Bankruptcy Reader

Winn-Dixie Stores Inc. recently took a big step toward coming out of bankruptcy, as a good majority of its creditors, including landlords and vendors, voted to approve the supermarket chain’s reorganization plan. Now, there will be a hearing on Friday in which the bankruptcy judge will be asked to approve the plan. The company hopes to emerge from bankruptcy by mid-November with a new board of directors. Chron.com reports:

Fifteen objections to the plan were filed in court, with about half coming from current shareholders who will lose their money. In a Chapter 11 case, shareholders are the last to be paid and get nothing if there is not enough money to pay off creditors. Winn-Dixie’s plan calls for it to issue new stock to creditors to pay off debt.

Read more: Creditors back Winn-Dixie reorg plan

Is your former spouse’s financial misdemeanors haunting you? This is a familiar story: One of the spouses makes a mess of the finances and then the family is forced to go into personal bankruptcy to save assets like their home. Now if you are divorced and you have the house, then you are probably paying the mortgage on the home. But if you don’t yet have the house in your name, and the bankruptcy prevents you from taking another loan, you may be in a bit of a soup. So how do you ensure that the house for which you are paying will indeed be yours at a later date?
If your ex-spouse still has the title to the property, then you should get a quit claim deed from him/her. This will show that s/he has relinquished all ownership right to the property to you.

However if s/he refuses to give you a quit claim deed until the time at which you’re able to refinance, you may probably have to wait until such a time. Then, you can have him/ her execute the quit claim deed at the closing on your mortgage. These things can happen simultaneously.

The bankruptcy filing of Kara Homes, one of the biggest home builders in Monmouth and Ocean counties, has left scores of customers and creditors worried. They are not too sure about whether the troubled builder will complete the developments it has under construction and make good on its debts. App.com reports:

The company said it had $350.2 million in assets and $296.8 million in liabilities. Under Chapter 11, Kara will be allowed to remain in business, and creditors’ claims will be frozen while it comes up with a reorganization plan and tries to regain its footing. David Bruck, the company’s bankruptcy lawyer, said the company laid off 100 workers this week, leaving it with 70, but it would take steps to continue operating.

Read more: Bankruptcy is met with uncertainty

A federal bankruptcy judge has finally approved the sale of California-based Tower Records to Great American Group, which plans to liquidate the music retailer. This indeed is the end of a tower of music. According to attorneys, there were almost 30 hours of vigorous bidding. At the end of this, Great American won with a bid of $134.3 million, beating Trans World Entertainment. Trans World had hoped to continue operating at least some Tower stores, by a single bid increment of $500,000.

The company will be sold for an aggregate of $150 million. This inculdes the sale of various leases and properties. Great American plans to begin the liquidation process and going out of business sales immediately. This means around 3,000 Tower employees are going to find themselves jobless pretty soon. Registerguard.com reports:

”This is not an easy decision,” said bankruptcy Judge Brendan Shannon, who nevertheless noted that the Tower debtors and other parties had agreed the bidding process was conducted fairly and in good faith.

Read more: Tower Records bankruptcy includes sale

Did you know that the filing and subsequent discharge of either a Chapter 7 or a Chapter 13 bankruptcy might eliminate some types of personal income tax liability? Well, so it seems, but there are certain conditions. You must meet these requirements if you want to completely eliminate your personal income tax liability through bankruptcy. In case of a Chapter 7 bankruptcy, to get your tax liability eliminated, you should:

• File your tax return on time
• Not make a fraudulent filing
• Have filed your tax returns over three years ago as of the bankruptcy filing date.

The complications may have slowed down the process, but it cannot stop it. I mean did the authorities really believe that by making the rules stricter and by making it tougher, people aren’t going to file? Agreed, the government must have had some really good reason to pass the new Bankruptcy Act last year, but the reason sure does escape me. Why do I sound so angry? Well because a close friend of mine just went through one of the worst experiences of her life when she tried to file for bankruptcy.

Sophie worked in a small firm that operated out of New York. It was quite a small firm that outsourced work from bigger companies and employed only around 15 people. Now last year, thanks to the outsourcing boom, Sophie’s firm didn’t have much work for its employees and slowly it started laying them off. Sophie hadn’t been laid off but she couldn’t continue with the uncertainty of not knowing if she would get her paycheck this month. And worse, her finances were running dry fast and she was too heavily in debt. Soon, she had creditors troubling her at all hours, asking her to repay her loans.

Knowing she couldn’t repay without going totally bust, Sophie decided to file for bankruptcy. And that’s where her problems started. First, it was almost impossible for her to get an attorney who could explain the new law and the effects it would have on her. Then, she realized she’d have to go in for counseling and pay for it with money that she could ill afford to waste.

So what did Sophie finally do? Last I heard, she’d gone underground. She doesn’t use the banks, asks her bosses for cash payments so her wages don’t get stuck in the way and worse, was very stressed. All this just because she decided to get her finances in order

West Contra Costa Healthcare District, a hospital district that serves the East San Francisco Bay region filed for bankruptcy, claiming it had at least $50 million in debts. The filing Sunday will allow the hospital to line up new financing, attorneys said. Mercurynews.com reports:

"The filing of the case activates something called an ‘automatic stay,’ a federal injunction that prohibits creditors from collection efforts from this day forward," said Andrea Porter, a San Francisco attorney representing the health care organization. "We have a whole new ball game today."

Read more: East Bay hospital chain files for bankruptcy protection

Bankruptcy of a group aiding gay Latinos has wide reverberations The recent financial collapse of te National Latina/o Lesbian, Gay, Bisexual and Transgender Organization, a prominent organization that aids gay Latinos has left federal officials stunned. They are now scrambling to reclaim hundreds of thousands of dollars in allegedly misspent government money. Mercurynews.com reports:

LLEGO once touted itself as the only national organization of its kind. But five months after it got the 2004 federal grant, LLEGO shut down. When auditors began probing, they found that the organization had incurred $703,181 in "unallowable costs" instead of the promised HIV/AIDS education efforts.

Read more: Bankruptcy of a group aiding gay Latinos has wide reverberations