Total bankruptcy filings totaled 910,090 nationwide for calendar year 2014 (Jan. 1-Dec. 31), a 12 percent decrease from the 1,032,572 total filings during the same period a year ago, according to data provided by Epiq Systems, Inc. The 875,635 total noncommercial filings during calendar year 2014 represented an 11 percent drop from the noncommercial filing total of 988,489 during calendar year 2013. Total commercial filings during calendar year 2014 (Jan. 1-Dec. 31) were 34,455, a 22 percent drop from the 44,083 filings during the same period in 2013.
Veteran NFL quarterback Michael Vick has paid back almost all of the $17.8 million he owed creditors, ESPN reported yesterday. Vick filed for chapter 11 protection in July 2008, while he was spending 548 days in federal prison on dog-fighting charges. Vick has paid back more than $15 million of that $17.8 million. A pending real estate sale could help Vick get closer to paying his debts off in full.
When the education technology company ConnectEDU Inc. sought chapter 11 protection earlier this year, 20 million student records hung in the balance, Education Week reported yesterday. Ultimately, the sale of ConnectEDU occurred without the company abiding strictly to its privacy policy. The "company sale" portion of ConnectEDU's privacy policy opened with: "Information collected through our website is considered a trade secret of ours." In that same policy, ConnectEDU had promised its users that they could delete their personally identifiable records before any sale. The Federal Trade Commission's Consumer Protection Bureau brought this to the attention of the bankruptcy judge in the case in May. It asked the court to have ConnectEDU destroy all personal data; or to notify users that their personal information was about to be sold and that they could have it deleted; or to appoint a privacy ombudsman to ensure protection of the users' privacy. Instead of registrants receiving notice before the sale, it was left to the acquiring companies that bought the failed company's assets — Graduation Alliance of Salt Lake City, and Symplicity Corporation of Arlington, Va. — to carry out the notifications after the records had been transferred. Fewer than 1 percent of those notified by Graduation Alliance requested that their records be destroyed, according to Ray Kelly, the CEO of the company, which was founded in 2007 and has specialized in dropout recovery and prevention.
The U.S. Trustee Program (USTP) announced yesterday that the independent auditor appointed under a nationwide settlement between the USTP and Citigroup Inc. (Citi) to protect the personal information of nearly 150,000 consumers in 85 jurisdictions has filed his final report, bringing the settlement to a successful conclusion. Under the settlement, Citi agreed to redact proofs of claim filed in bankruptcy cases nationwide in which the personal information of consumer debtors and third parties, including Social Security numbers and birthdates, had not been properly redacted by Citi as required by the bankruptcy rules. Also under the settlement, Citi agreed to notify all affected consumers and offer them one year of free credit monitoring and to change its internal practices and procedures so the redaction error does not recur. The settlement called for the appointment of a privacy expert to serve as independent auditor to review and certify the accuracy of the remediation process.
Total bankruptcy filings in the U.S. for November 2014 decreased 16 percent compared to the previous year, according to data provided by Epiq Systems, Inc. November bankruptcy filings totaled 62,403, down from the 74,070 filings registered in November 2013. Total commercial filings for November 2014 were 2,248, representing a 27 percent decrease from the 3,085 filings reported during the same period in 2013. Commercial chapter 11 filings totaled 296 in November, a 39 percent decrease from the 487 filed in November 2013. The 60,155 total noncommercial filings for November represented a 15 percent drop from the November 2013 noncommercial filing total of 70,985.
John Altorelli, co-chair of the U.S. finance practice at DLA Piper in New York, has become at least the third former Dewey & LeBoeuf partner to file for personal bankruptcy protection, the American Lawyer reported today. The chapter 7 filing by Altorelli in Bridgeport, Conn., on Nov. 25 comes after a recent ruling in Dewey’s own bankruptcy case precluding ex-partners from invoking a key defense against clawback claims by the defunct firm’s liquidating trustee. On Oct. 30, U.S. Bankruptcy Judge Martin Glenn ruled that ex-Dewey partners like Altorelli could not invoke the “value” defense in fighting claims filed by Diamond as he oversees the liquidation of Dewey’s estate.
An Illinois resident who files for bankruptcy doesn’t have to give up the family Bible to pay down debt, thanks to state law, the Wall Street Journal reported on Thursday. That includes a first edition of the Book of Mormon from 1830 — possibly worth tens of thousands of dollars — that Anna Robinson has kept in a plastic bag. A federal judge ruled earlier this month that Robinson, who is a member of the Church of Jesus Christ of Latter-Day Saints, doesn’t have to sell the book in order to pay the roughly $23,400 she owed to individuals and businesses when she filed for bankruptcy last year.
New York City rent stabilized tenants won a major victory when a federal appeals court ruled that their leases can’t be seized in bankruptcy and sold to pay off creditors, the New York Post reported today. The U.S. Court of Appeals for the Second Circuit on Thursday reversed a lower court decision that a rent-stabilized lease could be sold like any other household asset to satisfy debts. State law doesn’t specifically shield rent-stabilized leases from a forced sale in the event of bankruptcy, but the issue hasn’t really been tested in the courts until this case. “We hold that section 282 (2) of the Debtor and Creditor Law (DCL) exempts a debtor-tenant’s interest in a rent-stabilized lease,” the appeals court said in a statement.
Columbus (Ohio) Blue Jackets player Jack Johnson has earned more than $18 million during his nine-year NHL career, not including the $5 million he will be paid this season by the Blue Jackets, but he filed for bankruptcy after being crushed by debt, the Columbus Dispatch reported yesterday. Almost all of the money is gone, and some of his future earnings have already been promised — which is why Johnson, surrounded by a new team of financial advisers and an attorney, signed his financial surrender. The scene was nearly four years in the making, after a string of risky loans at high interest rates; defaults on those loans, resulting in huge fees and even higher interest rates; and three lawsuits against Johnson, two of which have been settled and one that’s pending. In 2008, Johnson parted ways with agent Pat Brisson, who represents some of the National Hockey League’s biggest stars, including Sidney Crosby, Patrick Kane and Jonathan Toews. With no agent and little knowledge of how the financial world works, Johnson turned over control of his money to his parents. In 2011, in the weeks leading up to Johnson’s first big contract — a seven-year, $30.5 million deal signed with the Los Angeles Kings, under which he now plays for the Blue Jackets — Johnson signed a power of attorney that granted his mother full control of his finances. Tina Johnson borrowed at least $15 million in her son’s name against his future earnings, taking out a series of high-interest loans — perhaps as many as 18 — from nonconventional lenders that resulted in a series of defaults.
After a quiet divorce from his now ex-wife, R&B crooner Ginuwine is one step away from filing for bankruptcy, BET reported yesterday. According to his lawyer, the singer is broke and has accrued debts that he's currently unable to pay. His financial woes were revealed during a pretrial hearing against the executive producer of his 1996 album, The Bachelor. The producer is claiming that he's owed royalties from a five-album, $1.25 million deal that Ginuwine signed with Sony.
