For bankruptcy attorneys in Orange County, there were no shortage of Chapter 7 bankruptcies at the Santa Ana Bankruptcy Courthouse in May 2009.
The ten cities with the most Chapter 7 bankruptcy filings in Orange County for the month of May 2009 were: Anaheim, Costa Mesa, Fullerton, Garden Grove, Huntington Beach, Irvine, Lake Forest, Mission Viejo, Orange, and Santa Ana.
Prospective car buyers and GM car owners take note — GM has just filed for Chapter 11 bankruptcy protection. The survival of Orange County GM dealerships is unclear, but will be determined over the next two or three months, which is approximately how long the restructuring is expected to take. Orange County GM dealerships are located in: Anaheim, Buena Park, Costa Mesa, Foothill Ranch, Irvine, Laguna Niguel, Tustin, and Westminster.
From the Los Angeles Times online:
President Obama said that pushing General Motors Corp. into bankruptcy today was a painful but necessary step to revive the legendary automaker, saving thousands of jobs and avoiding another direct hit to the struggling economy.
“‘Working with my auto task force, GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again,’ Obama said at the White House just hours after the company filed for bankruptcy protection this morning in a Manhattan courtroom…
‘Simply loaning GM more money, instead of taking equity in the company, would have continued to saddle GM with ‘irresponsibly large debt,’ the reason the company is in its current dire position, Obama said.
‘We are acting as reluctant shareholders because that is the only way to help GM to succeed,’ he said. ‘What we are not doing, what I have no interest in doing, is run GM.’”
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Legislation aimed at allowing bankruptcy judges to modify home mortgages to stem the tide of foreclosures looks like it will not get the 60 Senate votes it would need to pass. This legislation was seen by many bankrutpcy attorneys and bankruptcy experts alike as the best way to quickly help those debtors facing foreclosure, whether in Orange County, or in any county for that matter.
From Yahoo News:
“In February, Obama announced his plan to save some 9 million debt-ridden individuals from losing their homes by providing incentives to lenders to cut homeowners’ monthly payments or refinance loans for individuals whose home’s market value has sunk below what they owe.
As part of the plan, Obama said he also wanted to change bankruptcy laws so a judge can reduce a person’s mortgage payment based on its market value if the homeowner had otherwise been unable to modify their loan.
While cast as a last resort, the bankruptcy option would have arguably had the most immediate impact in stemming the tide of foreclosures facing the nation.
Bankruptcy judges can already reduce loans on investment properties or personal property based on the property’s current value.
Congressional Democrats championed the legislation, which passed the House in March. But the measure quickly stalled in the Senate, where a simple majority is not enough and 60 votes are needed to overcome the objections of any one senator.
Senate Majority Whip Dick Durbin has been trying to negotiate a deal with the industry under the assumption that an agreement would help secure the bill’s passage.
“If we don’t do something significant and specific then it’s going to go from bad to worse,” Durbin, D-Ill., said in an interview.
But aides acknowledged that the bill had lost momentum in recent weeks, as one association representing federal credit unions publicly rejected the measure after weeks of private talks.
Democratic leaders said they wanted to hold the vote anyway to put Republicans on record for turning their backs on Americans facing foreclosure.
The bankruptcy provision will be offered as an amendment to legislation aimed at freeing capital for banks by increasing the borrowing authority of the Federal Deposit Insurance Corp.
If it doesn’t pass, Democrats say they will try again. But Durbin predicts the Senate might not be able to act in time to stem the tide of foreclosures.
“We’d continue with what we have — more and more people falling into delinquency and foreclosure with no place to turn,” he said. “I think the banks have been derelict in their responsibility.”
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From the OC Register online:
“Retail chain Everything But Water recently filed for Chapter 11 bankruptcy protection, according to a court document.
The chain has Everything But Water stores at Brea Mall, South Coast Plaza and The Shops at Mission Viejo, according to its Web site.
The company wants to close 10 stores; none of those are in Orange County, according to a court document.
During the period from late September to December 2008, the company experienced a more than 23 percent decrease in gross sales compared to the same period in 2007. Still, the company showed a profit for 2008. But recognizing that no end to the economic crisis was in sight, the company began efforts to reduce expenses and streamline operations as early Sept. 15, 2008. The company has been operating at a net loss in 2009, according to a court document.
The company is also attempting to sell the business as a going concern in Chapter 11, according to a court document.
Everything But Water has been a retailer of women’s swimwear, resort wear and accessories for 25 years. In October of 2006, Everything But Water acquired the assets of another retailer in the same line of business, Water Water Everywhere, and in February of 2007, Everything But Water acquired the stock of Just Add Water, effectively doubling the size of the business’ retail operations.
The Florida-based company has 70 stores in malls and strip malls in 26 states and Puerto Rico.
In April of 2006, Everything But Water was acquired by Bear Growth Capital Partners, an affiliate of Bear Stearns Merchant Banking, which is now a part of J.P. Morgan Chase Bank.”
Both Chapter 11 bankruptcies and Chapter 7 bankruptcies have seen a marked increase in Orange County this year, according to the bankruptcy attorneys at Curtis Law Group, a bankruptcy law firm with Orange County offices in Irvine, Mission Viejo, and Fullerton.
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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.
Attention, bankruptcy attorneys in Orange County — the number of rising bankruptcies in the near future may not be due to the economy alone. Consumer bankruptcies, especially Chapter 13 bankruptcies, may increase do to the new Bankruptcy Bill that has just passed in the House. How the Senate may change the bill remains to be seen, but now we know how the House wants it to look.
From the AP:
“A plan to give debt-strapped American homeowners a chance to lower their mortgage payments through bankruptcy courts won House of Representatives approval Thursday as a report revealed that foreclosures and past-due home loans hit a record 5.4 million last year.
A survey by the Mortgage Bankers Association released Thursday found that nearly 12 percent of U.S. homeowners were in foreclosure or behind on their payments at the end of 2008.
The legislation, part of President Barack Obama’s housing rescue plan, is facing a much tougher road in the Senate amid the same industry opposition and reservations from moderate Democrats that nearly derailed it in the House.
The House passed the bill 234-191 mostly along party lines, and the Senate could consider it within weeks.
The legislation would give bankruptcy judges — who now can modify loans for such items as cars and student loans but not for primary residences — new power to reduce the interest rate and principle on a home mortgage.
Supporters regard the threat of a mortgage modification in bankruptcy as a crucial tool to prod banks to negotiate with homeowners for more affordable terms. Critics argue the measure will create a flood of bankruptcy filings that ultimately will drive up mortgage rates and further destabilize the battered housing market.
The House bill is the product of a compromise between dueling Democratic factions. A group of moderates broke with liberal backers last week and refused to support the measure unless it included several changes the banking lobby had sought.
It took days of intense bargaining with an assist from Obama’s team to get the measure back on track. The president dispatched his housing secretary, Shaun Donovan, to a closed-door meeting in the Capitol to explain to restive Democrats how the measure fits in with the $75 billion housing initiative Obama unveiled this week.
The resulting compromise would bar homeowners from getting loan modifications in bankruptcy court unless they have first tried to work out a deal with their lenders and have no other way of affording their mortgages.
It also would let judges consider whether the home loan company had made a reasonable offer to change the terms to those embodied in Obama’s housing plan — allowing the homeowner to reduce his monthly payments to about one-third of his income.”
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The Orange County Bankruptcies Blog is paying special attention to the developments with the bankruptcy legislation presently being debated in Congress, as the outcome of these debates will impact Orange County bankruptcy attorneys and Orange County residents seeking the help of a bankruptcy attorney to a great degree.
From the Wall Street Journal online:
“House Democrats are discussing a new restrictions to a controversial measure that would allow strapped borrowers to have their mortgage debts reduced in bankruptcy, people familiar with the matter said.
After pushing a set of changes last week, lawmakers are discussing whether to tighten language in the legislation to clarify that Chapter 13 bankruptcy is a last resort only after efforts at voluntary mortgage modifications fail.
The negotiations are designed to win the approval of centrist Democrats uncomfortable with the concept. They have exposed a rift between liberal Democrats and the more business-friendly wing of their party.
The measure is a central plank of the Obama administration’s strategy to right the housing market. Proponents say it will act like a cudgel that will encourage mortgage companies to voluntarily take advantage of government-backed financial incentives to modify loans.
Under the legislation, bankruptcy judges would be able to reduce the principal amount of mortgage loans for struggling borrowers — a process dubbed “cramdown.”
The banking industry warns such a move will raise borrowing costs for all homeowners and clog the bankruptcy courts, prompting judges to write off tons of other consumer debt just when lenders are reeling from the financial crisis.
The legislation’s fate remains up in the air after Democratic leaders last week postponed a vote on the measure until Tuesday after support softened among some of the rank-and-file. That vote is now likely to happen no earlier than Wednesday due to a snowstorm that disrupted the House schedule.”
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