Phoenix Bankruptcy Law News

June 2012 Archives

Product liability claims against the bankrupt U.S. distributor of Maclaren strollers will now be covered by Maclaren, the U.K.-based manufacturer of the faulty strollers, The Wall Street Journal reports.

The lawsuits stem from a 2009 product recall of Maclaren strollers that had amputed the fingers of children who rode in them. When Maclaren USA, now known as American Baby Products, filed for Chapter 7 bankruptcy, a hold was placed on many of the lawsuits.

The last thing you want to deal with when you’re laid up in a hospital bed is a debt collector. The government feels your pain.

The U.S. Treasury Department has proposed new rules to prevent abusive debt collection practices in non-profit hospitals, NPR reports. The rules are aimed at aggressive debt collectors who swoop down on consumers when they’re most vulnerable.

Last week, a federal judge in Arizona approved an agreement requiring a Milwaukee law firm to pay $26.5 million to settle a class action suit over an alleged Ponzi scheme run by a Phoenix company, the Journal Sentinel reports.

Law firm Quarles & Brady’s Phoenix office is accused of representing Radical Bunny LLC, a securities dealer that reportedly raised money for Mortgages Ltd., an Arizona mortgage broker that allegedly ran a Ponzi scheme. According to the filings, Mortgages Ltd.’s investors lost around $900 million when the real estate bubble burst, resulting in at least two bankruptcies.

More and more students are relying on private student loans to pay for expenses not covered by federal Stafford loans, scholarships, and grants, The Associated Press reports. The problem is that private loans can be a lot less forgiving than their federal counterparts.

Below, we’ve described some of the key differences between private and federal student loans and some tips to help you decide whether a private loan is for you.

On Wednesday, the Federal Reserve announced that it will be extending a program intended to lower long-term interest rates, The New York Times reports.

Fed officials noted that job growth has weakened, but consumer spending is slowly rising. By extending “Operation Twist” through the end of the year, Fed officials hope to buy time to gain a better perspective on where the economic recovery is heading.

Most people think that in a Chapter 7 bankruptcy all debts are discharged and the debtor gets to start over with a clean slate. While that’s true for most debts, there are some types of debts that aren’t discharged in a bankruptcy.

In addition, there are certain circumstances in which a debtor or a bankruptcy court may decide that a debt shouldn’t be discharged. Below, we’ve outlined several reasons why all debts may not be discharged in a Chapter 7 bankruptcy.

Solyndra, a California-based solar panel manufacturer, expects to file its new bankruptcy plan in the next two to three weeks, The Associated Press reports.

In March 2009, the federal government gave the company a half-billion dollar loan to develop production facilities for the company's solar panels. On September 1, 2011, Solyndra filed for Chapter 11 bankruptcy and laid off all of its employees. Now, the company is preparing to take the next step in its bankruptcy.

This week, a judge burned pot grower CGO Enterprises LLC by throwing out the company’s bankruptcy case, The Wall Street Journal reports.

Last month, CGO filed for Chapter 11 bankruptcy in order to avoid being evicted from the warehouse where it grows its plants. Although Judge Michael Romero of the U.S. Bankruptcy Court in Denver cited incomplete filings as the reason for the dismissal, CGO’s case was plagued by legal questions regarding the company’s controversial cash crop.

While bankruptcy can be a great tool to help you get out from under your debt burden, it can have lasting effects. Filing for bankruptcy can cost you your property and possessions and wreck your credit score. In addition, bankruptcies are expensive.

So what can you do if you decide not to file for bankruptcy? Below, we’ve included three of the best alternatives to bankruptcy.

Former Arizona Diamondbacks pitcher Curt Schilling’s video game company has filed for bankruptcy, The Associated Press reports.

According to the bankruptcy filings, 38 Studios and its subsidiaries owe more than $150 million to their creditors, yet own only $50 million in assets, The New York Times reports. In a Chapter 7 bankruptcy, the company’s assets will be sold to pay off its creditors.

The end of May brings some good news and some bad news for Phoenix’s recovering economy, The Arizona Republic reports. First, the bad news: bankruptcies in the metro Phoenix area rose to a nine-month high in May.

The good news: the rise in bankruptcies was relatively small and the numbers are actually consistent with a trend of stabilization, according to The Republic.

Last week, American Airlines failed to reach an agreement with its flight attendants’ union on labor cost cuts, Bloomberg reports. AMR Corporation, American Airlines’ parent company, filed for Chapter 11 bankruptcy protection in Nov. 2011.

Now that the talks have fallen through, a bankruptcy judge will likely rule on whether American can void its labor contract with the Association of Professional Flight Attendants to cut costs. In April, the carrier’s labor unions reached an agreement with Tempe-based US Airways, in preparation for a possible merger between American and US Airways.

With former NFL stars Warren Sapp, Terrell Owens, and Jamal Lewis all filing for bankruptcy over the past month, many people are left wondering, “Where did all the money go?”

Below, we’ve included five of the biggest reasons why former NFL players go broke, as observed by Jack Bechta, one of the NFL’s most experienced agents, in the National Football Post.