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Archive for the ‘Bankruptcy Articles’ Category

Pemco World Air Services Files Bankruptcy, Intending to Sell Aircraft Maintenance and Conversion Business

Posted by Nancy Prew on April 9th, 2012

Introduction

On March 5, 2012, Pemco World Air Services (“Pemco”), filed chapter 11 petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  According to the Declaration of Pemco’s CFO (the “Declaration”), Pemco describes itself as “an industry leader in maintenance, repair and overhaul for wide and narrow body aircraft and regional jets from around the world.”  Decl. at *2.  In addition to maintenance and repair, Pemco also is one of the leading providers of narrow body aircraft cargo conversions. Id. 

Pemco’s Business Operations

Pemco provides its maintenance and overall services out of three service facilities located in Tampa, Florida; Dothan, Alabama; and Erlanger Kentucky.  At its service facilities, the company provides customers with scheduled and unscheduled maintenance, interior refurbishment, interior and equipment installations as well as equipment repair and upgrades.  Decl. at *3

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Tags: Air Services, Bankruptcy, World Air, World Air Services
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Total Student Loan Debt Reaches the Frightening $1 Trillion Mark

Posted by Nancy Prew on April 4th, 2012

The Consumer Financial Protection Bureau announced this week that the amount Americans owe on student loans is far higher than previously thought, and U.S. officials warned that high levels of debt could lead to more home foreclosures for struggling homeowners.

The total amount of student debt apparently passed the $1 trillion mark late in 2011, according to a report from the Wall Street Journal.

This estimate of student loan debt, provided by the newly minted Consumer Financial Protection Bureau, offered a figure that was 16 percent higher than the estimate given by the Federal Reserve Bank of New York Last Year.

The Wall Street Journal recently provided several interesting pieces of information about what some are calling a looming student loan debt crisis:

  • Survey method. In finding that total student loan debt had reached $1 trillion, the bureau surveyed a broad range of private lenders, which it claims offers better information than simply relying on consumer credit reports.
  • Reasons for rising debt.

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Tags: Debt, Student Loan
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A Cram-Down Can Help You Keep Your Car in AZ

Posted by Nancy Prew on March 27th, 2012

In my past few blogs, I’ve discussed the benefits of Chapter 13 bankruptcies. In my last blog, I referenced a major tool that can help you keep your home, the lien strip. But did you know that there is also a mechanism that can help you keep your car as well? When you file for bankruptcy under Chapter 13, you can reduce the amount you pay on your car and reduce the interest rate through a process known as a “cram-down.” A Chapter 13 bankruptcy does not require you to pay the loaned amount of your vehicle, just its fair market value. As an example, if you purchased a car 3 years ago, and you owe a total of $20,000, but it’s currently only valued at $10,000, a cram-down would allow you to pay just $10,000 over the life of your Chapter 13 bankruptcy. This could be the solution that allows you to keep your car!

When filing a Chapter 13 bankruptcy, you will be required to pay back a portion of your debts over a 36 to 60 month period (3 to 5 years). This would be at a set interest rate by the court (which is typically significantly lower), so you can adjust your interest rate and the duration of the loan as well as your principal payments. Payments

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Tags: Keep, Keep Car
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Ninth Circuit Sends Nevada AGs Lawsuit Against Bank of America Back to State Court – State of Nevada v. Bank of America et al.

Posted by Nancy Prew on March 13th, 2012

Vincent Howard and our Claremont foreclosure defense lawyers wrote with interest in January about a federal appeals case involving claims filed by the Arizona state attorney general against Bank of America. The state brought the case on behalf of its people, but the bank challenged the case on the grounds that it was really a class action lawsuit involving numerous homeowners, and thus should be removed to federal court. The Arizona district court rejected this argument and the Ninth U.S. Circuit Court of Appeals declined to hear an appeal, but a dissent from that case suggested taking it and consolidating with a very similar Nevada case. Now, the Ninth Circuit has decided the Nevada case, and in the same way — it sent the case back to state court. In State of Nevada v. Bank of America Corp. et al, the court established that “mass actions” cannot be removed as class actions.

Nevada attorney general Catherine Cortez Masto sued multiple Bank of America entities, alleging they misled Nevada consumers about loan modification practices.

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Tags: Bank, V Bank
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Decision in Washington Mutual, Inc. Holds that Litigation Tracking Warrants are Equity Instruments

Posted by Nancy Prew on March 4th, 2012

Summary

In a 32 page decision signed January 3, 2012, Judge Walrath of the Delaware Bankruptcy Court ruled that holders of litigation tracking warrants that would be paid out in stock of the debtor were equity instruments, and would be paid out at the same priority as common equity under the bankruptcy plan. Judge Walrath’s opinion is available here (the “Opinion”).

Background

Washington Mutual, Inc. (“WMI”) was a holding company that owned Washington Mutual Bank (“WMB”). Through a series of mergers, WMI became the owner of litigation against the federal government, originally commenced by Anchor Savings Bank. In connection with the numerous mergers that led to WMB controlling the litigation, a group of investors was given litigation tracking warrants (“LTWs”) that would provide them with 85% of the value of any recovery from the litigation, in the form of WMI common stock. Opinion at *4.

As reflected by the length of the Opinion, there was extensive issues raised in argument regarding whether the LTWs should be considered debt or equity. Because of the di

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Tags: Litigation Tracking, Litigation Tracking Warrants, Tracking Warrants, Warrants
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Home Mortgage Settlement May Offer Debt Relief for Some Consumers

Posted by Nancy Prew on February 28th, 2012

The housing settlement recently announced by the federal government should make it easier some homeowners to modify their mortgages and escape home foreclosure, but consumer advocates say it won’t help everyone recover their losses.

The settlement will provide payments of between $1,500 and $2,000 to people who have already lost their homes due to foreclosure, but relief won’t come quickly, according to a report from Reuters.

In fact, consumer advocates are skeptical about many features of the home mortgage program.

Reuters reports that homeowners should be aware of several key features of the housing settlement, including:

  • Act quickly. According to Alys Cohen, a staff attorney with the National Consumer Law Center, borrowers must act quickly to modify their mortgages before the end of the year because the tax break offered by the settlement expires at the end of 2012. So, consumers must be aggressive in seeking to modify their loans.
  • Five major banks. The

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Tags: Settlement, Settlement May
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I Need to File for Bankruptcy in Arizona, but How am I Supposed to Come Up with Money for Attorney Fees?

Posted by Nancy Prew on February 19th, 2012

Hearing the term “attorney fees” when filing for a bankruptcy can be a real nail biter.  Let’s face it, if you are behind in paying other bills, hearing about a new expense can cause even more anxiety.  The good news is, once you have retained an attorney, the creditors stop calling.  That still leaves many with the question, “How do I come up with the money for my attorney fees?”

When faced with paying attorney fees, some people are tempted to use their credit cards.  This is illegal because it encourages additional spending you cannot pay back.  A better option is to simply stop paying your credit cards.

If you are still trying to make payments to credit cards while preparing to file, that can be like throwing your money out the window.  The credit cards are going to be included in your petition anyway.  Paying the attorney fees with the money you would have been sending to the credit card company can expedite the process.

One good option is to use your tax refund, if you qualify.  Tax refunds are not exempt in bankruptcy cases so any refund owed to you will be absorbed by the trustee in the bankruptcy estate.  By postponing filing for bankruptcy until after you have received your tax refund, you may have your attorney’s fees covered instead of taking the loss.

A point to remember is that in the state of Arizona there is a cap of $150 (if filing single, $300 if filing jointly) as a free cash exemption. This means if you have any money in your accounts over $150 at the time of your filing, it will be taken by the trustee.  Using any funds you have in your accounts for your attorney fees will limit the amount that will be taken so you can start to rebuild again.

Another avenue to explore is asking a third party, such as a relative to help contribute.  If you have a relative you can rely on, they can be a good resource, especially if you are about to get relief of other financial burdens.

No matter how you come up with the fees, it is important to get the ball rolling so the creditors stop harassing you.  Coming up with the attorney fees can be overwhelming but by choosing to retain a qualified attorney, you are taking the first step toward regaining your financial freedom. If you’re still intimida

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Tags: Attorney Fees, Fees
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Bankruptcy Court Says No Claims Permitted For Conspiracy or Aiding And Abetting Fraudulent Transfers

Posted by Nancy Prew on February 14th, 2012

 A recent bankruptcy court decision addressed the issue of whether people who assist a debtor’s pre-bankruptcy fraudulent transfers can be held liable for damages in the bankruptcy proceeding. In this case, a trustee hired to liquidate debtor property filed a complaint pursuant to Section 544(b) of the Bankruptcy Code against a group of people for conspiring with the debtor to make fraudulent transfers. 

  The Court said that the bankruptcy Code provides for avoidance of fraudulent transfers, but it does not permit the trustee to pursue non-avoidance actions such as claims based upon civil conspiracy or aiding and abetting under applicable state law.   The court held that the same claims cannot be asserted under Florida law either because Florida law does not permit claims for either civil conspiracy to make a fraudulent transfer or for aiding and abetting a fraudulent transfer. Only the transferee shares liability with the debtor under federal bankruptcy law or Florida law. The c Read full post…

Tags: Bankruptcy Court, Fraudulent Transfers, Transfers
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