Daisuke Wakabayashi and Joseph Checkler with The Wall Street Journal report that Apple was shocked to learn of the Chapter 11 bankruptcy filing by GT Advanced Technologies, Inc. The WSJ states that GT uses furnaces to make sapphire, and Apple planned to rely on GT for synthetic sapphire screens for its new Apple smartwatches following a partnership that developed between the two companies in November 2013. According to the WSJ, sapphire screens prevent the breaking and scratching many iPhone users have experienced; however, Apple reportedly no longer plans to put sapphire screens on its iPhone 6 model since it did not perform as anticipated as a screen.
The WSJ article states that Apple has loaned GT $439 of the $578 million it needed for sapphire furnaces (despite the fact that “GT didn’t always meet the technical milestones for the plant”) and 2015 was the year when GT was to begin making repayments pursuant to the terms of the loan.
The initial bankruptcy pleadings were reportedly meager in regard to an explanation for GT’s filing. The pleadings disclosed $85 million in cash as of the end of September, according to the WSJ, but CEO Thomas Gutierrez stated that the GT planned to have nearly $400 million in funds by the end of this year. GT reported $1.3 billion in liabilities and $1.5 billion in assets. and GT would like debtor-in-possession financing.
The WSJ reports that many were shocked by GT’s bankruptcy filing since the share price of stocks did not decrease prior to the filing, and GT paid as scheduled to bondholders in the days leading up to filing—both of these actions are uncommon for a company that intends to file bankruptcy.
If you are in debt and considering filing for bankruptcy, please contact The McKellar Law Firm, PLLC for a free consultation.
Chattanooga, Tennessee pay day lender Carey Brown is facing criminal usury charges in New York. Usury is defined as the lending of funds at an exorbitant rate or a rate above that permitted by law. State law varies on what rate is considered to be usurious. Brown and two associates are accused of forming shell companies to extend and collect pay day loans at rates above that permitted by law in the State of New York.
Pay day loans offer the promise of quick cash that must be repaid with interest once the borrower receives their next paycheck. While New York law caps interests rates at 25%, the companies’ rates ranged between 350% and 650%. The Manhattan District Attorney, Cyrus R. Vance, Jr., described the practice as “exploitive” and “sadly typical of this industry as a whole.”
Brown made his fortune selling used cars. The corporate entities crafted by Brown were allegedly designed to hide the true owners and the origination of the loans. Some were formed offshore or on Indian reservations. Prosecutors say that the site MyCashNow.com was incorporated in the West Indies to place the company beyond the reach of U.S. authorities. The number of entities (twelve) further obscured the trail leading back to Brown. Brown’s alleged legal advisor Joanna Temple and COO Ron Beaver are also charged.
Girls Gone Wild founder Joe Francis is in deep trouble in bankruptcy court. Girls Gone Wild filed for Chapter 11 bankruptcy protection in February 2013. Shortly thereafter, Francis agreed not to interfere in the company’s business.
As the company continued to operate under the court’s supervision, Francis was accused over the following months of various misdeeds. These include making threats to employees, hiding company cars, transferring intellectual property to another company, and having his girlfriend block the bankruptcy court trustee’s access to the building. Eventually, an injunction issued requiring Francis to stay 100 feet away from the company’s headquarters.
In April 2014, the bankruptcy court ordered company assets sold for over $1.8 million. In May, Francis and his girlfriend allegedly came to the company’s headquarters and screamed obscenities at employees, resulting in the police being called. A second occurrence followed a few days later.
A motion for contempt was filed against Francis for ignoring court-ordered sanctions. At the hearing, Francis argued that the 100 foot-injunction no longer applied after the company’s assets were sold. He also argued that company employees were the aggressors when he visited the office in May. The company cars, he claims, were seized outside of a Mexican strip club and he cannot get them back.
The Bankruptcy Court Judge, Sandra Klein, did not buy Francis’s argument and found that the injunction was violated. She ordered Francis to immediately return the vehicles or pay the clerk $5,000 a day for each day they remained missing, and pay $41,000 in attorneys’ fees and costs.
In a document filed with the court, Judge Klein stated that ” the facts of this case justify issuing arrest warrants as a coercive sanction for civil contempt.” Because current case law is murky on whether or not a bankruptcy judge has the power to issue an arrest warrant, she referred the matter to the District Court.
Should Francis be arrested, it would not be his first time behind bars. He was sentenced to jail last year following convictions for a 2011 incident of false imprisonment and assault.
Do you need a lawyer in the Knoxville area to help you with a Chapter 7 bankruptcy? Chapter 7 is the most common bankruptcy filed by individuals with primarily consumer debt. Chapter 7 is sometimes referred to as the “fresh start” bankruptcy option. Many people who qualify for a Chapter 7 can have their unsecured debt discharged without losing any assets. How do I know if I qualify for a Chapter 7? Generally, there are two ways to qualify for Chapter 7 bankruptcy. The first is to earn below the median income for a Tennessee family of equivalent size. Income will include any earnings from employment or other sources, including contributions to household expenses from others. Even if you make over the median income for a family your size, that does not necessarily mean that you won’t qualify for Chapter 7. Under the Bankruptcy Code, you may still qualify depending on your monthly expenses and the amount of surplus income that you have left over. Your attorney will use the information you provide about your income and expenses to complete a Means Test to determine if you are likely to be successful in filing a Chapter 7 bankruptcy. Do you need a Knoxville bankruptcy attorney for a Chapter 7 bankruptcy? Call us today for a free consultation with an attorney.
Detroit’s historic bankruptcy was filed on July 18, 2013, one year ago today. When the bankruptcy was filed by emergency manager Kevyn Orr , the city was nearly $20 billion in debt. In the five preceding years, the city spent an average of $100 million more than it brought in. Orr had failed to reach agreements with creditors to restructure Detroit’s debt outside of court and believed that bankruptcy was the best option.
In a December 2013 ruling following a nine-day trial, Judge Steven Rhodes declared Detroit eligible to proceed with Chapter 9 bankruptcy. He held that the city met all factors for insolvency, was unable to pay its debts, and was unable to provide a minimum level of basic services to residents.
Opponents of the bankruptcy had argued that the city did not negotiate in good faith with creditors, particularly those retired city workers receiving pensions. Those workers also argued that their pensions were protected by the Michigan state constitution.
In February 2014, Orr filed a proposed plan of adjustment in the city’s bankruptcy case. The plan called for spending $1.5 billion over the next ten years on improvements to the city, including blight removal, technology upgrades, and infrastructure repairs. The investments aimed to prevent further population loss and revitalize the city once known as the Paris of the West. The plan’s impact would be felt heaviest by non-uniformed city retirees, who would see their pensions cut by nearly one-third if the plan was approved. The plan would spare pensions for police and firefighters somewhat, with those pensions cut by only ten percent.
In April 2014, Detroit reached a settlement with a large group of unsecured bondholders. In June 2014, Michigan lawmakers passed a series of bills with bi-partisan support to allocate $194.8 million for Detroit in a one-time influx of money. The bills help alleviate cuts to the city’s pensioners and insulate artwork at the Detroit Institute of Arts from sale. The bills also indemnify the state from lawsuits relating to the bankruptcy filing and provide for a nine-member committee to oversee the city’s finances, budget, and contracts. The state’s contribution added money to the $366 million already pledged by charitable foundations and the $100 million pledged from the Detroit Institute of Arts.
City employees and retirees were given an opportunity to vote on Orr’s plan of adjustment, and the results will be announced on July 21. Next, Judge Rhodes will hold a hearing in August and rule whether or not to accept the plan of adjustment.
World Cup finalists Argentina will play Germany on Sunday, with superstar Lionel Messi and his teammates hoping to prevail against the team that showed no mercy in its last game.
In another high-stakes clash, Argentinian officials met with a mediator Friday in New York to attempt to settle a looming debt crisis.
Argentina defaulted on $100 billion in debt in 2001, throwing the country into economic chaos. Argentina again risks defaulting on its debt obligations. The current crisis involves $1.5 billion owed to investors who bought bonds during the 2001 default. The due date of July 1 has come and gone, and the 30-day grace period will soon expire.
Leading the group of investors is billionaire Paul Singer, who has previously sued Peru and the Republic of the Congo to pay bond obligations. The investors sought and received a US Supreme Court ruling that Argentina must make the payment.
President Cristina Fernandez has said that the country cannot make the payment and keep up with interest payments to other creditors. Argentinians also worry that payment of this obligation would set a dangerous precedent and invite lawsuits from other investors demanding to be paid on the same terms.
Section 523 of the Bankruptcy Code provides that a Chapter 7 discharge does not include debts for “fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny” nor does the discharge include debts that are for a “fine, penalty, or forfeiture payable to and for the benefit of a governmental unit.”
A Michigan woman recently sought to discharge a large restitution debt owed to her former employer. The former Kentwood parks clerk was convicted of fabricating reservations for city parks, canceling the reservations, and refunding the money into her own pockets. Upon her sentencing, she was ordered to repay the city $331,000 as restitution.
After filing Chapter 7 bankruptcy with her husband, she argued that the city would recover the money from insurance payments and that she should not have to pay the money back. The bankruptcy judge denied her request.
Fashoin designer Michael Kors is the embodiment of the self-made success story. He designed and sold clothing from a very young age. He set up a fashion boutique in his basement at the age of 11. Working in a department store in sales, he ended up designing the store’s clothing line. He started his own women’s clothing line in 1981.
Going through a Chapter 11 bankruptcy in 1993 did not deter the designer. Chapter 11 provides (generally) for reorganization, usually involving a corporation or partnership. A Chapter 11 debtor proposes a plan of reorganization to keep its business alive and pay creditors over time.
The designer expanded into the realm of reality television in the early 2000s. He served as a judge on the television show “Project Runway” for ten seasons, known for his fair but rigid comments towards the contestants.
Tennessee woman Janet Brown was sentenced on Thursday to one year in federal prison for bankruptcy fraud.
Accused of participating in a Ponzi scheme along with her late husband Jack Brown, the only charge against Ms. Brown to date is the bankruptcy fraud charge, to which she entered a guilty plea in February. That Ponzi scheme was allegedly run under the guise of Brown’s Tax Service in Soddy Daisy, and defrauded investors of $12 million. Many local residents say they lost their savings in the scheme. A group of the investors filed an involuntary Chapter 7 bankruptcy against the couple.
The bankruptcy fraud charge stems from a question at Ms. Brown’s 341 Meeting of Creditors in which she was asked under oath if she had turned over all of her jewelry to the Chapter 7 trustee. Ms. Brown said that she had except for the three pieces she was allowed to keep (her wedding band, high school ring, and mother’s ring). The Trustee produced photos of her wearing missing diamond jewelry. Three days after the meeting, Ms. Brown delivered a bag of jewelry later appraised at $25,000 to her attorney, who was bound to turn it over to the Trustee. Her lie about her assets at the 341 Meeting was the basis of the bankruptcy fraud charge, which can carry a sentence of up to five years and a fine of up to $250,000.
You are at home, and someone calls you. It’s a number you don’t recognize. You pick up and quickly realize that the person on the other end of the line is a debt collector. They tell you that you owe money to a company you have never heard of. Or, they talk about a debt you recognize but the amount doesn’t sound right. What do you do next?
You may have more options than you realize. If you are tired of the telephone calls or just don’t seem to be getting anywhere with the collectors, you may want to put it in writing. The Consumer Financial Protection Bureau (CFPB) has published five form letters you may want to use to communicate to the collector about the debt.
The first letter requests more information about an unfamiliar debt.
The second letter indicates you, the consumer, are disputing the debt and do not want the collector to contact you again.
The third letter may be used if you want to communicate with the collector to resolve the debt, but only want them to call or contact you at certain times.
The fourth letter notifies the collector you have hired an attorney and that they must contact them and not you.
The fifth letter is a request to stop contact. The collector could pursue other remedies such as bringing a lawsuit to collect the debt, but this letter could provide some temporary relief.
The CFPB provides general information to consumers. For a free consultation regarding your specific debts and legal rights, contact The McKellar Law Firm, PLLC.