Going-out-of-business sales started Friday at Alco Stores, a chain of nearly 200 general-merchandise discount retailers that cater to small communities in America’s heartland.
The impending closure of the stores—which sell everything from appliances and furniture to clothing and groceries—is likely to severely limit the shopping options for Alco customers. Most of the stores are located in towns of fewer than 5,000 residents, and Alco specifically targets areas not already serviced by Wal-Mart and other larger retailers. (As evidence of Alco’s small-town vibe, Bankruptcy Beat noticed that 22 of its stores are located on a city’s Main Street.)
The 113-year-old business sought bankruptcy protection last month with plans to liquidate if it didn’t find a buyer willing to keep the stores open. This week, Alco said a sale didn’t pan out, and it won a bankruptcy court’s approval to go through with the going-out-of-business plan.
In a Friday press release, liquidators said more than $260 million worth of inventory, fixtures and equipment will be up for sale. The liquidators say they expect to keep daily essentials “fully stocked for a limited time” and that they’ll be discounting everything on store shelves.

WSJ.com: Bankruptcy Beat
(posted 2 days 3 hours ago)


Regina Stango
Kelbon

The following is a summary of a paper prepared for the Pennsylvania Bar Institute.
The decisions by the Bankruptcy Court for the District of Delaware in In re Fisker Auto. Holdings, Inc., and the Bankruptcy Court for the Eastern District of Virginia in Free Lance-Star Publ'g Co., have sparked discussions as to the circumstances justifying the curtailment of a secured creditor's credit bid rights in a sale conducted pursuant to Section 363 of the Bankruptcy Code.
The In re Fisker Auto. Holdings, Inc. case represents the first major case in a post RadLAX world limiting a secured creditor's credit bidding rights under section 363(k) of the Bankruptcy Code. Following the court's lead in Fisker, the Bankruptcy Court for the Eastern District of Virginia in In re Free Lance-Star Publ'g Co. limited a secured creditor's right to credit bid because the secured creditor did not hold valid liens on all of the assets being sold, and because the secured party engaged in a loan-to-own strategy and inequitable conduct that the court found resulted in the depression of the sale price for the debtors' assets.

Bankruptcy Law Watch
(posted 2 days 4 hours ago)
Fireworks burst over the Detroit city skyline during the annual Ford Fireworks show in downtown, Monday, June 23, 2014.
Associated Press

A judge on Monday is expected to set a formal date to free Detroit from bankruptcy protection, which could come as soon as early December.
U.S. Bankruptcy Judge Steven Rhodes put the end of the nation’s largest municipal bankruptcy case in sight earlier this month when he approved the city’s debt-cutting plan.
The ruling came more than 15 months after the city filed for Chapter 9 amid population loss, spiraling debt and rising pension and health-care costs. The city earlier reached settlements with all of its major creditors.
The city’s restructuring roadmap calls for trimming from its balance sheet $7 billion, or more than one-third of Detroit’s estimated long-term debt. It was a rare milestone decision for cash-strapped cities, even among those that have sought bankruptcy protection.

WSJ.com: Bankruptcy Beat
(posted 2 days 4 hours ago)

A recap of the informed opinions (and the discussions they generated) on BankThink this week.

BankThink
(posted 2 days 4 hours ago)
The U.S. Supreme Court ruled against Internet-streaming TV company Aereo, which filed for bankruptcy.
Getty Images

Internet-broadcast streaming company Aereo Inc. filed for bankruptcy protection five months after the Supreme Court delivered the technology company a fatal blow in its fight with traditional television broadcasters, Daily Bankruptcy Review reports via The Wall Street Journal.
(Daily Bankruptcy Review is a daily newsletter with comprehensive coverage and analysis of emerging and in-progress insolvencies and turnarounds. For a two-week trial, visit our homepage, scroll to the bottom and click “try for free.”)
A new ruling will allow New Yorkers to file for bankruptcy without risking losing their rent-controlled apartments, WSJ reports.

WSJ.com: Bankruptcy Beat
(posted 2 days 6 hours ago)

Why are banks missing the early warning signs associated with employee misconduct?

BankThink
(posted 2 days 6 hours ago)

Earlier this year Maryland’s Community Law Center had its first victory under an updated law meant to stop bad behavior by the owners of blighted properties that refuse to clean them up. But late Tuesday night the progress in that effort hit a road block—the bankruptcy code.
Last year, using Maryland’s revised community bill of rights law, a number of community associations and the Community Law Center sued Scott Wizig—a landlord who was sued by Eliot Spitzer in New York in the early 2000s and is the subject of an recent investigative report by the Houston Press—and nine LLCs that owned 57 nuisance properties in Baltimore. These properties were uninhabitable, vacant houses that were attracting crime and trash, allegedly posing a health and safety hazard and harming the community.
The lawsuit alleged that Mr. Wizig was breaking the law at approximately 140 of his Baltimore properties. Pointing to a pattern of behavior in Buffalo and Houston, the complaint alleged that Mr. Wizig purchased the properties at tax lien sales for between $491 and $16,500 and had no intention of improving them. Instead, he would hold the properties vacant and uninhabitable “until such time as the market conditions permitted a profit through re-sale.”

WSJ.com: Bankruptcy Beat
(posted 2 days 7 hours ago)

Authored by Adam B. Brandon of Rogers TowersAs part of a coordinated, multi-agency initiative known as “Operation Choke Point,” the Federal Deposit Insurance Corporation (FDIC) has warned financial institutions that they might be liable for maintaining banking relationships with certain “high risk” businesses and customers.  Specifically, the FDIC expressed concern about relationships between banks and payment processors who use their deposit accounts to process payments for third-party merchant clients.  If these merchant clients are involved in money laundering or consumer fraud, then the banks could be liable for facilitating illegal activity.  However, critics of Operation Choke Point contend that the regulators are actually seeking to deny access to credit markets for legitimate industries that  are  politically unpopular.
FDIC Guidance and Clarification

Florida Banking Law Blog
(posted 2 days 7 hours ago)

Receiving Wide Coverage ...

Too Cozy?: The Fed established a team in Washington to review whether it's too cozy with the banks it regulates. The New York Times described the review as a "surprise announcement." The Fed's inspector general will simultaneously conduct a similar review, looking specifically at whether "top officials were hearing all the opinions of Fed bank examiners." The moves were announced Thursday, ahead of Fed Governor Daniel Tarullo's and New York Fed President...

BankThink
(posted 2 days 8 hours ago)

In re SR Real Estate Holdings, LLC, 506 B.R. 121 (Bankr. S.D. Cal. 2014) – A group of lenders moved to dismiss the debtor’s bankruptcy case on the basis that it was filed in bad faith, or in the alternative asked … Continue reading →

(posted 2 days 9 hours ago)