BlueHippo Bankruptcy
BlueHippo Funding LLC which markets computers to consumers with low credit scores, filed for Chapter 11 federal bankruptcy protection. The firm was driven to file for bankruptcy protection when its bank accounts were frozen due to contempt charges filed by the Federal Trade Commission. The FTC has accused BlueHippo of violating a settlement agreement filed in April of 2008. Pursuant to that agreement, BlueHippo was barred from collecting payments from its customers without delivering the product the consumer expected to receive.
BlueHippo has had more than 4,200 complaints filed against it for allegedly failing to provide the goods promised. BlueHippo paid a $3.5 million fine to the FTC as a part of its settlement agreement. BlueHippo claims the FTC’s current action is based on false statements and that it has not been inappropriately using customer funds, but merely paying creditors to remain in business. Under Chapter 11 bankruptcy protection, BlueHippo can petition the Court to use cash collateral to keep its doors open and pay its creditors. BlueHippo will be best served by quickly proposing a restructuring plan to the court to end its stay in bankruptcy as quickly as possible.
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