Archive for January, 2010

Chapter 11 and Litigation

15 January 2010 by Kelly Black  |  Chapter 11 Bankruptcy  |  No Comments

For many Valley businesses, being served with even one major lawsuit can cripple business operations.  Even a successful defense can be expensive, and losing could end the business. One business recently in the news, Luna Innovations, filed for bankruptcy protection under Chapter 11 precisely because it appeared it might lose a lawsuit (losing is described as a “potential negative outcome”).  Within six months, the company was able to settle the claim and secure approval of a reorganization plan. Filing a Chapter 11 bankruptcy triggers the “automatic stay,” halting pending litigation.  While the creditor still has an opportunity to prove its…

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Valley Bankruptcy Rates Up 82% over 2008

12 January 2010 by Admin  |  General Bankruptcy  |  No Comments

Russ Wiles of the Arizona Republic reports today that bankruptcies for those in the Phoenix Metro area are up 82% when compared to total bankruptcy filings in 2008.  Chapter 7 filings accounted for about 81% of all filings, while Chapter 13  cases accounted for the remainder.   I was able to provide information for the Republic article and you can read it here:  http://www.azcentral.com/business/articles/2010/01/11/20100111biz-Bankruptcy0112.html . This mirrors what I am seeing in my practice –specifically that more families are opting for Chapter 7 bankruptcy.  A chapter 7 bankruptcy will help you to wipe out most if not all unsecured credit-card type debts, including medical bills…

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AZ Leads Nation in Bankruptcy Increase

5 January 2010 by Admin  |  General Bankruptcy  |  No Comments

In a story by the Associated Press yesterday, it was announced that in 2009 there were approximately 1.4 million bankruptcies filed across the nation.  Arizona saw the fastest increase with a jump of 77 percent in filings when compared to 2008. Over the last two years I have seen not only a significant jump in the number of people filing, but a significant change in the type of financial situation that is leading a person into bankruptcy.  Two years ago almost all filings were associated with a foreclosure or fear of losing a home.  Now, most have experienced a reduction…

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Mesa Air Files Chapter 11

5 January 2010 by Kelly Black  |  Chapter 11 Bankruptcy, General Bankruptcy  |  No Comments

The Phoenix Business Journal reports on the Chapter 11 filing by a local company, Mesa Air Group.  Mesa Air’s CEO states a common reason for filing a Chapter 11 bankruptcy petition: burdensome lease obligations. Long term leases can cripple a business of any size.  Many East Valley businesses are stuck in multi-year leases at rental rates set during the boom.  Often, revenues in 2010 simply do not cover lease payments set 2006 or 2007, when revenues were high.  In other cases, the business no longer needs to lease as much space or as much equipment, as with Mesa Air’s excess aircraft…

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