Bill to ensure casinos keep doors open despite Atlantic City shutdowns

A group of democratic law makers in New Jersey are pushing for a measure to protect Atlantic City’s casinos and racetracks should the state government ever face another shut down, something law makers say they hope doesn’t happen again, but they want to be forthright in protecting the state’s economy in case it does.

An article on NJ.com explains that during the recent state government shutdown, the city’s casinos may have been forced to close if the impasse had lasted longer than a week.

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“But just days after the shutdown ended — without the gambling halls shuttering — a group of Democratic lawmakers from south Jersey are pushing a measure to make sure the state’s casinos and racetracks never face that threat again.”

The bill (S3421/A5126) would ensure that casinos and tracks keep their doors open indefinitely if a shutdown does occur.

“That would amend the current law — signed in the wake of the last shutdown, in 2006 — that says casinos and tracks are required to stay open, but only for the first seven days of a shutdown,” the article reads. “A 2008 law was designed to prevent that from happening during a state government shutdown. But there is a catch as New Jersey faces another budget impasse.”

State Sen. Jim Whelan commented saying that Atlantic City is once again becoming a popular destination and if the casinos close now, or at any time in the near future, it would be destructive to the lives of all of the people and families who are dependent on them to make a living – creating an economic riptide throughout the city and state that would end with negative consequences for everyone.

“The bill would have to be approved by both the Senate and Assembly and then signed by Gov. Chris Christie before becoming law,” the article reads. “Even though the city has lost five casinos in recent years thanks partly to increasing competition from neighboring states, Atlantic City’s seven casinos still employ about 50,000 workers and generate $1.3 million in state taxes each day. Plus, experts say the city is on the rebound lately after facing the threat of bankruptcy last year.”

During a 2006 shutdown 12 casinos in Atlantic City were forced to close their doors for three days, which cost the state about $4 million in casino tax revenue due to regulators and inspectors being unable to work.

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New documentary explores the collapse of coal mining

A new documentary recently released follows the lives of coal miners after they are laid off from their jobs, leaving them without insurance or a pension.

“We knew it was coming, we just didn’t know how hard it was gonna be. We’re losin’ everything,” Regina Lilly, wife of a West Virginia coal miner who was laid off after their child was born, said in a new National Geographic documentary about coal mining,” an article by the Business Insider reads.

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The documentary is called “From the Ashes,” and it explores the past, present, and future of coal mining. The documentary is currently on YouTube. 

When mining companies move to new locations with cheaper coal, local residents have said they believe that the coal companies have “failed” them.

“In one example portrayed in the documentary, Alpha Natural Resources sent letters to 100 workers about upcoming layoffs. These ‘WARN notices’ are generally sent to workers two months before a round of layoffs, giving them time to find new jobs,” the article reads. “However, some coal workers still face unexpected layoffs …”

A wife of one of the workers said it’s heartbreaking for a community and the workers because not only have they lost their livelihood, they’ve also lost their worker’s pension, retirement plans, their savings – any finances they had in the company – but the company just then files for bankruptcy and so long as they get money in their pockets, they don’t care about the workers who have lost everything.

“In the documentary, Mary Anne Hitt, director of Sierra Club’s Beyond Coal campaign and a West Virginia resident, described the aftermath of a mine layoff as a ‘life and death struggle’ for local communities. She described the scene as one she’s seen time and again, where coal companies ‘want to shed their obligations to workers, that includes pensions and healthcare commitments,’” the article reads.

Hitt goes on to say that not just one worker loses their livelihood when coal mining jobs go, but entire communities do, which makes it harder to bounce back from. She said that it’s happening across the U.S. on an unprecedented scale. 

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Takata files for bankruptcy amidst lawsuits, fines due to defective air bags

Takata filed for bankruptcy Monday following lawsuits, fines and recall costs for millions of lethally defective air bags in the U.S. and abroad. The air bags proved to be the company’s undoing and an article by the New Jersey Herald claims it could take years to get the dangerous devices off the road.

“Crushed by lawsuits, fines and recall costs, the Japanese auto parts supplier filed for bankruptcy in Tokyo and Delaware and will sell most of its assets for $1.6 billion to a rival company,” the article reads. “A small part of Takata will continue to manufacture replacements for the faulty air bag inflators.”

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About 100 million of the Takata inflators across the world have been recalled; 69 million in the U.S. alone. It’s reportedly the biggest automotive recall in American history. It will take the industry years to produce all the necessary replacements.

“In the meantime, millions of car owners are forced to nervously wait for someone to fix a problem blamed for at least 16 grisly deaths worldwide, 11 of them in the United States. Many owners have been put on waiting lists by their dealers until the parts arrive,” the article reads. “The big problem is the air bags are still out there. They’re like bombs waiting to explode, said Billie-Marie Morrison, the lawyer for a young Las Vegas woman grievously injured by an exploding air bag in March.”

According to the New Jersey Herald, the last batch of repairs in the U.S. won’t start until September of 2020. The National Highway Traffic Safety Administration is overseeing the recall.

More than 16 million inflators have been repaired so far in the U.S. That’s about 38 percent of the total. In Japan, 70 percent have been replaced, according to Takata. That’s partly because Japan refuses to renew vehicle registrations unless recalls have been completed.

“Because of the type of chemical propellant used by Takata, the defective air bags can inflate with too much force and spew deadly shrapnel at drivers and passengers,” the article reads. “Takata sold the inflators to 19 automakers, including Toyota, Subaru, BMW, Honda, Ford and Nissan.”

Takata’s bankruptcy filing clears the way for most of its assets to be taken over by Key Safety Systems, which is a Chinese-owned company based in suburban Detroit.

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More retailers join the ranks of bankruptcy

A newly released Moody’s Investors Service report suggests that many more retailers are expected to close within the next year or year-and-a-half, and 17 Pennsylvania stores are actually on the verge of bankruptcy and could close their doors permanently.

“Overall, 22 national retailers had debt ratings of Caa or lower — higher than the number of bankrupt-leaning retailers during the Great Recession of 2008-2009,” an article in the Radnor Patch reads. “Debt rated at Caa or below is the lowest rank on Moody’s credit rating spectrum. Seventeen of those have Pennsylvania locations.”

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Charlie O’Shea, who is Moody’s lead retail analyst, told the Radnor Patch that while the majority of retailers remain healthy for the most part, a select group of retailers continue to struggle to keep their doors open. O’Shea suggests in the article that the stores that are struggling are mainly department stores or specialty retailers. He says they believe the distressed ranks will keep growing, fueled in part by distinct vulnerabilities.

Here is the list of retailers with stores in Pennsylvania that are on the verge of bankruptcy:

• Bon-Ton
• Charlotte Russe
• Charming Charlie
• Claire’s Stores
• Cole Haan
• David’s Bridal
• Eddie Bauer
• Gymboree
• J. Crew
• Kmart
• Neiman Marcus
• Nine West
• Savers
• Sears
• Totes Isotoner
• Tops
• True Religion Apparel

A report, “US Retail and Apparel: B2/B3 Issuers Gain Spotlight As Distressed Retail and Apparel Ranks Grow,” provides the public an overview of factors that impact companies at these rating levels. Click here to obtain the full report.

“Some of these retailers, such as Sears and Kmart, have already announced store closings in Pennsylvania,” the article reads. “Earlier this year, Sears announced it would close 150 Kmart and Sears stores by the spring, part of a difficult but necessary step as we take actions to strengthen the company’s operations and fund its transformation.”

 

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Joe’s Crab Shack, Brick House Tavern file for Chapter 11

The owner of Joe’s Crab Shack filed for Chapter 11 early last week. The company released a statement to the media about the filing recently.

“The chain’s owner, Ignite Restaurant Inc. — which also owns the Brick House Tavern + Tap chain — plans to sell the company for at least $50 million to a private equity firm, according to a report by CNBC.com,” an article on NJ.com reads.

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According to the article, Ignite was trying to sell the business in 2016, but sales continued to decline this year and potential buyers eventually pulled their proposals. This is what reportedly led the company to consider filing Chapter 11 bankruptcy.

“Today’s sale agreement represents the culmination of a long and thorough process, and is an important step in positioning Joe’s and Brick House for future growth and success,” acting CEO Jonathan Tibus said in the statement.

NJ.com reports that Ignite has filed a proposal to sell its assets to the private equity firm, Kelly Investment Group. Ignite Restaurant Group said the fate of the restaurants at this time is unclear, but the company many seek bankruptcy protection.

“Michael Kelly, CEO of KRG Acquisitions Co. — an affiliate of Kelly Investment Group — said in a statement that he is excited about acquiring a well-known national brand such as Joe’s Crab Shack and Brick House Tavern + Tap,” the article reads. “Ignite said in its statement that both Joe’s Crab Shack and Brick House Tavern + Tap restaurants will remain open and operating as usual and Ignite customers can expect to continue to enjoy the same great food and service that they have come to expect from our brands.”

Five restaurants are listed on the Joe’s Crab Shack website including Clifton, Deptford, Eatontown, Lawrenceville and South Plainfield. Brick House lists locations in South Plainfield, Princeton and Neptune.

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Pittsburgh Athletic Association files for Chapter 11 bankruptcy

An iconic Pittsburgh organization filed for Chapter 11 bankruptcy protection on Tuesday. The Pittsburgh Athletic Association in Oakland opened its doors about 100 years ago and has been a gathering place for the business and cultural elite ever since.

“In a filing in U.S. Bankruptcy Court for the Western District of Pennsylvania, the organization listed assets and liabilities estimated between $1 million and $10 million,” an article in the Post Gazette reads.

The social club was founded in 1908 and thrived for many years, but has since sunk deep into debt amid changing lifestyles, declining membership and dwindling revenue.

“Operations at the stately Fifth Avenue building have been shut down since mid-April when the water was cut off because of $168,000 in bills owed to the Pittsburgh Water & Sewer Authority,” the article reads. “Association President James Sheehan said Tuesday that despite the club’s mounting financial troubles, it hoped to form a plan of reorganization and reopen.

Sheehan told the media the plan now is to reach out to local and national real estate developers in hopes of coming up with proposals so the organization can remain in the building, but likely with a smaller footprint. They also hope to redevelop the building, Sheehan said.

“The association has obtained $750,000 in financing from a subsidiary of JDI Realty in suburban Cleveland, Ohio, to fund operations during the reorganization, according to the club’s bankruptcy attorney, Jordan Blask of Tucker Arensberg, Downtown,” the article reads. “He said there was no official target date for reopening, but the club hoped to be back in business ‘before year-end, if not sooner.’”

Many events that were scheduled for the next few months are in the process of being canceled, including weddings. Sheehan said they wanted to go ahead and cancel the events early enough for people to make alternate plans.

“Employees of the club who are owed back pay will be treated according to the bankruptcy code,” Blask said. “Hopefully, the [$750,000 in] funding will pay some of those claims and pay employees going forward when the PAA reopens, he said.”

The club’s debts reportedly include hundreds of thousands of dollars in overdue state and federal payroll taxes, and bills from utility companies, vendors, and contractors.

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Mountain Creek seeking Chapter 11

Mountain Creek ski resort and waterpark is amongst a long list of companies and organizations that have recently announced they are seeking Chapter 11 protection under the U.S. bankruptcy code.

“That provision, if granted, would enable Mountain Creek Management LLC to restructure its debt while maintaining daily operations, including the opening of Mountain Creek Waterpark next month,” according to an article on NJ.com.

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Mountain Creek is the largest ski area in New Jersey, has the world’s tallest and only double-looping waterpark slide, and offers guests the East Coast trails of the Mountain Creek Bike Park. According to the Mountain Creek website, there’s no shortage of adventures to leave you with stories that will last a lifetime. With a range of accommodations from mountaintop cabins to poolside condos and townhomes, there are also plenty of options to relax.

“Here at Mountain Creek we pride ourselves on providing a warm, welcoming resort experience for the whole family,” the website reads. “The pioneering spirit that began almost 50 years ago lives on today through our independent ownership and vibrant staff. We look forward to sharing our playground with you.”

The company’s CEO, Jeff Koffman, recently issued a statement in regards to the bankruptcy filing. In the statement, Koffman attributed the filing to “legacy debt we inherited from the property’s former owners.”

“Of the $26.2 million listed in the filing for the Vernon Township Municipal Utilities Authority, the biggest creditor, more than $20 million is for potential future use of the sewer system,” the article reads.

Koffman noted that they remain committed to seeing Mountain Creek develop to its full potential, which he said would include new hotels, new outdoor attractions and expanded residential homes.

“Our vision to create a world class, four-season resort here in New Jersey is still our main objective and this move will put us in the best position to achieve that,” Koffman said.

The resort has also struggled with challenging weather the past two winters. Mountain Creek said the bankruptcy filing is not expected to result in any job losses.

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Mall owned by Pennsylvania Real Estate Investment Trust facing another bankruptcy

Another mainstay at the Cherry Hill Mall, which is owned by Pennsylvania Real Estate Investment Trust, has filed for Chapter 11 bankruptcy protection. This time, it’s a family-owned restaurant that’s been at the mall for 20 years.

“The Bistro at Cherry Hill, which serves Italian and American dishes, owes roughly $470,000 in unpaid taxes to New Jersey, plus another $40,000 to the IRS for wage and payroll taxes, and just over $4,000 to authorities in Pennsylvania, according to the Courier Post.

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The restaurant released a statement after it went to U.S. Bankruptcy Court in Camden, saying it “plans to successfully stay in business for at least another 20 years.”

“The restaurant was briefly shutdown in late March, apparently following a visit from state tax officials, an article by Philadelphia Business Journals reads.

This isn’t the first time the South Jersey mall has seen struggles. Earlier this year, Cherry Hill Mall owner, Pennsylvania Real Estate Investment Trust, announced retailer Uniqlo would be closing its store.

Business Insider released an article earlier this year stating that analysts predicted that 2017 would be a rough year for retail stores, especially those with a high proportion of locations in malls.

“Many chains that are closing stores are also facing a very real threat of bankruptcy,” the article reads.

Eight retailers that are disappearing across the U.S. include, but are not limited to the following:

• The Limited : Shut down all 250 stores in January.
• Macy’s: Shut down 68 stores and laid off nearly 4,000 employees, beginning in early 2017. Ultimately, the retailer plans to shut down about 100 stores, or 15% of its store base, over the next couple of years.
• Sears: Sears plans to shut down 108 Kmart stores and 42 Sears stores by April.
• Wet Seal: The struggling teen retailer is closing all 171 of its stores, thecompany announced in late January. 
• BCBG: The retailer is shutting down 120 locations, primarily in the US, the Star Tribune reported in early February.Currently, BCBG has 570 locations worldwide, and 175 in the US.
• Bebe: The retailer announced in early February that itplanned to close up to 25 locations in 2017.
• Payless: The discount shoe retailer could close as many as 1,000 stores as part of a debt restructuring plan, sources told Bloomberg.Currently, Payless has about 4,400 locations worldwide, including 3,600 in North America.
• American Apparel: The future of American Apparel’s stores remains unknown; following the retailer’s acquisition by Gildan Activewear Inc. Gildan did not acquire the chain’s 110 locations when it bought the American Apparel brand. If American Apparel doesn’t find a buyer, then these stores will likely be shut down.

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Post-petition filing of NJ construction lien violates automatic stay

The Third Circuit Court of Appeals recently upheld that the filing of a mechanic’s lien following a bankruptcy violates the automatic stay. The opinion by the court was filed on March 30.

In United States bankruptcy law, an automatic stay is an automatic injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. Under section 362 of the United States Bankruptcy Code, the stay begins at the moment the bankruptcy petition is filed.

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“Under New Jersey law, any contractor, subcontractor, or supplier who provides work, services, material, or equipment pursuant to a contract is entitled to a lien for the value of the work or services performed or materials or equipment furnished, in accordance with the contract, based upon the contract price,” an article on the Lexology website reads.

The Bankruptcy Code does provide an exception to the stay though, stating that the filing of a petition in bankruptcy does not stay any act to perfect, or to maintain or continue the perfection of, an interest in property to the extent that the trustees or debtor-in-possession’s rights and powers are subject to such perfection under section.

Section 546(b)(1) in turn provides that the rights of a trustee or debtor-in-possession to avoid a lien are subject to any generally applicable law that (A) permits perfection of an interest in property to be effective against an entity that acquires rights in such property before the date of perfection; or (B) provides for the maintenance or continuation of perfection of an interest in property to be effective against an entity that acquires rights in such property before the date on which action is taken to effect such maintenance or continuation.

Under New Jersey law, the filing of a mechanic’s lien, or any other lien, that under State law does not attach to a debtor’s property is not barred by the automatic stay.

The Court emphasized that its ruling relates to lien creation or perfection and not to enforcement or maintenance.

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Dance Mom star facing prison time for bankruptcy fraud

Abby Lee Miller, who is a former “Dance Moms” reality TV star was in court on Monday as defense attorneys tried to chip away about $775,000 of Miller’s income that prosecutors say she hid from a bankruptcy judge.

Miller reportedly made a bankruptcy fraud plea last year and the amount that settled on in court will determine the 51-year-old’s sentence, according to an article in U.S. News.

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“Assistant U.S. Attorney Gregory Melucci wants Miller to spend 2 1/2 years in prison, while her attorneys are hoping she’ll receive probation,” the article reads. “The hearing was scheduled to resume Tuesday.”

Miller’s attorneys argued that some of her sales from merchandise were split 55-45 with a partner and other income she received, including payments from special appearances, didn’t deduct some of her expenses for the trips.

Melucci pointed out that none of that matters because when someone files for bankruptcy, they are required to truthfully disclose all income so the court is able to ensure all creditors receive maximum value in a repayment plan that is set by the court.

“Melucci contends Miller repeatedly hid her true income and contracts for future income from her TV shows until her channel-surfing bankruptcy judge saw her on TV and concluded she must be making far more than the $8,899 in monthly income she initially declared,” the article reads.

Eventually, Miller confessed that about $288,000 of income she received that she failed to report. On top of that, federal investigators uncovered she had also hidden about $550,000 from personal appearances, selling merchandise, and from teaching dance sessions.

Miller filed for bankruptcy after defaulting on a $245,000 condominium mortgage in Florida and also a $96,000 mortgage on her dance studio that’s located in Penn Hills, a Pittsburgh suburb.

“Miller wanted the bankruptcy court to let her repay only $150,000 of the condominium mortgage at a lower interest rate and sought to repay her other debts in full but without interest or at lower rates,” the article reads. “The outraged bankruptcy judge ordered Miller to repay every penny.”

Miller’s defense argued that she didn’t disclose the TV income because her career was just taking off and she couldn’t guarantee her future earnings.

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Italian airline workers nix deal to avoid bankruptcy

Employees at an Italian airline recently rejected a government-brokered package aimed at saving the airline from bankruptcy.

According to an article in the New Jersey Herald, Alitalia employees rejected the package late Monday afternoon. The deal reportedly included job and wage cuts.

Because employees voted no, now union leaders are calling on banks and other investors to come up with an alternative strategy to keep the airline from closing its doors.

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“What will happen, I don’t know,” UILTrasporti union leader Claudio Tarlazzi told RAI News24 state TV.

“The country needs Alitalia, and 12,500 people don’t deserve to go home” jobless, Tarlazzi said, referring to the airline’s employees. He urged banks and shareholders to “show good sense” and called for renewed negotiations with unions for a revised industrial plan.

The board was expected to meet later this week to discuss the airline’s next steps, which could potentially be filing for bankruptcy.

The airline has been losing nearly $2.2 million a day.

“Some 12,500 Alitalia workers began voting last week on whether to accept the package offering less drastic wage cuts and fewer layoffs than first proposed,” the article reads. “Parent company Etihad Airways wants to cut costs in hopes of securing 2 billion euros ($2.1 billion) in investment to keep the airline afloat.”

The plan would have left about 980 permanent workers without a job and cut flight crews’ paychecks an average of 8 percent. Union leaders had reportedly urged workers to accept the proposal, despite that fact that employees were angry about the situation.

“The current crisis follows about 20 years of attempts to successfully re-launch the company, including privatization efforts and searches for industrial partners,” the article reads.

The airline has reportedly suffered due to competition from low-cost airlines. There are also high-speed trains that run between Rome and Milan, which are draining passengers from a major Alitalia route.

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Cranberry’s Westinghouse Electric Co. files bankruptcy, hundreds could be affected

Hundreds of people will potentially be affected after the recent decision by Westinghouse Electric Co. to file for bankruptcy.

According to an article by Cranberry Patch, Westinghouse is Cranberry’s largest employer and the greatest impact could be felt in the township where the company is headquartered.

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About 2,200 of the company’s 4,500 western Pennsylvania workers are stationed at its Cranberry Woods complex, according to Patch.

“According to township statistics, more than 300 Westinghouse workers live in Cranberry, while about another 300 live in other Butler County municipalities,” the article reads. “Westinghouse’s parent company, the Japan-based Toshiba, announced on Wednesday that the major player in global nuclear projects filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in New York.”

Toshiba told the media last week the company had suffered nearly $10 billion in losses. The losses are related to nuclear reactor construction initiatives.

Township manager Jerry Andree told the media that the decision by Westinghouse Electric Company to file for bankruptcy is not unexpected and that the company has a long-standing history to managing challenges within its industry.

Patch said Andree is downplaying the announcement with his statement. Andree also said the company is resilient and has many talented employees who serve a global demand.

“There is every reason to believe they will overcome this current challenge and continue to be a leader in their field,” Andree is quoted as saying in the article. “Ironically, when Westinghouse announced it was moving its headquarters from Monroeville to Cranberry in 2007, the company cited the rapid expansion of the global nuclear industry as the primary reason. The Cranberry Woods campus was formally dedicated in 2011.”

Westinghouse is just one of many companies in the U.S. and Pennsylvania that have recently filed for bankruptcy to try and salvage financial issues within the last few years.

Unilif Corp., a Pennsylvania-based medical device company recently announced it filed for bankruptcy, listing company assets of about $83 million and debts totaling $201 million.

Payless ShoeSource is filing for Chapter 11 bankruptcy protection and closing nearly 400 stores. WetSeal,Aeropostale, Pacific Sun, and Quicksilver have all recently filed for bankruptcy, and a new report says Rue21 may be the next to fall.

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Payless Shoe Source announces bankruptcy

Payless Shoe Source, a widespread discount shoe store chain, announced on Tuesday that it’s seeking bankruptcy court protection.

According to an article on the NewJersey.com website, the company, which is based in Topeka, recently filed a Chapter 11 petition for bankruptcy in St. Louis.

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Payless Shoe Source is joining the ranks of other retailers such as J.C. Penny, Macy’s, Radio Shack, Gamestop, and HH Gregg that have suffered in a changing retail market and have been forced to shut down store locations across the country.

“The Topeka-based company filed a Chapter 11 petition in bankruptcy court in St. Louis, stating it had just $1 billion in assets and $10 billion in liabilities. The company said it plans to shed debt and boost online sales in a bid to stay competitive,” the article reads.

The company released a statement on Tuesday explaining that it plans to implement a strategic plan moving forward to enhance the company’s growth and profitability.

“As part of its restructuring, the company also said it would close 400 of its stores in the U.S. … The company operates 4,400 stores across the world, including several in New Jersey.

Other media reports say at least nine Payless Shoe Source stores will close in the New York City metro area. More than 70 stores are spread out across New York State and New Jersey.

“This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify,” Payless CEO Paul W. Jones said in a prepared statement. “We will build a stronger Payless for our customers, vendors and suppliers, associates, business partners and other stakeholders through this process.”

New Jersey Store closings include:

• 146 Smith Street in Perth Amboy
• 306 Route 9 North in Woodbridge

 

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Federal judge: No fraudulent transfer in Foxwoods casino project

A federal judge in Pennsylvania Tuesday agreed with a bankruptcy judge’s ruling to nix a bid by the developer of a Foxwoods casino project in Philadelphia that failed. The bankrupt developer was seeking to recoup $50 million from a casino licensing fee it paid to the state.

U.S. District Judge Joseph Leeson Jr. agreed that U.S. Bankruptcy Judge Magdeline D. Coleman had come to the correct conclusion that the Pennsylvania Gaming Control Board’s action did not qualify as a fraudulent transfer, according to an article posted on the Law360 website.

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“In its appeal of Judge Coleman’s April 2016 ruling, Philadelphia Entertainment & Development Partners LP, which had its casino license revoked by the state in 2010, said the judge misconstrued its fraudulent transfer claims as a challenge to the revocation of the license itself.”

Leeson on Tuesday cited the transcript from the bankruptcy court hearing that it was a fraudulent transfer because it was revoked, and nothing was received in return. He goes on to explain that the bankruptcy court did not misunderstand the claims.

“PEDP in 2006 landed one of two casino licenses earmarked for the city of Philadelphia, for a proposed Foxwoods casino along the Delaware River. But the license was revoked in 2010, after the Gaming Control Board found that it had halted construction and failed to maintain financial suitability,” the article reads.

It was after the company lost an appeal of the decision that it filed for bankruptcy and launched an adversary proceeding against the state in May 2014.

The claims dealing with the revocation of the license cannot go before a federal court due to the Rooker-Feldman doctrine, which bars federal courts from reviewing state court rulings. Tuesday’s affirmation confirmed this.

“We have reviewed and were disappointed re: the opinion; we think it is wrong in its application of the Rooker-Feldman doctrine,” Fred Jacoby of Cozen O’Connor, who represents PEDP, said in an email. “We have recommended to our clients that they pursue appellate review in the Third Circuit Court of Appeals.”

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Toshiba: Westinghouse filed for Chapter 11

Last week Japan’s Toshiba Corp. made an announcement that its U.S. nuclear unit, Westinghouse Electric Co., has filed for bankruptcy protection. Various media reports say the filing was an attempt at restructuring Toshiba’s finances and hopefully getting out of the red ink.

“Toshiba said in a statement that it filed the Chapter 11 petition in the U.S. Bankruptcy Court of New York. The move had been largely expected,” an article in the New Jersey Herald reads.

Toshiba acquired Westinghouse in 2006. The company is expecting a loss of about $4.3 billion (in American dollars) from April to December of 2016, and $6.2 billion from Westinghouse. The numbers could reach a whopping $9 billion loss for the company’s fiscal year.

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Costs of the business have ballooned due to growing safety concerns and regulations, along with a dislike of nuclear power in some countries, like Germany.

“Toshiba has been eager to get Westinghouse off its books to improve its plight, and it said it would do just that from this fiscal year. It has said earlier it wants to sell Westinghouse. Toshiba said Westinghouse had racked up debt of $9.8 billion,” the newspaper reports.

Toshiba President Satoshi Tsunakawa told media the move was aimed at “shutting out risks from the overseas nuclear business.”

Toshiba plans to monitor the rehabilitation proceedings and disclose information as quickly as possible. Its chairman has taken responsibility for the company’s financial troubles.

“The company has said it will no longer take on new reactor construction projects and will focus on maintaining the reactors it already has,” the article reads. “But it is also involved in the decommissioning of the Fukushima Dai-ichi nuclear plant, which suffered multiple meltdowns after the March 2011 tsunami.”

Toshiba has reportedly sold off so many parts of its operations, it has little left but its infrastructure business.

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Tentative settlement reached in fire department bankruptcy case

The Conneaut Lake Volunteer Fire Department and Mercer County State Bank, the fire department’s main creditor, have reached a tentative settlement agreement in an effort to resolve the fire department’s Chapter 11 bankruptcy case.

The fire department and Mercer County State Bank reached the agreement during an all-day mediation session last Wednesday, according to an article published by Firehouse.

Read more: Bankruptcy Attorney, Pennsylvania

A report on the settlement was filed with U.S. Bankruptcy Court in Erie by Norman Gilkey, the court-appointed mediator.

“As a result of the session, details of the settlement agreement are being drafted and will be reviewed before being submitted to the court for approval, according Gilkey’s report, which was filed with the court Friday,” the article reads.

In January of last year, Conneaut Lake Volunteer Fire Department filed for voluntary Chapter 11 bankruptcy protection. The department did so in an attempt to reorganize its debts, which include more than $1.6 million to Mercer County State Bank, and also to remain in operation.

The bank filed a mortgage foreclosure action in Crawford County Court of Common Pleas in December 2015.

“U.S. Bankruptcy Court Judge Thomas Agresti of Erie approved a consent order on Jan. 19 allowing the fire department and Mercer County State Bank to try federal mediation after both sides has asked the court to do so,” the article reads.

The Chapter 11 bankruptcy filing halted any foreclosure action by the bank and other creditors. Bankruptcy rules prohibit legal actions by, for, or against a corporation unless approved by a federal bankruptcy judge.

“The bankruptcy filing has not affected Conneaut Lake Volunteer Fire Department’s ability to provide fire protection. The department’s primary service area is the borough of Conneaut Lake and the southern and eastern portions of neighboring Sadsbury Township,” the article reads. “The fire department operates a social club equipped with a restaurant and liquor license adjacent to its fire station.”

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Court sides with workers in New Jersey bankruptcy case

A bankruptcy plan that failed to include compensation for hundreds of workers was in the hands of the Supreme Court, who last week sided with the employees.

According to various media reports, a claim by hundreds of workers at a New Jersey trucking company, JEVIC Transportation, Inc., says the workers were treated unfairly when they were denied a claim for lost wages after JEVIC filed for bankruptcy protection.

“The justices ruled 6-2 that a bankruptcy court should not have approved a plan allowing JEVIC Transportation Inc. to settle other legal claims first, leaving nothing for the workers,” an article published by the New Jersey Herald reads.

Japan Export Vehicle Inspection Center Co Ltd (JEVIC) is a Japanese-registered company that works in pre-shipment inspection and certification of cargo. The company’s services are primarily for used-vehicle inspection and extend to vessels, containers, and new vehicles.

JEVIC provides independent pre-shipment inspections, surveys, verifications and certifications.

The company has facilities located at major Japanese ports – in Yokohama, Kawasaki, Nagoya, Osaka and Kobe – and its head office is in Yokohama City.

With more than 30 facilities for inspection purposes JEVIC carries out inspections in countries such as Dubai and South Africa, where vehicles are shipped from Japan and subsequently exported from there, to other destinations within Africa.

JEVIC clients range from shipping agents, freight forwarders and vehicle importers / exporters to individuals and countries that require mandatory inspection and certification.

“The workers said the bankruptcy plan did not follow traditional rules requiring unpaid wages to be paid ahead of other debts,” the article reads. “The company said settlements with lower-ranking creditors are sometimes essential to resolving the bankruptcy process.”

In 2008 JEVIC filed for bankruptcy protection, two years after it was acquired by a private equity firm in a leveraged buyout.

About 1,800 ex-workers are seeking lost wages.

“Writing for the court, Justice Stephen Breyer said a bankruptcy court does not have the power to deviate from the basic priority under which creditors are paid in bankruptcy cases without seeking consent from the affected parties,” the article reads.

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Pennsylvania battery company owes state money following bankruptcy

Aquion Energy Inc., a Pittsburgh battery company that has a manufacturing facility in Westmoreland County, filed for bankruptcy last week and the Pennsylvania Department of Community and Economic Development released a statement that it intends to try and recover funds the company owes it.

The state was reportedly the company’s top creditor. The loans were secured by collateral, but what that collateral was has not been publicly released.

Read more: Bankruptcy Lawyer, PA

“Aquion was current on all of its loan payments and made payments as recently as last week,” an article on the Trib Live website reads.

How much the company still owes is unknown.

About 80 percent of Aquion employees were let go after the company filed for Chapter 11 on March 8 because the company failed to raise enough money to keep running. The factory has closed its doors.

Aquion representatives have said the company hopes to find a buyer for its assets.

“State incentives helped keep Aquion in Western Pennsylvania in 2012 when the company was looking for a place to expand and build a factory,” the article reads. “The company received $8.6 million in grants and another $8 million in loans from the state, according to DCED’s investment tracker tool. Aquion’s bankruptcy filing listed the $8.6 million in grants.”

Aquion had reportedly failed to live up to a promise it made the state that it would create 341 jobs on top of the 70 employees it already had. The company also promised to invest at least $64.4 million in private money into the factory.

According to Trib Live, as of February 2016 Aquion had created 50 more jobs and secured $108.4 million in private investment. The company asked for a two-year extension to fulfill its promise and was granted a one-year extension instead. The company’s extension expires at the end of March and the state will then reassess its progress.

Governor Tom Wolf, who was not in office when Aquion received state funding, is calling for tighter accountability from businesses that receive state funding.

“In his 2017-18 budget proposal, Wolf … recommended tighter controls on state funding for economic development projects,” the article reads. “Wolf proposed forcing companies that receive state grants to maintain newly created jobs for five years and stay in the state for at least eight years. If a company fails to create the jobs it promised, it will have to repay the grant. If the company moves out of state, it must repay the grant plus a 10 percent penalty.”

 

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Creditors object to more debt for NPHS amid Chapter 11 filing

Following the recent Chapter 11 filing for North Philadelphia Health System, some creditors are voicing their concerns and objecting to the tax-exempt organization’s plan to go into more debt to get through bankruptcy.

Unsecured creditors filed objections to the plan on Tuesday, according to an article on philly.com, saying they feel the organization must prove its viability before borrowing more money.

NPHS provides healthcare through prevention, education, and treatment in their hospital and community, including services and special programs for persons with behavioral medical disorders and/or extended acute medical conditions. They offer services in a manner that is spiritually and culturally sensitive and responsive to community needs, according to their website.

North Philadelphia Health System states its vision is to be the region’s premier provider of behavioral and extended acute medical services. Through the provision of high quality, innovative, culturally sensitive services, North Philadelphia Health System will meet the needs of the community it serves.

North Philadelphia Health System will continue its commitment to the under-served patient population in all its plans for services expansion.

The banckruptcy filed by NPHS last year was due to the fact it couldn’t pay its $400,000 mortgage that was due Jan. 1. The organization sought to protect millions of dollars held by the mortgage trustee, so filed for bankruptcy.

“The bankruptcy was portrayed as a maneuver to eliminate leftover liabilities from St. Joseph’s Hospital, which NPHS closed last March, after the Pennsylvania Department of Human Services pulled a long-running subsidy. St. Joseph’s is under an agreement of sale for $8.1 million,” the article reads.

People on the creditors committee are questioning whether there is a reorganizational plan available for the debtor – or whether they plan to focus on liquidation. North Philadelphia Health System’s bankruptcy attorney released a statement saying the system would provide information to allay the creditors’ concerns.

Talks of selling, refinancing and mergers were also brought up.

“NPHS’s plan is to continue providing drug and alcohol services and psychiatric care at Girard Medical Center, at Eighth Street and Girard Avenue, but the committee of unsecured creditors said it is not clear that Girard can be operated profitably,” the article reads.

The committee has said their plan to borrow $3 million dollars and use $1 million of that to repay pre-bankruptcy debt, should be halted until NPHS reduces expenses, including executive compensation. One example was the cost of a vehicle the debtor was paying more than $1,000 for each month – the other is the debtor’s annual pay, which a Feb. 17 filing claims is the highest paid rate of a health care executive in the region compared to the size of the organization.

NPHS assured the committee that the vehicle has been given up and that the debtor – along with other executives – took a 10 percent pay cut.

 

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Popular electronics and home appliance retailer files for Chapter 11

A well-known electronics and home appliance retailer in the U.S. recently announced that the business filed for Chapter 11 bankruptcy.

HHGregg, which has multiple consumer stores and a distribution center in New Jersey and more than a dozen stores in Pennsylvania, made the announcement on Tuesday.

The filing comes just days after the company announced it was shutting down 88 stores in 15 states, a move made to give the Indianapolis-based company a better chance at survival, according to an article published by the Indy Star.

USA Today reports that HHGregg will close the following local stores:

In New Jersey:

• Deptford, Woodbury
• Mays Landing
• Moorestown

In Pennsylvania:

• Dickson City
• Downingtown
• Erie
• King of Prussia/ Berwyn
• Lancaster
• Langhorne
• Lower Paxon/ Harrisburg
• Mechanicsburg
• Montgomeryville/ North Wales
• North Hills/ Pittsburgh
• Whitehall
• Whitman Square/ Philadelphia
• Wilkes-Barre
• Wyomissing
• York

A news release by HHGregg explains that the business has signed a term sheet with an anonymous party to buy the retailer’s assets. The selling of assets will allow the company to exit Chapter 11 “debt free with significant improvement in liquidity for the future stability of the business.”

Robert J. Riesbeck, president and CEO of HHGregg said in the release that the company has given a valiant effort, which included a review of alternative routes, but they believe restructuring through Chapter 11 is the best option to ensure the company long-term success.

“Riesbeck said he expects the Chapter 11 process to be smooth and quick,” the article reads. “The company expects to emerge from the restructuring in about 60 days.”

The store closures, which were announced last Friday, should be complete sometime in April. About 1,500 people are expected to be laid off. This is the company’s second round of layoffs. Last month, HHGregg announced it was laying off about 100 people.

About 132 U.S. stores will continue with their usual day-to-day business.

“Over the years, the retailer has struggled for market share against online retailers and traditional big-box stores such as Best Buy,” the article reads. “To stand out, the company has tried to reinvent itself as a high-end appliance store through its Fine Lines division.

HHGregg is the seventh-largest appliance retailer in the U.S.

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Will I Lose My Life Insurance Policy if I File for Bankruptcy?

With a life insurance policy, in return for your payments your insurance company will provide your beneficiaries with a death benefit in the event of your passing. As of 2013, about 62% of Americans report having a life insurance policy. But what happens if you run into serious financial hardship? If you file for Chapter 7 or Chapter 13 bankruptcy, will you lose your life insurance benefits to creditors? Our Princeton bankruptcy lawyers explain.

Are Life Insurance Proceeds Exempt in Bankruptcy?

Bankruptcy divides debtors’ assets and possessions into two broad categories: those which are exempt, and those which are non-exempt. Exempt items enjoy partial to full protection from creditors, with the extent of protection dependent on where you are located and which set of exemptions you elect to use. In contrast, non-exempt items are not exempt from the bankruptcy estate, and therefore may be pursued by creditors to help satisfy your debt obligations.

As mentioned above, exemptions can vary dramatically depending on where you live. Some exemptions which exist in one state do not even exist in other states. New Jersey and Pennsylvania debtors may choose between using the exemptions which correspond to their state, and the nationwide federal exemptions. (However, you must remember that you have to stick with the exemption system you elect to follow: you cannot simply pick and choose the most favorable exemptions from different systems.)

The current life insurance bankruptcy exemptions are as follows:

• Pennsylvania — Proceeds from life insurance may be exempted if the beneficiary is the decedent’s child, spouse, or a dependent relative.

• New Jersey — Proceeds from life insurance are exempt if the policy expressly prohibits proceeds from being used to satisfy the beneficiary’s creditors. Additionally, proceeds which go toward individuals other than the insured person are exempt from the creditors of both the beneficiary and the insured person. You can also exempt proceeds related to disability provisions in your policy.

• Federal — Life insurance proceeds can be exempted if they have not matured, with the exception of credit life insurance (i.e. a policy which is meant to pay the borrower’s debts in the event of death). Furthermore, under the federal personal property exemptions, you can exempt up to $12,250 in the loan value of your policy.

It’s also important to talk about the 180-day rule which applies to Chapter 7 bankruptcy cases. If you inherit life insurance within 180 days of filing for bankruptcy, that inheritance will be folded into the bankruptcy estate, and anything which is non-exempt may be vulnerable to the trustee and your creditors. However, if you do not inherit insurance until after 180 days have already passed from the time of your filing, the insurance proceeds will not be added to the bankruptcy estate.

You Must List Your Assets — Even if They’re Exempt

Whether you have a term life policy or a whole life policy is another important point of consideration. When you file for bankruptcy, you have to list all of your assets. In fact, if you are caught attempting to conceal assets in an attempt to hide them from your creditors, your case may be dismissed — not to mention the fact that you could find yourself being charged with fraud.

Despite the aforementioned life insurance exemptions, if you fail to list the CSV (Cash Surrender Value) of your whole life policy, it may be taken and distributed by the trustee assigned to handle your case. While term life policies do not have a CSV like whole life policies, proceeds could also be claimed by the trustee if you were to pass away after the completion of your bankruptcy case and you failed to list your policy.

The bottom line is that, even if you are confident the proceeds of your policy would be exempt from the bankruptcy estate, your assets must still be properly disclosed and documented — or else you risk losing more than you have to. When the time comes to list your assets, insurance should be documented on “Schedule B,” which is used for personal property. In the “Type of Property” column, you will see insurance noted at entry number nine (“Interests in insurance policies”). Filers are instructed to “Name insurance company of each policy and itemize surrender or refund value of each.”

The relationship between insurance and bankruptcy is very complex, and filling out bankruptcy schedules correctly can be difficult, so it’s important to talk about your questions and concerns with experienced legal representation. To set up a free and confidential case evaluation with our New Jersey bankruptcy attorneys, call Young, Marr & Associates at (609) 755 3115 in New Jersey or (215) 701 6519 in Pennsylvania today.

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