Orange County Restaurants Expanding Marketing Strategies.
The downturned economy is setting the perfect scene for a battle starring restaurants, food chains and small diners in Orange County.
Restaurants and other food joints are using different tactics to attract customers, keep the loyal ones, or if it comes to it, to avoid layoffs and closings.
Facing soaring ingredient prices and lack of customers, the food industry has been doing all it can to survive this recession. Employing tactics such as value deals, 2 x 1 coupons, smaller food portions, price increases and lunch service elimination, restaurants of all sizes in Orange County are hoping this will be enough to avoid bankruptcy.
Some of the chains and restaurants In Orange County that have implemented these tactics are Black Angus, with locations in Fullerton, Lake Forrest and Fountain Valley; Mimi’s Café, with locations in Tustin, Costa Mesa, Fountain Valley, and Garden Grove; The Daily Grill, with locations in Newport Beach and Irvine.
None of these chains or restaurants have been forced into bankruptcy — yet. Orange County residents are hoping it stays that way…
Cash Decreases, Creativity Increases.
In an economy such as ours, where many Orange County residents and businesses are doing all they can to avoid bankruptcy, and in many cases need the help of bankruptcy attorneys, creative solutions to save cash are needed. For even if a bankruptcy attorney is to be hired, there still has to be some cash around to pay for those bankruptcy services. Enter: bartering.
The practice of bartering has increased these past few months, according to Mike Ames, founder of Trade American Card, a barter club based in Orange County. Barter, or reciprocal trade, allows people to trade goods or services for other people’s products or services. “If you need to save cash, bartering is best”, says Bob Meyer, founder and publisher of the Mission Viejo trade publication “Barter News”.
Trade American Card hosted its 38th Barter Expo this past Sunday in Anaheim. They were expecting more than 1,000 people and 150 exhibitors selling the products they usually barter. “The potential deals are almost limitless”, said Paul Herrera, owner of Herrera Advertising and Marketing in Garden Grove.
Nevertheless, Mayer notes that trade exchanges are not exempt of risks. “See where you can spend your trade dollars”. “[When doing barter,] the chance you take is that the small business will still be in business later”.
For many professionals and stores located in Irvine, Tustin, Costa Mesa, Santa Ana, Newport Beach and other Orange County cities, bartering could be a good option to get the most out of their bucks, possibly avoid bankruptcy, or at least save some cash to be able to pay for a bankruptcy attorney.
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During Credit Crunch, Bankruptcy Difficult to Avoid
Last month saw a 34% growth in bankruptcies filings, as compared to cases filed in October 2007. According to the New York Times, this increase in the number of bankruptcy filings is due in large part to the specific nature of this particular economic crisis. Besides the usual reasons why people look for bankruptcy protection, such as job loss, medical bills, divorce, the central reasons for the increase in Chapter 7 and Chapter 13 bankruptcy filings during this economic crisis have more to do with the abrupt drop of home values, unstable incomes, and the “credit crunch”.
It seems that more people are turning to bankruptcy lawyers during this economic downturn than during the tech bust because of how the mortgage crisis has affected the lending practices of financial institutions. Essentially, where debtors used to be able to avoid bankruptcy by obtaining more credit, and tried to stay afloat for a while longer, the current “credit crunch” has made it nearly impossible for many to obtain new credit cards, refinance their home mortgages, or get a home equitiy line of credit, due to the banks’ pull back on lending. This has, in turn, driven many debtors to file for bankruptcy that would have otherwise avoided it. This does not mean that many people aren’t trying their best to avoid filing, as seen in a key statistical comparison to the filings in 2001.
In recent studies, it was shown that the typical family who filed for bankruptcy in 2007 carried 21% more secured debt and 44% more unsecured debt than people who filed in 2001, even though average income among those filing for bankruptcy remained static over those six years. So although income stayed the same, debt rose, illustrating the attempt by debtors to put off bankruptcy as long as possible while trying to get back on their feet. Studies also show that filings increased mostly in places where real estate values skyrocketed and then crashed, including Irvine, Laguna Beach, and Mission Viejo in Orange County, as well as Corona, Murrieta, and Temecula in Riverside County.
Although filing for bankruptcy and hiring an attorney is not anyone’s idea of a good time, for many Orange County, Riverside County, and San Bernardino County residents it’s the most sensible solution to get their financial sanity back, and the best path toward a well deserved fresh start.
To read the NY Times article, click here
Fifteen SunCal-Lehman Brothers Developments in Bankruptcy
The number of Sun-Cal Cos. Developments that have faced bankruptcy petitions increased by three this week, bringing to 15 the total of Irvine-based, SunCal-Lehman Brother projects in California that are under U.S. Bankruptcy Court supervision.
The total of SunCal voluntary and involuntary petitions submitted by attorneys reached 15 after the filing of the Northlake development in Castaic and its Oak Valley and Heartland projects in Beaumont, along with a petition against the SunCal Marblehead development in San Clemente.
The involuntary petitions take place when one of the parties, in this case Lehman Brothers, who financially backed up the projects, does not consent to a voluntary bankruptcy filing. Thus, involuntary bankruptcy is the only way SunCal can get their projects into bankruptcy court, in order to get additional financing.
Officials of SunCal also disclosed that involuntary bankruptcy petitions are to be expected within days on the other five developments controlled by Lehman. David Soyka, SunCal company spokesman, said that Lehman has cut off critical funding for their developments since the investment bank had its lawyers submit their petition for bankruptcy in September.
Soyka said that SunCal has lined up a partner willing to provide $75 million. But SunCal’s proposed bankruptcy lender is requiring priority over Lehman’s liens before providing the financing.
Some of the SunCal Cos. Developments filed for bankruptcy are located in the cities of San Juan Capistrano and San Clemente in Orange County. Others are located in Riverside County, in the cities of Yucaipa, Modesto, Rubidoux and Beaumont.
Read a related article at the OC Register.
Are Gift Cards Safe from Bankruptcy? Think Again.
Have you ever thought what to do with a “toxic” gift card? You know, those gift cards from companies that could go bankrupt?
Lots of people see gift cards as the perfect present, but what if those gift cards belong to the troubled retailers that faced closings in 2008? It’s estimated that more than $75 million from store and restaurant gift cards could be lost this year. For Orange County residents, home to South Coast Plaza in Costa Mesa, the Mission Viejo Mall, Laguna Hills mall, and many other shopping centers, this is something to be worried about.
Last Christmas, shoppers spent approximately $26.3 millions on gift cards at retailers. Big retailers, such as Sharper Image, Bombay Co. and most recently Circuit City, have filed for bankruptcy protection. The Bankruptcy Code considers unused gift cards as unsecured debt, which means that the company would not be forced to honor them, no matter if the amount goes to $20 million as in Sharper’s case.
Although Sharper Image first decided not to honor the gift cards, the company later proposed to accept them if the clients spent twice the value of the gift card on a single transaction. So, in order to get your Christmas present from Grandma, you would need to spend twice its value. Talking about not-so-good deals.
In cases in which a company is sold or reorganized, and continues its operations, most owners will get authority from the Bankruptcy Court to honor the cards, but in outright liquidations, in which stores are closed, the cards would be worthless. In that case, you could use your long expected gift card as a ruler, or as a chewing gum scratching tool.
What are you going to give your picky relatives this Holiday season? In case of doubt, just remember that good old cash never expires and it’s always well received.
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