Phoenix Bankruptcy Law News

March 2011 Archives

Harry and David Holdings Files For Chapter 11 Bankruptcy

America's favorite gift basket retailer is now facing a bit of financial trouble. According to CNN Money, the company Harry & David Holdings filed for Chapter 11 bankruptcy protection last week in hopes of restructuring the business.

With the weak economy, Harry & David has seen less consumers shopping for their goodies in retail stores and online. The company, which is based in Medford, Oregon, has a bankruptcy filing that reports nearly $200 million in outstanding debt.

Crowne Plaza San Marcos Files For Chapter 11 Bankruptcy

Downtown Chandler’s lovely Crowne Plaza San Marcos Golf Resort is in a bit of financial trouble. Court papers show that the resort has liabilities of between $10 million and $50 million and thousands of creditors. Hence, the company has filed for Chapter 11 bankruptcy protection so that the business can be reorganized and finally get out of debt.

The bankruptcy petition, which was filed this month, reportedly halts a trustee sale. Crowne Plaza San Marcos General Manager Frank Heavlin said in The Arizona Republic that business at the hotel will continue as usual during the the bankruptcy proceedings. He also says that he is confident that the business will survive through the Chapter 11 bankruptcy.

Arizona's Per Capita Income Below National Average

If you’re not raking in a lot of money each year and you live in the Grand Canyon state, then you’re certainly not alone. The Phoenix Business Journal reports that based on information released by the U.S. Bureau of Economic Analysis, the state of Arizona now ranks 40th among U.S. states in the category of per capita income.

Residents of Arizona made an average of $34,999 for 2010, which is far below the national average of $40,584. The good news is that the state’s per capita income last year increased significantly from 2009, when the per capita income was at $32,935.

Robb & Stucky Declare Chapter 11 Bankruptcy

The high-end home furnishings retailer Robb & Stucky will no longer be able to keep it’s Arizona store in Scottsdale open, since a Florida judge recently ordered that the business liquidate its assets. According to the Phoenix Business Journal, the furniture company filed for Chapter 11 bankruptcy protection last month in a U.S. Bankruptcy Court and a liquidation firm bought the company on March 8.

Robb & Stucky has blamed the bankruptcy filing on the economic recession, high rates of unemployment and low demand for housing in the U.S. markets that it serves. The 95-year-old company, based in Florida, just couldn’t compete in the struggling economy. Yet Scottsdale shoppers might be able to get some good deals on furniture over the next month at Robb & Stucky, before the store is gone for good.

Rising Gas Prices in Phoenix and the Economy

As gas prices are hitting just under $4 per gallon, many consumers will have to put limits on the amount of money that they are spending. This could mean a tough spring season is on its way for Valley retailers.

Reuters reports that three-quarters of Americans surveyed by America's Research Group said they were shopping less due to rising gas prices. Consumer spending makes up about two-thirds of the U.S. economy. Hence, there are now new worries when it comes to the nation's economy.

Thirry Chahez Pays His Credit Card Debt With Pennies

If you're having trouble paying your bills, you can always try counting up your pennies and loose change so that you can afford payments. A San Diego, CA man learned a lesson this week that every penny really does count.

The Daily Mail reported that business owner Thirry Chahez paid off all of his $6,500 credit card debt with 650,000 pennies. After loading crates of pennies into Chase Bank, the bank said that they refused to accept the pennies as payment unless they were packaged into rolls rather than individual coins. Chahez then surprised bankers by returning with his 650,000 pennies neatly rolled up, boxed into crates.

Phoenix Metro Area Expects Many Blockbuster Closures

At a time when people seem to prefer online video rentals, Blockbuster is having to adjust to the changing market and reorganize its business. America's largest video rental chain store is now in the process of closing many of its video store locations, including 50 Blockbuster locations in the Valley alone.

The Arizona Republic reports that 25 Blockbuster stores will be closing as early as next month in the Phoenix area, which will put about 250 people out of work in the region. The company filed for Chapter 11 bankruptcy protection last September in hopes of reorganizing the business, but now liquidation might be Blockbuster's only option. A number of creditors see liquidation as the best way to recover the money that is owed to them.

Debit Card Caps Could Mean More Credit Card Debt

It’s possible that we’ll be seeing an increase in credit card usage and a decrease in debit card usage due to proposed policies that would put caps on debit card transactions. The Wall Street Journal reports that Chase is looking to limit debit card purchases to a maximum of just $100.

This proposed limit on debit card transactions is coming about now because of a specific federal law that is supposed to go into effect in July. The law will enact a limit on the fees that banks can charge retailers for debit card transactions. Banks like Chase are fighting back against this law by discouraging consumers from using their debit cards. With a cap on debit card purchases, it’s likely that consumers will start using their credit cards more.

Number of Phoenix Bankruptcies at Two Year Low

At times when Arizona’s unemployment rate seems to be improving and consumer credit card debt seems to be falling, the Phoenix metro area is seeing a decrease in bankruptcy filings. According to The Arizona Republic, Phoenix-area bankruptcies fell to a two-year low in February.

There were reportedly 1,819 bankruptcy filings in the region last month, which is 12 percent less than the number of filings in February 2010. Perhaps the decrease in bankruptcy filings is a sign that the Phoenix economy is improving. Bankruptcy filings have decreased in 10 out of the past 11 months.

Identity Theft, Debt Collection Top Consumer Complaints of 2010

For the 11th year in a row, identity theft was ranked in 2010 as the number one type of consumer complaint that the U.S. Federal Trade Commission received, making up 19 percent of all complaints. According to an FTC press release, the debt collection category took second place on the list of most complained about categories with the federal agency (11 percent of all complaints).

Perhaps the top complaint categories indicate that fraudulent schemes, debt collection scams, and aggressive debt collection tactics are some issues that most concern American consumers. Listed below is the full list of the Top Ten complaints among consumers for 2010.

Many local eateries are simply unable to completely recover from The Great Recession and are thus forced out of business. The Tempe-based J.B.'s Family Restaurant chain, for example, is filing for Chapter 11 bankruptcy protection due to the poor economy.

The Phoenix Business Journal reports that the restaurant started its operations in 1961, and that the company has locations in the states of Arizona, Utah, New Mexico, Idaho, Wyoming and Montana.

AG Tom Horne Will Continue Lawsuit Against Bank of America

Bank of America has been accused of deceiving Arizona homeowners by foreclosing homes after repeatedly assuring the owners that their loans were being modified so they would continue to make payments. This is why Arizona's new Attorney General Tom Horne is continuing with the lawsuit that former Attorney General Terry Goddard filed in his last days in office.

According to Associated Press, Horne says that he would be willing to settle the lawsuit with Bank of America under the same terms that Goddard proposed last December. Settlement provisions would include deadlines for completing loan modification applications and a second deadline for a decision by the bank. The Attorney General is also calling for Bank of America to assign just one person to a homeowner's case, so that the borrower does not have to deal with multiple people when there is the threat of foreclosure.

Mesa Air Group Reorganizes After Emerging From Bankruptcy

Fourteen months after filing for Chapter 11 bankruptcy protection, the company Mesa Air Group has finally emerged from their bankruptcy case. According to The Arizona Republic, the Phoenix-based airline now has contracts with US Airways and United Airlines.

As part of Mesa Air’s reorganization plan, the private company will pay out $19.4 million to secured creditors and $43.2 million to unsecured creditors in 8 percent notes. Since the bankruptcy filing, the regional airline has fewer than half of the planes it previously had and about 26 percent fewer employees. Mesa Air currently operates 76 aircraft with approximately 450 daily system departures to 94 cities, 38 states, the District of Columbia, and Mexico.

Your Rights Under the CARD Act

The Credit Card Accountability Responsibility and Disclosure Act of 2009, more commonly known as the CARD Act, went into effect in February 2010 and has since transformed the way the credit card industry operates. Now, one year after the law took effect, economists are analyzing the positive and negative aspects of the law.

The law had the intention of protecting consumers from egregious fees. FOX Business News reports that credit card companies can now no longer apply increased interest rates to pre-existing balances unless account holders are at least 60 days delinquent. The CARD Act has also mandated various regulations that require increased clarity in the statements that credit card companies send to their customers.