Results tagged “bankruptcy”

After threatening to lay off some 400 employees during the lucrative holiday season, Tavern on the Green has been granted a reprieve. The city had ordered owners to vacate the premises on January 1st and turn over the lease, but owners insisted that deadline would have required them to close down in December, in order to conduct an onsite auction of their assets, which were valued by an appraiser at $8.171 million. Though Tavern's owners had wanted three months for the changeover, a US Bankruptcy Court judge in Manhattan said "two weeks to a month" in January would be "a reasonable transition period." But will the new occupant play along?

A Mets' World Series ring will be given out in Queens after all this year and instead of costing hundreds of millions in salaries to banged up megastars, one of the old Shea faithful was able to bring it home for a mere $56,000. That's how much one Queens native paid to win an auction for Lenny Dykstra's 1986 World Series ring the outfielder won with the Mets, possibly even beating out Dykstra himself. It was one of 11 auctions of Nails memorabilia that fans got to dip their bids into, closing yesterday and bringing in over $162,000.

Just days after failing to win the right to continue running a mediocre overpriced tourist trap in a 19th century Central Park sheepfold, Tavern on the Green is filing for Chapter 11 bankruptcy. CEO Jennifer Oz LeRoy tells the Times it's "our only alternative given the current situation." In four months, Central Park Boathouse owner Dean Poll will take over the location, and in the meantime Tavern will attempt to burn appease some 20 creditors, such as the New York Hotel Trades Council, which is owed $1,778,764. Tavern also owes the Parks Department—which declined to renew its lease—$76,923, and one imagines LeRoy's gonna love shrugging off that one. Meanwhile, the dining industry paroxysm is even hammering celebs like Mario Batali—the Crocs-wearing chef was a partner in the far-out seafood restaurant The John Dory, which just went belly up after nine months. The landlord is now suing Batali for $75,000 back rent. Oh, and Café des Artistes, the Lincoln Square restaurant that just closed after 90-plus years, is also jumping on the bankruptcy bandwagon. Expected to be screwed in that filing are the restaurant's employees, who are owed $116,471 in benefits through their union.

Back when antediluvian diners sought opinions without the help of the Internet, Tim and Nina Zagat built a restaurant survey and ranking empire, which grew into a sprawling international family of guides on everything from dating to dumping. Just before the financial collapse really got nasty, they tried to sell the whole enterprise for $200 million, and are rumored to have turned down offers as high as $100 million. Today, the Post finds the Zagats in deep weeds, largely due to competitors like Yelp, which now boasts more than 7 million U.S. visitors per month with reviews on all sorts of things, including Zagat! By comparison, Zagat's website, which requires a $25 annual fee, averaged just 270,000 unique visitors last month. The company laid off 16 people, and the Zagats have given up trying to sell it. As one Yelper opines, "If Zagat was the bomb, [Yelp] wouldn't exist, so thanks for sucking so bad, Zagat. I almost was forced to go to Chinese food in Chinatown due to an out-of-town colleague who had armed himself with Zagat and biblical notions of self importance... In the end, I won and we ended up at a real restaurant that didn't have to pay for a review." Well, not exactly.

Bloomberg News has a long article looking at Lehman Brothers' collapse last year, reporting that Lehman executives actually predicated in the memo to government officials, "Massive global wealth destruction... Impacts all financial institutions... Retail investors/retirees assets are devastated." But apparently the banking executives gathered by Treasury Secretary Paulson and then-Federal Reserve Bank of NY (and now current Treasury Secretary) Geithner were thinking about themselves; former Merrill Lynch CEO John Thain tells Bloomberg News, "The discussion among the CEOs was ‘How do we prevent the next firm from going under?’ There should have been much more discussion about the impact directly on the markets if Lehman went bankrupt." Mohamed El-Erian, CEO of Pacific Investment Management Co., "the world’s largest bond-fund manager" remembers, "I remember at the end of the week calling up my wife and saying, 'Jamie, go to the ATM, go to the cash machine, and take cash out.' She said, ‘Why?’ I said, ‘I don’t know whether the banks are going to open tomorrow.’" And some believe the government hasn't learned the lesson, by allowing banks to stay big or get bigger without a thorough regulatory process.

OTB is really starting to resemble that schoolyard friend who keeps on losing a bet and immediately fires back, "Okay, how 'bout double or nothing?" In what he called an "unprecedented but necessary move," yesterday Governor Paterson issued an executive order authorizing Off-Track Betting to file for bankruptcy protection. Last year OTB was one of the forgotten beneficiaries in the Year of the Bailout, the money-bleeding agency rescued by the governor in a deal with the mayor. At its current pace, OTB would run out of money completely by next spring. Paterson said Tuesday's move was necessary to close failing parlors, and expand automated-betting systems to pay off the agency's mounting debts. The Times has an in-depth look as to just how much money the agency wastes by insisting on company cars for its city employees. One gray ponytailed OTB patron told the paper, “I tell you what my bookie in the Bronx don’t have this problem. He always has money. Nowhere else in the world does a bookie lose money.”

Six Flags Inc. declared for bankruptcy this morning after the company had been trying to clear its multi-billion dollar debt without having to go to court. New management took over the company in 2005 and began restructuring the theme park chain that has kept New Yorkers saving Coke cans for years in order to get discounted admission at Great Adventure in nearby Jackson, NJ. In the last few years, the company has sold ten parks, laid off 300 employees and instituted changes such as having more costumed characters and banning smoking in the parks. Recently they've gone so far as bringing back the nightmarish dancing speed freak, Mr. Six, the "old" man who seems to have found the courage to speak while he was away from the company. Six Flags's CEO Mark Shapiro said, “The current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in these challenging financial markets." The latest snag for the company came when they had to temporarily shut down their Mexico City park due to swine flu.

General Motors, an "icon of American business," has filed for Chapter 11 bankruptcy this morning at US Bankrutpcy Court in New York's Southern District. The NY Times reports, "The company was forced into the filing by President Obama, who is betting that by temporarily nationalizing the onetime icon of American capitalism, he can save at least a diminished automaker that is competitive."

Crunch is filing for Chapter 11 bankruptcy, so soon we'll have an airtight excuse for why we're fat. Or will we? According to the Wall Street Journal, the deal arranged by Crunch would allow it to be acquired by two private-equity firms and only have to close just one of 30 locations—the one on the chopping block is down by the bottom of Broadway (and it's apparently already closed, according to a reader; see below), near Bowling Green. Crunch execs are blaming the company's poor health on weak membership sales and a number of unprofitable club locations that have "overpriced long-term leases." They're also furious with Bally's Total Fitness for allegedly misrepresenting the number of active members before Crunch bought 25 Ballys in 2006.

A U.S. Bankruptcy Court judge decided to postpone his decision regarding Chrysler's bankruptcy filing after objections from some of the automaker's lenders. Bloomberg News reports:

A group of Chrysler LLC’s secured lenders is seeking to block the bankrupt company’s plan to sell its business at auction this month, arguing that the U.S. government is violating federal law in order to preserve the automaker.

Continue reading "Bankruptcy Judge Postpones Decision On Chrysler"

After failing to make a deal with creditors, automaker Chrysler is expected to file for Chapter 11 bankruptcy today in New York. The White House had been pushing for controlled bankruptcy if the automaker wasn't able to restructure in time; according to CNBC, "The talks for a restructuring of Chrysler had had the full support of the company's key stakeholders, including the UAW and the largest creditors, but the rest of creditors did not agree." Bloomberg News reports, "The president’s staff plans to use the filing to pave the way for Fiat Spa to take a 20 percent stake in the Auburn Hills, Michigan-based automaker." President Obama said last night, "I am actually very hopeful, more hopeful than I was 30 days ago, that we can see a resolution that maintains a viable Chrysler automobile company out... It would be a very quick type of bankruptcy, and they could continue operating and emerge on the other side in a much stronger position." Obama will discuss Chrysler today at noon.

General Growth Properties, the country's 2nd biggest mall operator, filed for Chapter 11 bankruptcy in a New York court today. Bloomberg News called the filing the "biggest real estate bankruptcy in U.S. history after amassing $27 billion in debt." Dealbook explains that GGP "has been severely wounded by the recession, which has wreaked havoc upon the retailers who inhabit its more than 200 malls in 44 states. Many stores have shuttered, depriving mall operators like General Growth of revenue." The company, which points out some subsidiaries aren't part of the bankruptcy filing, will spend the time to restructure its debt and points out on its website, "Our properties will continue to operate, our employees will continue to come to work and get paid, and shoppers will continue to shop." Last December, GGP considered selling the South Street Seaport, if there was interest.

According to the NY Times, "The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite G.M.’s public contention that it could still reorganize outside court." President Obama's auto task force, which is continuing talks with GM, wants to make sure a "bankruptcy filing is ready should the company" in case they cannot work out a deal with bondholders to "exchange roughly $28 billion in debt into equity in G.M. and with the United Automobile Workers union, which has balked at granting concessions without sacrifices from bondholders." The Times reports that one idea is to create a company that buys the "good assets" of a bankrupt GM, which lost nearly $31 billion last year (and received $13.4 billion in federal aid), while the "bad assets" are liquidated. This news is currently dragging Dow futures down.

In spite of objections from the Department of Justice and Securities and Exchange Commission, a judge ruled that Bernard Madoff can be forced into personal bankruptcy. Bloomberg News reports, U.S. District Judge Louis Stanton reversed his previous ruling (which did not allow victims to force the Ponzi-scheming "investor" into bankruptcy), writing in his opinion, "The concern that appointment of a bankruptcy trustee will increase administrative costs or delay recovery by victims is speculative and outweighed by the benefits to Mr. Madoff’s victims." In the meantime, the trustee currently liquidating Madoff's estate is seeking $150 million from an offshore investor. About a month and a half before Madoff confessed to his scam, his firm sent $150 million to Vizcaya Partners; Dealbook explains, "Under the bankruptcy code, any payments made by Mr. Madoff’s firm that occurred 90 days before it filed for bankruptcy is considered “preferential” and can be retrieved by the trustee."

When US Airways Flight 1549 crash- (or splash-) landed in the Hudson River on January 15, the first boats to arrive and offer help were NY Waterway ferries, which ultimately took 142 of the 155 passengers and crew from the cold water. Now, the ferry company says it may go bankrupt by the end of the year. And, Crain's reports, "Its situation is so precarious that the company is preparing a lawsuit against US Airways to recoup the expenses it incurred during the rescue effort."

Nearly two months after announcing its plan to liquidate—and four months filing for Chapter 11—electronics retailer Circuit City is closing its doors today. The AP reports, "Circuit City was slated stay open until the end of the month, but the final day came early because most of the remaining merchandise has been sold. One of the liquidators (four were handling the sale of CC's merchandise) told Bloomberg News, "Overall, we are pleased with the way things went." Some consumers, on the other hand, might not have been happy with the liquidation sales, such as a Minnesota family that claims they were prevented from opening a TV box to see if it was damaged...only to go home and see it was shattered. The chain leaves behind a number of locations (some rather large) in NYC; it's unclear what stores will fill them in this real estate market.

With productions fleeing the city after the state's tax credit program ran out of money, a popular prop house's parent company is trying to weather the storm. Props for Today, which has been around for 28 years, hooks up shows like Saturday Night Live and 30 Rock with furnishings, and Crain's reports that owner Dyann Klein will attempt to "reorganize" after a rough year. Klein said, “The decrease of film making and television in New York, which began with the writers' strike and has continued and been escalated by the loss of the tax incentives, has impacted everybody in this industry."

St. John's Queens and Mary Immaculate Hospitals stopped accepting patients last night and will close their doors tomorrow. The hospital's operator, Caritas, filed for bankruptcy; Caritas had asked for a $36 million bailout in early February, but the state health department refused, pointing out that it lent $50 million to Caritas. Over 2,500 people are losing their jobs and NY1 spoke to an ER doctor who said, "Things came so fast that I didn't have a chance to look for another job. I don't know. Maybe go home and stop by unemployment - that's the plan we have now." Another told WABC 7, "A patient called crying on the phone learning that the hospital was closing tonight. I didn't know what to tell her."

Today began the wind down in the liquidation process for local Circuit City stores after the electronics chain announced yesterday that it would be filing for bankruptcy. Circuit City has 30 stores instate and ten in the immediate area (plus one in Woodbridge, NJ), but the store was not available to say just how many local employees it would have to lay off. Consumerist has an FAQ about the liquidation process—encouraging customers to use their leftover gift cards ASAP, return any unwanted purchases before January 30th and avoid the "big liquidation sales" which they describe as a gimmick where after markups, prices end up "the same or even higher than the price before the liquidation." Any employees laid off in the closing will receive pay and benefits for a 60-day period that began yesterday. Economists fear that Circuit City may just be the first in a number of closings to be announced after holiday sales figures for retailers were even lower than projected.

In the Wall Street Journal's article about expected post-holiday bankruptcy filings from retailers, ubiquitous NYC drug (and lots of other stuff) store Duane Reade might be on that list! "According to Standard & Poor's, nine U.S. retailers and restaurants, including off-price apparel chain Loehmann's Holdings Inc., drugstore operator Duane Reade Holdings Inc. and jeweler Finlay Enterprises Inc. are at significant risk of default, with junk-bond ratings of CCC, or 'very weak.'" But a DR spokesman told the WSJ the chain is "a vibrant and viable retail operation, and any suggestion to the contrary is inaccurate." He also cited "positive trends" at 1+ year old stores, pointed to nearly $70 million in available credit and said there were "no liquidity issues." A 2005 New York magazine article had noted that in 2004, "the company’s profit margin hovered around 1 percent, about a third of what national chains take home," which is good for New York but nothing to copy.

The Tribune Company, which owns the Chicago Tribune, LA Times, and Baltimore Sun, as well as the Chicago Cubs and Wrigley Field, has filed for bankruptcy, which Dealbook calls, "the latest — and biggest — sign of duress for the newspaper industry yet." A year ago, real estate developer Sam Zell bought the Tribune Co., but the Wall Street Journal says the Tribune "stayed ahead of its $12 billion in borrowings with the help of asset sales... The company's cash flow may not be enough to cover nearly $1 billion in interest payments due this year, and Tribune owes a $512 million debt payment in June." Tribune sold off Newsday to Cablevision earlier this year, but still owns WPIX/Channel 11.

Steve & Barry's, the cheap clothing retailer that offered inexpensive fashions from celebrities like Sarah Jessica Parker, Amanda Bynes and Stephon Marbury, filed for bankruptcy for the second time in three months. Steve & Barry's, whose bankruptcy filing said it had no "prospects for continued financing of their business," will start liquidating and closing its 177 stores. Newsday reports that a group of employees who were laid off on Monday are suing because the company did not give them the required 60-day notice. Back in July, the Long Island-based company came under scrutiny during its financial troubles; it did receive a $163 million lifeline to restructure but the current economic situation was unforgiving.

lawyers? According to law professor Lynn LoPucki who spoke to the Daily News about corporate bankruptcies, "The lawyers and all the other professionals who work on the case get paid first. The system deliberately makes the old creditors wait - sometimes for two or three years - while payday for the new creditors comes once a month." So while the now-bankrupt Lehman Brothers is selling off assets like their corporate jet for almost $25 million, LoPucki tells the News that legal and professional fees may be as high as $1.4 billion, "with Weil Gotshal & Manges, lawyers for the debtor, snaring about $209 million, and Milbank, Tweed, Hadley & McCloy, counsel to the creditors, getting some $58 million." Lawyers, FTW?

AIG, the insurance company that was saved by an $85 billion federal bailout, will cooperate with Attorney General Andrew Cuomo's review of its finances. Additionally, the company will not make a $10 million severance payment to its outgoing CFO and it is canceling future junkets and perks, like its "Best Operator" conference in Las Vegas (cost: $750,000) and a Risk Management Conference at a Ritz Carlton (cost $500,000).

Richard "Dick" Fuld, the CEO who led the once-storied Lehman Brothers into bankruptcy, was defensive when questioned by the House Oversight Committee yesterday. The NY Times reports he "blamed the news media. He blamed the short-sellers. He blamed the government, as well as what he characterized as an 'extraordinary run on the bank.'" but "never really blamed himself." Fuld did take responsibility for the collapse, and said he'd wonder for the rest of his life how he could have done something differently.

CNBC reports "Under pressure from New York Governor David Paterson and AIG policyholders, the Federal Reserve is considering reversing its decision on Monday and providing some kind of financial aid to the troubled insurer." However, if there's no financing deal, the company could file for bankruptcy tomorrow. The Wall Street Journal has a Q&A about AIG, explaining why the company is in crisis and what the effects might be.

The financial industry's worst weekend ended on these notes: Lehman Brothers filed for bankruptcy, after being unable to find a buyer; Bank of America, previously interested in Lehman Brothers (but didn't want to buy it with government protection) decided to buy Merrill Lynch for $50 billion; and it's worried AIG and Washington Mutual will fall next. The financial markets are expected to be in tumultuous territory, and a banking analyst told USA Today, "We are in a hysteria."

A judge approved for Steve & Barry's, the cheap-n-chic retail chain which faced bankruptcy earlier this summer, to be acquired by two investments firms for $163 million. Newsday reports the new group, BHY S&B Holdings LLC, made up of Bay Harbor Management and York Capital (with Steve Shore and Barry Prevor as investors), will "Steve & Barry's merchandise inventories, store leases and all of Steve & Barry's intellectual property rights, including its celebrity and brand licenses." Though Sarah Jessica Parker is still on board, Stephon Marbury claims Steve & Barry's still owes him $2 million in licensing fees--plus more in roylaties--for the Starbury brand. But Newsday points out, "Under the bankruptcy proceedings, the new owners would owe Starbury nothing."

After finding themselves in bankruptcy last month, Steve & Barry's, the clothing retailer boasting inexpensive designs from Sarah Jessica Parker and Stephon Marbury, announced that an investment company has offered them $163 million. Newsday reports that a subsidiary of Bay Harbor Management, which specializes in "purchasing and revitalizing troubled companies," has made the offer, in exchange for some assets and would want the company to continue to operate. The offer needs to be accepted by bankruptcy court and would establish "a minimum price for other bidders during the auction process." One retail consultant said it would be a "steal." It remains to be seen what will happen with its stores--some would probably be closed.