Atty. Larry Yang

Porno partners file BK

Monday, 02 February 2009 21:51 Atty. Lawrence Yang

Client had two companies involved in the production and sale of adult videos. Client had a full-time job as a marketing vice president for a consumer product firm. So, he depended on his industrial partner to run his business. The partners knew each other since high school. His partner had spent seven years in the porno business and was familiar with the industry. Client sold his house and used $250,000 from the net sale proceeds to capitalize the porno business. The business involved producing adult videos using well-known stars in the porno industry, and selling them wholesale to retailers. First year business was good. Total sales were more than $1.0 million. Second year sales almost reached $3.0 million. But retailers relied on 60 to 90 days of credit for purchase of videos. Thus, capitalization was short and financing was drastically needed. His partner contacted several factoring companies and started doing business with smaller factoring company. Bigger amounts of financing were required to continue operations, so the partner started to get larger financing from another factoring company. Then things started to get messed up. The latest factoring company noticed that buyers were paying factored bills directly to the business and their checks were being cashed by partner.

Circuit City converts to Chapter 7

Tuesday, 27 January 2009 21:27 Atty. Lawrence Yang

(2 votes, average: 5.00 out of 5)

FOLLOWING the parade of large retailers filing for bankruptcy because of the recession, Circuit City filed for reorganization under Chapter 11 of the bankruptcy code last month, just before Christmas, hoping that good Christmas sales will generate enough cash for it to continue operating. At the same time, it was hoping to be bought by a cash rich buyer to get it out of bankruptcy. However, Christmas sales were dismal, and no buyer came forward with an offer to purchase the no. 2 electronics retailer in the country, second only to Best Buy. The Mexican billionaire who owns the largest electronics in Mexico decided to stay put South of the border and decided not to buy Circuit City. The plan was to retain 350 smaller Circuit City stores nationwide. Circuit City operates 765 stores in the United States and Canada and employs 34,000 people here, 3,000 in Canada.

Circuit City converts to Chapter 7

Saturday, 24 January 2009 05:59 Atty. Lawrence Yang

(1 vote, average: 5.00 out of 5)

Bankruptcy judges might be allowed to modify mortgages

Friday, 16 January 2009 21:09 Atty. Lawrence Yang

THE much-touted Obama stimulus package currently making its way through Congress may contain a proviso amending bankruptcy law allowing bankruptcy judges to modify mortgages. This amendment has been very long in the making and recently gained prominence in the presidential debates when president elect Obama said that his answer to the mortgage and foreclosure crisis is to amend bankruptcy law to empower bankruptcy judges to modify mortgage terms. For the first time since the housing crisis began, Citigroup, a major mortgage lender agreed last week that bankruptcy courts should be allowed to order reductions in the principal of upside down loans for some troubled borrowers, cracking what had been fierce and unified industry opposition.

Start fresh in 2009 with no debt

Sunday, 11 January 2009 22:35 Atty. Lawrence Yang

2008 was the year of the financial meltdown, the likes of which had not been seen since the great depression of 1929. Pundits of all sorts who predicted that the worse consequences of the financial meltdown had come and gone were all proven wrong when the sub-prime mortgage crisis started toppling the titans of the financial world, national retailers, and even the BIG 3 car-makers of Detroit. A steady parade of financial behemoths becoming bankrupt made the headlines in the last quarter of last year. Countrywide, Washington Mutual, Wachovia, Indy Mac, Bear Stearns, & Lehman Brothers all went bankrupt. All felled because of too much debt. The CEO’s of Chrysler, Ford and General Motors, went to Washington last month with tin cups in hand asking for bail out funds to save them from bankruptcy. All 3 were shoved into the brink of bankruptcy by too much debt.

Creditor tells debtor to eat less

Sunday, 28 December 2008 19:09 Atty. Lawrence Yang

I thought after 30 years of dealing with creditors, I had heard everything in the book. But yesterday, client told me something I had never heard before. She had spoken to her mortgage lender to ask for a modification of her payment. The creditor which had become bankrupt itself but was purchased by a large bank, a beneficiary of the bailout, sent her a modification package. Standard in these packages is the income /expense sheet where the homeowner is asked to list household income on one side and expenses on the other side. Since client and her husband were both professionals, they made over a hundred thousand yearly. But even with the high income, client was having a hard time making the mortgage payments, which was about $3,000 for two mortgages.

What do chickens and toys have in common?

Sunday, 21 December 2008 22:06 Atty. Lawrence Yang

PILGRIM’S Pride, the biggest supplier of dressed chickens in the United States filed for bankruptcy protection late last month. It had assets of over $3.0 billion and debts of over $2 billion. K B TOYS, a nationwide toy retailer, filed for bankruptcy protection last week. Bankruptcy is what chickens and toys have in common it seems. They are the latest victims of having too much debt that threaten their existence as a viable business entity. This year we saw many titans of business and industry destroyed by too much debt forcing them to knock on the doors of bankruptcy court for protection from their creditors: Countrywide, Washington Mutual, Wachovia, Bears & Stearns, Lehman Brothers, AIG, were stalwarts and leaders in the financial industry. Some of them have existed since the civil war and have been doing business for hundreds of years. But all of them were felled in the last few months by too much debt. Billions of revenues were not enough to pay for billions more of debt and interest forcing them to become bankrupt.

‘LA Times’ parent co. files for bankruptcy protection

Sunday, 14 December 2008 22:28 Atty. Lawrence Yang

The Tribune, the parent company of the Los Angeles Times, Chicago Tribune and the Baltimore Sun, filed for Chapter 11 bankruptcy this week to restructure $12 billion of debt. The Tribune had interest payments due for this year of $1.0 billion and another $500 million of interest payments due by June next year. In other words, their monthly debt service payment required for interest alone to keep $12 billion of debt current is close to $100 million.

Actually, Sam Zell, who acquired it last December, bailed Tribune out last year. Mr. Zell said that a precipitous decline in revenues in a bad economy with a credit crisis "makes it extremely difficult to support our debt"; hence, another business behemoth felled by too much debt. In the last two months, we saw very large banks, insurance companies, and national retailers make a bee- line to bankruptcy court all seeking the court’s protection from creditors and permission to continue operating while they hammer out reorganization plans that jettison most of their debts in the hope of coming out of bankruptcy leaner and profitable again.

Start fresh in 2009

Sunday, 07 December 2008 23:10 Atty. Lawrence Yang

(1 vote, average: 3.00 out of 5)

It’s the start of a new year again. It’s a good time to reflect on how things should be in our lives. If your debt burden is unbearable, now is the best time to seriously consider starting fresh again. Mistakes made in the past can be corrected. In the United States, there is Federal law that gives debtors a chance to start fresh again.