The company responsible for Ho Hos, Twinkies, and Ding Dongs has announced that it has filed for bankruptcy protection. Hostess Brands has filed for Chapter 11 bankruptcy once before, in 2004 when it was under the name Interstate Bakeries Corp. The company recently came out from a financial restructuring process in 2009 with changes that the company now considers as “insufficient.”
Eastman Kodak Co., the notoriously innovative company that was credited with making the camera financially assessable to the greater public, is considering filing for Chapter 11 bankruptcy, according to the Wall Street Journal. How did a company that was once so successful end up in such a rut?
While it may be general practice among other law firms to pass these increased costs along to the client, at JacksonWhite we have elected to absorb some of the miscellaneous costs associated with filing bankruptcy. We hope to keep the total money coming out of your pocket as minimal as possible.
Once someone makes the decision to file for bankruptcy, the next question is – “What chapter should I file?” There are four different chapters that an individual can file – Chapters 7, 11, 12, and 13. Chapter 12 is for farmers and fishermen (and no, occasional fishing trips or having a garden in your backyard does not qualify you). Chapter 11, while most often filed by businesses, can also be filed by those who make too much money for a Chapter 7 and have too much debt for a Chapter 13. If you are an individual, it is most likely that you will end up filing a Chapter 7 or Chapter 13.
In 2008, current Republican presidential hopeful, Mitt Romney, wrote an op-ed piece for the New York Times titled “Let Detroit Go Bankrupt.” The main idea of the article was that he believed Bankruptcy, not government bailouts, would save the auto industry. The premise was that Romney had the best economic plan for the country and that his policies would help the nation recover much faster than the policies of McCain or any of the Democrats. Obviously, Romney didn’t even win the Republican nomination back then.
Certain debts cannot be discharged, meaning they will not be wiped out should you choose to file bankruptcy. If you file for Chapter 7 bankruptcy, you’ll still owe these nondischargable debts even after your bankruptcy case is over. If you file for Chapter 13 bankruptcy, you will have to pay these debts in full as part of your repayment plan.
Bankruptcy attorneys often forget that the terms and lingo used in their day to day lives is not generally known by the general public. Bankruptcy is its own area of the law with many terms not used in other areas of non-bankruptcy law. I thought it would be helpful to give a brief run down of terms used in the bankruptcy process to help you in your navigation of the bankruptcy system. Automatic Stay: The Automatic Stay is provided for in 11 U.S.C. § 362(a). This is an order automatically entered by the bankruptcy court upon the filing of…
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…
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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