal judge halts legal challenges to bankruptcy filing (Guardian, July 24, 2013):

Ruling is major victory for city which had been sued by pension funds claiming bankruptcy threatened 22,000 employees

A federal judge agreed with Detroit on Wednesday and stopped any lawsuits challenging the city’s bankruptcy, declaring his courtroom the exclusive venue for legal action in the largest filing by a local government in US history.

The decision by US bankruptcy judge Steven Rhodes was a major victory for Detroit, especially after an Ingham County judge last week said that Governor Rick Snyder ignored the Michigan constitution and acted illegally in approving the Chapter 9 filing. That ruling and others had threatened to derail the case.

Retirees had sued, claiming the bankruptcy threatened their pensions that are protected by the constitution.

Continue reading »

Tags: , , , , , , , , , , , , ,

Jul 24

Detroit By The Numbers (ZeroHedge, July 23, 2013):

With the Detroit bankruptcy hearing under way (constitutional crises notwithstanding), we thought it useful to cut through the rhetoric, break-down the mutally-assured-destruction barriers, and peer into the cold-hard facts as the city looks to restructure its $18 billion in debt.

$18 billion Detroit’s estimated debt obligations.

$11.9 billion City’s unsecured obligations to lenders and retirees.

$6.4 billion City’s obligations backed by enterprise revenues (Revenue Bonds).

38 cents Of every tax dollar that the city collects goes to service legacy debt and other obligations rather than providing services for the city’s residents and businesses.

$115.5 million Detroit’s negative cash flows in fiscal year 2012. Continue reading »

Tags: , , , , , , , ,

Jul 22

“They want your f$$$ing retirement money!”
George Carlin (2005)


Cries of Betrayal as Detroit Plans to Cut Pensions (New York Times, July 22, 2013):

Now there is a new worry: Detroit wants to cut the pensions it pays retirees like Ms. Killebrew, who now receives about $1,900 a month.

“It’s been life on a roller coaster,” Ms. Killebrew said, explaining that even if she could find a new job at her age, there would be no one to take care of her husband. “You don’t sleep well. You think about whether you’re going to be able to make it. Right now, you don’t really know.”

Detroit’s pension shortfall accounts for about $3.5 billion of the $18 billion in debts that led the city to file for bankruptcy last week. How it handles this problem — of not enough money set aside to pay the pensions it has promised its workers — is being closely watched by other cities with fiscal troubles.

Continue reading »

Tags: , , , , , , , ,

Jul 20

Report: Michigan Judge Orders Detroit Bankruptcy Filing Withdrawn (TPM, July 19, 2013):

A Michigan judge on Friday ordered Detroit’s emergency manager to withdraw a federal bankruptcy petition filed on behalf of the city, Reuters reported.

State Circuit Court Judge Rosemarie Aquilina ruled that the law allowing Gov. Rick Snyder (R) to authorize the bankruptcy filing was unconstitutional, according to Reuters. Aquilina ruled in favor of Detroit retirees and workers who argued the Michigan Constitution protected the retirement benefits in their city pension funds.

Tags: , , , , , , , , , ,

Jul 19

The Death Of A City: Detroit’s Eulogy As Delivered By Kevyn Orr (ZeroHedge, July 19, 2013:

From the bankruptcy court declaration filed by Kevyn D. Orr in support of the Detroit Chapter 9 Petition.

After decades of fiscal mismanagement, plummeting population, employment and revenues, decaying City infrastructure, deteriorating City services and excessive borrowing that provided short term band-aids at the cost of deepening insolvency, the City of Detroit today is a shadow of the thriving metropolis that it once was. The City does not provide basic and essential services to the residents who remain in the City. Crime is endemic. The City is infested with urban blight, which: (a) depresses property values; (b) provides a fertile breeding ground for crime and tinder for fires (with the attendant disproportionate devotion of police and firefighting resources to abandoned lots); and (c) compels the City to devote precious resources to demolition.

Continue reading »

Tags: , , , , , , , , ,

Jul 18

H/t reader M.G.:

“Detroit latest city to file bankruptcy.
I thought you would like to see this story.
This is a growing trend. The city officials will be fired, corporations will send in their bureaucratic bean counters and take over. Any remaining assets or treasures this historic city might have will be sold off at auction to the Greedy Guts at pennies on the dollar. Then, after they have taken everything that is left, pensions and benefits for the workers all canceled, they will go on, leaving Detroit destitute. It is like a Mafia bust out.”

“They want your f$$$ing retirement money!”
George Carlin (2005)


Emergency manager Kevyn Orr takes decision after failing to broker deal between city’s bondholders and pension funds


Kevyn Orr. Detroit’s cost of borrowing will soar and the city will struggle to raise cash, analysts predicted. Photograph: Rebecca Cook/Reuters

Detroit becomes largest US city to file for bankruptcy (Guardian, July 18, 2013):

Sinking under huge debts and decades of mismanagement, Detroit formally filed for bankruptcy on Thursday, becoming the biggest US city ever to take such a drastic measure.

Kevyn Orr, Detroit’s emergency manager, took the decision after failing to broker a deal between the city’s bondholders and its pension funds.

The filing sets a new record for municipal bankruptcies and dwarfs the previous record filings by Jefferson County, Alabama, and Stockton, California. No other city of Detroit’s size has ever gone bust.

Orr and the city’s creditors and pensioners will now begin a fraught legal consultation period while a court determines whether the city is eligible for “chapter 9” bankruptcy protection for its $18.5bn debts and liabilities.

Continue reading »

Tags: , , , , , , , , , , , ,

Jun 14

Detroit defaults on some debt to avoid bankruptcy filing (Reuters, June 14, 2013):

Detroit defaulted on some debt on Friday and proposed that creditors take a drastic cut in the money they are owed by the “insolvent” city in order to avoid the largest municipal bankruptcy filing in U.S. history.

In a meeting with creditors, Detroit Emergency Manager Kevyn Orr announced a moratorium on principal and interest payments on the city’s unsecured debt, and for the first time presented a detailed proposal calling on the holders of nearly $17 billion in Detroit debt to make substantial concessions.

Under his proposal, Orr said unsecured debt holders would be paid less than 10 cents on the dollar, but some creditors would get a bit more based on city revenue.

Continue reading »

Tags: , , , , , , , , ,

May 20

Related article: Detroit May Run Out Of Cash Next Month


Detroit Bankruptcy Decision Depends On Next 6 Weeks As Kevyn Orr Deals With Debt (Huffington Post/Reuters, May 19, 2013):

DETROIT, May 19 (Reuters) – Bond restructurings, negotiated settlements with bondholders and bond insurers, and tough talk with unionized workers are on the agenda as Detroit’s emergency financial manager tries to meet a self-imposed, six-week deadline to decide whether the city can get through its financial crisis without a bankruptcy filing.

Kevyn Orr, a former bankruptcy lawyer, in his first report to the state of Michigan since Governor Rick Snyder appointed him, laid out last week a bracing picture of steps he may need to take to address the city’s troubles.

Continue reading »

Tags: , , , , , , , ,

May 20

Doctors increasingly declaring bankruptcy as Obamacare kicks in, causing widespread care shortages (Natural News, May 20, 2013)

Tags: , , , , , , , , , ,

May 02

Hank Paulson Burned As Another Electric Car Maker Goes Up In Flames (ZeroHedge, Mai 1, 2013):

It would appear that (apart from Tesla, for now) that any thing related to electric cars is going up in flames. From Fisker’s fubar (and blowing all that hard-earned government funding) and Chevy’s Volt dysphoria to A-123 Systems (the Lithium-Ion battery-maker) and now Coda – which Yahoo Finance notes was among an emerging crop of California startups seeking to build emission-free electric cars three years ago. After selling just 100 of its $37,250 five-passenger vehicles, Coda filed Chapter 11 today taking a few well-known investors with it. On the bright side, the government was not involved (from what we can tell), but on the even brighter side, none other than former US Treasury Secretary Hank Paulson was among those burned by the company going up in flames (as was Harbinger’s Phil Falcone).Despite the $300 million the company managed to raise, that quickly went and unable to raise an additional $150 million in new funding (we suspect blaming ‘market conditions’ for its mere $22million raise), Coda had no choice (and Fortress was more than happy to scoop it up and provide the DIP – the cars will make for fancy paperweights in a collateral liquidation). ‘Green’ is the new ‘red’ as it seems when it comes to electric cars, regardless of funding source – private or public – it goes up in flames.

Via Reuters,

Green car startup Coda Holdings Inc filed for Chapter 11 bankruptcy protection on Wednesday after selling just 100 of its all-electric sedans, another example of battery-powered vehicles’ failure to break into the mass market.

… exit the auto sector and refocus on energy storage, a far less capital-intensive business. Continue reading »

Tags: , , , , ,

Apr 08

Record 2,564 Spanish Firms File For Bankruptcy In Q1, 45% Higher Than Year Ago (ZeroHedge, April 8, 2013):

Perhaps the best measure to gauge the European recovery is by the soaring number of companies going bust, because only from this perspective is Europe finally “fixed.” As Reuters reports citing a report by Axesor, a record 2,564 companies filed for “insolvency proceedings”, a more palatable version of the word bankruptcy, in the first quarter – an increase of 10% from Q4 and up a whopping 45% from Q1 2012. The reasons given: “tight credit conditions and meager demand.” Or in other words: no actual cash flow to fund demand for products and services. Obviously it will take some truly phenomenal massaging and manipulation to represent GDP as rising in this environment, but we are confident the Spanish authorities are already on it, and somehow the Spanish pension fund, already 97% filled with Spanish government bonds, will somehow have a finger in yet another completely unbelievable economic print which will fool most of the algos most of the time on flashing red Bloomberg headlines.

Per Reuters:

“Most Spanish businesses did not prepare for a crisis this big or this long, which could be a determining factor,” said Javier Ramos-Juste, head of economic studies at Axesor.

Spain has been in its second recession in five years for the past 18 months and unemployment is more than 25 percent.

Continue reading »

Tags: , , , , , , , ,

Apr 02

Stockton Becomes Biggest US City To Declare Bankruptcy (It’s Official) (ZeroHedge, April 1, 2013):

A mere nine months after we first discussed the inevitability of Stockton, CA.’s bankruptcy, a judge has ordered today that the city will now become the most populous in the US to be declared bankrupt.

  • *STOCKTON CREDITORS DIDN’T NEGOTIATE IN GOOD FAITH, JUDGE SAYS

Creditors are pushing to get the city out of bankruptcy but the judge states that “by any measure” the city was insolvent. So, in summary, yeah, it was broke years ago, it still is broke – despite the best efforts by the Central Planning Reserve to reflate the same housing bubble that was the primary reason for the city’s insolvency in the first place. Only this time, it’s official!

Via Reuters:

Continue reading »

Tags: , , , , , , , , , ,

Mar 14

UK Bankruptcy Tzar On Verge Of Bankruptcy (ZeroHedge, March 13, 2013):

Despite around $135 million in bailouts, the UK government’s Insolvency Service disputes its own insolvency. The FT reports that one British MP summed it up – “it is fair to say that if this was a company it would be in deep trouble.” The group, which polices bankrupt companies, liquidates failed businesses and disqualifies unfit directors, would be bankrupt were it not for the government’s cash injection. Dependent on fees and recoveries from bankrupt companies, the agency over-estimated its ability to recover assets from collapsed businesses. It dismisses the insolvency claims against itself however, noting the service is “living within its means” and expects to be deficit-free by 2015 (though it is unclear how unless they expect recoveries to rise dramatically or bankruptcies to increase significantly) as it is forced to provide services even when there is no prospect of recovering fees from bankrupt people or companies. Their rate of prosecution has dropped from 40% to 21% and even the creditor community has lost faith arguing that the agency’s model was “unreliable in the current economic climate” and required urgent reform.

Via The FT,

The UK government’s Insolvency Service is all but insolvent.

Experts suggest the group, which polices bankrupt companies, liquidates failed businesses and disqualifies unfit directors, would be broke had it not received an emergency injection of cash from the government. Continue reading »

Tags: , , , , , ,

Nov 16

Capitalism At Work: Twinkies Soar On Ebay (ZeroHedge, Nov 16, 2012):

The invisible hand at work once again as fat-fingered demand dominates union-stifled supply… $8,000 for a single Twinkie… and other offers… It seems, once again, that there are more than a few greater fools who still have no idea just how the bankruptcy process works… will Twinkies be rebranded Bimbettes?

and Via Mashable:

Here’s what’s currently up for sale and bid on eBay: Continue reading »

Tags: , , , , , , ,

Oct 02

As Legendary Nurburgring Files For Bankruptcy, Broke Greece Launches Its Own Formula 1 Race Track (ZeroHedge, Oct 1, 2012):

There is something very wrong with this story. Two months ago, the world’s most legendary race track, Germany’s Nürburgring filed for bankruptcy. As AP wrote then: “Germany’s legendary Nürburgring racetrack and entertainment complex is effectively bankrupt. The circuit—which hosted Formula One’s German Grand Prix last year—is to launch insolvency proceedings amid fears that it could run out of cash while the European Commission considers planned government aid. The state government in Rhineland-Palatinate, which owns the financially troubled Nuerburgring GmbH, decided on the move on Wednesday, the dapd news agency reported…. A state subsidy had been in place since a disastrous development plan left the ‘Ring organization saddled with more than 350 million euros in debt. While the Nordschleife—the circuit’s famous “North Loop” which covers more than 13 miles—generates healthy operating profits, the income does not cover the interest payments on the enormous debt incurred when the state entered into the plan with two developers, Kai Richter and Jorg Lindner.” Sadly such is life in a world in which not everyone is bailed out by the government, and when it comes to the “fairness for everyone, bankruptcy for no one” doctrine, Germany has still not jumped on the bandwagon.

Continue reading »

Tags: , , , , ,

Sep 12

The Student Loan Debt Bubble Is Creating Millions Of Modern Day Serfs (Economic Collapse, Sep 10, 2012):

Every single year, millions of young adults head off to colleges and universities all over America full of hopes and dreams.  But what most of those fresh-faced youngsters do not realize is that by taking on student loan debt they are signing up for a life of debt slavery.  Student loan debt has become a trillion dollar bubble which has shattered the financial lives of tens of millions of young college graduates.  When you are just starting out and you are not making a lot of money, having to make payments on tens of thousands of dollars of student loan debt can be absolutely crippling.  The total amount of student loan debt in the United States has now surpassed the total amount of credit card debt, and student loan debt is much harder to get rid of.  Many young people view college as a “five year party“, but when the party is over millions of those young people basically end up as modern day serfs as they struggle to pay off all of the debt that they have accumulated during their party years.  Bankruptcy laws have been changed to make it incredibly difficult to get rid of student loan debt, so once you have it you are basically faced with two choices: either you are going to pay it or you are going to die with it.

But we don’t warn kids about this before they go to school.  We just endlessly preach to them that they need a college degree in order to get a “good job”, and that after they graduate they will easily be able to pay off their student loans with the “good job” that they will certainly be able to find.

Sadly, tens of millions of young Americans have left college in recent years only to find out that they were lied to all along.

As I have written about previously, college has become a giant money making scam and the victims of the scam are our young people.

Back in 1952, a full year of tuition at Harvard was only $600.

Today, it is over $35,000.

Why does college have to cost so much?

At every turn our young people are being ripped off. Continue reading »

Tags: , , , , , ,

Sep 10

GM Loses Over $49,000 On Every Chevy Volt (ZeroHedge, Sep 10, 2012):

Watching Phil LeBlow providing Ford with a reacharound this morning reminded us of total farce that is both the forest and the trees of the US auto industry. We have discussed the FUBAR channel-stuffing and the subprime-lending SNAFU but now, as Reuters reports, we see the ugly truth about GM’s little baby “the Volt is over-engineered and over-priced”. Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds….

Furthermore, there are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce. And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others. Continue reading »

Tags: , , , , , , , , , , ,

Sep 05

Spain’s Hell Is A Bankruptcy Lawyer’s Heaven (ZeroHedge, Sep 5, 2012):

You’ve seen Spanish youth unemployment rates soaring; been brow-beaten with data on the dramatic rise and acceleration of Spanish bank non-performing loans; and the rate of Spanish capital outflows chart is now ubiquitous; but where there is pain, there is also pleasure. As we are always looking on the bright-side and trying to find a silver-lining, Michael Cembalest provides just such a chart. To wit, the unprecedented surge in corporate bankruptcies in Spain; without question, a boon for the bankruptcy-lawyer industry and perhaps just the economic boost the country needs. Tongue-out-of-cheek, this is just a disastrous chart of reality on the ground.

Tags: , , , , , ,

Aug 20

ATP Oil And Gas Files For Bankruptcy, CEO Blames Obama (ZeroHedge, Aug 18, 2012):

Now that the “alternative energy” industry is in shambles following one after another solar company bankruptcy, as the realization that at current prices, alternative energy business models are still just too unsustainable, no matter how much public equity is pumped into them, more “traditional” companies have resumed circling the drain. First, it was Patriot Coal, which finally succumbed to reality a month ago. Now it is the turn of ATP Oil and Gas, which filed Chapter 11 in Texas last night. And sure enough, in a world in which nobody is to blame, and everything is someone else’s fault, the CEO promptly made a case that he is blameless and it is all Obama’s fault. According to Forbes: “The founder and chairman of [ATP Paul Bulmahn] wants the world to know that the Obama Administration—and its illegal ban on deepwater drilling in the wake of the BP disaster—is to blame for the implosion of his company. Not him. “It is all directly attributable to what the government did to us,” he rails. “This Administration has gone out of its way to create problems for my company, the company that I formed from scratch.”

Forbes continues:

Continue reading »

Tags: , , , , , , ,

Aug 03

San Bernardino, California, files for bankruptcy with over $1 billion in debts (Reuters, Aug 2, 2012):

San Bernardino filed for bankruptcy protection on Wednesday citing more than $1 billion of debts and making it the third California city to seek protection from creditors.

The city of about 210,000 residents 65 miles east of Los Angeles declared a fiscal crisis last month after a report said local government had tapped out its reserves and projected spending would top revenue by $45 million in the fiscal year that began on July 1.

The filing, made in the United States Bankruptcy Court, Central California District, states that the city has “more than $1 billion” in liabilities, and estimated that it has between 10,001 and 25,000 creditors.

Continue reading »

Tags: , , , , , , , , ,

Jul 11

San Bernardino Is Third California City to Opt for Bankruptcy (Bloomberg, July 11, 2012):

San Bernardino’s City Council voted to become the third California city this year to file for bankruptcy, as it struggles with declining tax revenue, growing employee costs and accounting discrepancies in its ledgers.

The council voted 4 to 2, with one abstention, last night to authorize a filing under Chapter 9 of U.S. bankruptcy law. The city of 209,000, about 65 miles (105 kilometers) east of Los Angeles, is so broke it can’t make its Aug. 15 payroll, interim City Manager Andrea Travis-Miller said.

“If the employees are not paid on Aug. 15, on Aug. 16 there will be a mass exodus of city employees,” City Attorney James Penman told the council before the vote. “People are not going to work when they don’t get paid. Most of our employees will not show up to work. That would include police, fire, refuse, everybody. The city will virtually shut down.”

Continue reading »

Tags: , , , , , ,

Jun 27

Stockton to file for bankruptcy, will be largest U.S. city to fail (Los Angeles Times, June 26, 2012):

STOCKTON — This Gold Rush-era port city, an epicenter of California’s agricultural exports, will become the nation’s largest city to seek protection under the U.S. bankruptcy code after its City Council on Tuesday stopped bond payments, slashed employee health and retirement benefits and adopted a day-to-day survival budget.

City Manager Bob Deis likened the process to cutting off an arm to save the body. He is expected to file bankruptcy papers immediately.

Continue reading »

Tags: , , , , , , , ,

Apr 14

Tax refunds being used to pay for bankruptcy filings (USA Today, April 12, 2012):

Some Americans spend their tax refunds on high-tech gadgets and long-awaited vacations. Others use the cash to file for bankruptcy.

More than 200,000 money-strapped households will use their tax refunds this year to pay for bankruptcy filing and legal fees, says a new study by the National Bureau of Economic Research.

The NBER research confirms what bankruptcy lawyers have long known: At the first part of the year, when Americans receive their tax refunds, there almost always is a spike in personal bankruptcy filings.

But that has been especially true since the cost of bankruptcy soared after U.S. bankruptcy laws changed in 2005. And many more families have been forced to delay filing until they can afford to pay the fees, the NBER study says.

“If people are expecting a big refund, they go as fast as they can to a tax preparer,” says Henry Sommer, a bankruptcy lawyer in Philadelphia. “They need the money so they can afford to file for bankruptcy.”

Continue reading »

Tags: , , , , , , , ,

Apr 03

From Enron To Sino-Forest – Same Old Song (ZeroHedge, Mar 30, 2012)

Enron –> Worldcom –> Adelphia –> Lehman –> MF Global –> Greece –> Sino Forest –> ????

I would rank these as some of the more notorious bankruptcies. These weren’t normal course of business bankruptcies. These were dark and deviant. They have many similarities.

Opaque and convoluted accounting and finances are common to them all. Whether it was Jedi for Enron, repo 105 for Lehman, or off-market swaps with Goldman for Greece, they all used every trick in the book to keep debt off balance sheet and to obfuscate the risk.

Continue reading »

Tags: , , , ,

Apr 01

Friday Funny: Sino Forest Seeks $4 Billion From Muddy Waters In Damages… As It Files For Bankruptcy (ZeroHedge, Mar 30, 2012):

Actually, in retrospect this may well be the funniest pair of headlines in one place ever.

  • SINO-FOREST TO FILE FOR BANKRUPTCY, MAY SEEK SALE OF COMPANY

But…

  • SINO FOREST SEEKING $4B IN DAMAGES AGAINST MUDDY WATERS

Uh? What? #Ref! #Ref! #Ref! We wonder: if Sino Forest files for bankruptcy in its forest of imaginary trees, did it really file for bankruptcy.

In other news, how many of the following analysts who had a buy on the stock as of the day the Muddy Waters report saved countless other investors the 100% certainty of a full wipe out by putting their money in Sino Forest, have been terminated.

The Following Sino Forest Sell-Side Analysts Should Be Terminated Immediately

As we pointed out the day after we broke the news that Paulson is about to suffer a historic loss on the Sino Forest Chinese fraud (a loss that has now been realized), the Paulson analyst who suggested this humiliating investment for the man who is now best known for hiring Paolo Pellegrini, have long since seen the pink slip. The story however does not end there: below we present again the sell side analysts who had Buy and Outperform ratings on what is now the biggest financial ponzi fraud since Madoff. In order to protect the reputation of such host firms as Raymond James, Dundee Securities, TD Newcrest, Credit Suisse, RBC, BMO and Scotia Capital, we urge the management teams to immediately terminate the following sell-side “analysts” whose work on TRE.TO was nothing but piggybacking on groupthink, doing absolutely no actual due diligence, costing clients billions in losses, and whose names will now forever be enshrined in the pantheon of “most worthless sellside analysts” ever. Continue reading »

Tags: , , , , , ,