truthaboutbankruptcy » bankruptcy filing

Celebrity Bankruptcy: Restaurant Owned By Eva Longoria Files Bankruptcy

poster1 — Fri, 14 Jan 2011 15:00:20 +0000

Celebrity Bankruptcy: Restaurant Owned By Eva Longoria Files Bankruptcy--Image via Wikipedia

Beso, the Las Vegas restaurant and nightclub owned by actress Eva Longoria and several other co-investors, has filed for Chapter 11 bankruptcy with nearly $5.7 million in debt and other liabilities.

Beso LLC, 32 percent owned by Longoria, listed assets of about $2.5 million in the Chapter 11 bankruptcy filing in U.S. Bankruptcy Court in Las Vegas. The restaurant, which has a nightclub called Eve, projected ongoing losses of $76,000 per month. Court records indicated Beso may be having trouble meeting lease obligations, with the company reporting $1.8 million owed to landlord Crystals at CityCenter… Beso generated nearly $14.6 million in gross income in the past 12 months, the filing said.

Many of the bankruptcy debts stem from construction contractors, several of which have litigation pending against the restaurant. The construction of Beso allegedly ran over budget and suffered under the mismanagement of one of the co-investors and managers according to litigation records.

A June lawsuit filed in Clark County District Court by Ronen and Mali Nachum, investors and purported managers at Beso, alleged they provided the company a $280,000 loan to help fund construction but were later pushed out of the company without payment.

Clark County District Court Judge Mark Denton on Oct. 27 denied a motion by Longoria and co-defendants that the case be dismissed.

Attorneys for Longoria, Beso and the co-defendants then filed a counterclaim against the Nachums, saying the validity of their ownership interest “is in question because of the existence of irregularities and certain improprieties which may have been committed” in connection with the initial grants of their interests.

The counterclaim says Ronen Nachum was permitted to help oversee the construction of Beso in early 2009 based on his representation that he was a licensed contractor, though Beso says he has never been so licensed in Nevada.

“Due in large part to Ronen Nachum’s mismanagement of the construction process, Beso LLC was forced to request an additional contribution in the form of a $1 million loan by Longoria,” the counterclaim says.

If it is found that Nachum engaged in fraud by misrepresenting himself as a licensed contractor when in fact he is not, the bankruptcy court could find him liable for damages.

(source: http://www.lasvegassun.com/news/2011/jan/06/eva-longorias-beso-files-bankruptcy-restructure-de/)

“Aged” Asset Transfers Can Still Lead To Bankruptcy Troubles

poster1 — Wed, 12 Jan 2011 15:00:36 +0000

“Aged” Asset Transfers Can Still Lead To Bankruptcy Troubles--Image via Wikipedia

In a recent bankruptcy case involving debtors who were saddled with a $19.7 million dollar judgment after the shooting of a former employee, the bankruptcy court voided several asset transfers despite the fact that the transfers were made before the judgment against the debtors was made.

The debtors in the case knew that they were probably going to be sued by the shooting victim and his family and they also knew that a judgment against them was likely. Therefore, soon after the shooting the debtors began to transfer cash and property to their numerous children. A few years later they filed bankruptcy. The bankruptcy court ruled that the asset transfers made by the debtors were clearly fraudulent because they were made with the intention of not paying the judgment even though the transfer happened long before the plaintiff filed the lawsuit and won a judgment.

Under the Texas Uniform Fraudulent Transfer Act (TUFTA),
a transfer . . . is fraudulent as to a creditor, whether the creditor’s claim arose before or within a reasonable time after the transfer was made . . . if the debtor made the transfer . . . (1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or (2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor: (A) was engaged or was about to engage in business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or (B) intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.

Debtors filing bankruptcy need to take care that they are not using asset transfers to avoid paying a debt. The bankruptcy court has made it clear that they are willing to disallow “aged” asset transfers if there was an intention to defraud creditors.

(source: http://www.leagle.com/xmlResult.aspx?xmldoc=In%20BCO%2020110105432.xml&docbase=CSLWAR3-2007-CURR)

Filing Bankruptcy After College

poster1 — Mon, 10 Jan 2011 15:00:29 +0000

Filing Bankruptcy After College--Image via Wikipedia

During this recession more young people 18 – 34 years old are trying to take charge of their finances. But taking charge of finances can be particularly difficult for college educated youth who are short on resources and deep in debt. Making their situation worse is the fact that jobs are in short supply and the jobs which do exist often offer less than a living wage with even more senior, experienced job seekers snatching those jobs up. Because of the circumstances surrounding today’s youth, many of them are filing for bankruptcy and reaping the rewards that can be particularly beneficial to those debtors who are just starting out in life. Let’s take a look at some of the unique benefits that bankruptcy provides to college educated youth:

Bankruptcy can wipe out credit card debt which was accumulated during a debtor’s carefree college years. Until recently college students have been able to get credit cards with relative ease. Easy access to credit cards makes it simple to rack up debt and become a prime candidate for bankruptcy. Fortunately, the mistakes college students make with credit cards can be wiped out in bankruptcy.
Bankruptcy can free up more income so that college graduates can focus on paying off their student loans. Although it is very difficult to discharge student loan debt in bankruptcy, the discharge of other debts has a “trickle down” effect on the debtor’s income. Once the debtor is freed from paying on high interest credit card loans they will have the cash to pay off their low interest student loans.
Finally, bankruptcy can free the college graduate from the stress associated with carrying a high debt load. It’s already stressful to move from college life to full-fledged adulthood; but the threat of lawsuits and garnishments can make that transition stressful. Once bankruptcy discharges debt and any lawsuits or garnishment orders attached to the debt, the debtor will have a lot more peace of mind and the energy to focus on building a better life after bankruptcy.

(source: http://www.delawareonline.com/article/20110106/BUSINESS/101060328/Younger-adults-vow-to-cut-debt-balance-budgets)

Three Tax Myths That Could Land You In Trouble With The IRS

poster1 — Thu, 06 Jan 2011 14:18:58 +0000

Three Tax Myths That Could Land You In Trouble With The IRS - Image via Wikipedia

Tax time is right around the corner and this is about the time that a lot of myths get thrown about online and offline. If you want to stay out of trouble with the IRS and get your tax situation done correctly take a look at some of the most common but nonetheless untrue tax myths out there:

Money earned online is tax-free. Whether you earn money online or offline, all revenue is taxable by the IRS and must be reported to the IRS on your income tax filing. One of the biggest victims of this tax myth are entrepreneurs who finding more of their business online than before. Do yourself a favor and take the time to carefully document and report all revenue earned online and offline to the IRS at tax time.
If you barter, you don’t have to pay taxes. While it is true that no money changes hands during a barter exchange, the value of the barter is taxable by the IRS for both sides. For example, if you bartered services valued at $100 with someone who was giving you services also worth $100, you both would need to pay taxes on the $100 worth of value you received.
Under-age workers don’t have to pay taxes. All singles under age 65 with $9,350 in gross income in 2010 must file a return, as well as those 65 and older with income of $10,750 or more. Self-employed individuals with incomes of $400 or more regardless of their age must also file a tax return.

Dallas not the only city struggling with corruption issues

poster1 — Sat, 06 Feb 2010 11:07:03 +0000

Individuals, who file bankruptcy, will file for either Chapter 7 or Chapter 13 bankruptcy. The type of bankruptcy you file will depend on several factors, including your income. The bankruptcy process starts with a thorough discussion with your bankruptcy attorney before you file your application. Providing an accurate accounting of your income to your bankruptcy attorney is an extremely important component in this process. Last week, former Louisiana congressman, William Jefferson, learned this lesson the hard way. By the time he was convicted of federal corruption charges including soliciting bribes and money laundering, Jefferson racked up legal bills in excess of $5 million. His total debt obligation is expected to be around $10 million. The Louisiana state Supreme Court has suspended his license, and as such, it is unlikely that he will have the funds anytime soon to satisfy the ballooning debt. Jefferson filed for Chapter 7 bankruptcy protection. However, the procedure for qualifying for Chapter 7 became more stringent in 2005. Ironically, the change to make filing for Chapter 7 more difficult was supported by Jefferson when he was still a congressman. A bankruptcy judge has since ruled that because of Jefferson’s income, he will be subject to the more stringent standards, which includes his income over the next three years being earmarked for debt repayment.

The news is ironic on several levels. One would think after incurring convictions for money laundering and corruption, Jefferson would feel a bit more compelled to dot his “i’s” and cross his “t’s”. For some reason, he slipped up in providing good information to his attorney. Probably the paramount lesson to be learning from Jefferson, other that avoiding corrupt practices, is to give your bankruptcy good information. The quality of their advice to guide you through the bankruptcy process will only be as useful to you as the quality of the information that you provide. The sanctions for providing filing false or misleading information can be extremely critical to your financial health. A bankruptcy attorney will not be happy once he finds out that you attempted to manipulate the bankruptcy process. In order to avoid complications with your bankruptcy filing, disclose every source of income to your bankruptcy attorney so they can correctly determine which type of bankruptcy you qualify for through the means test. If you are not sure whether or not an item qualifies as income or a loan, provide that information as well to your attorney out of an abundance of caution. A good bankruptcy attorney can help you make your filing as smooth as possible. However, the eventual success of your bankruptcy starts with gathering good information. So take the time to plan for a successful bankruptcy.

How Bankruptcy Can Impact Businesses

poster1 — Sat, 30 Jan 2010 13:37:55 +0000

Many people avoid bankruptcy because they feel that their financial life after bankruptcy is over. If we have learned anything over the last several months it is that there is definitely life for companies and individuals after bankruptcy. A bankruptcy filing will appear on your credit rating. However, just like delinquencies and slow pay entries, it can only last on your credit report for a statutory period of time. Any negative reports on your credit history will affect your ability to get a home loan and the rate of you loan, whether it’s a history of slow pay or bankruptcy. The question then becomes when are you looking to buy a new home? As long as you continue to receive negative entries on your credit report and you continue to struggle with debt management issues, you will be shut out of purchasing a new home. The sooner you start re-building your financial foundation, the sooner you will be able to obtain your homeownership goals.

Bankruptcy can actually be your first step in that reconstruction. The first advantage is that you get your debt situation under control. Depending on the type of bankruptcy you file and the type of debt obligations you have, your debts will either be discharged or paid through a structured payment plan. The payment plans developed during the bankruptcy process are designed to fit within your financial resources. This means that your credit history can begin improving with on-time payments, rather than a continued history of late payments. Also during bankruptcy, you will be required to attend courses on financial management so that you exit the process empowered with better information on how to manage your finances. The combination of these factors places you in a better position to begin accruing savings for the purchase of a home. A stronger down payment will help you in qualifying for a better loan agreement.

Once you get through your debt crisis and accrue the savings for a down payment, the next step is to develop a plan. A plan will help you prevent a relapse of credit problems. Leverage the knowledge gained through bankruptcy including:

Don’t over indulge… buy what you need, not just the biggest house you think you can afford.
Research your market… know what’s a bargain and a bust.
Do your homework….know all the costs of purchasing and maintaining a home in your market. This includes taxes, homeowner’s fees, and insurance.

The quickest way back into a financial hole is to jump into a major financial obligation without a plan. People often commit without understanding the full breath of the agreements they are signing. Through bankruptcy and diligence, it is possible to obtain the dream of owning your own home. Contact a qualified bankruptcy attorney to learn how bankruptcy can open the doors of homeownership for you.

Annie Leibovitz battling debt collectors

poster1 — Thu, 28 Jan 2010 12:42:38 +0000

for you Right now, Annie Leibovitz would probably tell anyone that when it rains, it pours. She joined Vanity Fair in 1983 and quickly became an icon of pop culture with famous photographs of John Lennon, Queen Elizabeth II, and a plethora of other celebrities. Despite her hefty earnings over the last couple of decades, she began experiencing financial stress as early as 2003 when a neighbor of one her properties sued her for $15 million. She eventually had to purchase his property for $1.9 million. Since 2003, the debts have been piling up her, including federal and state tax obligations. She took the route that many attempt and sought to consolidate her loan obligations with Capital Group in 2008. Despite the consolidation, her debt stress continued. She is now being sued by Capital Group on that account. As a result, she is at risk of loosing her life’s work, the portfolio of famous images. Her portfolio is estimated to be worth around $40 million. Fortunately, other options could develop that would allow her to save her work. Talks of bankruptcy are floating. Right now, her creditors are driving the collection activities. A filing of bankruptcy would give her automatic stay protection until she could get her finances organized. It would also give her more control over how to resolve her debt to Capital Group. She would have the ability to choose which resources to use to settle the debt, instead of Capital Group trying to take control of selective assets, like her portfolio.

Most of us don’t have $40 million worth of spare assets to settle accounts, but we can still identify with Leibovitz’s financial crisis. Most of us do have some type portfolio that represents what we have spent our life working for: your home, your car, or your computer equipment. We hope for the best and work diligently to take care of our finances, at least until something happens. It’s a little different for everyone and the reasons vary. But many people will try to do what Leibovitz’s did and consolidate because they do want to live-up to their obligations. Consolidation can work under the right set of circumstances. However, for many that have an ongoing set of financial stress factors, consolidation does little more than prolong the agony of a bad financial picture. It can also have an aggravating affect of increasing the costs of your debt with more financing and loan fees. So the hole you thought you were getting out of, just got deeper instead. When you have a prolonged financial crisis, bankruptcy may be the best option. It puts you back in control of your financial decision making. It also balances out the playing field. For example, Capital Group is driving the collection game right now and is looking to take the life’s work of an artist. A bankruptcy filing will give Leibovitz more control and say-so in the collection process, rather than just having to succumb to a collection suit. The same options and protections are available to you through the bankruptcy process. Contact a qualified bankruptcy attorney today to get a snapshot of the best choices