The Law Planet Blog

Buggy whips. I think of buggy whips when I hear stories like Kodak filing for bankruptcy. First I think how could this happen? Then I think "Buggy whips." I know that sounds crazy; why would somebody think about buggy whips? But it's pretty appropriate isn't it?

In the 1800s everyone had a buggy whip. You needed them to get your horses to drag around your cart. As the 1900s approach, and Ford and Benz build cars, they became a thing of the past. I wonder what happened to all those buggy whip companies. A few must have been wise enough to get into the automobile industry. Maybe they started creating belt drives or some other thing that would be similar to buggy whip on the new-fangled cars.

Kodak is just a buggy whip company and should serve as a hard lesson to anyone in business. Life moves quickly, and the only thing constant in life is change. If you don't look forward, you will be looking at your company broken and bankrupt, because the world, technology and life have moved past your usefulness.

I hate to say it, but the same is true for lawyers. Lawyers must look to the future, adapt to the new environment and change our business practices if we want to survive.

Those of us who are wise enough to create strong websites, begin client interactions over the Web and save our data in the cloud, MAY survive. Those of us to hang on to the institutional old-world model by setting up large law firms with bloated overheads and white shoe arrogant high-cost lawyers will eventually be a thing of the past.

Lawyering was an interesting profession where we selected few lawyers who knew and understood the law. We were uniquely able to research a legal issue and cogently understand them and then develop legal theories to help clients. Soon that may be done by anyone who can type it into the Google search bar!

If we are not able to adapt to this new environment, we might as well join Kodak in bankruptcy court.

I wish Kodak the best. I nostalgically love the company. It reminds me of photo albums and my childhood. I hope the bankruptcy provides them enough time and releases, and enough capital to turn their substantial investment in new technologies into profitable ventures. Turning the company around is a tricky business, and I know it's one that Kodak has worked hard to achieve. It just seems they figured out they were making buggy whips a little too late.

Hostess Brands Inc, the father of Twinkies, Wonder Bread and HoHos, is again preparing to file for Chapter 11 bankruptcy protection this week, The Wall Street Journal reported.

Twinkies ingredients have been the same for nearly 80 years, and although this is the second company restructuring, experts say the king of cakes won't disappear.

For more commentary and full news story:
Twinkie alert! Hostess may again file bankruptcy

Oh, how the Twinkie has fallen: Reflections of an ex-Twinkie tester

A recent article on Bankrate.com, "Help! I'm a victim of ID theft -- by my wife", highlighted an interesting scenario. A reader under the name "shocked", posed the following question to the Debt Adviser: Dear Debt Adviser,

I just checked my credit report and found my wife opened an account using my name and information. I have never used this account. I didn't apply for this credit. Now the account is delinquent. In your opinion, what is the best way to go about fixing my credit? Author, Steve Buscemi, gave a very detailed answer to the reader in regards to his marriage.

This question made me think about the implications regarding a person going through a bankruptcy or thinking about divorce. I sought answers from Florida Bankruptcy Attorney Audra Simovitch and Palm Beach County Divorce Attorney, Joseph R. Fields.

Continue reading "Unsecured Debt dispute with ex-spouse" »

In February, President Obama and attorney general, Eric Holder, announced that they considered Defense of Marriage Act, DOMA, unconstitutional and would no longer defend it in court. While the law is still on the books, the Justice Department will no longer defend the provisions of Section 3 and will leave that up to lawyers for Congress. DOMA refers to the exclusive federal recognition of marriages between men and women. In a recent turn of events, Bankruptcy Judges around the country are making landmark decisions regarding the rights of same sex couples in Bankruptcy Court.

In response to the bankruptcy case of legally married same-sex couple Gene Douglas Balas and Carlos A. Morales, 20 Bankruptcy Judges from the U.S. Bankruptcy Court in Los Angeles, signed a declaration that proclaimed Defense Of Marriage Act, to be in violation of the U.S. Constitution’s Fifth Amendment.

Judge Thomas B. Donovan of the United States Bankruptcy Court for the Central District of California wrote the following: “In this court’s judgment, no legally married couple should be entitled to fewer bankruptcy rights than any other legally married couple".

Continue reading "Bankruptcy Judges take giant step for rights of same-sex couples" »

JP Morgan Chase made headlines today with notice of dropping several credit card debt-collection laws nationwide per a WSJ article.

JP Morgan declined to give a reason as to why they are dropping the suits at this time. The list of states involved in the credit card cases are short, and yes, Florida made the list. The state list also included: California, Illinois, New Jersey, and New York.

As of March 31, there was an outstanding balance of $45.9 billion in credit cards due to JP Morgan. This included —current and delinquent accounts—for the states listed. JP Morgan is seeking an average of around $1,000 per lawsuit, per the WSJ.

CNN Money Reporter, Colin Barr, took the words right out of my mind in the article - JPMorgan's plastic explosives - Do we have credit card robo-signing scandal on our hands? For the sake of the already overburdened courts, let's hope not.

Continue reading "JP Morgan Chase drops several credit card lawsuits nationwide" »

One minute you’re on top of the world. The next, you’re being swept aside. It would be easy for one of America’s top real estate agents to feel that way. John McMonigle’s tale is a true rags-to-riches success story, but so far he hasn’t achieved a fairy-tale ending.

For two decades, McMonigle has been the top real estate agent in Orange County, Florida. He lived in a mansion, drove an expensive car, and appeared to have everything going for him. Now he’s declaring bankruptcy.

The Realtor is not alone. So far in in 2011, 40,291 Florida Bankruptcies have been filed already in the courts. Shockingly, the Florida bankruptcy numbers are not the worst in the nation. Consider California, where 16% of all filings in the nation have been made this year. Florida bankruptcies are 7% of the nation’s total, while Michigan is close behind with 6%. If you look at the numbers another way, they still seem quite high. Nevada has the most filings per capita, with Georgia and Tennessee bringing in the second and third spots.

Continue reading "Bankruptcy and a Former Number One Real Estate Agent" »

Rarely does a common business bankruptcy have all the mystery and international intrigue of a thriller spy novel, but one that was recently highlighted in the Wall Street Journal comes close. W. R. Grace and Company has a long and fascinating history.

William Russell Grace left Ireland during the potato famine to work harvesting guano in Peru. These bird and bat droppings were turned into fertilizer and gunpowder. His brothers began entrepreneurial ventures in America and London, but by the end of the 1800s, the brothers consolidated most of their holdings and the business passed on to their heirs.

In 1954, W. R. Grace Co. bought a chemical company. Within a decade, it was acquiring major shares of Miller Brewing, only to resell them to Phillip Morris three years later at a whopping profit. In 1987, it became the first foreign company to do business in the People's Republic of China when it opened a canning factory in Shanghai.

Continue reading "WR Grace Files Chapter 11, Royal Family Protests" »

Bankruptcy can be pretty scary, given today's unsettling economic times. However, if you are considering bankruptcy or have gone through one, you are not alone. In January 2011, The 2010 numbers showed that appx. 1.53 million people went through a personal bankruptcy. That was a 9% increase over 2009 numbers. The National Bankruptcy Research Center provided 2011 bankruptcy numbers through April, reported that 476,000 personal bankruptcies have been filed in 2011. If the economy improves we could see a trend of lower bankruptcies for 2011, but time will tell.

There are several myths about bankruptcies that are misconceptions. I came across a great article on Investopedia covering bankruptcy myths. West Palm Beach Bankruptcy Lawyer, Audra Simovitch, agreed that she hears these and more daily when working with bankruptcy clients in Florida and Massachusetts. She is amazed at how many people feel that they are in this alone and feel guilty about ashamed about their financial situations. "A bankruptcy is a way to get a fresh start. It is a restructuring of debts and assets and takes courage to admit that you want to improve your current situation.", said Attorney Audra Simovitch. "Hoping your debts will go away and not taking action will not make them disappear. Sometimes, lack of action, can make it worse.

Continue reading "Five Personal Bankruptcy Myths Explored" »

Florida courts received a sigh of relief today when Governor Rick Scott approved millions of dollars in emergency funding to help clear some of the hundreds of thousand of Florida foreclosure cases.

The Florida Supreme Court warned the governor that the $14 million was desperately needed to clear the massive foreclosure case backlog throughout Palm Beach County, Broward County, Dade County and other counties throughout Florida.

Florida Foreclosure Defense Attorney, Audra Simovitch, is in court almost daily representing clients in fighting the banks against fraudulent foreclosures and helping clients in bankruptcy matters. This new financial boost for Florida courts should help in this foreclosure crisis.

If you are in Florida facing foreclosure or bankruptcy, understand that there is help out there for you in getting you that fresh start.

Click on the following links to read more on the Florida courts receiving millions in badly needed funding:

Governor approves millions to speed up foreclosure cases - - WPTV.com

Scott approves partial bailout for Florida courts - WTSP.com (Associated Press)

Every year, lending giant JPMorgan Chase & Co. files an annual securities report. This year's report, which was filed on February 28, included some very eye-opening information. The bank disclosed that it is currently the defendant in more than 10,000 legal proceedings around the United States. The proceedings stem from the huge array of investigations that have been taking place concerning foreclosure practices. Around the fall of 2010, glaring paperwork errors on foreclosures were brought to public attention. In many cases, those errors cost people their homes. Not surprisingly, the discovery prompted a vast range of investigations into foreclosure industry practices.

If JP Morgan ends up paying out on all of the proceedings, the New York-based bank could end up paying fines of up to $4.5 billion. The legal proceedings have been initiated by a number of different entities. The attorney generals of all fifty states have banded together to investigate botched foreclosures. The United States Department of Justice has gotten into the act, too; many bank regulators have been filing suit, as well. Considering the huge number of involved parties, it isn't especially surprising that the nation's second-largest bank is knee-deep in litigation concerning these foreclosures.

JP Morgan is not alone in its battle, though. CitiGroup, Bank of America, Wells Fargo and many other banks and lenders are facing legal proceedings, too. For homeowners who are facing foreclosure, this news highlights the importance of seeking a qualified foreclosure defense attorney. All too often, homeowners feel helpless in the face of such troubles. When a bank begins foreclosure proceedings, many people just let things proceed. The assumption tends to be that the bank knows what it is doing. As the huge number of botched foreclosures and the issue of far-reaching foreclosure fraud comes to light, it is clear that homeowners need to protect themselves.

Continue reading "J.P. Morgan Facing Up to $4.5 Billion in Fines over Botched Foreclosures" »

2010 was a disheartening year for many people. According to the Bankruptcy Court in Miami, the number of personal bankruptcies in Miami-Dade, Broward and Palm Beach counties rose by 40%. Bankruptcies Florida totaled 24,681 in the state's southern region in 2009; they rose to 34,579 in 2010. As unfortunate as the increase is, it dovetails with unemployment figures, home foreclosures and business closings around the state.

Are Things Worse in Florida?
Across the country, personal bankruptcies were up by 9% in 2010. In 2009, approximately 1.41 million personal bankruptcies were filed in the United States. In 2010, that number rose to 1.53 million filings, according to the American Bankruptcy Institute. Based on that information, it may appear that Florida is worse off than many other parts of the country. However, there is a bit of a silver lining at play: Monthly bankruptcy filings have actually been on the decline in the state since September 2010. In December, there were 2,577 bankruptcies filed in south Florida, which represents a 2.6% decline from the previous month.

Understanding Bankruptcies Florida
The vast majority of the personal bankruptcies that are filed in the state of Florida are Chapter 7 bankruptcies. Under Chapter 7, a person must liquidate his or her assets in order to pay off old debt. Under Chapter 11 bankruptcy a person with the help of an attorney, works with the court to come up with a way to consolidate and reorganize his debt. Determining which bankruptcy is right for you can be tricky; an experienced attorney can help you make the right decision.

Unemployment and Bankruptcies
Considering the fact that Florida's unemployment rate is, on average, 12%, it makes sense that there have been excessive numbers of bankruptcies during the last twelve months. In south Florida, unemployment ranges from 10.8% to 13%, a fact that highlights the especially dire situation in that part of the state. Whether or not those numbers will improve in 2011 remains to be seen; similarly, it's too early to tell whether the slow decline in the number of bankruptcies is just a blip on the radar or the beginning of a long-term trend.

Click on the following links to read more on Bankruptcy increase in Florida:
South Florida Bankruptcies increas 40% in 2010 - Sun Sentinel - Marcia Pounds
Bankruptcy Statistics 2010 - U.S. Federal Courts