Chapter 7 bankruptcy filings for the month of August 2009 have been most numerous in the following Orange County cities:
Anaheim, Fullerton, Garden Grove, Huntington Beach, Irvine, Laguna Niguel, Lake Forest, Mission Viejo, Orange, and Santa Ana.
Chapter 7 bankruptcy attorneys in Orange County have also seen a high number of bankruptcies filed in Costa Mesa, Rancho Santa Margarita, and Westminster.
For bankruptcy attorneys in Orange County, there were no shortage of Chapter 7 bankruptcies that needed to be filed in February, 2009. The amount of Chapter 7 bankruptcy filings in the Santa Ana Bankruptcy Courthouse in February totals 612, a slight increase from January’s total of 605.
The ten cities with the most Chapter 7 bankruptcy filings in Orange County for the month of February 2009 were: Anaheim, Costa Mesa, Fullerton, Garden Grove, Huntington Beach, Irvine, Laguna Niguel, Orange, San Clemente, and Santa Ana. Other Orange County cities that also had a high number include: Aliso Viejo, Mission Viejo, and Tustin.
From Bloomberg news online:
“U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years.
Retailers may close 73,000 stores in the first half of 2009, according to the International Council of Shopping Centers. Talbots Inc. and Sears Holding Corp. are among chains shuttering underperforming locations.
More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc., Sharper Image Corp. and Steve & Barry’s LLC, have sought bankruptcy protection this year as the credit squeeze and recession drained sales. Investors will start seeing a wide variety of chains seeking bankruptcy protection in February when they file financial reports, said Burt Flickinger.”
As previously posted on this blog, Orange County has been affected by the filing of bankruptcies and closings of stores like Circuit City and Linens ‘n Things. From Costa Mesa to Irvine to Lake Forest, store closings have left little of Orange County untouched. So far only bankruptcy lawyers seem to have benefited. But Flickinger says that retail bankruptcies may be good for the industry in the long run:
“We’ll be going from a Dickens-esque worst of times this December to the best of times in future Decembers because we’ll rationalize out all the redundant retailers and retail space in shopping centers,” Flickinger said.
We shall see…
For More Information: click here
Although the economic crisis is hitting California as hard as the rest of the country, it is hitting certain counties in California even harder, according to UCLA economists. Riverside County, San Bernardino County, Orange County, and a few other areas will feel the effects of the recession more than the rest of the state.
From the OC Register:
“’The Inland Empire, Orange County, the East Bay and the Central Valley will be hit the hardest as the recession provides a double whammy with a generalized downturn in demand and a postponement of a recovery in residential construction,’says the UCLA quarterly economic forecast.
Orange County unemployment soared to 6 percent in October, a high not seen since July 1994 during the aerospace and construction recession of the mid-1990s.
Economist Jerry Nickelsberg blames the collapse of Orange County’s mortgage and home finance industry for creating an additional strain on the local economy now.
‘It created a big hole in Orange County employment,’says Nickelsberg. He believes it will take several years to absorb those lost jobs.”
According to the forecast, the next year will only get worse for Orange County residents, as unemployment will continue to rise. This, in turn, will lead to less consumer spending and more consumer and business bankruptcies. Bankruptcy attorneys in Orange County, from Irvine to Santa Ana to Rancho Santa Margarita, are reporting high volumes of new bankruptcy clients seeking to file Chapter 7 and Chapter 13 bankruptcies. As far as business in California goes, bankruptcy attorneys are among the select few that are seeing an increase in clients from this crisis.
For More Information: click here
Although untold numbers of real estate and mortgage companies in Orange County have fallen victim to bankruptcies lately, Orange County’s biotechnology companies have not suffered to the same extent. Biotech companies elsewhere have not been as lucky, though, as seen by recent and unprecedented bankruptcy filings, as well as in the cut in funds allocated to the development of new drugs to treat diseases such as multiple sclerosis, Alzheimerʼs and Parkinsonʼs.
Last month, at least five notable U.S. biotechnology companies filed bankruptcy, something unusual for the industry. Biotechnology bankruptcies have been relatively rare, as struggling companies have opted for other solutions, such as new investors, mergers, or new licensing or development deals.
Tactics used by some biotechnology companies to avoid bankruptcy include downsizing, moving to smaller offices, shelving early research projects and delaying research on new drugs, all in order to avoid looking for a bankruptcy attorney.
No one would suggest that the top companies are at risk, but Orange County is home to some of the best and fastest growing companies in the U.S. So far, leading Orange County compnies such as Advanced Medical Optics headquartered in Santa Ana, Beckman Coulter headquartered in Fullerton and Edwards Lifesciences headquartered in Irvine appear to be unaffected by the recent economic turmoil. However, BioLASE, Inc., of Irvine announced a planned reduction of 20% of its workforce earlier this week.
Investors are expected to come back once the economy gets stable, so the biotechs continue working on projects like a prostate cancer therapy, a polio vaccine and new diabetes treatments.
For more information, click here
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
Get free updates, subsbribe!