At the start of 2016, it was announced by Puerto Rican Governor Alejandro Garcia Padilla, that the commonwealth of Puerto Rico would not be able to cover the principal and interest payments on its debt. Given that there was a comparable announcement six months earlier, i.e., that an obligation for $72 billion in bond payments could not be met at that time either, this new announcement clearly could not have been a surprise.
Yet still, six months later, why would a debt relief plan still be nowhere in sight? The problem is that Puerto Rico is a commonwealth, not a municipality, so filing for U.S. Chapter 9 bankruptcy is not an option under current legal statutes. Additionally, the Federal Reserve and the International Monetary Fund are not able to help either, because Puerto Rico is not a country. And a federal bailout package has been denied as well.
Traditional taxi and car service companies have another reason to feel uncomfortable about their futures these days, as one of their own will soon be filing Chapter 11 bankruptcy.
According to the San Francisco Examiner, Yellow Cab Co-Op, the largest yellow cab company in San Francisco, is taking steps to restructure, amid a changing business environment. Not only do they need to reduce debts brought on by claims and lawsuits, but they also need to position themselves better be able to compete against app-based ride-sharing services like Uber and Lyft, both also headquartered in San Francisco.
While “financial setbacks” is the main reason being cited for the reason for the potential bankruptcy filing, the undertone of a more competitive business environment can’t be ignored. While expenses are exceeding income, and the potential Chapter 11 filing is focused on restructuring of expenses, it is the income side of the equation where the new competitive environment is making its mark, too.
Despite being handpicked by President Obama as one of his favorite sustainable energy projects, Abengoa is facing bankruptcy. This Spanish company in declaring bankruptcy could leave the taxpayers with a massive debt rumored to be several billion dollars. In addition to this huge burden there is also the confirmation of the belief that the Spanish government continues to back lame horses when it comes to green energy.
Abengoa is known to most for their two renewable energy products in the United States. They have been creating massive solar power projects of which they have received an access of $2.7 billion in the form of a federal loan. They began receiving the loans in 2010 but just recently shared that they are most likely heading towards bankruptcy.
We’ve all heard of, and probably use, the popular music streaming service Pandora. Perhaps you prefer some of the competitors Spotify or Apple Music, but have you ever heard of Rdio? I doubt it. You may be surprised to find out that they were also a competitor of these other popular streaming services. Unfortunately, since no one was aware of their existence they have proven unable to compete and will be closing their doors.
The company has chosen to file for bankruptcy. Though things are looking up slightly as Pandora has sent in an offer of $75 million to purchase the property owned by the streaming service and to take on some of their employees. This leaves many wondering if they will also take on their customer base. It is believed that this is a real possibility but would be conducted in a second transaction.
While American Apparel was once the go-to source for cool, Made in America shirts and jeans, in October of 2015 the retailer filed for bankruptcy protection. This comes after a string of lawsuits, the firing of its founder, and a steady decline of sales.
From Stylemaker to Struggling Label
In the 90’s and early 2000’s, American Apparel had come to define the alternative look of those decades’ youth. They also scored points with young people for keeping their garment construction factories in Los Angeles and championing many progressive causes. The founder of the company, Dov Charney, brought his energy into his business dealings, which unfortunately started to cross a line.
A new law allowing people to file for bankruptcy has just recently come into law in Russia. It will enable individuals to declare bankruptcy and no longer be pursued over debts. The law will bring Russia into line with most other countries’ bankruptcy court systems and ease the burdens of consumers who are having difficulties paying back their loans.
Prior Laws Only Protected Legal Entities
While Russian bankruptcy law is continuing to evolve, it has been observed that the bankruptcy procedure has been characterized by transparency in their insolvency cases. This enables interested parties to find out about the insolvent debtors. However, before this new law, the only bankruptcies could be declared by legal entities: companies or business partnerships. This left no recourse to ordinary individuals affected by the recession caused by dropping oil prices in 2014.
Rapper 50 Cent, well known for his saying “Get Rich or Die Tryin’” has apparently nearly finished building a new home in Africa—and this after declaring Chapter 11 bankruptcy protection in July.
Flaunted His Wealth
While it would seem that declaring bankruptcy would be a sign of financial troubles, 50 does not seem to have any problem flaunting his wealth. His rap songs were often filled with references to the things his talent brought him, like houses, cars and jewelry.
One year ago, he said he would donate $75,000 to charity if Floyd Mayweather, the boxer, would read from Harry Potter aloud without making a mistake, though Mayweather did not accept or respond to the challenge.
Paul Hansmeier, the attorney who became well-known for suing smaller businesses who cannot afford to fight him, has claimed Chapter 13 bankruptcy. Some would call this karma, as it seems he would bring lawsuits on behalf of people with disabilities in order to make money for himself.
Motives Under Question
The current troubles come with around 70 lawsuits against small businesses, alleging that they are discriminating against people with disabilities. Hansmeier and his law firm Class Justice has brought many lawsuits against small businesses in Minnesota, claiming violations of the Americans with Disabilities Act, violations such as the lack of ramps, or tables being too high. Though some the lawsuits may have a valid case, many more seem to be merely a quest for a settlement payout. The lawsuits not only sue for the changes to be made, but also ask for monetary recompense.
Caesar’s Entertainment Operating Company filed for Chapter 11 bankruptcy in January of 2015 and luck certainly seems to not be going their way.
The group runs Caesar’s Palace resorts as well as many other properties in the U.S. and offshore. The bankruptcy proposal will cut their debt by $10 million, and the company will be split into two separate entities. One will run the casinos, and one will be a property trust.
Litigation Financing is the practice of funding lawsuits by a third party unrelated to the case in exchange for a share of the proceeds. Currently, a new venture is hoping that this will also be applied to bankruptcy proceedings.
The Start of Litigation Financing
This began in the mid to late 1990’s, with some companies providing legal funds to plaintiffs with personal injury cases. The idea continued to grow and appeal to larger companies, who in turn formed more standards and offer lower pricing to consumers.
Legal funding has become popular among bigger corporations of all types. Despite some inevitable failures, the investments have been mostly successful.