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In a week that first saw fast food pizza chain, Sbarro, file Chapter 11 bankruptcy, the trend continues. Yesterday, toasted-sub chain Quizno's Subs filed for Chapter 11 as well.
The company says not to worry as they have a plan in place.
Quizno's Subs' CEO said in a statement, "The actions we are taking are intended to enable Quizno's to reduce our debt, execute a comprehensive plan to further enhance the customer experience, elevate the profile of the brand and help increase sales and profits for our franchise owners."
The restructuring is focused on a debt reduction plan that takes care of $400 million.
While Quizno's Subs is mainly a franchised chain, individual franchise owners ran into problems with the prices Quiznos was charging them for ingredients. Although many prices were eventually altered, it may not have been timely enough for some.
Included in the restructuring plan is a rebate program for franchise owners and new incentives for future franchisees.
With big competitors, such as Subway, Potbelly and Noodles and Company, Quizno's has fallen behind in the world of advertising and additional investments are planned to be made in that area as another part of the restructuring plan.



Posted 19 weeks 5 days ago

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Mt. Gox is in the hot seat as they were granted Chapter 15 bankruptcy protection by the U.S. on Monday. This move prevents traders in the U.S. from taking legal action against them for the current time, protecting their U.S. assets.
The company is fighting off fraud allegations and a proposed class action suit in Chicago. Mt. Gox, who at one time was the nation's biggest bitcoin exchange, filed bankruptcy in Japan in February.
Last month Mt. Got claimed to have been attacked by hackers which resulted in the loss of 750,000 bitcoins owned by customers. The attack supposedly was due to a glitch in bitcoin's software algorithm.
Mt. Got's founder, Mark Karpeles, has been in the spotlight throughout all of the fraud allegation talk.
Some of Karpeles actions right before the U.S. bankruptcy filing were called into question.
Attorney Jane Pearson stated, "We don't have proof yet but we do have concerns about the movement of hundreds of millions of dollars in bitcoins over the weekend, moved by Mr. Karpeles."
Attorneys for Mt. Got deny such fraudulent acts. In April, Mt. Got will be back in court as they try to get permanent stay of U.S. litigation.



Posted 20 weeks 2 days ago

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Melville, New York-based, Sbarro, has filed for Chapter 11 bankruptcy for the second time in three years. The pizza chain has struggled with debt and competition in the marketplace.
In the Chapter 11 reorganization plan, Sbarro hopes to cut down its debt by over 80 percent. Sbarro also plans to close approximately 50 locations, on top of the 180 money-losing operations they have already shut down.
Although the bankruptcy will not affect the franchise owned 582 restaurants, Sbarro as a company has 799 restaurants and employs over 2,700 people.
Sbarro has seen a drop off in mall traffic, where many of their restaurants are located. Their business model has also been called into question.
A restaurant consultant said, "Sbarro has been struck with an outdated business model...Its biggest shortcoming is that is sells food that has been sitting out for a while, and more people want food made to order."



Posted 20 weeks 3 days ago

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Nickelodeon's Drake Bell, formerly known as "Drake" from the show Drake & Josh has filed for bankruptcy.
Drake Bell is 27 years old and has experienced an income roller coaster in the last couple of years. In 2012, Drake made $408,000, while in 2013 he brought in $14,099.
His month expenses are reportedly greater than $18,000, while his monthly income is under $3,000.
Bankruptcy documents indicate that Drake owes $1.597 million on his home. The property is valued at $1.575 million.



Posted 24 weeks 7 hours ago

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Instead of opening their factory in the old General Motors plant in Delaware, the plug-in hybrid automaker, Fisker, found itself in bankruptcy in November and things are moving at a rapid pace.
Creditors will have until December 30th to vote on the bankruptcy plan for Fisker and the final confirmation hearing will take place on January 3rd.
Fisker has thousands of investors, many unsecured creditors, and a committee has been selected to represent those creditors. Between them, there could be about $725,000 to divvy up.
The state of Delaware is one of the secured creditors that has received collateral from Fisker.
Last month, Hybrid Technologies, LLC bought the $168 million loan from the federal government to Fisker, at a heavy discount.
The reason the bankruptcy is being fast tracked, according to one of Fisker's attorneys, is in an attempt to retain as much of the company's value as possible.



Posted 32 weeks 6 days ago

The city of Detroit's Chapter 9 bankruptcy filing was approved by Judge Stephen Rhodes Tuesday, officially becoming the largest municipal bankruptcy case in the history of the United States.
Judge Rhodes issued a 90-minute verbal ruling this morning, to be followed by a 140-page written ruling, finding that Detroit's financial woes meet the legal requirements for bankruptcy under a Chapter 9 reorganization, ending months of uncertainty following the initial July 18 filing
“It is indeed a momentous day. We have here a judicial finding that this once proud city cannot pay its debts. At the same time, it has an opportunity for a fresh start. I hope that everybody associated with the city will recognize that opportunity,” Judge Rhodes said in a packed courthouse.
In a surprise move, Judge Rhodes ruled that Detroit will be allowed to cut pension payments as part of its debt repayment. Much of the city's financial predicament is due to obligations to retired city workers. The pensions will be allowed to be cut as long as they are deemed "fair and equitable" to other creditors of the Motor City.



Posted 34 weeks 2 days ago

Congressional gridlock over a new budget has caused an indefinitely shutdown of many government services. The good news for those struggling with debt is that all federal courts will remain open and functional during the furlough. That means that if you've recently filed a bankruptcy petition or are considering bankruptcy as a debt-relief option, you won't face any additional roadblocks.
Federal courthouses are remaining open due to provisions under the Anti-Deficiency Act, which mandates that "essential" government work continues in the event of a federal funding shortfall. This provision will protect many government services until the 17th of October, at which point only the most essential services will be kept open.
The Office of the Judiciary issued a statement that it will reassess its financial situation on or around October 15, as assess whether it can continue operations during the shutdown. Until then, it will continue to process all court cases as regularly scheduled.



Posted 43 weeks 2 days ago

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The city of Detroit, Michigan filed for Chapter 9 bankruptcy protection in July and is now waiting until late October for a trial.
While there has been much controversy over the situation in Detroit, one thing is for certain, the people of Detroit have a lot to say about it.
On Thursday, taxpayers were front and center in the courtroom instead of the attorneys. Residents and retirees were given the opportunity to express their feelings on the Detroit bankruptcy situation to a judge, for 3 minutes each.
Judge Steven Rhodes listened to many residents who expressed strong concern about what would happen to their pensions in the city's bankruptcy.
Residents spoke to their reliance on pensions and the dedication they gave to the city for so many years, "promises made, promises broken."



Posted 44 weeks 6 days ago

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Detroit filed for Chapter 9 bankruptcy protection in U.S. Bankruptcy Court in the Eastern District of Michigan today.
Detroit will now enter into a 30-90 day period to determine whether or not the city is eligible for Chapter 9 protection and all creditors will have an opportunity to fight for who will get a piece of the $18.5 billion debt.
As the largest city in the US to file bankruptcy, Detroit was the 5th largest city in the country in 1950 with a population of approximately 1.8 million people. Today, Detroit's population is under 700,000.
What used to be one of the largest manufacturing cities in the country is now a city riddled with billions of dollars of debt.
In March, Michigan Governor Rick Snyder asked Emergency Manager, Kevyn Orr, to resolve the city's overwhelming debt issue. Orr was the one to ask for Snyder's approval to file the bankruptcy.
Snyder commented, "I have reached the conclusion that this step is necessary after a thorough review of all the available alternatives, and I authorize this necessary step as a last resort to return this great City to financial and civic health for its residents and taxpayers. This decision comes in the wake of 60 years of decline for the city, a period in which reality was often ignored."



Posted 1 year 1 week ago

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After more than two years of legal wrangling, pop star Toni Braxton has reportedly reached a deal to wrap up her bankruptcy filing, according to the San Francisco Chronicle.
Braxton originally filed for bankruptcy in 2010, claiming that she owed tens of millions of dollars to creditors, but it appears her long debt relief journey may be coming to an end.
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Toni Braxton Reaches Deal to Leave Bankruptcy Court
According to reports, Braxton has reached a tentative deal with the bankruptcy trustee to end her Chapter 7 bankruptcy case, which ended up costing her roughly $150,000 (although it may have allowed her to escape from millions of dollars in debt).
Sources say Braxton also reached a deal a few months ago with the bankruptcy trustee to buy some of the personal property she lost in the Chapter 7 case.
Braxton reportedly paid $5,000 a month for a little more than a year for the right to repurchase some of her own assets, sources indicate.
But Braxton and the trustee had also tussled for several months over the $754,000 Braxton was paid for performing in other countries after she filed for bankruptcy.



Posted 1 year 3 weeks ago