Phoenix Bankruptcy Law News

May 2011 Archives

Doubletree Hotel Tucson Files For Chapter 11 Bankruptcy Protection

Reid Park Properties LLC, the company that owns the Doubletree Hotel Tucson at Reid Park, is filing for Chapter 11 bankruptcy. The company has listed $52 million in liabilities and $14 million in assets on the bankruptcy petition, reports Arizona Daily Star.

There seems to be a bit of desperation with this company financially, as the hotel is reportedly delinquent on about $31 million in loans. A foreclosure notice was also reportedly filed at the 445 S. Alvernon Way location on March 30 in the Pima County Recorder's Office.

Harry & David Holdings Inc., the Medford, Oregon-based company known for their extravagant gift baskets and food treats, filed for bankruptcy last March after the company lost $39.2 million in fiscal 2010 and saw their sales fall by a significant amount. Some Harry & David stores were even forced to close their doors earlier this year because of financial concerns, including stores at the Scottsdale Fashion Square Mall and Outlets at Anthem in Phoenix.

Yet the Phoenix Business Journal reports that Harry & David, which has sold gift baskets since the 1930s, isn't going away for good just yet. The company reportedly expects to exit Chapter 11 bankruptcy this summer with a reorganization than that was recently filed in court.

The Burden of Student Loan Debt in Arizona

It’s time for graduation. But upon such a celebratory occasion, many college grads are reminded of their student loan debt and the difficulties that they might face with loan repayment. USA Today reports that student loans can not only produce great costs to students and their families, but also to American taxpayers. This is because many college-bound students, who fill out federal aid forms, lack a realistic plan to pay back their loans.

Taxpayers are now reportedly seeing tens of billions of dollars go into the hands of people who have no ability to repay their debt. Data from the U.S. Department of Education indicates that almost half of the money loaned to students who attended for-profit schools in the past decade is expected to default at some point.

Sbarro Bankruptcy: Company Reconsiders Chapter 11 Options

The pizza chain Sbarro Inc. announced last month that it would be seeking Chapter 11 bankruptcy protection in order to reorganize its business and get out of debt. Yet the Wall Street Journal reports that the fast-food chain known for its Italian cuisine in mall food courts may no longer be continuing with its reorganization plan in the bankruptcy case. Instead, Sbarro is now considering selling the business altogether.

In the Sbarro bankruptcy case, the entity that may offer to buy the entire chain is proposing a deal that is worth more than the original reorganization plan proposal. Currently, the company owns or franchises more than 1,000 fast-food pizza eateries, so there certainly seems to be a lot at stake.

Why Arizona is a Good State For Business

Chief Executive recently released their seventh annual list of the best and worst states in which to do business. The magazine ranks all 50 U.S. states based on how business leaders grade their state using categories that include taxation and regulation, workforce quality, and living environment.

This year, the state of Arizona was ranked as the 13th best state for business. While this is a slight drop from Arizona’s 11th place ranking in 2010, the Grand Canyon State consistently has been ranked among the top states for business over the past several years. In 2009, Chief Executive ranked Arizona as the eighth best state for business.

The Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD) has certain provisions that are aimed at preventing credit issuers from taking advantage of college students and young adults. The Wall Street Journal reports that some of these CARD Act policies include provisions in which students under 21 years of age must have a co-signer before they are granted a card unless they can show that they have sufficient income. Issuers are also no longer able to offer students gifts as a way to encourage opening up a new account, nor are they allowed to pitch offers on college campuses.

Yet the new policies under the CARD Act aren’t necessarily stopping credit card companies from using some aggressive tactics on college students.

Phoenix Sees Decline in Bankruptcies During April

The Phoenix metro area has seen a drop in bankruptcy filings for the third straight month in a row. Perhaps this is a sign that the local economy is improving and that Phoenix consumers are finally able to get a better grasp on their debt.

According to The Arizona Republic, the total number of Phoenix-area bankruptcies in the month of April was 8 percent lower than the number of bankruptcies in April 2010. Last month's number of 2,748 bankruptcy filings was also significantly lower than the number of bankruptcies in March 2011.

Home Rental Rates Increase in Maricopa County

At a time when home values are low in the Valley, rental rates for housing are actually shooting up. Why? ABC News reports that this trend is due to the fact that there's now a high demand to rent a home in the area.

Maricopa County reportedly has 58 percent fewer rental homes available today versus in the year 2006. With more people in need of home rentals in the area, the median list price for renting has jumped up 7 to 24.8 percent since 2006.

Metropark USA Clothing Store Files For Chapter 11 Bankruptcy

If you're looking to buy some new apparel, you'll probably get some good discounts at the store Metropark USA this week. The Los Angeles-based clothing chain has filed for Chapter 11 bankruptcy protection in a U.S. Bankruptcy Court, according to The Los Angeles Times, and will be closing its doors soon.

The apparel chain will reportedly be closing all 69 of its locations, including two stores in the state of Arizona. Shoppers can travel to the Metropark USA stores at the Scottsdale Fashion Square or at the Tucson Mall to get between 20 percent and 40 percent off of all merchandise. Metropark will not only be selling their clothes, but everything else in the store as well. This includes high-end DJ equipment, flat-screen televisions, apparel racks, shelving and lighting.

Phoenix Among Top Cities With Steepest Home Price Drops

CNN Money recently ranked the city of Phoenix among the six U.S. cities with the largest decline in home prices. This is probably not too surprising for local homeowners, many of whom have faced foreclosure proceedings.

Phoenix was on the CNN list along with Atlanta, Seattle, Detroit, Minneapolis, and Tampa. Arizona’s capital city reportedly saw housing prices double between January 2000 and May 2006, but unfortunately this trend of increasing home values was not sustainable. Since 2006, home prices have dropped to almost early 2000 levels.

It looks like one of the largest real estate franchises in Arizona is in a bit of financial trouble after struggling to make lease payments on several branch offices. The Arizona Republic reports that agents with the company were even locked out of their offices last month due to missed payments on commercial leases.

In order to get a fresh financial start with finances, Realty Executives Inc. will be filing for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court. Realty Executives announced the news of their intent to file for bankruptcy last week, shortly after sending out a memo to staff reassuring personnel that the firm was financially stable.