Charlie Batch Bankruptcy: Exposing the too frequent plight of professional athletes.

Charlie Batch, the journeyman backup Quarterback of the Lion and Steelers recently filed for Chapter 7 Bankruptcy.  He made over $20 million over his playing days but claims that bad investments have dissipated all of that income.  While it is probably true that he did invest in well-intentioned business ventures, I would suppose that many other "poor investments" like expensive cars, jewelry, trips to Atlantis, etc. were involved in the dooming of Mr. Batch's economic status.  It is sad to see but the majority of professional athletes are broke within 3 years of ending their careers.  Their plight illustrates what dooms most of us in our own small way.  Borrowing against our future for the toys and trips we want today.  If this has or is happening to your family I encourage you to visit my website www.attorneyok.com and research how bankruptcy can afford you a fresh start.  Remember, true ignorance is only failing to learn from our mistakes.  You likely have paid expensive tuition on those lessons so make the most of it.  We help Oklahoma file Chapter 7 and Chapter 13 Bankruptcy and let them get on with a more enjoyable and stress-free, debt-free life.

Stress, Cancer & Bankruptcy

A recent study has detected a strong correlation between folks who have been diagnosed with certain kinds of cancer and later bankruptcy filings.  While this speaks to the financial devastation that debilitating illnesses cause to a family's finances, there is something more to glean from this.  I would suppose that there is a bigger connection here.  Research in the 90s showed that stress reduces the cancer-fighting white blood cells in our body exposing us to an increased risk of cancer.  I would assume that if you were to take a closer look at the cancer/bankruptcy study you would find that those people who were diagnosed with cancer and later filed bankruptcy were already suffering financial stress prior to the diagnosis. . .the illness just further exacerbated the issues.
The take away here is that the stress that people have who are suffering through financial difficulties can be tremendous.  Every day I see people who are at the end of their rope and are, quite literally, dying from stress.  I encourage everyone to look at the connections between stress and poor health and realize that there may be a solution to your financial stress in bankruptcy.  Just remember. . .bankruptcy is not the evil concoction that it is made out to be. . .it may just save your life.

Company That Owns the Spiegel Brand Files for Chapter 11 Bankruptcy

Signature Styles (Spiegel, Newport News & Shape Fx Brands) Files for Chapter 11 With Deal to Sell All Assets

Signature Styles which operates a primarily internet/catalog retailer specializing in women’s apparel Spiegel, Newport News and Shape Fx brands, filed for chapter 11 bankruptcy June 6, 2011 in Delaware.  The company acquired Spiegel Brands, Inc., which were being sold in a foreclosure sale conducted by Dymus Funding Company, LLC.  Signature Styles was the only bidder for the assets and paid $21.7 million.

 $48.6 million of assets and liabilities of $87.6 million were listed in the schedules.  Secured debt is $14.6 million owed to Zohar II 2005-1 Limited and Zohar III, Limited, and $22.64 million owed under a term loan facility provided by Zohar III, Limited.  The obligations owing to the Zohar entities, which are investment funds managed by companies whose collateral manager is related to Patriarch Partners Agency Services, LLC,  are secured by liens on substantially all of the debtors’ assets.  The companies’ remaining debt consists of $9.8 million of trade debt, $23.2 million of obligations to customers for returns, credits and gift cards, and various other unsecured obligations.  The debtors’ equity is wholly-owned by Zohar III, Limited.

The debtors plan to use the chapter 11 cases to effectively liquidate most of their assets.  They’ve also petitioned for approval of bidding procedures to facilitate a quick sale and have received a stalking horse bid for the assets from a newly-created affiliate of the pre-petition lenders (i.e., the Zohar entities and Patriarch Partners).  Under the proposed stalking horse agreement, the consideration that the purchaser (Artemiss, LLC) would provide for the assets would consist primarily of solely the assumption of certain liabilities of the Signature Styles companies.  Specifically, the purchaser would assume the following liabilities:

Up to $30 million of outstanding DIP loan, pre-petition term loan and pre-petition revolver loan obligations.  These claims are all owed to affiliates of the proposed purchaser.
“All liabilities accruing or due to be performed from and after the closing under the Assumed Contracts, Assumed Leases and the Post-Petition Contracts” (all capitalized terms as defined in the sale agreement).
“All liabilities for employee compensation and certain employee benefits.”
“The liabilities and obligations of Sellers to retail customers for (i) merchandise returned to Sellers that was purchased on or after the Petition Date [June 6, 2011] to the extent not satisfied as of the Closing Date, (ii) outstanding merchandise ordered on or after the Petition Date [June 6, 2011] to the extent not satisfied as of the Closing Date and (iii) gift cards or gift certificates purchased on or after the Petition Date [June 6, 2011] to the extent not satisfied as of the Closing Date.”
“All liabilities under or in respect of any employee benefit or welfare plan.”
However, if the stalking horse bidder is not the winning bidder at auction, the agreements provide that the successful bidder would not be able to assume any portion of the outstanding DIP loan, pre-petition term loan and pre-petition revolver loan obligations, but would instead be required to pay those obligations in full.  In addition, the proposed agreement does provide some proposed relief for existing customers of the debtors (in other words, customers of Spiegel, Newport News and/or Shape Fx).  If it is the successful bidder, Artemiss would provide “merchandise credits under its loyalty award program for prior retail customers of [the debtors] in amounts, dollar-for-dollar, equal to (a) the amounts payable for returns of merchandise purchased prior to the Petition Date [June 6, 2011] and that are to be settled in cash by [the debtors] under [the debtors'] current [return] policy and that remain outstanding on the Petition Date, and (b) up to $10 million of the amount of any remaining balance of gift cards or gift certificates that were purchased by third parties prior to the Petition Date or that were issued or are to be issued for returns of merchandise purchased prior to the Petition Date in accordance with [the debtors' current return policy].”  The new loyalty credits would be good only for merchandise offered for retail sale by the purchaser and would expire as follows:
For merchandise return credits (subpart (a) above), on the first anniversary of the closing of the sale
For gift card credits (subpart (b) above), four months after the closing of the sale
According to a footnote in the debtors’ motion, they estimate that there are currently approximately $18.1 million in outstanding gift cards and gift certificates which would fall within the $10 million cap described in subpart (b) above.

My Video

Even Donald Trump needs Bankruptcy Protection from Time to Time

One of the first and most things I hear from people coming in to my office consulting about a potential bankruptcy is "I didn't want to have to file Bankruptcy."  While that sentiment is commendable, the simple truth is that bankruptcy is often the right and sometimes only option available.  Credit card companies' ridiculously high interest rates makes paying off large balances almost impossible for the average wage earner.  The guilt about filing bankruptcy, in my opinion, stems from the many fallacies that the creditor PR arms have disseminated over the past decades.  In reality, at least in Oklahoma, most of the myths like you will lose your home, automobiles, retirement, furniture, etc. is just that, myths.  Also, bankruptcy can be the best thing that ever happened to your credit long term.  And those of you who feel beaten and embarrassed by the thought of having to file bankruptcy remember this:  Donald Trump has filed bankruptcy at least 3 times over the past 20 years.

In 1991 he negotiated with his creditors to give up the Trump Shuttle airline, a 49% stake in the Grand Hyatt Hotel, his 282 foot yacht, a 27% stake in the retail store Alexanders after falling behind on $4 billion in debt.  He also had to relinquish large stakes in the Taj Mahal and other casinos in Atlantic City.  By 1995 he had paid off creditors and trimmed his debt to $70 million and was even flying again in his own jet.

Trump defends bankruptcy as a smart business practice used by the likes of Carl Icahn and Henry Kravis. . ."We're using the laws to our advantage, That shouldn't be embarrassing, that should be smart."

So, when your considering your own bankruptcy remember that the laws are there for a purpose.  You may just need to make the smart play and file bankruptcy and, who knows, you may just be flying private soon!

Rebuilding Credit After Bankruptcy

Ok, so this is going to sound counter-intuitive but. . .often the best way to rebuild your credit is through, that's right, credit cards!  The very menace that most likely helped lead to your bankruptcy in the first place.  You see, most credit card companies report monthly activity to the credit reporting agencies - the businesses that determine your credit score.  Therefore, to help build your credit faster you will need to offset your prior credit troubles and tribulations with some positive news.  Now in doing so be careful of potential pitfalls.
The first one is to be very selective in the cards that you apply for and use.  You will very likely begin receiving credit card offers soon after your bankruptcy discharge.  The credit card companies know that you can't file again for several years and they view you as a somewhat safe bet.  CNN recently published an article detailing the 7 best credit cards for rebuilding your credit: http://money.cnn.com/galleries/2011/pf/1104/gallery.best_credit_cards_bad_credit/index.html
The 7 best in their opinion based on low upfront/annual fees and APR are Orchard Bank, Capital One Secured MasterCard, Navy Federal 'n Rewards Secured Card, Citi Secured MasterCard, Mango Prepaid MasterCard, Capital One Cash Rewards for Newcomers & Open Sky Secured Visa Card.
Another thing to be careful about is how you use the cards.  I would recommend to charge a very conservative amount each month - say on things that are necessary like gas and would normally otherwise pay cash for.  Instead, put the cash that you would normally use away in the cookie jar and make sure to pay off your balance in full at the end of each month.
Only apply for one or two credit cards as you don't want numerous inquiries showing up on your credit report.  If you follow these steps and stay current on your car and/or home loan, you should have an A credit rating a lot sooner than you may have thought.

Sesame Street and Credit Cards

Well, this just in.  Sesame Street is tackling another educational frontier - debt.  With millions of adults in the quagmire of debt agony, the developers and writers of Sesame Street are creating a new video program designed to teach financial literacy to children.  While already tackling such topics that confound adults such as healthy living and multi-cultural understanding this is just a new twist on a long policy of helping to educate kids now on problems and issues that they are likely to face as adults.  See more at www.sesamestreet.org/save and www.pncgrowupgreat.com.

Foreclosure Alternatives

Considering a Short Sale?

Although Oklahoma weathered the nationwide slump in home values much better than other states, we have finally succumbed to declining prices.  That equity that you thought you had in your home may seem like it has vanished after your home has sat on the market for months without an offer close to your asking price.  What's even worse is finding out that the grand home-ownership investment that you made a few short years ago has turned out to be a losing venture and you're actually upside down or owe more than your home is now worth.  

You may have heard about or come across the idea of a short sale and believe that this is the answer.  With a short sale, the lender agrees to allow you to sell your home for less than it is worth so that they avoid the costly endeavor of foreclosing on your home.  There are some things to keep in mind with a short sale though.

A short sale can substantially reduce the amount of time you can live in your home. With a short sale, once your house is sold you need to move out so the new owners can move in. On the other hand, if you decide to let your lender foreclose you can't be evicted until your home has been auctioned. This can sometimes be many months after you stop paying your mortgage payment.  This gives you time to set aside payments that would otherwise be going to the lender and give you a financial cushion once you have to move somewhere else.  Even after the auction, you may be able to negotiate "cash for keys" and get paid to move out. Remember a short sale can result in income taxes owed for the difference between the price the house was sold for and the amount that you owed on the house.  

In Oklahoma, while it is not guaranteed, most lenders do not go after borrowers for the deficiency, if any, once a property has been foreclosed on.


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