Providence RH bankruptcy seen as unavoidable on budget gap
This is unfortunate events but in the end, these functions are beneficial. By taking the pain now and restructuring programs to meet the available funds for ongoing operations. We will and need to see much more of this so we can not have states running unsustainable budgets that they will not impose taxes and fees to cover.
Bloomberg - Providence Mayor Angel Taveras has put pressure on Brown University and other nonprofit organizations to help close a budget gap of at least $20 million, while Governor Lincoln Chafee is pressing lawmakers for action on measures to curb municipal pension costs. Unsustainable retiree expenses helped push Central Falls (1058MF) into insolvency. Moody’s Investors Service cut Providence debt a step to Baa1, third-lowest investment grade, this week citing its “strained” finances.
“Bankruptcy is not the preferred option for restoring Providence’s fiscal health; it is the last option, and I will do everything in my power to prevent it from happening,” Taveras said in a statement in response to a request for comment on Flanders’ remark. “I respectfully disagree with Judge Flanders that bankruptcy is unavoidable.”
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Former Irish billionaire declares personal bankruptcy
What a misstep on the part of Sean Quinn. He should of never pledged his entire equity of the Quinn Group to the bank to acquire its shares. When you took the money from the bank and started buying, you basically locked yourself in at the prices you purchase shares at. If you don’t acquire the majority stake in the bank, you loaned capital is now at the mercy of the managers of the bank and their board. In this case, the fix was already baked in so it would not of mattered if he got control of the now failed firm. It is plain to see what happened next, the bank was leveraged up with toxic real estate assets and as those declines, the shares fell and the bank went under. Now Mr. Quinn owes a huge note to a failed bank for billions and he owns shares in a bank that is now insolvent.
This is what happens when we use so much leverage in the system. Companies and people can just explode and leave huge liabilities that hurt the employees and shareholders alike.
Forbes (Edwin Durgy) – Once Ireland’s richest man with a personal fortune of $6 billion, Sean Quinn applied for voluntary bankruptcy in Belfast this morning. Quinn owed an alleged $3.85 billion to Anglo Irish Bank’s successor institution, the Irish Bank Resolution Corporation, which he simply couldn’t repay.
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Boise County Idaho files for bankruptcy
This is a good sign if you really think about it. If Boise County has unsustainable debt levels then having them file for protection and re-negotiate with their creditors is the proper and legal remedy. What we don’t want to see is the federal government coming in and bailing these municipalities out and basically trying to have them support large budgets without the tax revenues to back it up. There are quite a few more on the east coast that are getting close to this point so we should hear something to this effect in the future. As a nation as a whole, we need to get all our spending back to a sustainable level so we honestly get our house in order and start reducing this historic public debt we have.
Idaho Statesman - In a move rare in the United States and perhaps unprecedented in Idaho, Boise County is filing for federal protection against a multimillion dollar judgment. “This was not our first option. This was our last option,” said Jamie Anderson, chairwoman of the three-member Boise County Board of Commissioners. “This protects us so we can continue to operate.” Chapter 9 protection, from a section of federal code expressly for financially distressed municipalities, means that creditors can’t collect while the county is developing a plan for reorganizing its debts.
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Ambac files for Chapter 11 bankruptcy
This story almost passed by without me noticing it. It has been 2 years since we have had much news from the mono-line insurers. Looks like Ambac has missed some debt payments and this forced their hands into bankruptcy to try and re-negotiate with their creditors. This is going to affect the whole sector and we will likely see another insurer go under or some consolidation.
Forbes - Ambac Financial Group said late Monday it has filed for Chapter 11 bankruptcy, after failing to reach agreements with lenders on how to repay its debt. As of June 30, Ambac had $1.6 billion in debt outsanding.
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CIT Group Files Bankruptcy Under Debt Reduction Plan
No surprise that CIT is finally restructuring their debt, hopefully they can become a viable business finance company that can rely more on long-term financing then the more short and medium term financing. According to Bloomberg, they are looking to refinance $10 billion dollars of debt. This bankruptcy makes it the 5th largest in U.S. history at $71 billion dollars in assets against which it has $64.9 billion in liabilities.
CIT Group Inc., the 101-year-old commercial lender that saw its funding dry up in the credit crunch, filed for bankruptcy in an effort to cut $10 billion in debt following a failed debt exchange and U.S. taxpayer bailout.
CIT listed $71 billion in assets and $64.9 billion in liabilities in a Chapter 11 petition yesterday in U.S. Bankruptcy Court in Manhattan. The Treasury Department said the government probably won’t recover much, if any, of the $2.3 billion in taxpayer money that went to CIT.
The lender, which funds about 1 million businesses such as Dunkin’ Brands Inc. and Eddie Bauer Holdings Inc., plans to exit court protection next month after bondholders voted in favor of a “prepackaged” plan. None of CIT’s operating subsidiaries, including Utah-based CIT Bank, were included in the filing, and operations will proceed as normal, CIT said in a statement.
“Short term, it’s going to cause some difficulties for startups and smaller borrowers,” said Jean Everett, a partner at Hiscock & Barclay LLP focusing on financial institutions and lending. “CIT lent across so many sectors, it’s sort of difficult to predict how it’ll affect each sector.”
Source: Bloomberg
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Lehman Brothers bankruptcy filing may have wiped out $75 billion from creditors
No doubt everyone looking back will think that Lehman should of been saved from their current fate but that is now in the past and we have to deal with the current situation. I think some hard questions will need to be answered when we look early in this meltdown on why certain companies were saved when others were not even days apart? I am suprised no real criminal investigation have really been announced other than Madoff.
News:
Lehman Brothers Holdings Inc’s emergency bankruptcy filing wiped out as much as $75 billion of potential value for creditors, The Wall Street Journal reported on Monday, citing an analysis by the bank’s restructuring advisers.
A more planned and orderly filing would have allowed Lehman to sell some assets outside of bankruptcy court protection and would have given it time to unwind derivatives positions, according to the analysis by Alvarez & Marsal.
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Tribune newspaper files for bankruptcy protection from creditors
It will be likely to see more of these private equity deals fall apart and it up in bankruptcy as well. Sam Zell must not be happy about this turn of events. It is interesting that they talk about “de-leveraging” in this press release. Something tells me that this might not be a Recession but in reality a very real Depression. The stock market is sending mixed signals, with the amount of bad news coming out, it is surprising that the market is not only where it is at but actually gaining. Maybe some of these liquidity is seeping into the stock market?
News:
The publisher of the Chicago Tribune and the Los Angeles Times declared bankruptcy on Monday as the U.S. newspaper industry’s unrelenting loss of readers and advertisers claimed its biggest victim yet.
Tribune Co, which owns eight major daily newspapers and several television stations, filed for Chapter 11 bankruptcy protection after collapsing under a heavy debt load just a year after real estate mogul Sam Zell took it private.
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