U.S.
Bankruptcies Fall Again in Second Quarter
The
total number of new bankruptcies filed during the
second quarter of 2000 dropped to 321,729, posting
the lowest number of filings in the second quarter
since 1996, according to data released from the
Administrative Office of the U.S. Courts.
Despite the drop, bankruptcy filings
nationwide remain above one million.
Since June 1996, total bankruptcy filings
have increased 22.5 percent and non-business filings
have increased over 25 percent.
In that same time, however, business bankruptcy
filings have declined over 30 percent.
style='mso-spacerun: yes'> The only chapter to show an increase was chapter
11, under which filings rose 14.5 percent from 8,684
in June 1999 to 9,947 in June 2000.
style='mso-bidi-font-weight:bold'>“The continued drop in bankruptcy filings reflects
the positive impact that our strong economy has
had on household balance sheets.
Still, more than 1.2 million annual new filings
present a strain on the bankruptcy system, which
Congress should address by increasing the number
of bankruptcy judges,” said Samuel J. Gerdano, Executive
Director of the American Bankruptcy Institute.
Bankruptcy
Filings Now Accessible Over the Internet
CourtLink, the first company to provide an online
platform for connecting to and from the nation's
courts, yesterday announced the addition of U.S.
federal bankruptcy data to its CaseStream e-access
product, according to a newswire report. CaseStream
users can now access federal bankruptcy information
as well as U.S. federal civil and criminal information
in one location. Additionally, users of CaseStream
Alert, a personalized notification service, can
be notified of new case filings in federal bankruptcy
court.
The Bellevue, Wash., company’s
e-access services are shifting the traditional method
of manual record retrieval at a courthouse to an
e-commerce model, where an average search takes
less than five minutes and significantly reduces
costs. Using CaseStream, attorneys, legal professionals,
business owners and others can obtain case proceedings
instantly using their Internet browser. They can
also set up “alerts” to obtain updated case dockets
automatically on a regular schedule and to be notified
automatically of new cases filed in a specific area
of interest. Matthew Schiltz, president and CEO
of CourtLink, noted that the automatic alert of
information in bankruptcy cases would benefit attorneys
representing chapter 11 corporate reorganizations
where timely responses can be slowed by late notification
and large amounts of paperwork typical of today's
litigation. Visit
href='http://www.casestream.com/'>www.casestream.com for more information.
Living.com
Discontinues Operation, Files Chapter 7
Living.com, an award-winning
online furniture store that was backed by
href='http://quicken.excite.com/investments/quotes/?symbol=AMZN'>
style='color:windowtext;text-decoration:none;text-underline:none'>Amazon.com Inc.,
said yesterday that it has discontinued operations,
laid off 275 employees and filed chapter 7, according
to Reuters. The news came less than four months
after Austin, Texas-based
style='color:windowtext;text-decoration:none;text-underline:none'>Living.com
was rated the "best online furniture store"
by the research group
href='http://Gomez.com'>Gomez.com. "The decision to close our store
was an extremely difficult one,"
style='color:windowtext;text-decoration:none;text-underline:none'>Living.com
Chief Executive Shaun Holliday said in a statement.
"Despite our employees' tremendous efforts
and the loyalty of our customers, the recent downturn
in the capital markets has substantially impaired
our ability to raise the capital required to achieve
profitability."
style='color:windowtext;text-decoration:none;text-underline:none'>Living.com
was launched in July 1999, and this past May formed
a partnership with
href='http://Amazon.com'>Amazon.com that enabled customers to access its
store through the Amazon Web site.
Stock
Market Turmoil Means More Work for Silicon Valley's
Bankruptcy Lawyers
As a partner at
San Francisco-based Brobeck, Phleger & Harrision,
Frederick Hold caters to deal-happy technology companies.
What comes as a surprise is that Holden is a bankruptcy
lawyer, and if he's involved in the sale of a company
that means not everyone is happy.
Business
has picked up in recent months for bankruptcy lawyers
like Holden. The recent stock market volatility
has caused tech companies to have a tougher time
raising money from venture capitalists and IPOs.
As a result, cash-starved companies are crashing
before they can find a buyer. The sales that follow
can threaten assets held by companies that did business
with the troubled enterprise. Therefore it's signaled
to bankruptcy attorneys that even while liquidation
and reorganization filings are down, client traffic
is increasing at an amazing rate and it will likely
continue to swell. Even if predictions are true
that bankruptcy lawyers are about to get as busy
as their corporate colleagues, it's not all cause
for celebration. Asset-light, debt-heavy Internet
companies aren't much fun to liquidate, say bankruptcy
attorneys. In many cases, not much of a company
is left to reorganize and there are almost no assets
to sell or liquidate.
As a result, they generate little by way
of legal fees.
Bargain
hunters typically try to buy bankrupt tech companies
in a rush and pressure bankruptcy courts to finalize
their deal, bankruptcy attorneys say.
style='mso-spacerun: yes'>
Buyers claim that by hurrying, they’re ensuring
that payroll is uninterrupted.
But bankruptcy lawyers say the real purpose
to rushing deals is an attempt to get around the
auction-style sales encouraged by bankruptcy courts.
The San Jose, Calif., division of the U.S.
Bankruptcy Court of the Northern District clamped
down on the speedy deals last year, adopting guidelines
stretching the timeline both to ease a case overload
and to protect the sellers.
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