California Bankruptcy Lawyer Blog

San Jose Bankruptcy Lawyer Discusses Emerging After San Jose Symphony's Chapter 7 Bankruptcy Filing, Symphony Silicon Valley Strikes A Positive Note With New Business Model

Symphony Silicon Valley, a smaller organization that emerged after the San Jose Symphony filed for Chapter 7 protection in 2002, is growing as it hits its fifth season this year. It's success is due in large part to a new business model.

Rather than hiring famous conductors to reside at the symphony, Symphony Silicon Valley is only working with guest conductors, with each show presided over by a different conductor. The new model is a cost saver, as celebrity conductors are very expensive to have in-house. The reduced budget now goes toward paying the musicians’ salaries. In addition, the orchestra’s 12-week seasons are two-thirds shorter than the old orchestra’s seasons. There are only four members on staff, and a musicians’ committee decides which conductors should join the orchestra.

Symphony Silicon Valley’s slow-growing success has started to draw national attention, especially since 9 out of 250 American Symphony Orchestra League orchestras have filed for bankruptcy protection since 2002.

When a company becomes bankrupt and there is no way they can continue in operation, they may file under Chapter 7 bankruptcy. This means that the company ceases operations immediately and must work with a court-appointed trustee to liquidate their assets to pay legal and administrative expenses, as well as their creditors. Secured creditors will be paid first. If there isn’t enough money to pay secured creditors, then secured creditors will join the ranks of the unsecured creditors. Unsecured creditors can then file claims to be paid in case any money remains at the end.

Continue reading " San Jose Bankruptcy Lawyer Discusses Emerging After San Jose Symphony's Chapter 7 Bankruptcy Filing, Symphony Silicon Valley Strikes A Positive Note With New Business Model " »

Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Chapter 7 Bankruptcy

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Redwood City Bankruptcy Attorney Discusses Tithing Debate Asks Question Of Whether Chapter 13 Bankruptcy Protection Should Make Room For Religious Donations

A recent bill passed in the U.S. Senate earlier this fall protects a debtor’s right to tithe to a religious organization, even while this person is under bankruptcy protection. The bill was drafted by Senator Orrin Hatch and Senator Barrack Obama, after New York Bankruptcy Judge Littlefield’s ruling in August that a couple under Chapter 13 bankruptcy could not continue paying their parish $100 a month while they were under this protection before repaying creditors.

Since October 2005, debtors filing for bankruptcy have had to first undergo a means test, and if their annual incomes were above their state’s median income, they could only file for Chapter 13 protection (and repay their debts over a period of time) instead of Chapter 7 (which wipes out most of their debts).

Under a Chapter 13 filing, only certain reasonable expenses are allowed. Anything else must be used to repay creditors. Before the new bankruptcy law went into effect, and under the Religious Liberty and Charitable Donation Protection Act, debtors were allowed to exempt up to 15 percent of their annual income from creditors during Chapter 13 bankruptcy proceedings for tithing and charitable contributions.

The new bill must still be reviewed by the House of Representatives.

Continue reading " Redwood City Bankruptcy Attorney Discusses Tithing Debate Asks Question Of Whether Chapter 13 Bankruptcy Protection Should Make Room For Religious Donations " »

Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Chapter 13 Bankruptcy

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San Jose Bankruptcy Attorney Discusses Bankruptcy Filings In 2006 Are The Lowest In 10 Years

Compared to 2005, the number of bankruptcy filings from January to September 2006 was 1/3 less. This is believed to be due to the enactment of The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. In the past year, the new law has made it harder for individuals to have their debts excused and was the biggest U.S. bankruptcy overhaul since 1978. While credit card issuers have championed the law, saying it is a way to prevent bankruptcy filing abuse, critics of the law say that the people who file for bankruptcy protection usually do so not to get rid of their debt, but because they have lost their jobs, gotten divorced, can’t afford to pay their medical fees, or they can’t pay the high interest rates and fees on their debts.

According to data collected from the Administrative Office of the US Courts:
· There were 1.113 million personal and business bankruptcies in the fiscal year ending September 30, down 37.6% from the record 1.783 million the prior year.
· Personal bankruptcies fell 37.9% to 1.085 million.
· Business bankruptcies fell 20.1% to 27,3333.

Because the people who earn more than the median income in their states cannot file under Chapter 7 bankruptcy, they must now file under Chapter 13. Overall, the amount of bankruptcy filings was the lowest since September 1996.

Top 5 States with the highest number of bankruptcy filings in the fiscal year ending September 2006:

California: 85,223
Ohio: 72, 403
Texas: 65,474
New York: 57,686
Illinois: 57,023

Continue reading " San Jose Bankruptcy Attorney Bankruptcy Filings In 2006 Are The Lowest In 10 Years " »

Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Bankruptcy Law

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Fremont Bankruptcy Attorney Discusses After Filing Chapter 11 Bankruptcy In 2005, Books Inc. Creates Fresh Start

Two years after seeking bankruptcy protection under Chapter 11, Books Inc. is once again profitable and growing. The nation’s oldest independent bookseller now has 11 locations in California, has paid off all former creditors, and is in the process of launching a new e-book project with Ingram Book Company. The 155-year old bookseller says it will make a profit of $24 million this year.

Allbusiness.com offers the following insights on what to focus on to make your Chapter 11 bankruptcy reorganization as successful as possible:

1) Keep your investors informed regarding what is going on.
2) Identify what your company does well and build around them.
3) Discontinue, outsource, or sell whatever doesn’t work well.
4) Take immediate and decisive action rather than spending a lot of time debating as to what to do to save your company.
5) Slash overhead.

Continue reading " Fremont Bankruptcy Attorney Discusses After Filing Chapter 11 Bankruptcy In 2005, Books Inc. Creates Fresh Start " »

Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Chapter 11

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Redwood City Bankruptcy Attorney Discusses Winn-Dixie Emerges From Chapter 11 Bankruptcy Protection

Nearly two years after filing Chapter 11 bankruptcy, national grocery chain Winn-Dixie announced that it is exiting bankruptcy protection. Winn-Dixie’s reorganization plan had been approved by creditors and U.S. Bankruptcy judge Jerry Funk on November 9. The company now has $725 million in exit financing from Wachovia. Winn-Dixie says it will issue 54.5 million shares of new stock to unsecured creditors within the next 45 days. Any preplan common stock has been cancelled. Winn-Dixie has 522 stores in five states and about 55,000 employees.

According to Bank of America Business Capital, 85% of Chapter 11 bankruptcy cases never achieve the stage of the process where a reorganization plan is confirmed. Bank of America Business Capital suggests that company executives in charge of a reorganization effort take the following areas into consideration so as to ensure a successful Chapter 11 bankruptcy case.

1) Secure DIP Financing
Remain intimately involved with the negotiation of debtor-in-possession financing ("DIP Financing") or cash collateral order with the company's secured lenders. Too many times, the company files bankruptcy with no DIP financing or agreed-upon cash collateral order that results in bounced checks, missed payroll, and other crippling financial repercussions.

2) Watch Cash Closely
To ensure that your company receives the financing it needs, make sure the company is operating as close to break-even as possible. Create a realistic, achievable cash budget, rather than "best efforts" budgets. "Best efforts" budgets are regarded as goals by the company for which they expect praise for partial achievement. Unfortunately, failure to totally meet financial projections destroys a company's creditability with the secured lenders. Missed projections in a Chapter 11 filing could result in your company’s liquidation.

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Posted by Scott Sagaria | Permalink | Email This Post | Comments (0)

Posted In: Chapter 11

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